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INDIA positioning itself as a

global logistics

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44 58 70

E-commerce driving growth in air cargo amid escalating tensions of trade war Global trade: Reflecting myriad hues Is Indian Air Cargo Industry ready to take off?

SAGARMALA Maneuvering on low tides

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Contents

Volume IX • Issue X • SEPTEMBER 2018

Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent Gaurav Dubey Correspondent Upamanyu Borah

44

22 COVER STORY

India positioning itself as a global logistics destination

SPECIAL FEATURE

Global Trade: Reflecting myriad hues

E-commerce driving growth in air cargo amid escalating tensions of trade war ..10 FEATURE

INTERVIEW

focus

Steven Verhasselt, VP-Commercial, Liege Airport................82 Amit Bhardwaj, Deputy Advisor (Transport), NITI Aayog ....84 Samir J Shah, Partner JBS Group of Companies ...............86 Samir Mankad, CEO & Executive Director, GSEC Limited ....87 Ravinder Sethi, MD, RE Rogers India Pvt Ltd ......................88 Huned Gandhi, MD, Air & Sea, Dachser India Pvt Ltd ........89 Dileepa B.M, CEO, Shreeji Translogistics Limited ...........90 Xavier Britto, Chairman, Kerry Indev Group ....................92

Is Indian Air Cargo Industry ready to take off? ........................................................58

SAGARMALA Maneuvering on low tides .....................70

FRONTLINE ..........................................................6 BUZZ ...................................................................8 Shippers Speak ...............................................94 GUEST COLUMN ..................................................96 NEWS .........................................................98-107 APPOINTMENTS ...............................................108 EVENTS ....................................................109-111 PROFILE ...........................................................111 UPCOMING EVENTS ..........................................112 PEOPLECONNECT Shashidar Reddy

MD, Shakti Hormann Pvt Ltd .......................................114

Director Ajeet Kumar Marketing Managers Niti Chauhan Parminder Singh Rahul Arora Asst Manager Marketing Mehuli Choudhury Marketing Executive Akash Gupta Accounts & Administration Nitish Kumar Sr Designer & Visualiser Shaique Ahmad Designer & Visualiser Mayank Bhatnagar All material printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same.

CargoConnect is printed, published and owned by Smiti Suri, and

is printed at Compudata Services, 42, Dsidc Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014 Editor–Smiti Suri

6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 97113 83365, 98109 62016 Email: cargoconnect@gmail.com sales@surecommedia.com Website: www.surecommedia.com

frontline We have taken five river interlinking projects for early implementation and MOA for implementation of these projects is being finalised in consultation with concerned state governments.”

- Nitin Gadkari Union Minister of Road Transport and Highways

Due to increase in fuel costs, airline sector not just in India but globally is facing serious challenges. All the airlines are suffering because their cost has suddenly gone up after a long lull in oil prices.”

- Suresh Prabhu, Union Minister of Commerce and Industry and Civil Aviation

We should have a policy framework which will encourage investments in the ecommerce sector and the government should not get into the market by looking at micro issues of discounts and pricing.”

- Amitabh Kant Chief Executive, Niti Aayog

As per the released draft of India’s first e-commerce policy, e-commerce marketplaces would be prohibited from influencing the prices of goods and services, and most probably, the intention behind this is to make the prices compatible with offline traders

6

CargoConnect - september 2018

The airport sector needs Rs 3-4 lakh crore of investment in the next 1015 years. The goal is to bring in private-sector investment by making the tariff structure transparent and removing regulatory uncertainty.

R e c e n t l y, A l i b a b a ’s Executive Chairman, Jack Ma met Mukesh Ambani, C h a i r m a n , Re l i a n c e Industries Ltd and the news which came out could further tighten India’s extremely competitive e - c o m m e r c e s e c t o r.

According to sources, “Alibaba is willing to pick up a significant stake in Reliance Retail, preferably 50%, which will require Alibaba to invest $5-6 billion, It could also result in a strategic JV between Alibaba and Reliance Retail, with a smaller stake held by Alibaba.”

buzz

Centre proposes new financial model for greenfield airports

I

n a bid to make the airport sector more attractive to investors, the civil aviation ministry had recently proposed a new financial model for building greenfield airports aimed at making air travel more affordable and addressing concern of disputes related to tariff.

Under the new model, the concession fee given by the airport operator to the concessioning authority will be based on a ‘per passenger aeronautical model’.

“The passenger-based model will also be the base of the bidding process,” Civil Aviation Minister Suresh Prabhu said, while unveiling the transaction structure. The new model will encourage increased private investment, he said.

Currently, the transaction structure for airports, run under the joint venture route, is based on the revenue-sharing model.

The new model will be followed for building the Jewar airport in Uttar Pradesh.

The government announced a maximum blended aeronautical yield (MBAY) system which would be decided at the beginning of the concession period, thereby protecting the concessionaire from tariff uncertainty.

8

CargoConnect - september 2018

The ceiling amount has been set at `400 per passenger which would include all aeronautical charges like the user development fees for travellers, parking and landing charges for airlines. But the concession fee component, payable to the concessioning authority, will be bid out in terms of a per passenger sum.

In the new model, the government has increased the concession agreement period to 40 years from 30 years as per the released draft. Also, concessionaires will be allowed to develop up to 10 per cent of the airport land for nonaeronautical purposes.

“The airports sector needs `3-4 lakh crore of investment in the next 10-15 years. The goal is to bring in private-sector investment by making the tariff structure

Under the new model, the concession fee given by the airport operator to the concessioning authority will be based on a ‘per passenger aeronautical model’ transparent and removing regulatory uncertainty. It will make the tariff affordable for flyers,” Minister of State for Civil Aviation Jayant Sinha said. The ministry has invited public comments on the draft tariff structure till September 14.

The MBAY figure has been calculated on the basis of projected cash flow analysis for greenfield airports. “We studied tariff structure of five large airports for the last eight years and found out that the average aeronautical tariff ranged between `410 and `470. The average comes out to around `440 per passenger. We have kept the ceiling at `40 less than the average to keep the tariff affordable,” civil aviation secretary RN Choubey said. CC

focus

E-commerce driving growth in air cargo amid escalating tensionS of trade war Escalating tension of Trade War between US and China and rising fuel cost has put several developed and developing economies of the world on tenterhooks. The International Air Transport Association (IATA) has also predicted that the air cargo growth will slow down to four per cent in 2018, following a steep fall from the growth figure of 9.7 per cent last year. However, continuous growth in e-commerce, the transport of pharmaceuticals and other premium cargo services will drive growth in the air cargo sector. Gaurav Dubey takes views of the industry experts on the factors that will bring growth in the sector and challenges which booming e-commerce is throwing on the sector.

10 CargoConnect - september 2018

focus

A

ir cargo industry is considered as a barometer to measure the economic development and growth of a country. Development of the air cargo industry requires special attention due to specialisation of the industry. There is no denying to the fact that the industry touches our day-to-day life because of its involvement in the transportation of highly time sensitive, temperature controlled and high value goods. The share of transportation of perishable products, pharmaceutical items, live animals, electronics, etc. through air cargo is rising significantly. Involvement of wide range of logistics industry stake-holders play a crucial role in forming efficient end-to-end supply chain to ensure speedy delivery of products. The double-digit growth in e-commerce sector is largely being supported by Express Delivery Services which has different operational nature in the air cargo ecosystem.

E-commerce is expected to grow manifold in the next few years and demand will come majorly from small towns. In the NASSCOM and Akamai Technologies report titled: The Future of Internet in India and said, “The number of internet users in India is expected to grow by 730 million by 2020. Rural India will account for 75 per cent of this new internet user growth. The country also has one of the largest smart phone user bases in the world. This will further boost with government’s initiatives like Digital India Programme which also focuses on connecting each village panchayat of the country.�

september 2018 - CargoConnect

11

focus Growing protectionism could damage the airline industry: IATA Recently, IATA warned that growing protectionism in international trade could damage the airline industry.

The US president Donald Trump has renewed tariff threats against China and slapped duties on steel and aluminum on the country’s allies Canada, Mexico and the European Union. Trump’s actions drew retaliatory measures from some countries and Europe, Japan and other trading partners of the US are contesting Washington’s tariffs at the World Trade Organisation.

“We’re really worried about the trade situation,” Brian Pearce, Chief Economist of IATA said. “We’re still positive on the air cargo……….in the past when a restocking cycle ends, you had negative growth, we don’t expect that this year because we’ve seen ecommerce really benefit air transport because consumers need to get products and this is happening across borders now in the domestic US market.

The tariff on steel and aluminum will not have a direct impact on the freight business, as the commodities are not shipped by air, but escalation into further barriers will hamper trade and harm the industry,’’ he said.

The ever-rising growth of e-commerce industry will influence the imperative need for a robust and quality logistics,

III towns and rural markets.

Brian Pearce Chief Economist, IATA “We’re still positive on the air cargo………. in the past when a restocking cycle ends, you had negative growth, we don’t expect that this year because we’ve seen ecommerce really benefit air transport (sic).”

connecting rural footprint to the digital economy, which will in turn spur the growth of the logistics sector. Logistics is the key enabler and backbone of the e-commerce retail Industry. The logistics and fulfillment need of the industry have been evolving rapidly with the changing business dynamics. The industry has been witnessing a rapid scale-up in service orientation and complexity. There has been an everincreasing emphasis on service levels, speed, reliable transit times, customer centricity, geographical reach and penetration especially in tier-II and

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Earlier, people were habitual to moving out of their homes to go for shopping but rising trend of e-commerce has changed peoples’ attitude towards shopping. Now, people want their products to be delivered at their doorsteps and that too within a short span of time.

This changed attitude has given rise to several challenges for the Logistics industry.

Industry experts in the e-commerce sector, have projected a 47 per cent growth for the 2018-19 fiscal, a year after the online retail business saw a drop off owing to historical demonetisation announcement of `500 and `1,000 notes.

At the time of demonetisation, several e-commerce websites reported a fall in sales, especially due to fewer Cash on Delivery (CoD) orders. However, e-commerce consultants believe new shoppers from tier-II and III cities will lead to at least 25 per cent growth in the industry. The consultants cited the mobile internet revolution for the influx of new customers in the burgeoning e-commerce industry.

The report also projected that a 7 per cent increase will be contributed by customer base in metro cities, which will add up to a whopping 15 per cent growth for the year 2018-19.

focus Chitrangana’s Research and Survey team expects 2018 is golden year for specialised ecommerce startups and regional e-commerce model. The Research and Survey advises startups that they should keep themselves away from selling multiple category or marketplace business model. The startups should focus on specialised e-commerce category.

Through its new draft of e-commerce policy, the Govt. of India is determined to level the playing field for Indian start-ups in their battle against established overseas giants.

The policy, recently drafted by India’s Department of Consumer Affairs, is heavily tilted towards domestic firms. The new draft of e-commerce policy has reportedly recommended severe restrictions on online retain, including fewer discounts. Industry experts believe that the policy could prove as a deterrent to the global e-commerce giants.

The world trade is going global.

Few years back online sales were popular only in developed countries but now it has consolidated its position in developing countries like India and China as well. With a change in position of India, we are even becoming the largest consumer (like mobile phones) to use online sales. This has widened the scope for integrators like FedEx, DHL, UPS, etc. as they have ability to offer door to door and just-in-time delivery.

Alexandre de Juniac IATA’s Director General and CEO “The tariff war and increasingly volatile trade talks between the world’s two largest trading nations – China and the US - are rippling across the global economy putting a drag on both business and investor sentiment.

Trade wars only produce losers.”

The increase in e-commerce will increase business opportunities for all stakeholders involved in supply chain. Earlier, supply chain was limited from manufactures to whole sellers (bulk supply) to traders, while customers used to

14 CargoConnect - september 2018

According to available figures, 350 million Indians do online shopping and this number is set to touch 600 million mark by the year 2020.

According to a report by Worldpay, by the year 2034, India’s e-commerce market will overtake the US market to become the second largest in the world. In less than two decades, it will also go head-to-head with the Chinese e-commerce market. So, there is strong growth potential for the industry.

With the rise of internet penetration, a lot of companies are moving to the marketplace model. In case of air cargo, the supply side players are not many and hence, it is easy to connect them to an aggregator. But the demand side is so fragmented that it is challenging to get them

Battle lines

Chemicals 0.7

Trade in goods, 2017 Goods Covered by Proposed tariffs

Steel and aluminium 1.7 Printers 2.8

Plastics 3.5 Cereal Crops 1.3

E-commerce to boost air cargo industry Vipan Jain, Chief Operating Officer, Delhi Cargo Service Centre Pvt Ltd informs that Amazon as one of India’s largest and fastestgrowing e-commerce players, and with a long-term commitment to make e-commerce a habit for Indian customers, will boost investment in the necessary technology and infrastructure to develop the entire ecosystem.

buy things from the retailers. In the changed scenario, products are being delivered directly at doorstep.

It means if earlier 100 customers used to go out for shopping now the number has reduced to 20-25 people. This changed trend will also generate more job opportunities in delivery companies and will save time for end consumers.

Soyabeans 12.4

Propane 1.7 American exports to China, 2017 $130bn

Televisions and displays 4.5

Aircraft 16.3

American imports from China, 2017 $506bn

Electronics 26.9

Cotton 1.0

Other 1.0

Cars 10.6

Medical equipment 6.4

Chemicals 2.1 Cars 1.8 Other transport equipment 1.0 Other 0.4

focus all into the marketplace. However, with companies searching for newer avenues of growth, the uberisation of air cargo is bound to happen. We have already seen some traction on this in the road transport sector.

more viable. This will further help in transforming the nation’s economic landscape by shrinking distances and facilitating the growth of businesses along with seamless flow of investment.

Strengthening govt’s vision of ‘Make in India’ Cargo Airlines play a pivotal role in driving trade - domestic, imports and exports - by offering a reliable

During the last few years, the Air Cargo industry has also witnessed the entry of several leading private domestic and global cargo operators, bringing in the latest technology and best practices. The global operators include players such as DHL, FedEx, Emirates Sky Cargo and UPS. The key players in the domestic segment include Blue Dart, First Flight, DTDC, Skypak, Overnight, Professional Couriers, Quickjet etc.

Additionally, several e-commerce players such as Flipkart and Amazon also carry out their operations through their internal logistics centres such as Ekart and Amazon’s Transport Company.

The global airline industry is expected to achieve a collective net profit of almost USD 34 billion in 2018 despite rising fuel and other costs and looming threat of trade war and faster mode of transport. To strengthen the economy further, the government introduced a flagship campaign of ‘Make in India’ envisioning a ‘call to action’ for business leaders, potential partners and investors around the world to revive and support industries and to turn India into a manufacturing hub for global companies. Increased air connectivity enables various sectors to exploit the speed and reliability of air transport by shipping goods across the country,

Rachid Fergati MD Indian Sub-Continent, UPS “Supply chains in general must adapt to a new consumer paradigm, a shift reflected in decreased inventories along with faster and efficient fulfilment timelines.”

thereby minimising inventory costs and making the economy more efficient in its operations. Thus, it will be a key driver for the success of the Make in India campaign with making its sustainability essential.

The Government’s Civil Aviation Policy also focuses on increasing regional connectivity by providing financial support to operators and through utilising unused airports in the country. The air cargo industry will play an important role in supporting this vision by providing an additional revenue stream to the operators and making operations

Factors driving growth in the Air Cargo segment • India has witnessed tremendous growth of the e-commerce sector in recent years.

This growth is driven primarily by the large consumer base and an explosion in the number of users of smartphones and online sites. Cargo Airlines play a key role in delivering shipments in a timely manner so as to meet the requirements of customers located across the country.

Given that e-commerce operators rely entirely on the provision of express

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for in bound shipments, efficient final mile delivery and seamless information flow to the shipper is of utmost importance.”

• Changing business models such as Just-in-Time inventory management, manufacturing and global outsourcing models have increased the demand for time bound deliveries.

Felix Kreutel Senior Vice President Cargo, Frankfurt Airport

• End to end solutions provided by express service providers

“The biggest challenge is that the new market forces us to increase efficiency and offer data transparency. For that reason, we are intensively pushing our initiative of digitisation.”

• Growth of new time sensitive verticals like pharmaceuticals, healthcare, electronics, wireless telephony, automotive spares, travel, banking, financial and insurance services, telecom etc. is another factor leading to the increasing demand for air cargo transportation.

Supply chain must adapt to new consumer paradigm Rachid Fergati – MD Indian Sub-Continent, UPS says, “the air cargo industry has to keep pace with customer requirements and expectations. In e-commerce, the

timelines. Hence, demand for air cargo transport is rising worldwide.

“In India, UPS primarily focuses on cross border ecommerce. B2B

Global E-commerce: Growing Fast Retail E-Commerce Sales Worldwide, 2013-2018 (in trillions) $2.45 $2.20 $1.89 $1.59 $1.08

2013

$1.32

2014

2015

2016

2017

2018 Source: eMarketer, Dec. 2014 - rounded

thrust is more on delivery timeline than price. However, this is not only the case of retail delivery. Supply chains in general must adapt to a new consumer paradigm, a shift reflected in decreased inventories along with faster and efficient fulfilment

18 CargoConnect - september 2018

e-commerce segment, where the transaction is between businesses is emerging as a strong segment according to prominent SME lending platforms in India. For this segment, time sensitiveness, value added services, customs clearance

E-commerce, especially cross-border e-commerce, is predicted to grow significantly in the coming years.

Distinctive to this new market is that it promises very short delivery times. These can only be reached by using air cargo. Consequently, air cargo will definitely make profits from e-commerce. Mostly the segments of IT products, perishables and temperature sensitive products will continue to grow significantly.

In the fashion segment, we foresee continuous growth rates due to e-commerce.

It will be difficult for integrators to handle this massive volume alone. Already we are observing e-commerce streams handled by all logistics partners. Big forwarding companies are cooperating with e-commerce platforms and are more and more developing their own platforms where SMEs can book capacities for sending their goods abroad.

Market pushes the level of efficiency up While talking about challenges, Felix Kreutel, Senior Vice President Cargo, Frankfurt Airport elucidates, “The Frankfurt Airport offers enough capacity for the growing market, and security measures are state of-the-art in Germany. The biggest challenge is that the new market forces us to increase efficiency and offer data transparency. For that reason, we are intensively pushing the topic of digitisation. Digital development provides us the opportunity to offer faster, more efficient and more transparent processes.

With our community platform Fair@ Link, we have set the place for the

focus most advanced airport community system. What is favourable for the e-commerce business is that the German Customs are already linked to Fair@Link, thus ensuring fast handling. In order to continue the digital journey, we are planning on adding some additional modules to the platform, like for example integrating the shippers and other authorities directly to the system.

What further differentiates us from others is that Frankfurt Airport has a strong community where everyone works together. In order to satisfy the needs of the e-commerce business, it is crucial that the different players within the whole supply chain work closely together in order to have a seamless process when handing over the goods. Our ‘Air Cargo Community Frankfurt’ brings together all the players involved in the air cargo business and in particular also the authorities,” he adds.

In order to consolidate its position as an innovation leader in the industry, Frankfurt Airport is continuously working on new solutions so that more faster processes, greater reliability and transparency could be offered to the customers. The Frankfurt Airport is experimenting with drones and several projects pertaining to autonomous driving is in process.

Existing challenges in e-commerce and air cargo security Vipan Jain from Cargo Service Centre holds the view that the industry needs to work on more distribution centers and should cover the places which are far away from main cities. Security is a very vital aspect while accepting and delivering consignment. Sometimes, we get influenced by sudden surge in business volume and tend to ignore basic security requirement to carry consignments. It is not restricted to

20 CargoConnect - september 2018

in financing, infrastructure, logistics and focus on building customer loyalty to usher the next wave of sustainable growth in e-commerce.

Vipan Jain Chief Operating Officer, Delhi Cargo Service Centre Pvt Ltd “The increase in e-commerce will increase business opportunities for all stakeholders involved in supply chain. Earlier, supply chain was limited from manufactures to whole sellers (bulk supply) to trader and customers used to buy things from the retailers.

Today, products are being delivered directly at doorstep.”

goods but also covers online banking as well as there is a wide scope for this business to grow in near future considering traffic and parking restrictions.

Risks from the threat of trade war and geopolitical uncertainties have dented business confidence in the last couple of months The e-commerce industry is all about speed, accuracy and scale. There aren’t too many companies that can scale up their front and back end systems and pace up to manage the peak hour deliveries. Therefore, it is important to overcome challenges

“Due to lack of parking facilities, multi-modal transportation becomes a challenge. The load is on the Tier I airports while the Tier II and III airports have been neglected. The first thing is to decongest the Tier I airports and move the cargo to Tier II airports. Secondly there needs to be logistics parks close to the airport to facilitate multi-modal transport. Thirdly, investment needs to be made to improve material handling facilities at the airports,” asserts Sandeep Chatterjee, Sr Manager, Deloitte.

Technology plays an even crucial role in the e-commerce industry.

E-commerce needs a robust technology platform such as UPS’s Orion which can manage the flow of information seamlessly. The second crucial cog in the wheel for a logistics company is its people, who should be trained to respond with speed, agility and error free operation. It also requires creation of convenient solutions such as UPS My Choice®, as the customers demand it. Last but not the least, safety and security are critical issues since the shipper has already invested in the product and the consignee has paid for it. For UPS, the final measure of success is to meet expectations of both parties and keep delivering with consistency, efficiency and precision.

Air cargo is a sector which has been neglected for years because its passenger segment gets the more priority. There is lack of material handling facilities at airports specially for goods which require special treatment. Different locations of the transporters’ office and airports also make coordination seemingly difficult. CC

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cover story

India positioning itself as a global logistics destination

22 CargoConnect - september 2018

cover story

It seems India is all set and ready to host Industry high-level International events that hold a remarkable database. With the news of the pinnacle International Logistics Event, FIATA World Congress (FWC) – 2018, scheduled to be held in Delhi in September, the industry leaders are hopeful that the four-daylong event will help the logistics fraternity realise the untapped growth opportunities for doing the business in India. The event will also encourage International players to strategise on how to explore and invest in the Indian market. Ritika Arora Bhola and Upamanyu Borah, in line with the logistics professionals, elucidate more on the theme – The Future Starts Here, with establishing the importance of associations in bringing leaders together from across the globe, and whether India is on the path of becoming an ideal Air Cargo Hub soon

september 2018 - CargoConnect

23

cover story

I

n order to promote India as a ‘brand’ before the world’s logistics leaders and to help Indian Logistics Industry realise the untapped growth opportunities for doing business in India and abroad, the much sought after International Logistics Event, FIATA World Congress (FWC) 2018, organised by FFFAI is all set to kickstart in New Delhi. The four-day-long event will commence on September 26, 2018 and will culminate on September 29, 2018. Happening for the first time in India under the theme – “The Future Starts Here,” the event aims to benefit one and all – the freight forwarders, industry stakeholders, airlines, and ground handling firms, in every possible way.

The major highlight of the event is “Logistics Trends and Opportunities Ahead” where the focus would also be on the issues like investments in infrastructure and technology, transparency and speed in supply chain, benefiting government policies, and expanding business in India. The event and sessions alike will definitely provide an excellent platform to the leaders from across the globe to come together, discuss and raise common issues before the policy makers and authorities concerned for the larger interest of the logistics industry.

Undoubtedly, India has witnessed unprecedented growth rate in recent times. The logistics industry has witnessed major investments from both the public and private sectors in terms of infrastructure, technology upgradation, and expansion of all cargo related facilities in all modes of transport – sea, air and land. Apart from this, dedicated freight corridors setup under the Ministry of Railways to move goods between industrial heartlands in the North and ports

24 CargoConnect - september 2018

on the Eastern and Western coasts of India is to soon be operational.

Moreover, implementation of GST, reduction in dwell time, 24x7 customs clearance, Single Window Interface for Facilitating Trade (SWIFT), other digital initiatives, DPD, AEO, and above all, reaching out to industry people are some of the revolutionary steps taken by the government which the industry players genuinely appreciate and are thankful for.

The congress will emphasise on the prospect of intermodal transportation, logistics management and fostering socially responsible behaviour

Therefore, the logistics veterans and players feel that the theme of FWC 2018 is apt and logical as Indian Logistics Industry is in a very good position to deliver excellent and cost effective services to its customers, and is poised to become a global hub in the coming years.

Here, Debashis Dutta, Chairman, FIATA World Congress 2018, further informs about the event. He shares, “FWC 2018 is a platform for International Logistics providers where the participants can interact, discuss on the new business opportunities and generate their business globally.

There will be delegates from across the globe for attending the four day meet. We have the B2B opportunity for delegates to meet up with foreign customs brokers and freight forwarders from over 120 countries. For knowledge sharing, we have over 58 Speakers of International repute. The congress will emphasise on the prospect of intermodal transportation through air, sea and land, sharing international experiences, innovating total logistics management and fostering socially responsible behaviour.

FWC 2018 will help the worldwide freight forwarding industry to bloom their wings as it is expected that logistics would be the biggest beneficiary for the economic growth, opening the new vista to move ahead and tapping potential into the International market as we are poised for quantity jump for overall logistics development.”

Informing us further about the event, Ashish Pednekar, PastChairman, FFFAI says, “We have been effortfully working to organise this most important and prestigious international logistics event in India from the last couple of years. We are happy and bullish about the huge success of this event in New Delhi. The event will focus on the tremendous importance of logistics industry in India in view of present government’s impetus on manufacturing, trade facilitation – EXIM, and infrastructure development.

Our government, which is quite pro-active to facilitate logistics industry in the country, has

cover story “FWC 2018 will help the worldwide freight forwarding industry to bloom their wings as it is expected that logistics would be the biggest beneficiary for the economic growth.”

“The theme of the FWC 2018 is quite much apt in the context of the present global economy and trade scenario and its impact on the logistics industry.”

Samir J Shah

Debashis Dutta Chairman, FIATA World Congress 2018

promised full support to make FWC 2018 a grand success. We are happy to inform that Nitin Gadkari, Minister for Shipping, Road Transport and Highways, Government of India, has already confirmed his participation as the Chief Guest. We are also expecting active participation from other ministries, viz Civil Aviation, Commerce Industry, MSME, and the likes, to this game changer event.”

industry. The global logistics market currently generates over USD eight trillion annually and represents around 11 per cent of the global GDP. And, India remains one of the fastest growing economies and markets in the world.”

Justifying the theme, Samir J Shah, Partner, JBS Group of Companies and Immediate Past Chairman, FFFAI opines, “The theme of the FWC 2018 is quite much apt in the context of the present global economy and trade scenario and its impact on the logistics

by 2020, driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors. International trade is likely to remain the major drivers for freight forwarding and transportation companies.

Indian Government’s focus is on improved transportation

Shah takes a dig on the recent developments. He says, “The Indian freight transport market is expected to record a CAGR of 13.35 per cent

Partner, JBS Group of Companies and Immediate Past Chairman, FFFAI

infrastructure, industrial and economic reform initiatives such as ‘Make in India’, ‘Digital India’, and ‘Skill India.’ These are the key to drive growth opportunities for Indian LSPs, which in turn would promote growth of international business. The Indian freight forwarding industry has moved from being just a

The Indian freight transport market is expected to record a CAGR of 13.35 per cent by 2020, driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors

‘service-provider’ to provider of ‘endto-end supply chain solutions’.”

He hopes that FWC 2018 will help the freight forwarding industry realise the untapped growth opportunity within their supply chains for doing business

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cover story “I am hopeful that the underlying issues will be discussed and pondered over by the FWC participants, enabling people in the fraternity to interact and collectively evolve the future framework.”

Samir Mankad CEO & Executive Director, GSEC Limited

in India. “With end-to-end global logistics solutions, customer centricity and new business opportunities – the future for a global logistics network starts here. India will be in the top five economies of the world soon and each country would see growth in the cargo movements between them and India,” affirms Shah.

e-enabled process. It is in the backdrop that the FWC 2018 theme is rightly adopted as ‘The Future Starts Here.’

Observing the above, logistics expert and CEO & Executive Director for GSEC Limited, Samir Mankad stresses that an American fiction author, William Gibson had once coined the term - ‘The future is here- It is not just

“India is rapidly changing and moving on an e-enabled process. It is in the backdrop that the FWC 2018 theme is rightly adopted - The Future Starts Here.”

A V Vijaykumar Chairman, FFFAI

to tackle future challenges. Increasing global production, improving quality of life and subsequently consumption and a quest for more efficient logistics on a sustainable basis have created a need for more and more resources in terms of physical infrastructure and intelligent systems to make it happen. We will need more airports, ports, railways

Most of the developed and developing countries have or are establishing their base in India due to the vibrant potential India is offering for businesses

Agreeing with Shah, A V Vijaykumar, Chairman, FFFAI, and also a member of the organising committee says, “The forecast is that in the coming decade, India may reach the top position in terms of growth. Most of the developed and developing countries have or are establishing their base in India due to the vibrant potential India is offering.

Hence, the growth in future starts in India. On the logistic front, India is rapidly changing and moving to an

28 CargoConnect - september 2018

evenly distributed’. The context had then meant that things which would appear normal in future and part of day to day life, is already here for some.

On a positive note, Mankad continues, “In today’s business world, you have to stay relevant. You also have to stay one step ahead. With increasingly important role of logistics in general and freight forwarding in particular, this is an appropriate theme, as its time

and logistics facilities and we will need smarter and smarter systems to operate them. We will need efficient and effective regulatory policies and assist moves to future faster than ever. I am sure all these issues will be discussed and pondered over by the FIATA World Congress by the participants. It will also enable people in the fraternity to interact and collectively evolve the future framework.”

Logistics veteran, Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India Pvt Ltd, who has been actively participating in the event, shares that when he first heard the theme, it meant two things to

cover story “It’s the first time FWC 2018 event is happening in the country. I think Indian exports are really going to be explored. We definitely see some positive signs.”

Ramesh Mamidala CEO, Celebi Delhi Cargo Terminal Management India Pvt Ltd

him – “Firstly, there are many changes happening in the freight forwarding industry. Logistics, e-commerce and airlines business is growing; trade is going to change – so we don’t know what’s going to happen in the next one year but surely a lot many changes will be happening. Global trade relationships and trade businesses are definitely going to make huge impact on the Indian freight forwarding business.

So, after witnessing the event, we will review the outcome – then we could say more decisively whether the future will start from there.”

“Secondly, it’s the first time FWC 2018 event is happening our country, especially in Delhi. I think Indian exports are really going to be explored.

We are seeing some positive signs – good foundation has been laid, rules and regulations are in place and if everything continues as we are expecting, exports are surely going to increase which means air freight and the overall freight forwarding scenario will grow in India.

India is the future for air freight, the

kind of investments that we have done related to infrastructure and technology by constructing well-equipped airports across the country with world-class infrastructure and technologies, some

Global trade relationships and trade businesses are definitely going to make huge impact on the Indian freight forwarding business

airports have become transshipment hubs – we expect air freight to grow out of India. Definitely, many positive developments are going to happen in the years to come.”

Role of Trade Associations In India, we do have a good number of dedicated bodies for domestic as well as international air cargo and logistics

“Introduction of an Aviation Policy is a step in the right direction. However, we still have a long way to create a seamless cargo flow.”

T A Varghese President, ACAAI

industry like FIATA, TIACA, ACAAI, DACAAI, FFFAI, ACFI which provide an excellent platform to the freight forwarding community, airlines, ground handling agencies, importers/exporters and so and so forth to come together and discuss issues related to the Indian logistics/air freight industry. These associations call for B2B meetings, conferences, seminars, networking sessions or group discussions on a timely basis to address issues that need immediate attention of the authorities in the government and private sector.

The main objective of these associations is to tackle issues which restrict the growth of the industry and to improve the efficiency and deliver excellent services. With varied opinions from industry experts from across the country and globe, new ideas and strategies emerge and information is shared, on the basis of which businesses expand and investments decisions are made, while a lot more innovative steps are also taken side by side. The main aim of these associations is to benefit all stakeholders in one or the other way.

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cover story “Major airports in India are to be promoted as air cargo hubs. These in turn will boost air cargo growth and transform India into a major trade hub.”

“The event will focus on the tremendous importance of logistics industry in India in view of present government’s impetus on manufacturing, trade facilitation – EXIM, and infrastructure development.”

K S Kunwar

Ashish Pednekar

Director General, Air Cargo Forum of India

Past-Chairman, FFFAI

Observing the same, Vijayakumar suggests, “All these associations have a common thread – simplification of procedures and building up a more efficient and effective logistics industry.

Modes could be sea/air or even road/ rail. While working for the ultimate goal, approach and sectorial focus could be different. Logistics industry has a pivotal role in the economic growth as the cost has a bearing on the competitiveness of a product. In the pursuit of creating a cost and time efficient model, all these associations are relevant, and joint efforts for the common good always bring positive results. All these associations are recognised by the Indian Government and are a part of the various Ministerial Groups and Committees and thus they form a part of the consultative process.”

Agreeing with him, Dutta reiterates, “Trade bodies have representations from all stakeholders in the industry and their collective views are a balanced representative beneficial to the trade at large. These forums interacted with

32 CargoConnect - september 2018

various Government agencies and have been continuously addressing the major concerns of the industry/air/logistics trade. Need for a common platform for the entire logistics trade is now strongly felt. It has experienced that various trade members are making sincere efforts in bringing improvements in the

Driven by technology, the changes are now evolving faster than ever and now digitalisation is driving the growth of e-commerce

key areas of trade facilitation on the issue of industry. Looking at the present scenario, we all need to work jointly and put our whole hearted efforts for the success of our industry, since unity is the key to success.”

On the other hand, Mankad feels trade bodies, despite representing different yet related fraternities have played a great role in motivating authorities to improve physical infrastructure, influencing regulatory bodies to come out with more efficient policies and in general improve the quality of logistics.

He affirms, “From India’s point of view, these bodies help us move towards more global practices at a faster pace than earlier. We have seen a huge change in the recent past in terms of physical resources, systems as well as movement towards better manpower quality. Most of it has been a result of work done by these trade associations and the willing government at center.

There are times when these associations would find themselves at crosspurposes, but eventually the outcome is benefiting the overall logistics sector in India. In absence of representations, there could be chaos and confusion.

We, as air cargo custodians, very often find ourselves improving service quality based on actions or suggestions by these bodies which make our operations more efficient.”

Ram Menen, Independent Director in the International Board of EFL (Expofreight) expresses, “Globalisation of production and marketing has brought in better costeffciencies. Driven by technology, the changes are now evolving faster than ever and now digitalisation is driving the growth of e-commerce.

cover story “The government has also announced measures to push its ‘Make in India’ programme, including plans for two Defence Industrial Corridors and a new industryfriendly Defence Production Policy in 2018.”

Tim Strauss

Pierre de Bausset President and Managing Director, Airbus India

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. Definitely, every association has its own role to play for the purpose they have been established to serve. And, evidently all are significantly contributing to this industry’s development from their own capacity.”

government’s industrial and economic reform initiatives like ‘Make in India,’ ‘Digital India,’ and ‘Skills India.’

Experts believe these initiatives would promote the growth of international business, which will further enhance growth opportunities

India as a Cargo Hub As per reports, in a recent meeting with airlines and airport operators, Civil Aviation Minister Suresh Prabhu stressed on the need for making India the next cargo hub in the coming years. The minister had emphasised on manufacturing of aircraft hardware in India, developing a robust chopper service and carrying out a demand survey for development of routes. He also stated that there is great potential for air cargo in India, which is set to become a USD 5 trillion industry by 2025.

As per figures mentioned all over the web, the Indian freight transport market is expected to record a CAGR of 13.35 per cent by 2020, driven by the growth in various sectors such as retail, manufacturing, E-commerce, and FMCG etc. At present, the prime focus of the authorities is on improving and strengthening the overall infrastructure by utilising

34 CargoConnect - september 2018

“The global economy is super hot right now, and almost every sector is doing well. This is good news for all of us. We’ll continue to see a hot market with basic air cargo doing very well.”

Prime focus of the Government is on improving and strengthening the overall infrastructure through initiatives like ‘Make in India’ and other policy reforms

for Indian freight forwarders and logistics professionals.

India is renowned as a low cost service provider in the world. This has made

VP - Cargo, Air Canada

India an IT hub as several companies outsource their work to cut down their operational costs. However, logistics costs in India are pretty high due to several underlying problems, which are now being effectively addressed with the roll out of GST and E-way bill.

The future of Indian logistic industry looks bright, thanks to E-commerce penetration, economy revival, National Integrated Logistic Policy, 100 per cent FDI in warehouses, food storage facilities, etc. Now, industry leaders are very much positive and hopeful of India becoming an ideal cargo hub in the coming years.

Outlining the brighter prospects, Keki Patel, Cargo Manager India and Nepal, Emirates SkyCargo, annotates, “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. 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 diversifed 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.”

Pierre de Bausset, President and Managing Director, Airbus India, says “Industry leaders both from

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cover story “The Government’s aims to set up 400 regional airports having facilities for cold storages along with other logistics solutions within the vicinity of airports connected with rail, road and port.”

Sanjiv Edward

Chief Commercial Officer, DIAL

India and abroad have always collectively envisioned India as a highfunctioning economy focused on industry. Evidently, the govt has been addressing the aspirations of a modernising nation through initiatives to expand air connectivity under the UDAN scheme. The government has also announced measures to push its ‘Make in India’ programme, including plans for two Defence Industrial Corridors and a new industryfriendly Defence Production Policy in 2018. We hope such steps will foster a sustainable eco-system that promotes investment and helps expedite the modernisation of the armed forces in a constantly evolving strategic environment.”

On a positive note, Shah opines, “Taking into consideration the pace

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“Archaic govt. regulation from protectionism has changed to facilitating smoother international trade. We are currently in a dynamic evolutionary stage where old rules don’t apply and new ones are not written.”

Ram Menen

Independent Director in the International Board of EFL (Expofreight)

and potential of India’s economic development including manufacturing, domestic consumption and foreign trade supported by industry-friendly policies and infrastructure building exercises, we are quite confident that the country can achieve the ambitious goal of becoming a logistics hub in a stipulated time.”

Talking about the major trends being observed in the industry - shift of perishables trade growth from developed to developing countries due to income and population growth, Tim Strauss, VP

Growth trends for e-commerce are about 18 per cent while global demand for perishables continues to be strong. Both these sectors are likely to be a stabilising factor for air cargo in the present time - Cargo, Air Canada shares, “The global economy is super hot right now, and almost every sector is doing well. This is good news for all of us. We’ll continue to see a hot market with basic air cargo doing very well. Growth trends for e-commerce are about 18 per cent while global demand for perishables continues to be strong. Both these sectors are likely to be a stabilising factor for air cargo in the event of a downturn in the economy.

And, India being second in fruits and vegetable production in the world, after China, the vast production base offers the country tremendous opportunities for exports. However, the country is yet to address different perishable supply chain issues such as rising cost, capacity crunch, quality and regulatory pressures before it could reach a status to offer the customers a total logistics service.”

Reiterating the facts, a buoyant Sanjiv Edward, Chief Commercial Officer, DIAL replies, “The

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cover story “Export trade needs to be diversifed in terms of networks across the globe, friendly policies towards free trade and initiatives like bilateral agreements between countries will aid the industry.”

“The need of the hour is to pursue a logistics infrastructure strategy that minimises investment, maximises cost efficiency, reduces losses for users and is energy efficient.”

Keki Patel

Chandra Shekhar Pitre

Cargo Manager India and Nepal, Emirates SkyCargo

Government’s aim of setting up 400 regional airports having facilities for cold storages along with other logistics solutions within the vicinity of airports connected with rail, road and port, will certainly form a part of value added services and ease all the processes providing just-intime air cargo facilities with reduced cost to boost air cargo growth.”

The multi-modal integrated logistics are likely to increase India’s export with reduced logistics cost, as also will provide employment opportunity

chain and creating efficient air cargo hubs to complement the speed in the air with the speed on the ground as well. Our government is taking several initiatives for the betterment of infrastructure and connectivity and trying to transcend Indian Logistics Performance Ranking from 35 to 15 by 2020. Since the last five years, we have witnessed major investments from both the public and private sectors in infrastructure and technology up gradation. Air cargo in India grew 10 per cent between 2016- 2017 and 15 per cent last year. It is estimated that the

Air cargo in India grew 10% between 2016-17 and 15% last year. It is estimated that the present volumes can grow up to 4 times in the near future

for the country viz-a-viz making goods cheaper in the domestic market, he notes.

Citing figures, Dutta articulates, “India has an excellent geographic location and we have many airports which can be developed into air cargo hub.

This is possible by creating seamless linkage in the entire air cargo supply

38 CargoConnect - september 2018

present volumes can grow up to four times in the near future. The whole world will witness the growth in the cargo movements between them and India.”

However, Vijayakumar feels that India becoming a cargo hub– it’s a question of time. But 2020 could be a difficult proposition.

Regional Head –Commercial & Marketing, DP World Subcontinent

Along the same lines, T A Varghese, President, ACAAI puts down his viewpoint. He mentions, “In India, the percentage of goods which are transported by air is miniscule in comparison to other modes of transport such as ocean freight, rail and road freight. In order to increase air cargo, it is essential for the airport operators to provide modern infrastructure and facilities at the airports as well as the contiguous areas such as the approach roads to the air cargo complexes, adequate number of truck docks, etc.

In addition, it is also necessary that the airlines should offer competitive rates to the shippers and the agents to make air cargo a preferred mode of transportation of goods. Introduction of an Aviation Policy is a step in the right direction. However, we still have a long way to create a seamless cargo flow.”

K S Kunwar, Director General, Air Cargo Forum of India contemplates, “Almost all the major successful airports around the world are working on cargo hub and spoke model. It is supported by multimodal logistics to create a faster and efficient supply chain which has changed the pace of growth of the air freight industry around the world, as well as the growth business model of airports and airlines. Under this model, airlines use a hub airport to transfer traffic between destinations that may not be directly connected. Hubbing traffic is mainly the transit cargo, which, in western countries, forms a significant portion of its overall traffic. Multiple

cover story

options of connectivity giving varied and quickest route options to cargo traffic is another feature of hub airports.

Such flexible connectivity option is not possible where the airlines are following point to point connectivity model.”

He further elaborates, “The hubbing model brings a large number of benefits to all the stakeholders in the air logistics trade. It improves asset utilisation by capturing diverse traffic markets and growth options for saturated Origin and Destination (O&D) markets. For airlines it offers larger connectivity and higher frequencies within a given fleet size and for the EXIM trade it gives them more options (routes and frequencies), competitive prices and enhanced service levels.

Well, major airports in India are to be promoted as air cargo hubs for overall growth and development of India’s air cargo industry. These hub airports will boost air cargo growth and transform India into a major trade hub which in turn will not only boost Indian trade but trade through India as well. Nonetheless, it would benefit the Indian economy as a whole.”

Meanwhile, Mankad expresses, “We are just catering to our existing volumes and will probably be ready to handle double digit growth rate in cargo.

But to become a cargo hub, we need a significant change in all the factors which I have mentioned above. We

40 CargoConnect - september 2018

are a distance away from competing with other global hubs in terms of infrastructure as well as globally aligned policies and efficiency that can make it possible. But even if we manage to efficiently handle our own cargo,

Major airports in India are to be promoted as air cargo hubs for overall growth and development of India’s air cargo industry. These hub airports will boost air cargo growth and transform India into a major trade hub

with the double digit growth, it would be a lesser equation for transforming us to a global hub.”

To Sum it Up “The need of the hour is to pursue a logistics infrastructure strategy that minimises investment, maximises cost efficiency, reduces losses for users and is energy effcient. The country will have to build up its logistics infrastructure in a manner that creates an integrated network across favourable government policies and other modes to drive private sector participation and also streamline

processes across government bodies. I am much hopeful to see this materialise sooner,” avows Chandra Shekhar Pitre, Regional Head –Commercial & Marketing, DP World Subcontinent.

Apparently, the growth of the Indian logistics sector depends much upon its soft infrastructure like education, training and policy framework as much as the hard infrastructure. Though the big players are bringing in worldclass technology, standards of working and equipments to provide the best of services to customers, medium/small freight forwarders are still in the hope of reaching such milestones. Nevertheless, from time to time Indian government authorities/ Ministry of Civil Aviation has taken significant steps and invested whopping amounts in infrastructure, technology and manpower to overcome these challenges. Industry leaders also see a bright future for the industry and with big events such as FIATA World Congress 2018 taking place in the country it is presumed that India is ready to welcome the international players heartily. If this event goes as per the expectations of the industry leaders – it would definitely pave out many positive performance indicators such as increase in exports and investments in the Indian market by foreign players, international exposure for the local stakeholders, best standards and practices of working, and superlative infrastructure and technology for both passenger and freight. CC

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september 2018 - CargoConnect

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41

cover story

ACHIEVEMENTS AND PROSPECTS OF THE AVIATION SECTOR, 2017-18 Government Initiatives 2017 was a great year for the Indian logistics sector. From the rollout of GST and granting infrastructure status, to the continued growth of the internet of things (IoT), change has been the name of the game. Hopefully, 2018 will bring some certainty back into the mix. Now that we’ve laid a foundation of change, it’s time to build something meaningful on top of it. 2018 is the year for building.

Having said that, let’s take a look at the biggest trends of 2017 in the Indian aviation industry and what the future in 2018, and beyond, shall look like.

1

Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) shall connect 56 unserved airports and 31 unserved helipads across the country.

2

The Airports Authority of India (AAI) will undertake new development works at Lucknow, Deoghar, Rajkot and Allahabad airports.

3

Under the second round of Regional Connectivity Scheme (RCS 2), the government has awarded 325 routes to airlines as well as helicopter operators with the objective of enhancing �light services to hilly and remote areas.

4

Under the second round of Regional Connectivity Scheme (RCS 2), the government has awarded 325 routes to airlines as well as helicopter operators with the objective of enhancing �light services to hilly and remote areas.

Air tra�fic in India rose 15.80 per cent year-on-year to 280.24 million during April-February 2017-18.

During FY17, domestic passenger tra�fic increased by 22 per cent in comparison with growth rate of 21.24 per cent in FY16.

W

ith a promise of growth and improvements, the service oriented logistics industry is ready to expand beyond the horizons in the latter half of this decade. The industry which is worth around USD 160 billion is likely to touch USD 215 billion in the next two years with the implementation of GST. Rise of ecommerce logistics and increased domestic consumption will lead the way for the industry in the coming years. Integration of IT and technology will reduce the costs incurred and help meet the service demands.

42 CargoConnect - september 2018

Major Investments/ Developments

During FY17, international passenger tra�fic increased by 7.72 per cent.

Indian airports are emulating the Special Economic Zone (SEZ) Aerotropolis model to enhance revenues, focus on revenues from retail, advertising and vehicle parking, security equipment and services.

The E-Governance for Civil Aviation (eGCA) project envisages online service delivery, automation of systems and processes at the back-end with implementation of required IT infrastructure and service delivery framework.

cover story

4

THE RUNWAY

2

India is estimated to see an investment of US $25 billion in the next decade in the airports sector, and tra�fic growth of 13 per cent, according to Morgan Stanley.

1

Operations under UDAN scheme have started at 16 unserved airports.

3

Allocation to Civil Aviation Ministry has been tripled to Rs 6,602.86 crore (US$ 1,019.9 million) under Union Budget 2018-19.

6

7

8

5

India's first aviation university at Fursatganj in Uttar Pradesh's Rae Bareli district inaugurated on August 2017.

12

300 business jets, 300 small aircra�t and 250 helicopters are expected to be added to the current �leet of Indian carriers in the next five years.

Airport Authority of India (AAI) aims to bring around 250 airports under operation across the country by 2020.

The Prime Minister of India launched the construction of Navi Mumbai airport which is expected to be built at a cost of US$ 2.58 billion.

AAI is going to invest Rs 15,000 crore (US$ 2.32 billion) in 2018-19 for expanding existing terminals and constructing 15 new ones.

11

9

The Airports Authority of India (AAI) has allocated around Rs 3400 crore for the upgradation of airports in the North East region.

DigiYatra platform to add a digital experience for air travellers.

NABH Nirman aims to expand airport capacity by more than five times to handle a billion trips in a year.

10

In the coming 20 years, Indian companies will buy 2,100 new planes worth US$ 290 billion.

Also, domestic air tra�fic in India is expected to cross 150 million in FY19, on the back of unprecedented capacity induction by airlines.

Disclaimer: This information has been collected through secondary research and CARGOCONNECT is not responsible for any errors in the same.

september 2018 - CargoConnect

43

special feature

Global

trade Reflecting

myriad hues Global trade offers consumers and countries the exposure to new markets. Looking from the context of the aviation industry, the market is currently enjoying a significant position as far as global trade is concerned.

Porni Banerjee with the help of experts informs about how air cargo has become the backbone in supporting the current global trading system - its overall scenario and existing challenges, with also highlighting the major initiatives taken by the industry to boost the sector for facilitating trade growth.

44 CargoConnect - september 2018

special feature

G

lobal trade has played a significant role in bolstering economic development and making countries more competitive and productive. Evidently, it has promoted income growth and supported poverty reduction.

The international trade is now at about three times the level it was in the early 1950s. Concerning airline industry, it is an important contributor towards economic development. So much so, it has not only increased world trade activity by enabling faster and easier movement of passengers and goods, but has also provided jobs to millions of people.

Global trade by air cargo and its significance Air transport is vital for manufacture’s trade, particularly trade in components which is a major part of cross border trade today.

According to a study conducted by IATA, there will be a rise in cargo carried to 62.5 million tonnes in 2018 representing less than 1 per cent of world trade by volume. However, it represents world trade of over 35 per cent by value. The value of goods

september 2018 - CargoConnect

45

special feature International air cargo grew at 9.17 per cent. India will grow more than what the IATA has estimated. My belief is India will surpass the number” Tushar K Jani, Chairman, Cargo Service Center

carried by airlines is expected to exceed $6.2 trillion in 2018, representing 7.4 per cent of world GDP.

Air cargo industry continues to face challenges when it comes to sustainability, profitability and customer satisfaction.

Moreover, competition is stronger today than ever before when there is an availability of other modes of transportation such as waterways and railways.

“Looking from the Indian perspective, 35 per cent of value of the cargo moves via air, which is unchanged. As long as we try to achieve that, we will continue to have volume. Secondly, domestic cargo will go up with a lot of capacity available in the domestic leg. There is a potential to grow the domestic sector. But of course, we have a tough competition with the trucking. International air cargo will grow. According to IATA, International air cargo grew at 9.17 per cent. India will grow more than what the IATA has estimated. My belief is India will surpass the number”, said Tushar K Jani, Chairman, Cargo Service Centre.

relies on air transport for its speed and efficiency in transporting high-value, time and temperature sensitive cargo,

Average flight hours per day

% of AFTKs (SA) 47%

11.5

Industry-wide freight load factor (RHS)

11.0

46% 45%

10.5

44% 43%

10.0 42%

Large widebody freighter aircraft utilization (LHS) 9.5 20.12

20.13

20.14

Sources : Boeing, IATA Monthly Statistics

Air cargo is essential in our daily lives in all aspects. Moving perishable goods from one side of the world to the other would not be possible without air transport. The pharmaceutical industry

46 CargoConnect - september 2018

20.15

20.16

20.17

41%

*Monthly data

particularly vaccines. USD13.4 billion is spent worldwide on temperature controlled bio pharma logistics. By 2021, it is estimated that this will rise to USD 16.6 billion.

In today’s world, air freight of live animals is considered the most humane and expedient method of transport over long distances. Most people have personal electronic devices that were built using a global supply chain linked by air. Amazon, Alibaba, eBay and other e-commerce companies rely on the express delivery services made possible by aviation to get those devices, and so much more, to their customers. In China, online shoppers bought goods worth USD17.8 billion, representing 657 million packages, and air transport plays an essential role in their delivery.

Talking about the expansion and importance and increased growth of product delivery, Yashpal Sharma, Managing Director, Skyways Group, added, “delivery of product has become the key factor today and it is important that engagements and deliberations on service excellence take place in air cargo industry too.”

Over-capacity – still a major challenge Over-capacity is due to an expansion of the passenger business as well as an increase in the freighter fleet.

Additional cargo capacity from wide body belly passenger aircraft has continued to exceed that from freighter only fleet. Dedicated air freighters continue to play an essential role in the carriage of air cargo globally. Certain factors, such as the departure and arrival times, type and size of cargo, and difference between cargo and passenger destinations limit the use of belly cargo. Large wide-body freighter aircraft has witnessed a rise in its utilisation in large scale.

Apart from over capacity, the air cargo

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special feature Delivery of product has become the key factor today and it is important that engagements and deliberations on service excellence take place in air cargo industry too,” Yashpal Sharma, Managing Director, Skyways Group

industry continues to face challenges when it comes to sustainability, profitability and customer satisfaction.

Moreover, competition is stronger today than ever before when there is an availability of other modes of transportation such as waterways and railways. Customers are also looking at availing all types transport modes in order to balance costs and speed. In parallel, the industry has been slow to

the efficiency and service quality of air cargo are the major concerns at the earliest.

Looking at the challenges while carrying out trade worldwide via air, Jani opined, “Our first challenge is to better train people. Air cargo requires a lot of technical knowledge – be it safety, security and the technical aspects of the airlines and aircrafts. We currently have

sit with the stakeholders and find out new technologies, processes and review the entire process about how we can make procedures simple to carry out smooth trade without compromising with security”.

Trade agreements and trade protectionism Trade protectionism has a negative impact on world trade. Although

Global air cargo market share broken down by region (2017) Latin America, 2.80%

Africa, 1.60%

Middle East, 13.90%

Asia Pacific, 37.40%

North America, 20.70%

Implementation of electronic airway bill worldwide even today is just around 50 per cent.

Each day, millions of pieces of paper airway bill are exchanged across the supply chain, which increases the chance of error and reduces the efficiency of the process

Europe, 23.50% adapt to an increased electronic world that demands more transparency, speed and efficiency. Implementation of electronic airway bill worldwide even today is just around 50 per cent. Each day, millions of pieces of paper airway bill are exchanged across the supply chain, which increases the chance of error and reduces the efficiency of the process, thereby resulting tremendous problems for customers and partners.

This ultimately leads to poor quality of service. Therefore, increasing

48 CargoConnect - september 2018

a shortage of trained professionals. I opine that we must have more institutes.

Government agencies are not approving such institutes at a faster pace.

Secondly, as far as security procedures are concerned, Indian government should relook at it. Also, government must consider technology so that we need not to compromise with security. If you look at the security of the air cargo, it is part of the air cargo operations.

Without cargo being secured, it cannot go to the aircraft. Security agencies must

there has been an overall increase in trade volumes in the recent months, several administrative bodies continue to express threats of increased protectionist measures and possible retaliation actions. Such a move remains a concern for the air cargo industry. Consequently, a rise in protectionism rhetoric on trade contributed to an environment of policy uncertainty. Vigilance and a careful scrutiny of the trade policy environment remain an essential factor.

special feature 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.�

Glyn Hughes, Global Head of Cargo, IATA

According to WTO, G20 economies have put into application 42 new trade restrictive measures between October 2016 and May 2017. At the same time period, G20 countries also brought 42 measures into utilisation, which is aimed at facilitating trade. OECD estimates that the implementation of the WTO Trade Facilitation Agreement (TFA), which entered into force on 22 February, 2017, has the probability to cut costs of trade between 12 per cent and 18 per cent for countries and provide a much-needed boost to global growth which should continue in 2018.

Hopefully, implementation of the TFA will not only bolster trade worldwide, but make border procedures faster as well, particularly in developing economies. As a result, such a move is likely to foster the participation of developing countries in the

50 CargoConnect - september 2018

global market. A strong and positive prediction as well as harmonisation and standardisation of procedures will also have a positive impact for the air cargo industry. A recent IATA commissioned study showed that a 1 per cent increase in air cargo connectivity was associated

Value

of global trade transported by air

Aviation

$6.4 trillion

2020 Surface modes High value, time sensitive: Proportion of global trade transported by air Source : Air Transport Action Group (ATAG ), 2014

with a 6.3 per cent increase in a country’s total trade.

Cargo Security Ensuring safety is the topmost priority.

There is a proper development and maintenance of regulations, standards, training, and workshops to ensure the safety of aircraft, passengers and crew members.Despite existing stringent security measures, terrorists and criminals keep on developing new techniques and weapons with the objective to bypass those security measures and commit acts of unlawful interference against aviation entities.

As a consequence, regulators and industry are focusing more on the security measures concerning air cargo.

The agencies have been exploring and trying to enhance cargo screening methods and the introduction of measures to secure cargo upstream in the supply chain.

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special feature States have begun to take proactive measures to promote air connectivity like reducing sales tax on Aviation Turbine Fuel (ATF), development of no-frills airport, promotion of aviation academies and supportive policies for airlines and tourism” Amber Dubey, KPMG’s partner & head, Aerospace and Defence

IATA and industry initiatives enhancing supply chain security To support regulators and strengthen supply chain security, IATA and the industry are working on multilayered approaches that include: Application of security measures at a minimum or baseline level prescribed by ICAO’s Annex 17 Acquisition of a culture of security to enhance risk awareness and response Transmission of standard data exchange messages to rely security information (e.g. XML) Implementation of innovative technologies that are applied to cargo screening

Modernising air cargo Sharing views on trade facilitation by air, Brian Pearce, Chief Economist at IATA said, “Air cargo is 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 US $5.6 trillion worth of goods annually, or US $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

52 CargoConnect - september 2018

and implement policies for the efficient facilitation of air cargo.”

“World trade is moving faster and inspite of improvement on ocean freight side, air cargo is still not losing its grip on transporting value of goods by air, which is close to 35 per cent of total export”, said Jain.

The practical industr y modernisation priorities include: Facilitation of electronic processing, through electronic Air Waybills (e-AWB) and e-freight Implementation by gover nments of “single window” processing - u l t i m at e ly e n a bl i n g 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 t o appr o ve r e le a s e o f shipments in advance of their actual arrival

“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,” said Glyn Hughes, Global Head of Cargo, IATA. Discussing about the significant changes that have been witnessed by the air cargo industry, Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management Pvt Ltd, too opined, “The air cargo market has seen remarkable changes with initiatives taken by different sectors such as high end services being offered to the air cargo customers by the airlines as larger cargo friendly aircraft have come into the market. The door-todoor services offered by the express carriers, continuous up-gradation in the terminal facilities and technological advancements in the warehousing processes by cargo terminal operators, steps being taken by the regulatory authorities for reduction in cargo dwell time at the Indian airports which will augment the capacity of warehouse leading to the overall growth in the air cargo throughput.”

India to become world’s biggest aviation market by 2030 India is all set to become the world’s largest aviation market by 2030, and the third-largest by 2020, a joint study conducted by FICCI and consultant entity KPMG. Several factors including the entry of low-cost carriers, modern airports,

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foreign direct investment in domestic airlines, cutting-edge information technology and increasing importance of regional connectivity have resulted in the expansion of civil aviation in the country. In terms of market size, the industry was already among the top 10 in the world with a size of US$ 16 billion. However, experts claim that the figure is just a mere fraction of what can actually be achieved.

“States have begun to take proactive measures to promote air connectivity like reducing sales tax on Aviation Turbine Fuel (ATF), development of

Dubey, KPMG’s partner & head, Aerospace and Defence.

According to IATA, India is likely to overtake the UK to become the third largest air passenger market by 2025. China will be the top market, followed by the US

no-frills airport, promotion of aviation academies and supportive policies for airlines and tourism”, said Amber

Global air cargo traffic growth (2007 to 2017) 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0%

54 CargoConnect - september 2018

Presently, India is the ninth largest civil aviation market in the world. According to Tony Tyler, Former Director General and CEO, International Air Transport Association (IATA), “The world is focused on Indian aviation – from manufacturers, tourism boards, airlines and global businesses to individual travellers, shippers and businessmen.

If we can find common purpose among all stakeholders in Indian aviation, a bright future is at hand.”

According to IATA, India is likely to overtake the UK to become the third largest air passenger market by 2025.

China will be the top market, followed by the US. “The biggest driver of demand will be the Asia-Pacific region. The region will be the source of more than half the new passengers over the next two decades... the UK will fall to fifth place, surpassed

by India in 2025, and Indonesia in 2030,” IATA mentioned in a report.

It is estimated that by 2036, the passenger traffic of India will be about 478 million. This will be more than that of Japan and Germany. Currently, India’s passenger traffic is 141 million. CC

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MANDEEP WALIA Head- Supply Chain Management and Logistics Man Trucks

AKASH BANSAL Country Head- Logistics Om Logistics Limited

PRABU NITHYANANDHAM General Manager- Asia Pacific Logistics and Customs Ford Motor Pvt Ltd

NIDHISH KUCHHAL General ManagerDemand Chain Management Mahindra & Mahindra

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feature

Is Indian Air Cargo Industry ready to take off?

58 CargoConnect - september 2018

feature

T

he Indian Air Cargo Industry has been witnessing its ‘growth graph’ moving in upward direction, thereby, promising remarkable growth, development and ample of opportunities for freight forwarders. Even veteran freight forwarders, in various forums and events avow about delivering not just good quality services but ‘excellence’ to their customers worldwide.

Also, as per reports, India is expected to become the world’s third largest aviation market by 2020. The Indian air cargo segment is expected to register a growth of 14-15 per cent in FY18 as against 12 per cent last year. The sector is expected to grow in double digits over the next five years. “Increasing volumes, enhanced connectivity, beneficial policies and regulatory environment, with single window clearance clubbed It seems the Indian Air Cargo Industry with improved infrastructure makes India lucrative for international cargo operators,” states reports. has delivered what it promised-

tremendous growth, excellent services and customer satisfaction, over the years. The industry is truly witnessing a revolution with digitisation, paperless transactions, growth of e-commerce, and various government initiatives to boost the growth. Apparently, the day is not far when the industry will become a global hub for air cargo. Ritika Arora Bhola, with the help of experts finds out if the industry is moving in the right direction?

Air cargo industry plays a crucial role in the economic development and growth of a country as it is a specialised sector that involves transportation of a variety of cargo from one destination to another – be it shipments of highly time-sensitive, temperaturecontrolled goods, luxury products, high value goods, apparels, or pharmaceuticals.

To drive more growth and profitability, the Indian Government is actively investing whopping amounts into infrastructure development by building worldclass airports, air freight stations, bringing in latest technologies, excellent and cost-effective facilities at the cargo terminals, introducing smart and userfriendly cargo tracking applications, improving existing infrastructure and transportation facilities, and lot more.

The Air Cargo Community System under the National Civil Aviation Policy 2016 has also been created by the Government of India to ensure global competitiveness and sustainable growth of Indian Air Cargo Industry.

Another initiative to uplift the Indian cargo industry and making it the foremost integrated logistics network operator with primary focus on air cargo handling, Airports Authority of India has launched a subsidiary company, AAI Cargo Logistics & Allied Services Company Limited.

According to a report by the Centre for Asia Pacific Aviation (CAPA) and SITA, (Specialists in Air Transport Communications and IT Solutions), Indian aviation industry is examining whether the country has the right investment, infrastructure and regulatory system to enable this growth.

september 2018 - CargoConnect

59

feature As per the analysis, Indian aviation industry has changed remarkably since 2000 when just one carrier flew overseas, while today, there are many. Passenger traffic has also increased from 42 million to 150 million and the country’s fleet has grown from 119 aircraft to 437. By 2020, India is expected to have a fleet of more than 1,000 scheduled aircraft and 2,000 general aviation aircraft, it said.

Total investment in the sector by 2020 is expected to reach USD120 billion, of which USD80 billion is represented by aircraft, USD30 billion in airport infrastructure and USD10 billion in ancillary services such as ground handling, maintenance, cargo handling air traffic management, security and training.

The recent Air Cargo India’18 exhibition in Mumbai was organised with the sole aim to bring GSAs, shippers, airlines and forwarders together on one common platform in conversation to solve any grievances and showcase their products to all. The government authorities have also supported these industry relevant exhibitions and we can foresee the Air Cargo Industry to be at greater heights in the coming years.”

Ronnie Goveas Managing Director, Skylink Freight Forwarders Pvt Ltd

Air Cargo Industry Reaching for the Skies However, what lies beneath is one vital question. Is Indian Air Cargo Industry ready to take off, to be a global leader, to become a full-fledged air cargo hub, to be a one one-stop market for the players worldwide?

Considering India’s potential to play a much larger role in the global air cargo market, Ronnie Goveas, Managing Director, Skylink Freight Forwarders Pvt Ltd comments, “Indian Air Cargo operations are expanding and spreading its wings in different directions. As you know, India is one of the fastest growing economies in the world. Having said that, the recent Air Cargo India’18 exhibition in Mumbai was organised with the sole aim to bring GSAs, shippers, airlines and forwarders together on one common platform in conversation to solve any grievances and showcase their products to all. The government authorities have also supported these industry relevant exhibitions and we can foresee the Air Cargo Industry to be at greater heights in the coming years.”

Agreeing with Goveas, Jaideep Raha, Managing Director, Jetex Oceanair Pvt Ltd affirms, “The Indian Air Cargo Industry is fully ready for takeoff. I completely support my statement, since we now have world-class terminal operators handling air cargo. And, in fact it is good to see that at some airports there are multiple terminal operators functioning.

This is definitely a good sign, and encouraging too. The most important factor is that the government at the center and the respective state governments are now very much focused on logistics and consolidation of infrastructure. The proof of the same is that the Government is planning a National Air Cargo Policy wherein ACAAI (The Air Cargo Agents

According to the 2017 Agility Emerging Markets Logistics Index, India climbed to the second position in the 2017 Index, switching spots with UAE. China, the world’s second-largest economy, again topped the rankings.

The industry has ushered in a new wave of expansion driven by Low Activity in AAI airports - shares (%) – FY17 Cost Carriers (LCC), modern airports, Foreign Direct Investments (FDI) 120% in domestic airlines, cutting-edge Information Technology (IT), growing 100% 80% 78% 38% emphasis on No-Frills Airports (NFA) 80% and regional connectivity. At present, the Indian Civil Aviation Industry is 60% among the top 10 in the world with a 62% size of around USD 16 billion.

40%

Adding weight to the above mentioned statistics, the data from the Airports Authority of India (AAI) also clears I nd i a n c a r r ie rs pl a n to d ouble their fleet size by 2020 to around 800 aircraft.

60 CargoConnect - september 2018

20% 0%

20%

22%

Aircraft movement

Passenger traffic

International

Domestic

Freight Traffic

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feature Association of India) has been asked to give its inputs and suggestions to draft the framework of the same.”

Citing significant facts, Bharat Thakkar, Joint Managing Director, Zeus Air Services Pvt Ltd clarifies, “At a time when global slowdown had affected air cargo uplifts, Indian Air Cargo Industry continued its steady growth with pharma, textile, machinery and chemical exports. The International Air Transport Association (IATA) Airline Industry Forecast 20142018 shows that international freight volumes are expected to increase at a compound annual growth rate (CAGR) of 4.1 per cent over the next five years. Emerging economies, particularly in the Middle East and Africa, will be the fastest-’growing markets. Air cargo remains as vital to the global economic system as ever.”

The most important factor is that the government at the center and the respective state governments are now very much focused on logistics and consolidation of infrastructure. The proof of the same is that the Government is planning a National Air Cargo Policy wherein ACAAI (The Air Cargo Agents Association of India) has been asked to give its inputs and suggestions to draft the framework of the same.”

Jaideep Raha Managing Director, Jetex Oceanair Pvt Ltd

He adds, “This year, more than $6.8 trillion worth of goods, equivalent to 35 per cent of total world trade by value, will be transported around the world by air. So it is welcome to see a forecast for a return to growth for the air cargo sector after several years in the doldrums. An average of more than 4per cent growth for the next five years would be a marked improvement on the performance in recent years. Since 2011, for example, growth in freight tonnes has averaged just 0.63 per cent per year. India will be the second fastest-growing market with a CAGR of 6.8 per cent to add 622,000 extra tonnes.

Bangladesh (339,000 total freight tonnes), Ethiopia (319,000) and Nigeria (276,000) make up the remainder of the top five.

India is all set to grow into one of the ten largest international freight markets by this year - as indicated by IATA.” Highlighting the significant untapped potential for air cargo in India, Vikram Kumar, Director, CTC Air Carriers Pvt Ltd shares, “The Indian Air Cargo Industry is poised for a huge takeoff especially in the coming year. With the imposition of higher duties on Chinese Products by USA and the counter

62 CargoConnect - september 2018

POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR … (1/2) Greater focus on Infrastructure 1.

GOI envisions airport infrastructure investment of US$ 11.4 billion under the 12th Five Year Plan (201217)

2.

The Indian government is planning to invest US$ 1.83 billion for development of airport infrastructure along with aviation navigation services by 2026

Liberalisation, Open Sky Policy 1.

With the opening of the airport sector to private participation, six airports across major cities are being developed under the PPP model

2.

Currently 60 per cent of airport traffic is handled under the PPP model, while the remaining 40 per cent is managed by the AAI

3.

Increased traffic rights under bilateral agreements with foreign countries

4.

India signed its 1st open skies agreement with Greece

5.

In May 2017, India and Spain signed an MoU for cooperation in civil aviation industry. The MoU would spur greater trade, investment, tourism and cultural exchanges between both the countries

6.

In April 2017, Brussels Airlines launched its service from Brussels to Mumbai, its 1st flight to Asia. The launch is a part of Lufthansa’s group strategy to expand its business in India

Encouragement to FDI 1.

The GOI has allowed 100 per cent FDI under automatic route for greenfield projects, whereas, 74 per cent FDI is allowed under automatic route for brownfield projects

2.

100 per cent FDI is allowed under automatic route in scheduled air transport service, regional air transport service and domestic scheduled passenger airline. FDI over 49 per cent would require government approval

3.

Approval of 49 per cent FDI in aviation for foreign carriers

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feature effect of WTO countries imposing tariffs on American products, the beneficiary of this trade tussle between the economic superpowers will be countries like India whose costs will go lower by default. Also, with the depreciation of the Rupee and the appreciation of the Chinese yuan, the Indian market will definitely become more lucrative and cheaper for buying commodities. The immediate application of these tariffs will shift a bulk of orders to India suppliers, a major portion of which will have to be uplifted by air due to time constraints.”

He continues, “The acceptance and settling of GST with the smoothening out of refund mechanism has eased the working capital pressure on exporters and once the system is stable and understood, there will be a positive shift in manufacturing facilities being shifted into India. The prime example of this are the Chinese mobile phone companies which have set up factories in India and companies like Samsung which has

At a time when global slowdown had affected air cargo uplifts, Indian Air Cargo Industry continued its steady growth with pharma, textile, machinery and chemical exports.

India will be the second fastest-growing market with a CAGR of 6.8 per cent to add 622,000 extra tonnes. Bangladesh (339,000 total freight tonnes), Ethiopia (319,000) and Nigeria (276,000) make up the remainder of the top five.”

POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR… (2/2) Participation and Duties 1.

100 per cent tax exemption for airport projects for a period of 10 years

2.

Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers are exempted completely from customs and countervailing duties

Budgetary Support 1.

In the Union Budget for FY17, Government of India, for the purpose of equity infusion has earmarked US$ 255.86 million for Air India Limited

2.

Also, a budget of about US$ 14.98 million has been allocated to Airports Authority of India, of which US$ 4.29 million has been attributed towards Pakyong, Sikkim project

3.

The government has planned to allocate a sum of US$ 11.80 million to Directorate General of Civil Aviation to implement various schemes

4.

The government has also supported the Bureau of Civil Aviation Security with US$ 9.71 million to meet their expenditure

5.

The Civil Aviation Ministry to receive budgetary funds of US$ 768.64 million an increase of over 22 per cent in the Union Budget for 2017 as compared to the funds allocated in Union Budget 2016

Bharat Thakkar Joint Managing Director, Zeus Air Services Pvt Ltd

recently unveiled their largest ever factory out of Korea in India at Noida. The GST on international air freight which has a sunset clause till September 2018 needs to be revisited and extended indefinitely as it was a major impediment for exports by air choking the working capital requirements of the exporters and freight forwarders to an extent of driving many companies to defaults and bankruptcy.”

Sunil Arora, Managing Director, Delta Air Freight Services Pvt Ltd and VP – ACAAI had recently in an exclusive interview assured that at the pace with which India’s Air Cargo industry is moving ahead, it is certain that it will reach significant milestones. He reiterates, “Few years back, the focus of the government was mainly on the passenger side but from the last few years, I have seen a dramatic change. The ministry has dedicated departments and team of people who are looking after cargo. So much emphasis and importance has been given on improving air cargo logistics.

64 CargoConnect - september 2018

National Civil Aviation Policy, 2016 1.

The policy covers 22 areas of the civil aviation sector

2.

Regional Connectivity Scheme (RCS) has been launched under the policy

3.

Airlines can commence international operations and have to deploy 20 aircrafts or 20 per cent of total capacity (whichever is higher) for domestic operations.

Source: : Ministry of Civil Aviation

feature Recently, the government has launched integrated web-based National Air Cargo Community System – through which the country’s entire logistics scenario is going to be on one single platform. Commendable transformations are happening; our airports are completely automated, paperless transactions are being processed, while digitisation and standardisation are already there.

Even today, customs department is a body which supports freight forwarders unlike earlier. Now, supply chain management, the superset of logistics management is being taken quite seriously. Moreover, the industry has been granted the ‘Industry Status.’ We have connectivity all over India, international cargo is growing, domestic connectivity is booming – airports are well-equipped, domestic airports have in-design warehouses for air cargo facilities with advanced cold-chains in place. Both government and industry

With the depreciation of the Rupee and the appreciation of the Chinese yuan the Indian market will definitely become more lucrative and cheaper for buying commodities.

The immediate application of these tariffs will shift a bulk of orders to India suppliers, a major portion of which will have to be uplifted by air due to time constraints.”

Vikram Kumar Director, CTC Air Carriers Pvt Ltd

is supporting; we are now being looked upon as a powerful market in the world. I feel, in a few years, we are going to lead the logistics industry.”

Boost in Air Cargo Performance All thanks to the rapid growth of E-commerce industry, government schemes like ‘Make in India’ campaign and active participation of authorities in boosting infrastructure, technology and manpower – Indian air cargo industry has finally reached a point of no looking back. It has not only made its presence felt globally but also opened doors for international players to come and invest.

Observing the relativities, Goveas says, “’Make in India’ has really boosted our performance better than the past and India has achieved greater importance in its performance especially in the Air Cargo supply chain. This major initiative announced by the Prime Minister of India has gained momentum and attention of all business trade partners within the country which has enhanced smooth flow of delivery outside India. The growing E-commerce industry has really helped the air cargo industry grow in different directions and provide opportunity for the Indian stakeholders especially in improving their services and to bring in new ideas by helping reduce the dwell time of each transaction to and fro within the country. The Indian Air Cargo industry, having its major share of shipments are pharmaceuticals, and the Indian pharmaceuticals market is

STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS Growing demand

Policy support

Increasing investments

Expanding middle income group and working population

Greater government focus on infrastructure

AAI driving large modernisation, development projects; expansion and upgradation of existing airports; development of low-cost airports

Rising domestic and foreign tourists and travellers

Strong growth in external trade 66 CargoConnect - september 2018

Inviting

Increasing liberalisation, Open Sky Policy

Policy sops, FDI encouragement

Resulting in

Increasing private sector participation, increasing greenfield projects Strong projected demand making returns attractive

feature

the third largest in terms of volume and ranks thirteenth in terms of value. The Indian government has taken tremendous positive interest by attracting foreign investments and developing airport infrastructure which was a long ongoing demand from everyone. This will boost the production levels and dwell time delivery with turning this into a business opportunity for many of them.”

The ministry has dedicated departments and team of people who are looking after cargo. So much emphasis and importance has been given on improving air cargo logistics. Recently, the government has launched integrated web-based National Air Cargo Community System – through which the country’s entire logistics scenario is going to be on one single platform.”

Sunil Arora Managing Director, Delta Air Freight Services Pvt Ltd and VP – ACAAI

On the other hand, Raha points out that all these years India was perceived as service hub of the world but the government’s initiative of ‘Make in India’ definitely helped in increasing the air cargo industry’s growth rate. In fact, it has actually accelerated the growth rate. The E-commerce industry has also tremendously contributed to the overall increase in air cargo volumes both domestic and international. On the International front it’s primarily on the imports, which is very good for the airlines as they have balance of both import and export load factor making their operations economical and thereby forwarders get better aggregate rates and which is ultimately cascaded down to the end user.”

Keeping aside the Make in India promotion and the booming E-commerce industry, Thakkar focuses on the formation of Air Cargo Logistics Promotion Board (ACLPB) and AAI Cargo

68 CargoConnect - september 2018

Logistics & Allied Services (AAICLAS) – other initiatives of the government to boost air cargo. He articulates, “The aim of the government is to provide an ecosystem for harmonised growth of various aviation subsectors that is airlines, cargo, aerospace manufacturing, skill development, etc. In order to promote both domestic and international air cargo and express delivery services, ACLPB has been constituted under the National Civil Aviation Policy 2016. It has been constituted to promote growth in air cargo by way of cost reduction, efficiency improvement and better interministerial coordination. While, perceived as the largest networked and fastest logistic solution provider company of India, AAICLAS - a multi modal interface linking air, surface & water transport will promote, represent, organise, undertake, establish, conduct, handle, arrange, own, operate, participate, facilitate, sponsor, encourage, and offer business as Cargo Terminal Operator, Free Trade Zone, Air Freight Station and Inland container depot for cargo and passengers”

To sum it up Indian air cargo industry has definitely delivered what it promised – growth, innovations, adoption of worldclass working standards, quality services and customer satisfaction. According to the veterans, the industry is growing at a tremendous rate and is poised to witness a brighter future. Definitely, Air cargo is a specialised sector and its development requires deeper focus with careful consideration of every stakeholder alike to establish new and viable models for ensuring profitable business.

Veterans say, nothing could slow down the growth of air cargo business be it – financial downfall, recession that had hit the market few years ago or various challenges like inadequate infrastructure and unskillful manpower. Indian freight forwarding community is working hard to deliver the excellence to its customers and India’s air cargo industry promises the required magnitude of growth that is bound to generate a strain on the existing infrastructure in the industry which makes technology and innovative practices critical components to facilitate business transformation. CC

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SAGARMALA maneuvering on low tides

The Ministry of Shipping’s ambitious Sagarmala project that aims to modernise India’s ports is estimated to save up to `40,000 crore per year spent on logistics by key industries, says a study done by the ministry. The study has come as a whiff of fresh air at a time when India’s lopsided freight modal mix is costing the economy as high 14 per cent of its GDP. In contrast, developed nations spend at the most 9 per cent of GDP per annum. As per the study, the Sagarmala project will save logistics costs for commodities such as coal, cement, iron, steel, food grains, fertilisers, and petroleum, oil and lubricant Upamanyu Borah

70 CargoConnect - september 2018

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riginally mooted by the Vajpayee gove r n me nt i n 20 03 a s t he water ways equivalent of the Golden Quadrilateral, the ongoing Sagar ma la project, launched in 2015, integrated with the development of inland waterways, will drastically reduce the logistics cost and time for transporting goods, benefiting industries and export/ import trade and make the industry competitive.

Kailash Kumar Aggarwal, Joint Secretary, Union Ministry of Shipping, who is in-charge of the project, said that as part of Sagarmala, estimated to cost over `8 lakh

all the variables necessary for overall industrial growth.

The Indian Government plays an important role in supporting the ports sector. It has taken several measures to improve operational efficiency through mechanisation, deepening the draft and speedy evacuations. It has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.

During FY18, cargo traffic at major ports in the country

crore, 562 projects would be taken up in the country between was reported at 679.36 million tonnes (MT). In April2015 and 2035. “Port modernisation and capacity augmentation, May 2018, traffic at major ports increased 2.41 per cent port connectivity (including coastal shipping and year-on-year to 116.26 million tonnes. inland waterways), port-led industrialisation and development of coastal communities During 2016-17, major and non-major such as fishermen are four main ports in India have accomplished a components of the Sagarmala,” total cargo throughput of 1,133.09 he said. million tonnes, an increase of 5.7 The share of major Capacity of the ports would go up to 3,500 million tonnes by 2025 from 2,000 mt now. Out of the 577 projects identified, a total of 492 projects are under various stages of implementation, development and completion as of March 2018. Close to 59 projects have been completed so far; another 88 projects worth `31,000 crore are likely to be completed this year.

ports in the total traffic handled by Indian ports increased from 56.5 per cent in 2015-16 to 57.2 per cent in

2016-17

15 multi-modal logistics parks would also be set up at a cost of `3,553 crore, as part of Sagarmala, which would truly transform the sector. He said the AIIB, the ADB and other multi-lateral development banks would have to play a key role in the project,” he explained.

Shipping as a growth industry According to the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is done through maritime transport. India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km. There are two geographical factors that put the Indian maritime sector at an advantageous position – the vast coastline of 7,500 km and the strategic location along most major shipping highways. For years, the maritime routes have been used for trade and a show of strategic strength. Today, the country boasts of a modern shipbuilding and shipping sector, replete with

72 CargoConnect - september 2018

per cent previous year 2015-16.

The growth in cargo handled at major and non-major ports in 2016-17, were 6.8 per cent and 4.2 per cent, respectively. The share of major ports in the total traffic handled by Indian ports increased from 56.5 per cent in 2015-16 to 57.2 per cent in 2016-17.

The major ports recorded the highest ever capacity addition of 100.37 MT in 2016-17, thereby raising the total capacity to 1065 MT per annum, as against a capacity of 965.36 MT per annum in 2015-16.

Congestion and the Economy As many as 12 out of India’s 26 states have a shoreline, spreading across 7,517 kms and about 200 small harbours.

Despite a strong platform, the Government has so far failed to transform coastal shipping into a lucrative business opportunity in India.

Most cargo that can be transported via costal shipments is still being transported through traditional modes like Rail and Road. Government regulations are not coastalshipping friendly yet. Though India has 14,500 kms of navigable waterways, large cargo vessels are unable to use them due to insufficient draught. Furthermore, as these rivers are extensively used for irrigation and electricity generation, the capacity for cargo transportation is severely restricted even further.

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feature The Inland Waterways Authority of India (IWAI) was set up in 1984 to develop, maintain and administer the waterways while The Central Inland Water Transport Corporation (CIWTC) was set up to undertake freight transport. However, a marginal proportion of domestic cargo is moved via this mode, which the policy makers wish to improve upon.

A 70 per cent abatement of service tax on coastal shipping brings the fares at par with road and rail. Additionally, central excise duty has been exempted on capital goods, raw materials and spares used for repair of ocean going vessels. Given the present governments openness to Foreign Direct Investment, it is expected the same would be implemented for the marine sector. If the industry response to 100 percent FDI in critical sectors such as aviation and defence manufacturing sectors is to be seen as a barometer, it would be a step which would be welcomed in the marine sector.

Capacity Augmentation along Inland Waterways still a challenge The Government proposes to augment capacity to develop eco-friendly and economic mode of transportation along inland waterways and coastal shipping routes under the Sagarmala Programme.

It has declared 111 ‘National Waterways’ (including 5 existing NWs) under the National Waterways Act, 2016. It is implementing the Jal Marg Vikas Project, JMVP for augmenting the navigation capacity of NW-1 from Haldia to Varanasi at a cost of `5369 crore with technical and financial support of the World Bank. Development of 8 new National Waterways has been taken up.

development as a supplementary mode would enable diversion of traffic from the over-congested roads and railways; however the infrastructure in terms of jetties, terminals, and navigational channels continues to be a challenge.

“Out of the 577 projects identified, a total of 492 projects are under various stages of implementation, development and completion as of March 2018” Kailash Kumar Aggarwal Joint Secretary, Union Ministry of Shipping

Director, Sea Marine Logistics Pvt Ltd. The traffic projections and forecast models in the feasibility studies and DPRs prepared for the development of viable National Waterways indicate an enhanced demand for low draft – high carrying capacity and tug-barge flotilla vessels. Inland Waterways Authority of India has engaged a reputed agency in the field of vessel design to make appropriate designs for (NW-1) with emphasis on low draft high carrying capacity and fuel efficient vessels.

Sa ndeep Chadha, CEO, A l l Ca rgo Logistics & Industrial Parks affirms,

“Bunker prices will be of great concern and Government must ensure that bunker prices are maintained at a steady rate over a period of a month or more” Capt Rumi Engineer Sr President, Sarjak Container Lines

Capt Rumi Engineer, Sr President, Sarjak Container Lines adds, “India is blessed with some gigantic rivers that criss-cross the

country and run along major bustling towns and cities. Developing rivers and transferring the cargoes from trucks and rail to barges will greatly reduce transport costs as a lot more cargo will be transported in a single sailing.”

National waterways provide a cost-effective, logisticallyefficient and environment-friendly mode of transport, whose

74 CargoConnect - september 2018

“Today, land transport is becoming more expensive due to diesel costs. Also the distance covered is land to major inland destination which is more compared to sea/river. By developing river inland waterways – will reduce transportation costs and transit time. Moreover, it will avoid accidents which you find on land transportation,” says Ranjit Nair, Managing

“Water transport is the most cost effective and fuel efficient mode of transport. According to estimates, one litre of fuel can move 24 tonne km of freight by road, 85 by rail and 105 by IWT (Inland Water Transport). As per the research a shift of one billion tonne km of freight to IWT will bring down the fuel cost by about INR 250 million and the cost of transportation by about INR 450 million.

So we can see there is a lot of promise this mode of transportation has. However, the real crux is to overcome the challenges like low water level, additional storage required and automation for an enhanced throughput.”

Other issues aggravating trouble

In the words of Chadha, “On a macro level, the challenges are many such as Low Freight Rates, Security Threat (the threat of pirates and cyber-attack is there), SOLAS Compliance (The new regulation which requires vessel administrators to load only those packed compartments with Verified Gross Mass (VGM) announced by the shipper, has added

feature to the developing worries of the shipping industry). In addition there are Environmental Issues and the issues related to the labour.

On a policy level, constraints like Regulatory (Regulations that may act as deterring factors like the SOLAS and The Multimodal Transportation of Goods Act), Operational (The absence of modern equipment, bad infrastructure), Institutional (Lack of a single window clearance and stricter regulations), Infrastructural (lack of developed National Roads highways network, conversion of narrow gauge rail tracks and dredge the inland waterways) & Financial (Government should pitch in for more favourable financial paradigm. As of now bulk of the demand is being met by private players), are being faced by the sector as a whole.”

“As per research a shift of one billion tonne km of freight to IWT will bring down the fuel cost by about INR 250 million and the cost of transportation by about INR 450 million” Sandeep Chadha CEO, All Cargo Logistics & Industrial Parks

Nair agrees, “The freight rates are going down due to the stiff competition in the market. The financial credit market is huge; taxation on service industry is much higher. Also, the international export/import movement of cargo is quite slow. On the other hand with crude oil & charter rates rising, it seems like a tough market for survival.”

Bulk and container shipping have seen firm charter rates as global economic activity has picked up. However, tanker and offshore rates remain weak as supply overhang remains an issue. There are some green shoots as crude oil prices have moved beyond their 2015 highs, indicating higher tanker rates sometime in the next 12 months.

to March 2017 with average monthly sales hitting as much as 150,000 tonnes.

However, with the introduction of GST, bunker sales have dropped by as much as 90 per cent. Sales are happening only on account of emergency situations where ships are stuck due to wrong calculations on bunker requirements. The steep fall in bunker sales is having a cascading effect on foreign exchange earnings, logistics, barge operations and ancillary services.

Capt. Rumi expresses that bunker prices will be of great concern and Government must ensure that bunker prices are maintained at a steady rate over a period of a month or more. That way, shipment rates could be fixed more realistically. The other main concern is the depth of the rivers. There will need to be continuous process of de-silting and ensuring that the depth of the rivers remains constant to prevent grounding and damage to vessels.

Strategising on growth of the sector The study done by the Shipping Ministry says that coastal shipping can help India move up to 200 MMTPA of coal transported to the 400 thermal plants, and save up to `17,000 crore per annum.

It will also cut down prices of power produced in such plants by 50 paise per unit, says the study.

“The financial credit market is huge; taxation on service industry is much higher. Also, the international export/ import movement of cargo is quite slow”

The study also says that thermal coal amounting up to 70 MTPA for non-power uses can be transported through coastal route if port-based coastal linkages are provided. The report further says that steel and cement plants in India are mostly located near the places where raw materials are found. It sees potential of establishing up to 80 MMTPA steel and cement plants in the coastal regions, and savings of up to `6,500 crore per annum in logistics.

Indian shipping sector has a larger Ranjit Nair dependence on tankers due to high Managing Director, Sea imports, but this segment has not done Marine Logistics Pvt Ltd well. The dry-bulk segment, which accounts for 45-50 per cent of the world fleet (in deadweight tonnage terms), witnessed a 35-40 per cent increase in charter rates during January-April this year, as compared to a similar period last India can save another `5,600 crore using coastal routes to year. However, the tanker segment has not done so well, as move commodities such as fertilisers, petroleum, oil and rates have fallen by 5-10 per cent. The fall is even bigger for lubricants, food grains and iron. large crude carriers. This increase is on account of high-quality coal and iron ore imports and by the East Asian nations.

The study also identifies locations for steel plants in Odisha, northern Andhra Pradesh, northern Tamil Nadu, Bunker sales in India touched 2 million tonnes in the year and Maharashtra. For cement plants locations in southern

76 CargoConnect - september 2018

feature Gujarat and central Andhra Pradesh have been identified, based on the mapping of limestone reserves.

“Again, coming as a boon, lower costs for fuel allow shipping firms to focus on operational efficiencies, adding new routes that were once unprofitable, taking on delayed infrastructure upgrades, purchase of vessels with greater cargo capacity and invest in technological innovations. This also offers the opportunity to ship more products thereby raising the demand for the shipping industry. This scenario should always be taken utmost care of,” affirms Sandeep Upadhyay, Managing Director & CEO, Centrum Infrastructure Advisory.

“Lower costs for fuel allow shipping firms to focus on operational efficiencies, adding new routes that were once unprofitable” Sandeep Upadhyay MD & CEO, Centrum Infrastructure Advisory

The projects aims to decrease exporting time by five days, which is now 32 days and save up to `6,000 crore. It uses a three-step approach that requires connecting highways with ports, building dedicated toll lanes for export and import on national highways, and simplification of customs clearance method.

The railways are also going to play a major part in decreasing logistic charges, the study says, adding that the share of railways in container transportation can be increased to 25 per cent from 18 per cent.

It can help save up to `3,000 crore in freight.

The report further adds that India’s container transport is skewed towards road transport due to h igh railway freight, lack of last mile connectivity, and lack of reliable rescheduling of freight trains. The study has identified 14 road to railway networks to bridge this gap. It envisions to save up to `3,000 crore.

Looking towards a promising future A g g a r w a l e x p r e s s e s , “ P o r t- l e d development and inland waterways are being encouraged to help save `35,000 crore per annum in terms of logistics cost and increase the share of water-borne transport with a freight modal mix from 6 to 12 per cent. This would also help the Centre spend on development and possibly reduce taxes.”

Beginning 2018, the Indian Government constituted a committee to make port projects more investor-friendly and to improve the investment climate in the sector while clearing several stalled port projects.

Meanwhile, Sagarmala seems to be cruising already and the project ti mel i ne has been reduced from 10 to just five years. If Ind ian port development takes off In Kochi alone the government has proposed similarly, local and foreign to develop 17 minor and medium f und s wou ld f low i n a nd ports to boost coastal shipping in coastal regions may become India. A ten-year plan titled Maritime good bets for real estate too, Agenda 2010-2020 consisting of a budget of USD 110 billion has been put as they will see industry and job in place to increase India’s ports’ growth.

Logistic costs savings of over capacity significantly and `35,000 crore per year. reduce its dependency on

Also, the overall easing of chartering rules, would give a fillip to entrepreneurship in the sector.

Chadha explains, “The impetus on felicitating the institutional money in the sector would do a world of good. The government should ease up the regulatory framework for a faster throughput. The participation of private sector, in addition to

78 CargoConnect - september 2018

the money the government is committing, in building the required infrastructure can go a long way in shaping the sector for greater margins. The use of technology in automating the labour intensive work will bring in the much needed efficiency.

To tackle, such money intensive asset class, a holistic approach is needed and PPP (Public Private Partnership) may be one such route. Thorough catchment analysis of the entire coastal belt, on a macro and micro level is highly desired.

It will help a long way in forming the relevant policies to push the sector on an unparalleled growth trajectory.”

road transport

There are many factors conducive to the development of a robust and sustainable maritime sector. Finally, it will depend on how the different stakeholders utilise the opportunities presented to them to transform the sector into an engine of growth for India. Therefore, while 2016-17 was viewed as the year for enabling the maritime sector’s transformation, it seems India is on the cusp of major maritime revolution which will play out over the next couple of years. CC

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Liege Airport, situated at the heart of the AmsterdamParis-Frankfurt golden triangle, is strongly focused on airfreight services, positioning itself as the easy in-and-out cargo hub for central Europe. Companies, airlines, handlers, transit agencies, etc. form a community who is at service at this biggest cargo friendly airport in Belgium. Steven Verhasselt, VP-Commercial, Liege Airport, in a one-to-one conversation with Upamanyu Borah, talks about the infrastructural evolution at the airport, their USP, implementation of technology and automation in their cargo handling operations, potential of the Indian market, and trends in air cargo that will pave the way ahead.

1) Cargo activity at Liege Airport h a s b e e n u n d e rg o i n g m a j o r structural growth. With regard to that, how much investment the airport has materialised so far in developing its infrastructure?

The infrastructure investment policy in Liege Airport intends to be ahead of demand. The goal is to provide first line and second line infrastructure before occupation is guaranteed or tendered for.

The growth over the last 3 years exceeded our expectations, and the investment in infrastructure by the airport has been caught up with by the demand.

Still, in 2018, we opened up already one 6,000 m2 first line facility, while construction is on its way to add another 6,000 m2 and a 12,000m2 first line warehouse. In the second line, our office capacity has doubled, and the first

82 CargoConnect - september 2018

warehouses in second line will be opened before the end of the year.

of airlines, forwarders, shippers and the Belgian government.

The airport invested more than 20 Mio Euro already, and the operators, our 4 handlers, are investing in equipment and manpower to keep up with the growing demand

4) What added advantages shippers

2) Air Cargo standards for handling

Each of the Belgian Airports has its own strategy and focus. In Liege Airport, the full focus is on cargo; our #freightersfirst policy is a clear indication of the core business of Liege Airport. The airport is open for freighter activities 24/7, both scheduled freighters and charters. The 5 product pillars we focus on (express / perishables / live animals / pharma / outside airfreight) are those where freighter operators differentiate themselves from other logistics providers. Our strategy

time and temperature sensitive cargo is becoming more stringent.

How does Liege Airport ensure an uninterrupted and transparent cold chain to end users?

The focus of Liege Airport, for all cargo and especially for perishables, is a minimum transit time between unloading the aircraft and loading the trucks. As a cargo airport, where all cargo arrives and departs on freighters, we can park the freighters in front of their respective handlers’ warehouse, and offer minimum time into the warehouse. Throughput units, for example a lot of flowers from Ethiopia and Kenya, are loaded immediately into cool trucks for departure.

Each of the handlers has cooling facilities inside its own warehouse that can be used for perishables and pharma. Liege Airport supported its handlers to obtain the CEIV standards. With airlines, handlers and truckers operating in Liege being certified, the pharma shippers are well aware of the opportunities to ship via Liege. On top of that, the Liege Airport managed Perishable center is designed specifically to assist the handlers with the cold chain. Even though they all have cooled facilities, the Perishable Center is there as a back up or an extension.

3) How far have you been successful in implementing technology to effectuate security of air cargo at the airport?

Liege Airport, and all members of the Liege Airport Cargo Community, considers security as a priority. As far as the airport is concerned, an intelligent mix of technology and human intelligence secures the airport. All the first line facilities have their own security systems, and respond to the high requirements

get while transporting cargo through Liege Airport in comparison to using services of other airports in Belgium?

The focus of Liege Airport, for all cargo and especially for perishables, is a minimum transit time between unloading the aircraft and loading the trucks

is well known in the airfreight industry, and the positive response is clear from our growth figures and market share.

In Liege we focus on our partners and our community.

5) Air cargo industry still relies heavily on paper documentation for the exchange of data and information. In such a scenario, how much progress Liege Airport has made to implement e-AWB in its system?

As an airport, we are not directly involved, as we are focusing on infrastructure and operations. Still, the need for community based solutions is clear, and Liege Airport considers the infrastructure to make that happen as important as the physical infrastructure. We are proud that many of

customers are leaders in the development of the E-AWB. We are convinced that the Liege Airport Community, including airport, customs and all service providers, are at the forefront of the digital era in airfreight.

6) How important do you think is the Indian market for the overall growth of the global air cargo industry?

Liege Airport has made a lot of efforts to establish itself as a gateway to India. We were the first European airport to support the Air Cargo India event. We believe in the Indian market, and the Make India policy, combined with the E-commerce boom, will definitely require more freighter capacity into this belly-hold dominated airfreight market. We are looking forward to direct connections between India and Liege. Until then, we know a lot of Indian cargo is already arriving and departing in Liege via different partners, for example Qatar Cargo.

7) Research has predicted that worldwide Air Cargo Logistics market will experience a 5.97 per cent compound annual growth rate from 2014 to 2019. What trends do you foresee will shape the Global Air Freight market in the upcoming years?

The unique selling point of airfreight is the speed of delivery. The globalization of the economy, the growth of spendable income in big parts of the world, will increase demand for non-local products. Those will be either perishables, for which the nature of the product requires speed, or e-commerce, for whom the nature of the consignee requires speed.

We believe that airfreight is indeed looking into continuous growth, as long as the USP is guaranteed. Airplanes will always be faster than trains or boats, but cargo moves door-to-door, not airportto-airport. The need for speed requires an integrated approach, to guarantee a seamless logistics process from shipper to consignee. The market is there, and the airfreight community is working hard to capture it and grow it. CC

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“We are making earnest efforts to reduce logistics costs”

Interview

1) How is NITI Aayog playing an instrumental ro l e i n t h e t ra n s f o r m a t i o n o f I n d i a n transport sector?

In NITI Aayog, we have been working closely with all stakeholders on variety of issues including Electric Vehicles (EVs), Intelligent Transportation Systems (ITS), shared mobility, and logistics policy, to name a few. Our sincere efforts are in the direction of eco-system approach while addressing the long ailing issues. Our logistics efficiency is quite poor. We have a major modal share in logistics through roads which is more than 60 per cent, but it is neither good for the economy nor environment. We are putting in efforts to increase the modal share of Railways and Inland Water Transportation (IWT) so that the load on roadways could be rationalised.

“Now in addition to hard interventions like augmenting infra, we have started thinking of including soft interventions like shared mobility, congestion pricing, interoperable electronic tolling of highways, national logistics portal, etc” says Amit Bhardwaj, Deputy Advisor (Transport), NITI Aayog, when asked about the efforts being taken by the Govt to decongest Indian roads. He also shared his views on how green modes of transportation can change the face of Indian transport sector and much more. Excerpts!

- Gaurav Dubey

Declining technology costs and business – model innovation is driving the world towards renewable energy and electric vehicles.

Against this background, NITI Aayog, in collaboration with various ministries and industry partners will be organising ‘MOVE: Global Mobility Summit’ in New Delhi on 7th and 8th September, 2018. This Summit will help to push Government’s goals for vehicle electrification, renewable energy integration and job growth and would also take India on the path of becoming a clean energy economy.

2) Roads within Indian metro cities still face a lot of traffic congestion. In such a situation, what innovative solutions have you designed to ensure smooth flow of traffic?

In addition to hard interventions like augmenting infra, we have started thinking of including soft interventions like shared mobility, congestion pricing, interoperable electronic tolling of highways, and national logistics portal, to name a few.

In order to find out more solutions, this month we have launched Mobility Hackathon to address specific problem statements in the mobility sector and throw a global challenge to come up with innovative solutions. The

84 CargoConnect - september 2018

selected solution would be rewarded by the Hon’ble PM during the upcoming MOVE Summit.

The renewed stress on asset utilisation, reinventing public transit and right use of data analytics will result in solutions that will provide efficient asset utilisation and finding new ways of public transport using innovative data driven solutions.

We are working with stakeholders to find out useful ways to solve problems merely by soft interventions at the place of hard interventions, like building flyovers and underpasses, etc.

3)

How will the development of Inland Waterways in India can bring down logistics cost? To what extent would it aid to the development of the country’s economy?

In the recent past the Government has given extra stress on promoting clean modes of transportation, including the Inland Water Transport (IWT). At the same time under the National Waterways Act 2016, a total of 106 additional National Waterways have been notified spanning over 24 states in addition to the existing 5 stretches. All these are notified while looking at the hinterland capabilities of bulk cargo transport on these stretches.

It is expected that many of these waterways would act as feeder routes to the main bigger waterways and help in evacuation of deep hinterland cargo through smaller vessel, thus adding to the economic development of the hinterland, besides acting as an aggregator of cargo for main bigger waterways.

These waterways would not only boost the logistics sector but also drive tourism, cruise operations, water sports activities, etc. They will also enhance across the river connectivity of various remote villages by providing better and safer navigation.

It is also worthwhile to mention that IWT is the cheapest and cleanest mode of transportation. In fact, as per IWAI, while 1 litre fuel can move 24 ton per km on road and 85 ton per km on rails, the

same amount of fuel can move 105 ton per km on waterways. However, with such a big economic advantage the share of IWT in India is only 0.5 per cent as compared to other modes. In China it is 8.7 per cent, USA 8.3 per cent, Europe 7 per cent and our close neighbour Bangladesh has 16 per cent and Vietnam with a whopping 48 per cent, of cargo being transported via IWT.

5) With improved port connectivity, under ‘Sagarmala Programme‘, can we expect a huge spike in export of goods? What is your observation regarding the same?

4) Transporters across India are not satisfied with the operational process of E-way bill. Where do you think the bill is lacking? And, what could be the best possible solution for it?

• Reducing cost of transporting domestic cargo through optimising modal mix • Lowering logistics cost of bulk commodities by locating future industrial capacities near the coasts • Improving export competitiveness by developing port proximate discrete manufacturing clusters • Optimising time/cost of EXIM container movement

In the current year an effort towards providing one platform for logistics E-way bill system was introduced which mandated that E-way bill after being generated has to be carried by transporters for moving any goods worth more than `50,000 within the state. In the new GST

As per IWAI, while 1 litre fuel can move 24 ton per km on road and 85 ton per km on rails, the same amount of fuel can move 105 ton per km on waterways.

era, a common portal is being created for E-way Bill generation where a unique E-way Bill number is assigned to the dealer, the recipient and the transporter leaving no room for tax evasion.

The intent is good towards formalising the system and increasing efficiencies.

As per my observation, there are genuine issues which needs to be addressed and the Government is doing all that is necessary and required to make the system work as desired. In a country of the size of India with so much unorganised players in the logistics domain, any effort towards formalisation is bound to face resistance. All genuine issues are being addressed by the Center so as to make the system seamless and user friendly to all stakeholders.

The vision of Sagarmala Programme is to reduce logistics cost for EXIM and domestic trade with minimal infrastructure investment. This includes:

The vision would be achieved by addressing four components of the programme which are as follows: • Port Modernisation & New Port Development • Port Connectivity Enhancement • Port-linked Industrialisation • Coastal Community Development As we reduce logistics cost which is mainly on account of transportation component, a lot of redundant capacities at the ports will be freed up which is estimated to increase the overall trade at ports including both exports and imports. We are making all efforts to reduce logistics costs and increase cargo handling capacities at our ports. In India, 95 per cent of the trade by volume and 70 per cent by value are being transported by maritime transport and in the medium- term we will achieve the desired levels of exports.

Indian ports have started developing efficiencies, which are now at par with global levels and standards. For instance, in container handling we have comparable turnaround time with the world’s best, at two of our major ports and a few non-major ports. We are improving the efficiencies and increasing capacities and it is just a matter of time and right trade partnerships to see the surge in the overall trade including exports. CC

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Interview

“India in a Position to become Logistics Hub Soon” International Logistics Event, ‘FIATA World Congress (FWC) 2018,’ is set to begin in New Delhi in September. The four-day-long event aims to promote India as a brand before the world’s logistics leaders. Samir J Shah, Partner - JBS Group of Companies and Immediate Past Chairman, FFFAI, in an exclusive interview with Ritika Arora Bhola, talks about how the event is going to help the industry realise the untapped growth opportunities within their supply chains for doing business in India, and on the contrary how it will benefit freight forwarders.

1)

Please justify the theme of FIATA World Congress 2018 - “The future starts here.”

The theme of the FWC-2018 is very apt in the context of present global economy and trade scenario and its impact on logistics industry. The global logistics market currently generates over USD 8 trillion annually and represents around 11 per cent of global GDP. India remains one of the fastest growing economy and market in the world. Indian Government’s focus is on improved transportation infrastructure, industrial and economic reform initiatives such as ‘Make in India,’ ‘Digital India,’ and ‘Skills India,’ which would promote growth of international business, in order to drive growth opportunities for Indian LSPs. FWC 2018 will help the industry realize the untapped growth opportunity within their supply chains for doing business in India.

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2) Please throw light on this year’s

agenda. What will be the major highlights of the event?

FWC-2018’s primarily agenda is to promote brand India before the world’s logistics leaders. At this Congress, we would discuss on logistics trends and opportunities before the logistics industry practitioners.

3) According to you, what are concerning issues for sea freight and air cargo industry presently?

We should cautiously point out the fact that India spends around 14 per cent of its GDP on logistics and transportation as compared to less than 8 per cent by other developing countries. Studies have estimated that India can save up to US$45 billion if logistics costs are brought down to 9 per cent of the country’s GDP, thereby making domestic goods more competitive in global markets. Capacity constraints,

process parity as par world standard, proper and time-bound implementation in responding to set policies and targets, technological hitches, mindset issues, etc., are still remaining as the areas of concern.

4)

With unprecedented growth and development happening, do you think Indian air cargo industry is ready to become a cargo hub by 2020?

It depends on how quickly we can resolve the issues mentioned above.

Otherwise, taking into consideration the pace and potential of India’s economic development including manufacturing, domestic consumption and foreign trade supported by industry-friendly policies and infrastructure building exercises, we are quite confident that the country will be able to achieve the ambitious goal of becoming logistics hub in a stipulated time. CC

“We are a distance away from competing with other global hubs” 1) Could you elaborate the theme

of FIATA World Congress 2018 “The future starts here.”

American fiction author William Gibson coined the term- ‘The future is here It is not just evenly distributed.’ The context then meant that things which would appear normal in future and part of day to day life, is here already for a few. In today’s business world, you have to stay relevant and one step ahead. With increasingly important role of logistics in general and freight forwarding in particular, this is an appropriate theme and time to tackle future challenges. Increasing global production, improving quality of life and subsequently consumption and a quest for more efficient logistics on a sustainable basis have created a need for more and more resources in terms of physical infrastructure and intelligent systems to make it happen.

We will need more airports, ports, railways and logistics facilities and we will need smarter and smarter systems to operate them. We will need efficient and effective regulatory policies, and have to assist moves to future faster than ever. I am sure all these issues will be discussed and pondered over at the FIATA World Congress by the participants. It will also enable people in the fraternity to interact and collectively design and strategise the future framework.

2) How do associations like FIATA, TIACA, ACAAI, DACAAI, FFFAI and ACFI benefit the industry as a whole? Does it always bring positive outcomes?

Trade bodies you mentioned, despite representing different yet related fraternities have played a great role in motivating authorities to improve physical

Interview

infrastructure, influencing regulatory bodies to come out with more efficient policies and in general improve the quality of logistics.

From India’s point of view, these bodies help us move towards more global practices at a faster pace than earlier.

We have seen a huge change in the recent past in terms of physical resources, systems as well as movement towards a better manpower quality. Most of it has been a result of the work done by these trade associations and a willing government at the center.

There are times when these associations would find themselves at cross-purposes but eventually the outcomes benefits the overall logistics sector in India. In absence of representations, there could be chaos and confusion. We, as air cargo custodians, often find ourselves improving service quality based on actions or suggestions by these bodies which make our operations more efficient.

Experts feel excellent infrastructure, effective and efficient government policies and investments can help Indian air cargo industry compete globally in becoming a cargo hub. Samir Mankad, CEO & Executive Director, GSEC Limited, in an interview with Ritika Arora Bhola, talks about upcoming FIATA World Congress 2018 - to be held for the first time in India, importance of trade bodies like ACAAI, ACFI, TIACA, and the future of Indian air cargo industry

3) According to you, what are the crucial issues of concern for sea freight and air cargo industry at present?

4) With so much growth and development happening, do you think Indian air cargo industry is ready to become a cargo hub by 2020?

Factors like incredible growth of E-commerce, global production, improved and diverse consumption, etc. has led to a huge potential for growth. But to exploit these opportunities, we will need more and improved infrastructure like ports, airports and railways. The current infrastructure is not adequate to handle existing load, let alone ready for future. Lack of fresh investments could be a major impediment. Intermodal movement is almost absent. Regulatory policies have been improving but could be at a faster clip. And, lastly, we need more cool chain facilities.

We are just catering to our existing volumes and will probably be ready to handle double digit growth rate in cargo. But to become a cargo hub, we need a significant change in all the factors which I have mentioned above.

We are a distance away from competing with other global hubs in terms of infrastructure as well as globally aligned policies and efficiency that can make it possible. But even if we manage to efficiently handle our own cargo, with the double digit growth, it would be a lesser equation for transforming us to a global hub. CC

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Interview

“Govt Must Promote DOMESTIC Transportation facilities” Established in 1986 with a small office, RE Rogers India Pvt Ltd is now a global name. Specialising in International Exhibition Logistics – it was and will remain their core business. Ravinder Sethi, Managing Director, in an exclusive interview with Ritika Arora Bhola, outlines why it is important for the government to grant ‘Industry Status’ to this sector. He also talks about their expansion plans, new trends in logistics, and government initiatives to boost the sector.

1) RE Rogers was formed in 1986.

How has the journey been so far?

It has been a phenomenal journey. What started with five people in a small office in Delhi is today pan-India with over 100 highly motivated professional manpower at the backend. Starting with a ‘Telex’ machine, we’re today a state-of-the-art technically advanced company. Once only with labour handlers, today we’re powered with handling equipments (forklifts, cranes, etc.), unmatched with any freight forwarding company in India.

Also, once functioning with or under no systems, we’re today driven by ISO certifications, etc. I would proudly say, we’ve attained a handful of achievements in our 32 years of history.

2) How do you think the industry has changed since the time you stepped in? How do you foresee its future?

Advanced communications, technical innovations, and digitalisation were nowhere in existence when we started.

The future will see more advancements in all these areas one could even imagine.

3) How do you see the future of Exhibition Logistics industry in India?

The main focus of exhibitions industry in India would be on its development in

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major metros – Delhi, Mumbai, Bangalore and Hyderabad. What we crucially need is a major venue in Mumbai – other than that, we need to have a good start. By the end of 2019, Dwarka will come up with 200,000 sq m of massive exhibition space, Pragati Maidan will be having 50,000 sq m by the end of February 2019, with another 120,000 sq m coming online in September 2019, and so on and so forth.

The required venue development has happened, and this is going to be a game changer in our industry. Another milestone is the introduction of a uniform GST- all India uniform tax policy. And the final game changer will be the ease to do business. Government is encouraging FDI’s, and the results are obvious to see.

Intellectual property rights are very strong, unlike other countries (like China, for example). On the ground, all major global players are in India – be it the Messes, the PLCs, or small players they’re here with their major brands, and bringing in more. The domestic industry is growing phenomenally as well. Indian players and Indian product association events (IMTEX, ITME, Plast India etc.) are all on the rise.

4)

According to you what are the latest trends in Indian logistics sector?

There’s a technical and digitalisation revolution happening in the general logistics sector in India right now. I’d say service levels here will be at par with

the Western world within a few years.

5) Government initiatives you would like to see for the betterment of the Indian logistics industry?

Government should give ‘Industry Status’ to this area - MICE should be looked as a whole. Once the exhibition industry grows, logistics industry will eventually see growth. My aspiration for the entire industry is that government must take immediate steps to transform and promote domestic transportation facilities to match global standards.

6) What are your new projects in the pipeline...any business expansion plans?

We started in 1986 as a purely professional logistics service provider for international exhibitions in India. This will always remain our core business.

Over the years, this has changed significantly. We’re today providing similar services for Indian exhibitors going overseas. This has grown manifold due to India’s exports market moving into high tech and industrial products. In addition we’re the major service provider for global entertainment movements into India (Rolling Stones, Justin Bieber, etc.), as also major sports events (all editions of Formula One, etc.). Last, but not the least, we’re now heavily into logistics for final defense imports. Our clientele is a ‘who’s who’ in this industry. Our plan for the future is simple and specific - to remain market leaders. CC

“We are committed to providing operational excellence on a daily basis”

Interview

Indian economy is slowly and steadily recovering after sustaining jolts of Demonetisation and implementation of single biggest tax reform - GST. As per predictions, GDP growth rate is expected to be around 7 per cent in the upcoming time which has again brought a smile to the faces of businessmen across India. Huned Gandhi, Managing Director, Air & Sea Logistics Indian Subcontinent, Dachser India Pvt Ltd, in an exclusive interview to Gaurav Dubey, shared his point-of-view on recently rolled out policy reforms, supply chain solutions introduced by the company, and much more. Excerpts from the interview!

1) How could the recently rolled out E-way bill, infrastructure status granted to the logistics sector and GST give a push to the business of Dachser in India?

With an expected GDP growth of around 7 per cent, the Indian economy seems to be on a strong recovery path. The broad range of infrastructure and initiatives pertaining to logistics in India is paving the way for the industry to achieve more efficiency. At the same time, the Goods and Services Tax (GST) has been helping to drive positive developments, thanks to reduced checkpoints and warehouse consolidation. Technology resulting from the implementation of the E-way bill has been supporting transporters to reduce costs and improve lead times.

Such activities fully support Dachser India’s strong process orientation. We are strongly committed to providing operational excellence on a daily basis.

2) Dachser provides full-fledged logistics services to its clients.

What are your other expansion projects in the pipeline which will further increase the company’s service line?

At Dachser India, we strive to be the customer’s first choice for global supply chain solutions. The introduction of our worldwide transport management system Othello will set new standards in terms of offering integration and visibility. When it comes to services, we are constantly extending air and

sea freight connections between key economic areas of the world which is important in today’s volatile times.

We recently introduced regular LCL services to and from Europe, for example, thus increasing predictability for our customers.

Delivering high-quality Contract Logistics solutions are another major focus for Dachser India. This encompasses not only warehousing but also transportation and value-added services like quality checks, packing or repacking, as per customer requirements.

Currently, we are serving around 15,000 sq m of warehouse space in India. Our dedicated Contract Logistics experts help to detect appropriate facilities in the most favourable locations and assure that they are equipped with high firstclass standards. At the same time, our own warehouse management system Mikado is fully integrated across all transport modes.

3) Do you believe multimodal logistics can turn out to be the magic pill to change the way cargo is transported? Do you also think promoting containerisation is an essential step?

In order to cater and handle worldwide supply chains successfully, it is essential to master different modes of transport.

While the origin of Dasher’s business is road logistics services across Europe, we have constantly been developing

transport modes and services. This does not only include air and sea logistics, warehousing and value-added services but also Dachser Rail Services. Currently, we are extending our LCL consolidation services to offer regular sea freight connections between continents. As such, containerisation will significantly help the global shipping industry.

4) How could better tailored supply chains help in reducing cost of automobile logistics?

Precise timing and high degree of accuracy are crucial for the highly developed and industrialised automotive industry.

Worldwide supply chains have to be designed considering the procurement and distribution processes and the individual schedules of a company.

Along with our proven performance as a 3PL network provider, Dachser will also take on 4PL tasks. Serving as a lead logistics provider, we control, monitor and optimise the Automotive Supply Chain to add real value. The focus here is on managing carriers and all kind of network providers while offering comprehensive supply chain visibility.

On top, we are performing various administrative tasks like preliminary checks of invoices from providers used by customers. CC

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Interview

Electric Trucks: Future of Indian Transport Industry The Indian government has announced plans to purchase electric trucks to reduce pollution and operating as well as maintenance costs in the long run,� exclaims Dileepa B.M, CEO Bonded Trucking, Shreeji Translogistics Limited. In an interview with Ritika Arora Bhola, he talks about industry post GST, recent developments in the transport sector, the company’s future and projects in the pipeline.

1) Shreeji Translogistics made a foray into Custom Bonded Trucking in the year 2002. Please elaborate on the developments you have witnessed in the last few years in the Indian Transport Industry.

Good roads play a vital role in the developing Indian transport business.

Nowadays, we are seeing roads in better condition. Efficient transportation reduces costs in many economic sectors, while inefficient transportation increases these costs. In addition, the impact of transportation is not always intended and can have unforeseen or unintended consequences. For instance, congestion is often an unintended consequence in the provision of free or low cost transport infrastructure to the users. However, congestion is also the indication of a growing economy where capacity and infrastructure have difficulties keeping up with the rising mobility demands.

2) Please share the current scenario of Bonded Trucking in India.

Presently, Bonded Trucking is needed by almost all the airlines in one or the other sectors to move their export or import transhipment cargo. Currently, the formalities to operate Bonded Trucking is becoming online process. But in turn of commercials the charges levied by few custodians are more than the Bonded Trucking rates itself. Which is resulting

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in reducing the volume of bonded cargo movements. The basic motto to introduce Bonded Trucking facility in India is to reduce the cost and stop flights flying with empty space. Policies from the Custom Authorities in few stations have to be reduced, as presently there are to many formalities. As of now in India we are moving cargo from one airport to other airport only. The consolidation of cargo from different locations cannot be done in one truck under one customs seal making it impossible for bonded trucker to carry mixed load resulting into an expensive proposition.

5) What are the crucial challenges

3) How do you think the Indian transport industry has changed post the implementation of GST?

6)

From GST, Indian cargo industry has one common wish list: one market, seamless flow of goods, helping businesses focus on real cost optimisation in their supply chain and eventually lower transaction cost.

At present, we are focusing more on International Bonded Trucking operations.

that Indian transport industry is facing at present?

One of the unorganised industries in India is Transport Industry. Yes, there is huge shortage of drivers in India. Earlier, there was no education restriction to obtain driving license, but now Govt. of India has made compulsory 10th standard education as minimum requirement to obtain driving license.

But those who are eligible wants to work in office as an office boy but do not want to drive the trucks.

Please tell us about your projects in the pipeline. Any business expansion plans?

7) You will be participating in FIATA

4) How do you foresee the future of

Indian transport industry?

World Congress 2018, happening for the first time in India. What are your expectations from the event?

Indian government and private sectors both have responded positively to embrace electric vehicles for the future.

The government has announced plans to purchase electric trucks to reduce pollution and operating as well as maintenance costs in the long run.

It’s a proud moment for us that the FIATA World Congress 2018 is happening in India, that too for the first time. Various trade fraternities are participating in this world class event. Definitely, we expect some good decisions favourable to the trade.

Industry veterans complain of inadequate infrastructure, lack of investments and trained manpower etc., in the transport sector.

Pertaining to Bonded Trucking, we expect that FIATA takes up Bonded Trucking issues in India with customs authorities and get us the solutions. CC

APPAREL 20 CONNECT 19

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NETWORK WITH Export Houses, Clothing Brands, LSP’s / Freight Forwarders, Warehouses, Logistics Parks, Shipping Lines, Airlines, Airports, Ports, Terminals / Depots, 3 PL/ 4 PL service providers, Post and Parcel Companies, Skill Development Sectors, Transportation Companies, Technology & solution providers, Regulatory Bodies, Cargo Terminals, Associations, Banks and Investors, Academicians, Research Companies, Government Policy Makers Witness the leading voices from among Policymakers, Industry Players in the segment, Academicians & Researchers, as they discuss debate and ruminate on how the supply chain of this segment will be reshaped with the phenomenal growth and opportunities in India. Also on, how India is positioned to take advantage of the enormous changes in status quo disruptions, technology and practices in the apparel supply chain.

INDIAN APPAREL MARKET 2020 Among the emerging markets, India is quickly becoming a preferred destination for international apparel brands. Indian apparel market is calculated to grow at a CAGR of 13% and is predicted to reach approximately USD 124 billion by 2020.

APPAREL CONNECT 2018

180 Delegates 30 Speakers Sponsors, Partners & Supporters

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Interview

Xavier Britto Chairman, Kerry Indev Group

To be held in India for the first time, FIATA World Congress 2018, is around the corner and a great many national and international logistics players are geared up to participate in the event. Xavier Britto, Chairman, Kerry Indev Group, in an exclusive interview to Gaurav Dubey, briefs on his expectations from the event - discussions should be carried out on how global strategies could be tailor-made to fit in India’s logistics business environment and our approach should be leant towards ‘Think globally and act locally.’

Excerpts!!

“FWC 2018 would spark new thoughts amongst Indian logistics professionals” 92 CargoConnect - september 2018

1) How has your company evolved overtime to being the first logistics company in India to receive the AEO status?

Kerry Indev was conceived as Indev in the year 1984. It started its operationsas a Customs Brokerage firm and over the period of time it developed different activities under the Shipping sphere.

After implementation of Liberalisation, Privatisation and Globalisation policies, a sea of opportunities came for the Indian market. We realised the world as one potential market and started focusing on all other allied activities to offer end to end supply chain solutions to our customers. This changed scenario gave us the opportunity to consolidate our services under one roof while also helping us to bring operational efficiencies and lower down logistics cost. We got AEO status in Customs Brokerage, Freight Forwarding, Container Freight Station (CFS) and ICD from Govt. of India as we meticulously follow all the set of procedures, processes and perfectly align ourselves with all required compliances. That’s the reason our Chennai CFS became India’s first CFS to receive AEO certification.

2) What challenges you foresee in the current year? What strategies you would follow to overcome those?

Our economy is on the path of revival after facing temporary decoupling due to demonetisation and roll-out of GST. My observation says, real benefits of GST could be realised only in the long run. Continuous depreciation in value of Rupee against Dollar is presently posing a big challenge and it’s not a good sign for our growing economy.

There is a general perception that whenever value of rupee depreciates exporters earns money, but customers are now smarter and negotiate on the charges with them to bring down costs.

Delay in GST refunds is also creating liquidity issues for exporters. Slowdown in exports from India due to depreciating value of rupee could also increase trade deficit. Hence, these are some of the challenges before the industry. I think logistics operators have to ensure that

they consolidate their operations, expand their supply chain activities and strengthen their distribution channels to tackle challenges.

We will optimise our staff strength and concentrate more on operational efficiency to overcome the prevailing challenges. In the present situation, we need to do complete audit of growth to reduce cost, wherever possible, to maintain profitability.

3) Which goals you missed to achieve in the year 2017 and the possible reasons which held you back in achieving those set goals?

In the year 2017, we had to rework on our strategies due to introduction of GST and other policies which held us back in achieving certain goals. We sought to achieve the target of creating 2M sq ft warehousing space in the year 2017 but we were able to create only 1.5M sq

Continuous weakening of Rupee against Dollar is not a good sign for a growing economy like India ft space. Now we have reset our target and arestriving to create 3M sq ft Supply Chain Management warehouse space by the year 2019.

We have invested a lot of money in the Free Trade Warehousing Zone (FTWZ) in Mundra but as people are not aware about its benefits we had to undertake a lot of exercise to make people aware about the benefits of FTWZ. Now people have started coming in after understanding its benefits. Similarly, we thought to open an Air Freight Station by the year 2017 but it hascome to operations this year. Similarly, in the previous year, 10-15 per cent surge in diesel rates created major hurdle in our plan to expand domestic transportation in a big way. Recently, we have acquired Velex Courier and Ecommerce Solutions companies in order to improve last mile connectivity for our customers. These were some of the targets which we missed

in the year 2017 and are now striving to achieve.

4) How does events like FIATA prove fruitful for your business?

What are your expectations from the event?

We are extremely delighted that FIATA is happening in India this year. We have extended our support to the event so that more and more global logistics players could come to India and participate in the event. My expectations from the event is that – brainstorming sessions should be held on global challenges and focus should be on ‘Thinking globally and acting locally’ approach.

Discussions should seek to find out solutions of the prevailing problems and how global strategies could be tailor made in order to fit our country’s requirements.

Events like FIATA could open up ways for new thoughts, innovations and ways of adopting and upgrading our existing technology platforms.

Our primary motive should focus on ‘How we can adopt best practices of other countries for the development of Indian Logistics industry.’ However, Govt. of India has done remarkable work by creating separate Logistics Department, and now we are looking forward to the roll-out of National Logistics portal.

5)

What is your organisation’s definition of optimisation? Please elaborate.

My definition of optimisation is related to operational efficiencies. The scope of optimisation ranges from staff level, equipments, size of infrastructure and so on. Our company Indev who has invested huge money in building infrastructure and capacities has to think on optimising existing capacities. For instance, to optimise our capacities, we thought of building general warehouses close to CFS so as to offer facilities to our customers for storing cargo in our warehouses and thereby offer them a convenient delivery time. Our breakeven point is also quite quick in the business because of better operational efficiency. CC

september 2018 - CargoConnect

93

SHIPPERS SPEAK

“We choose LSPs that can resolve problems in shortest possible time” 1. How important is logistics for the overall scheme of your business?

Logistic sector plays a pivotal role in carrying immense importance for any business model and in winning customer’s expectations by delighting them with value preposition along with the product.

With FIAT’s extensive geographical spread, the company’s sole aim relays upon providing customers with products at the right time, right cost and with impeccable quality.

With a rich experience of almost two and half decades in supply chain management, Purchasing, and Supplier development, Kalpesh Pathak, Sr. Vice President, Corporate Supply Chain Management & Business Development at Fiat India Automobiles Limited, has won many laurels for the company. In an exclusive interview with Sugandh Bahl, he primarily focused upon the standards and procedures behind providing their customer base with timely delivery of Automobiles in impeccable condition which has further helped them sustain customer’s trust for over a century now..

94 CargoConnect - september 2018

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

We have seamless integration of all stakeholders i.e. suppliers, transporters and other departments through ERP network, as well as customised software to meet the needs of the respective stakeholder’s requirements. We also possess a smooth flow of orders for our customers through a principled legacy system, where we are the sole OEM offering choice to customers for configuring their own products. Our end-to-end consumer solution software is also exported and used by foreign markets such as UK, Australia, Japan, etc.

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

We are probably the only unique OEM offering configurable product solutions for end customers across Indian borders.

Now, having covered a vast area, it becomes difficult for us to cater to people’s diverse needs, therefore it requires an integrated system solution in place. Since time immemorial, we were very clear about this requirement and therefore planned a decent investment in system solutions and connectivity with all stake holders.

4. What percentage of your logistics work is outsourced? What functions are under the kitty of your logistics partners and what per cent are internally controlled?

We believe in focusing on our core competences to build quality products, optimising cost and an appropriate time to meet customer needs. Hence, most of our logistics activities are outsourced since we also believe that service providers have the required competence and skill sets to help us in solution building and operational aspects of various logistics activities.

5. Tell us about the most common problem faced by your company during its supply chain process.

What steps do you take to overcome these?

There is no common problem in supply chains. We have a strong ongoing focus on grooming and developing our team for managing any kind of discrepancies and debottleneck it in the shortest possible time. In India, I have always observed that our ultimate efficiency is governed by congestion on roads. However, a lot of infrastructure improvements have already happened but there is a lag factor with reference to industrial and infrastructure growth. This specific factor is not in our control but we hope to experience reduced traffic woes with the new policies and focus of the Government.

6. Who are your Logistic Service Providers (LSP)s and what qualities you seek for in them before choosing their services?

We believe in taking a reasonable time for developing our relationships with LSPs and therefore sign up a minimum contract of 3 years. We make sure to take a deep dive in terms of understanding LSPs, their capabilities, skill gaps and their ability to resolve them in quickest possible time.

gistics o L e h t tent for ad format n o c t n t releva n an easy to re s o m e ing th nals i Present stry professio indu y red b Powe

ation l u c r i Total C0000/1 Airports Freight Forwarders Airlines Indian / Multinational LSP’s Export Houses / Buying Houses Ground Handlers Important Association of Logistics Industry in India Relevant Govt. Dept. and Ministry

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Surface Express:

Growth Challenges and The Way forward is expected to grow at healthy rate of more than 15 per cent in next 3 years.

Vikash Khatri

T

he Express industry is a premium segment of the transportation, which has major differentiation of time sensitivity especially for small parcels and part load shipments. This segment of logistics industry is more organized and tech savvy than normal logistics market. As per the report published byTechnavio Global Courier, Express and Parcel industry is estimated around $198 Billion in 2016 and is expected to grow

by CAGR of 5 per cent. Due to the speed of shipment and better handling capabilities the consignment portfolio of this industry belongs to high value and low volume products.

It has come a long way in domestic market since its organized launch in 80s, when domestic companies like Blue Dart and Gati entered in the space.

In line with the global trends, Indian Express industry is having certain sub segments based on the geography, mode of transportation, type of shipment and end receiver of shipments as follow: As per a report published by EICI and Deloitte domestic express market is estimated at INR 17000 Cr annually.

Out of which 12000 Cr is via Surface more and rest is via Air mode. As the focus of this analysis is Surface express, air express component has been skipped here. As per our estimate Surface express industry market size is INR 7300 Crore in B2B segment, which

96 CargoConnect - september 2018

Challenge from Traditional Part Truck Load (PTL)/Parcel Players: In order to understand the scope and challenges of surface express industry, we need to understand long sustained surface transportation eco system and its value chain. Express industry contribute only 3 per cent of surface transportation market, while remaining 97 per cent market is dominated by Full Truck Load (FTL) and traditional Parcels / PTL. Parcel /PTL segment is closer to express industry in terms of nature of shipment, weight category etc. But the Parcel/ PTL market has been unorganized with presence of few strong regional players across countries.

These players had a natural way of evolution in specific region without much professional management, technology and other operational drivers. In last 2-3 years we have witnessed the blurring differentiation in Surface express and PTL/Parcel segment and the primary reasons for that are as follow: • Bridging Gap in Transit Time: With the implementation of GST, abolition of check posts and improvement in road infrastructure, average transit time has reduced substantially in last few years. This changed has favored the conventional transporters in reducing transit time.

This has reduced the transit time difference between express and PTL/ parcel to an extent from the levels where it was a decade ago.

• Bridging Gaps in technology: In last few years’ access to technological tools has improved for SME segment.

In transportation space, there are a lot of New Age Start-Up providing SaaS based utility tools or software related to TMS, Fleet Management, Track and Trace etc. at fraction of cost. This in-turn has reduced the gap between express and traditional players. While on the other hand very few express players have invested on Artificial Intelligence, Machine Learning, Internet of Things etc.

• Bridging Gap in Infrastructure and network: Network and reach is back bone of Logistics business. Historically unorganized players of PTL/Parcel players were having lane specific reach, while semi organized players were having limited reach or strong regional reach like V-Trans, VRL, Jaipur Golden, NECC, Nitco etc. Every state/ region were having such players who were having strong regional reach but weak national reach. While most of the express players were having edge of national reach. But over a period of time these regional players are also trying to build National network and serving across geography.

• Gap in Pricing: Competition in surface express has led to reduction of effective per KG price, still there is significant gap in pricing of Express and Parcel/PTL services.

Which is prompting these players to move up in value chain. Most of the players are eyeing for snatching some business from express players on one side or providing improved services almost similar to express to their existing clients with nominal increase in price.

(The article is authored by Vikash Khatri, Founder, Aviral Consulting Pvt Ltd )

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Loco moves at 100 kmph in trial run of western dedicated freight corridor

Chennai Port sets record by berthing giant vessel ship

The first-ever trial run on the western section of the ambitious dedicated freight corridor project was carried out recently, with a locomotive attaining 100 kmph speed during the run, an official statement said. “A locomotive was run on the western corridor between Ateli and Phulera, falling in Mahendragarh district of Haryana and Jaipur district of Rajasthan. During the trial run, the locomotive attained a speed of 100 kmph”, said the statement issued by Dedicated Freight Corridor Corporation (DFCC). The distance between two stations is 190 kms which was covered in 3 hours and 52 minutes.

The trial run on the eastern corridor of DFC was carried out in March 2016. The DFC is an ambitious project undertaken by railways. It comprises the eastern and the western corridor.

The two corridors have missed several deadlines, though a source in the railway ministry, after a recent review meeting, said the entire project would be completed by March 31, 2020.

The section on which the trial run was conducted today comprised 10 viaducts and major bridges, 127 minor bridges, one rail fly over and 118 route under bridges, the statement said.

There are 6 DFC stations in this section and two junctions, i.e.

Ateli and Phulera.

Chennai port (ChPT) has become the first major port to handle a very large crude carrier (VLCC) inside the port basin. All other major ports, including Chennai, have so far handled such ships outside port basin considering the vessel size and difficulty in manoeuvring such ships inside the basin.

The VLCC New Diamond with a length of 333 m; beam of 60 m; dead weight tonne of 2.99 lakh and maximum draft of 21.33 m was the largest ship to be handled by the port till date.

ChPT Chairman P Raveendran said that in a complex operation the ship was manoeuvred by a team led by the harbour master with two dock masters and a pilot. The port trust’s deputy conservator was present at the Vessel Traffic Management System tower throughout the critical operations.

A year-long effort was taken to bring the VLCC to the port.

This involved a thorough technical simulation study, training of port’s pilots and chartering of higher capacity specialised tugs from Kamarajar Port Ltd. A thorough risk analysis was done with respect to safety, oil spill emergency and fire hazards, he said.

The ChPT achieved the feat with the berthing of VLCC New Diamond, which brought crude oil from Basra in Iraq. In future shipments, the ship with full load will first offload the crude at Paradip where IOC has a plant, and after that at Chennai.

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FFFAI to organise Young Logistics Programme in September India’s logistics industry is booming towards as a sunrise sector, has been extremely successful into drawing attention of the government as well as the common mass. Young entrepreneurs and start-up ventures are becoming inquisitive about this lucrative sector. But the sector isn’t booming without certain challenges and loopholes, In today’s logistics industry there is dirth of skilled manpower and therefore it seems fragmented to young professionals and looks unattractive in wooing young professionals because of its poor image.

In accordance with this scenario, the Federation of Freight Forwarders’ Associations in India (FFFAI) is organising “Young Logistics Program (YLP)” on September 24 on the occasion of the FIATA World Congress 2018 which is being held from September 26-29, at Pullman Hotel, Aerocity, New Delhi. According to Tej, Executive Committee Member, “learning is the necessity of life. We learn something new every day and will continue to do so. After an energetic morning with the disruptions with startups, what better way that to introduce the newest way of learning the Logistics Business by playing a game,” At the special Young Logistics Programme FFFAI will excel the process of learning the logistics business “With Business on the Move” perception.

Jani to lead ACFI for 2nd consecutive term Recently, Air Cargo Forum of India (ACFI) held its 6th AGM in which the names of elected office bearers and board members were announced for the term FY 20182020. Newly elected board members of ACFI again vested their confidence in the leadership of Tushar K Jani, Chairman, Cargo Service Center and elected him Tushar K Jani as the board’s President for the second consecutive term.

Jani, after taking over the charge of President of ACFI, thanked all the members for reposing confidence and belief in him by bestowing this important responsibility on his shoulders. He assured his full commitment to discharge the responsibility as the President of ACFI and requested the support and cooperation of all the members.

Cyrus Katgara, Partner, Jeena & Company was elected as Vice President; Yashpal Sharma, Managing Director, Skyways Air Services Pvt Ltd as Secretary, and Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management Pvt Ltd as Treasurer in the newly comprised board of ACFI. P.S Atree, Managing Director, P.S Atree & Company was in the role of Returning Officer in the election process.

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AUTOCONNECT 2018 to be held in Pune

Warehouse space leasing up 45% in major cities

Witness logistics heads of automobile companies brainstorming on supply chain issues

IWAI launches portal for cargo owners and shippers

A report by CBRE, the world’s leading real estate firm, said that India’s Logistics and Industrial space leasing activity increased by 45 per cent to about 10 million sq ft in the first half of 2018 as compared to the first half of 2017, primarily because of the GST implementation last year. More than 75 per cent of the leasing transactions during the period were performed by e-commerce, retail, 3PL, and manufacturing and engineering companies in order to consolidate or expand their businesses.

“This is as a result of the policy reforms that the sector has undergone in the past two years (implementation of the GST), as more and more corporates in this sector consolidate their operations and locate closer to consumption hubs, thereby driving demand for larger warehouses,” added the report.

The Inland Waterways Authority of India (IWAI) has launched a dedicated portal to connect cargo owners and shippers with real time data on availability of vessels.

The landmark e-connect measure will enable direct interaction among the vessel operators, shippers and cargo owners. Named as the Forum of Cargo-Owners and Logistics-Operators (FOCAL), the link of the portal is available on the IWAI website.

FOCAL will facilitate responses from the logistic operators against the requirement raised by cargo owners and vice-versa. The users can register on the portal to key in the availability and details of vessels or the available cargo, as the case may be.

Cargo owners will be able to put details like the origin, destination, type of cargo, etc.

Reopening of Kochi airport brings sigh of relief

Samara Capital and Xponentia fund partners to acquire Spoton Logistics

The CARGOCONNECT magazine, India’s leading logistics publication, in its series of events is proud to organise the automotive logistics conference - AUTOCONNECT 2018.

The day-long insightful conference on the automobile supply chain will be held in Pune on October 15, 2018.

The supply chain heads of leading automobile manufacturing companies such as Mahindra & Mahindra, Man Trucks India, Hyundai Motor, FIAT Chrysler Automobiles will brainstorm on supply chain loopholes and ways to restructure supply chains in order to ensure quick delivery of finished products with the heads of the foremost LSPs of India.

Delhi-Mumbai Expressway Construction To Begin From December Nitin Gadkari, union road transport and highway minister has confirmed that the construction on DelhiMumbai expressway will start in December. According to Gadkari, the Delhi-Mumbai expressway will take three years for completion.

It will connect the two prominent cities in the country-the national capital and the capital of Maharashtra, with a significant reduction in travel time by 8 hours (approximately).

The expressway will be built at a humongous cost of 1 trillion and will allow cars to speed up to 120 km/h.

Reduction in travel time will be credited to the expressway that will cut-through less-developed areas, saving overall distance travelled to 1,250 km, which is around 400 km less.

102 CargoConnect - september 2018

Exactly two weeks after it suspended operations following floods that ravaged the State,Cochin International Airport limited (CIAL), the country’s first Greenfield airport, is up and running once again.

Submerged in water and slush that came surging down the Periyar for about five days, CIAL was a devastated landscape just a week ago. Thanks to an army of workers and executives who worked hard.

A statement issued by the airport company said all airlines, both domestic and international, would follow the current schedule of operations. An intimation regarding the readiness of the airport had already been given to all airlines.

CIAL sustained a loss of around `220 crore as floods caused damage to the runway and equipment.

Express logistics company, Spoton has been acquired by a consortium of investors led by homegrown private equity fund Samara Capital and Xponentia Fund Partners for 550 crore in cash.

With this, PE firm India Equity Partners has completely exited Spoton, the logistics company announced on Monday.

Spoton’s acquisition is a part of Samara’s plan to create a retail ecosystem that the Mauritius-based PE firm would require if it is successful in acquiring the More supermarket chain from Aditya Birla Group, said a person familiar with the firm’s strategy.

Samara was teaming up with Amazon and Goldman Sachs to try to acquire More, the country’s fourth largest supermarket operator.

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Government to develop 17 road-cumairstrips, says Gadkari

Nepal-India to Sign the Dotted Line for Major Railway Projects

As many as 17 facilities that can be used as roads as well as airstrips are being developed in the country, Union Minister Nitin Gadkari said. The facilities are being developed under the ambitious Bharatmala project that mainly seeks to strengthen roads network in the country.

Gadkari told the Lok Sabha that several projects have been taken up under the Bharatmala project.

One of the best things regarding backward areas and Rajasthan is that 17 road-cum-airstrips are being developed. These facilities would come up at places in the state where there is no airport in the vicinity of 300 kilometres, the Minister for Road Transport and Highways said during the Question Hour. Road would be closed for traffic at the time of landing and take-off of aeroplanes, he added.

Under the first phase of the Bharatmala, a total of 34,800 km of road, including 10,000 km of residual NHDP (National Highway Development Project) have been approved for development.

India and Nepal are expected to ink two key agreements on Kathmandu-Raxual railway line and movement of bulk cargo from three more transit points between the two neighbours.

Officials are making preparations to sign a memorandum of understanding (MoU) for a preliminary survey of the proposed Kathmandu-Raxual railway line. India had agreed to fund the survey during Prime Minister KP Sharma Oli’s visit to New Delhi in April.

Earlier, an Indian team had conducted the baseline survey of the proposed railway line from Chovar in Kathmandu to Raxual.

The pre-feasibility survey is expected to be completed within a year, according to officials.

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Investment in logistics to touch $500 bn by 2025: Prabhu

Moderate Freight Growth Continues in July, up 2.1%

Commerce and Industry Minister Suresh Prabhu recently said investments in logistics and infrastructure will touch $500 billion by 2025 as the country becomes an attractive destination for manufacturing and services.

“Expenditure on investment in logistics, including infrastructure, will touch $500 billion, by 2025... this will create millions of jobs and also do away with the hurdles hampering India’s internal and global trade,” Prabhu said at an event here.

Prabhu said India, with initiatives like “Digital India, Make in India and Skill India”, is now being looked upon as one of the most appropriate destinations for manufacturing and service locations by many of the foreign companies.

The minister further said the government has taken many measures to improve the trade performance through efficient and effective logistics including granting of infrastructure status to “warehousing, cold chains and multi-modal logistics parks.”

The minister also released the logo of logistics division.

The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 2.1 per cent in July 2018, compared to the same period the year before. This was the slowest pace of growth seen since May 2016 and well below the five-year average growth rate of 5.1 per cent.

Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 3.8 per cent year-on-year in July 2018. This was the fourth time in five months that capacity growth outstripped demand growth.

• The inventory re-stocking cycle, which requires quick delivery to meet customer needs, ended at the beginning of the year.

• There has been a broad-based weakening in manufacturing firms’ export order books. Specifically, export order books in Europe started weakening in February and have fallen in China and Japan in recent months.

• Longer supplier delivery times are being reported by manufacturers in Asia and Europe, the top two global trading areas by volume. This typically means that they have less need for the speed afforded by air freight.

AirAsia is now just one plane short to start its international operations

Hey DeeDee forays into cargo logistics

Inducts 19th aircraft in its fleet; Adds 2 new routes

AirAsia India announced the induction of 19th aircraft in its fleet of planes. With the induction of the latest Airbus A320, the Tata Sons-AirAsia group joint venture airline is now just one plane short of the mandatory 20 aircraft for starting international operations by a domestic carrier.

The airlines said it will add two new routes in its flight network from October. The 19th aircraft will be based at AirAsia’s Kolkata hub and will be deployed for operating daily flights on HyderabadKolkata and Hyderabad-Indore routes, which are being launched from October 1, the airline said in a statement.

The bookings for new routes have opened by the airlines.

“The airline is focused on expanding its presence in tierII/III cities, providing affordable airfares and improved services for flyers,” the budget carrier said. The new aircraft will also help the airline enhance the frequency of flights between Hyderabad and Bengaluru, it said, adding in addition, guests can travel from Indore to Kolkata through Hyderabad as well.

104 CargoConnect - september 2018

Hey Deedee, India’s only all-women last mile logistic services company has expanded its fleet to include four wheelers, to facilitate last mile and mid mile deliveries.

The company has taken a step towards entering the bulk and bigger parcels delivery and mid mile delivery segment by adding their Hey Deedee women drivers in the cargo services.

Recently, the company successfully raised pre-seed funding of $500,000 from Metaform Ventures LLC. The funds are going to be utilized for expansion of footprint, further gaining bandwidth and build technology. They intend to grow from the current four cities to 10 cities in this calendar year 2018 and launch their four-wheeler warehouse to hub deliveries with an all women drivers team.

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Maersk Line moves largest break bulk cargo

Maersk Line, the global containerized division of the Maersk Group has created a new record by strongly moving the largest ever break bulk cargo at 103 ft in length and weighing over 16 tons from Krishnapatnam to Tianjin, China.

The break bulk cargo consisting of windmill blade that was moved on its weekly service, Chennai Express, using 13 flat racks.

This is the first time ever that breakbulk cargo of this size has been handled by Maersk line in South India. This delicate shipment of windmill blade, meant for wind farms was time bound cargo and had to be loaded on to an earliest available vessel.

Steve Felder, Managing Director, Maersk Line- India Sub continent said, “There was seamless co-ordination between our team, the customer and the terminal operator to overcome infrastructure challenges and help deliver this delicate and expensive cargo to China.

Freight rates up on shortage of trucks Freight rates for the nine-metric tonne pay load section rose by `1,000 at the local truck transport market in the national capital today following the shortage of trucks against increased cargo movements. Transporters said less availability of trucks against pick up in cargo movements mainly pushed up freight rates for select destinations.

Delhi to Guwahati, Kanpur and Indore freight rates were up by `1,000 each to `61,000, `21,000 and `23,000, respectively.

Rates to Kolkata, Goa, Chennai and Hyderabad also rose by `1,000 each to `33,000, `59,000, `65,000 and `58,000, respectively.

Following are recent freight rates per nine-tonne load (in `): Jaipur 17,000 Hyderabad 58,000 Chandigarh 18,000 Vijayawada 60,000 Ludhiana 20,000 Bengaluru 62,000 Kanpur 21,000 Chennai 65,000 Indore 23,000 Mysore 67,000 Ahmedabad 23,000 Puducherry 68,000 Baroda 25,000 Coimbatore 72,000 Patna 29,000 Kochi 75,000 Surat 27,000 Thiruvananthapuram 82,000 Mumbai 29,000 Goa 59,000 Pune 31,000 Gwalior 15,000.

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DACAAI elects new Managing Committee for 2018-20 Domestic Air Cargo Agents Association of India (DACAAI) recently held its Managing Committee election and elected office bearers for the term of 2018-20. Col Rajendra Shukla, Secretary-General, DACAAI informed to media that in the new Managing Committee, Amit Bajaj – Mituj Marketing Pvt Ltd elected as President and Ravijeet Sherawat - Surya Cargo Pvt. Ltd as Vice President of the association.

Other office bearers include Suraj Agarwal – Secretary, Monopoly Cargo Services Pvt Ltd; Ismail Khan – Joint Secretary, Index Logistics and Roop Chand Baheti - Treasurer, Bhagwati Cargo. The association is committed to the development of domestic air cargo industry by engaging itself proactively with Government, regulatory agencies, airlines and terminal service providers for simplifying and streamlining procedures and enhancing the level of ease of doing business in India.

6000 railway stations to be Wi-Fi enabled in about 6 months Piyush Goyal, Minister for Railways and Coal, Government of India, said that in about six months 6000 railway stations will be Wi-Fi enabled, while speaking at the recent ‘Smart Railways Conclave’ organised by Federation of Indian Chambers of Commerce and Industry (FICCI).

“We believe that if we have to leverage digital technology, the basic ingredient is to ensure access to technology in the remotest part of the country. The Railways are working on a program to do the last mile connectivity wherever we do not have fibre optics in our network. We are hopeful that in next six to eight months all railway stations, other than the halt stations, about six thousand stations will be Wi-Fi enabled,” he said. emphasising on project implementation.

“We are focusing on smarter project implementation. We will have to start thinking, planning, and working smartly. I think that’s the change that you would have seen the last four years,” he added. On punctuality of trains, the Railway Minister said that between April 1 and today, punctuality has improved to 73-74% as railways have made a smart change by replacing the practice of the station-master recording the time with data loggers placed at interchange points across the network that ensure computer generated time.

news

Mahindra Logistics buys stake in technology startup ShipX

Prabhu meets Jaitley to discuss issues pertaining to aviation sector

Mahindra Logistics (MLL), one of India’s largest Third-party logistics (3PL) solution providers, announced the acquisition of a strategic stake in Transtech Logistics, also known as ShipX. ShipX is a SAAS (Software as a Service) based Transport Management Solution (TMS) platform that serves the supply chain automation needs for 3PLs, shippers and transporters.

ShipX has been working with MLL for over 3 years and has been enabling transportation solutions. This acquisition will help MLL to increase end-to-end digitisation and bring in operational efficiencies.

Pirojshaw Sarkari, CEO - Mahindra Logistics, said, “Logistics in future will be more technology driven – both in terms of our own operations, as well as interfaces with our customers and business partners. With our asset light business model, we are already like a ‘platform’. The strengthening of our relationship with ShipX opens up a new opportunity to take this to the next level.”

Amarnath Kalale, Co-Founder - Transtech, said “MLL has been our most valuable customer for more than 3 years. This investment will help us in developing more product features and strengthening the organisation.’’

Civil Aviation Minister Suresh Prabhu met Finance Minister Arun Jaitley and discussed various issues related to the civil aviation sector. Without elaborating, Prabhu said that Jaitley was “positive” about most of the issues. The meeting also comes against the backdrop of high fuel prices impacting the profitability of domestic airlines and efforts to bolster national carrier Air India.

Prabhu said in a tweet “Had a meeting with FM @arunjaitley ji along with my colleague @jayantsinha ji. Discussed about @MoCA_GoI matters related to Finance Ministry. FM positive about most of the issues.” Details about the discussions at the meeting could not be immediately ascertained.

Battling tough business conditions amid high fuel prices and intense competition, airlines have been pitching for bringing jet fuel under the Goods and Services Tax (GST) regime.

After the proposed strategic disinvestment of lossmaking Air India failed to take off in May, the government is now working on ways to revive the fortunes of the airline.

SpiceJet chief Ajay Singh said the domestic airline industry is in “great stress” as it is grappling with high fuel prices and fall in rupee.

GoAir is all set to kick off international operations

1233 tonnes of fly ash sets sail from Ganga to Brahmaputra through NW

GoAir is set to launch its international operations in October, making it the fifth Indian carrier to fly overseas, the Centre said on Friday.

At present, the Air India group, IndiGo, Jet Airways and SpiceJet fly abroad. The Air India group comprises Air India and its low-cost subsidiary Air India Express.

GoAir has been given permission to start international operations from the new Kannur international airport to Dammam in Saudi Arabia, Civil Aviation secretary R N Choubey told reporters here, adding that IndiGo will operate a flight from the city to Doha and Jet Airways will start a service from there to Abu Dhabi. The services are expected to start from the winter schedule, beginning October end.

At present, GoAir operates only domestic flights despite meeting the eligibility criteria for flying on international routes as it has a fleet of over 20 aircraft. In a written reply in Parliament Thursday, the government informed that the ‘air operators certificate’ has been endorsed for GoAir to start international operations.

Asked about the bailout package the government is considering for Air India, the secretary said they are working on a turnaround plan to make the airline competitive and holding consultations with the Finance Ministry before taking a final view on the matter.

In what is one of the longest hauls in Inland Water Sector (IWT) movement in the country, a consignment of bagged fly ash bound for Pandu Inland port in Assam sailed from Kahalgaon in Bihar.

Marking the commencement of a critical integrated movement through three Waterways, 1233 tonnes of fly ash (by product from National Thermal Power Corporation’s (NTPC) Kahalgaon power plant) was flagged off at Kahalgaon (NW-1, river Ganga) for Pandu (NW -2 ,river Brahmaputra). Two barges of 1000 tonnes capacity each, belonging to Inland Waterways Authority of India (IWAI) will reach Pandu near Guwahati via the Indo Bangladesh Protocol (IBP) route in nearly 20 days covering a distance of 2085 Kilometres. Fly ash is in huge demand as raw material in cement and brick industry and is also used for the purpose of land filling. The said consignment is to be delivered to M/s Star Cements for use in their cement plant in Guwahati.

The movement will evince confidence and interest in the inland waterways industry and vessel operators as more than 10 such pilot movements have been successfully completed lately on various stretches of NWs. In July, IWAI launched a dedicated portal ‘FOCAL” to connect cargo owners and shippers with real time data on availability of vessels. september 2018 - CargoConnect

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APPOINTMENTS Max Conrady to lead Fraport AG’s cargo division

Bombardier appoints Danny Di Perna as aerospace COO

Fraport AG, has appointed Max Conrady as new senior vice president to head Fraport AG’s Cargo Development & Management department.

Conrady who is currently Fraport’s head of operations planning terminal management at Frankfurt, will move into his new role from November 1 this year.

With his years of expertise in the airport business, Conrady will continue to further advance cargo development at FRA, stated Fraport in a press statement.

Bombardier has roped in Danny Di Perna as chief operating officer, Aerospace, effective September 15, 2018.

In his new role, Danny will report directly to Alain Bellemare, president and chief executive officer, Bombardier and assume responsibility for leading the company’s aerospace engineering, procurement and transformation functions. Danny brings more than 30 years of aerospace and industrial experience to Bombardier.

AK Pathak takes charge as Member (Planning) in Airports Authority of India

Razdan promoted as CEO of Delhi Cargo Service Center

Anil Kumar Pathak has taken over the charge of Member (Planning) in AAI. Pathak has 30 years of rich experience in planning, design of modern state-of-the-art environment-friendly airport terminals and airside infrastructure like runways, apron and their financial evaluation, regulatory clearances, tendering & award processes.

He is also associated with execution of various Greenfield & Brownfield airport projects across India.

Avinash Razdan has been recently appointed as Chief Executive Officer of Delhi Cargo Service Center Pvt Ltd (DCSC).

With 28+ years of progressive leadership experience and skilled at navigating complex situations, Razdan has varied industry knowledge ranging from manufacturing to service. Before being appointed as CEO he was the Chief Financial Officer in DCSC for 7 years and directed financial operations of the company.

SEKO appoints Mike Powell as new Chief Technology Officer

Anand Stanley to take charge as Airbus India head

US-based supply chain specialist SEKO Logistics has appointed Mike Powell as chief technology officer.

In his new role, he is tasked with taking the company’s technology suite to the next level to support customers’ global demand chains.

Powell had previously spent 4 years with SEKO as vice president, Information Technology and as a member of its leadership team before leaving in 2010.

Airbus has appointed Anand E Stanley, to succeed Pierre de Bausset as president and managing director of Airbus India.

Anand, 41, has experience in sales, P&L management, M&A, aftermarket and manufacturing. He will pursue the consolidation of Airbus businesses in India with a view to further reinforcing the position of the group for long-term success and growth in India.

Delta Air Lines Cargo ropes in Rafael Figueroa as MD

CML appoints Adrian Goodman as new Finance Director

Delta Air Lines Cargo has appointed Rafael Figueroa as Managing Director – Cargo Operations and Customer Experience, a role previously held by Julian Soell.

Figueroa will transition from Aeromexico Cargo to Delta Cargo to lead a team of over 1,600 employees.

This appointment is part of an international talent exchange program between Delta and Aeromexico, which aims to share best practices and skills across all areas of the business.

CML, a logistics specialist located in Lutterworth, has just appointed Adrian Goodman as the new finance director.

With over 20 years of experience in finance, Adrian will lead the Finance, IT and Site Services teams at CML and ensure that they continue to provide high levels of support to other departments. Adrian will also be responsible for financial controls and compliance, as well as contributing to CML’s strategic objectives.

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events

Safexpress comes up with new Logistics Park at strategic location 35th ultra-modern park to boost economic growth in Karnataka Safexpress, India’s largest supply chain & logistics company, has launched its ultra-modern Logistics Park in Bengaluru. This stateof-the-art facility is strategically located on National Highway 75. On this occasion, senior dignitaries from Safexpress were present to launch the Safexpress Logistics Park at Bengaluru.

These included Rubal Jain, Managing Director, Safexpress, Vineet Kanaujia, Vice President – Marketing, S.K Jain, Chief of Administration and PS Narayan, Regional Manager – Karnataka.

Speaking at the launch ceremony, Rubal Jain, Managing Director, Safexpress said, “With an economic growth of over 10%, Bengaluru is the second fastest-growing major metropolis in India. It is the country’s fourth largest FMCG market. The city is a hub for biotechnology related industry in India, and several biotechnology companies are located here. Being one of the largest industrial hubs of India, Bengaluru is a crucial location from supply chain & logistics perspective. Keeping this in mind, Safexpress has established its state-of-the-art Logistics Park at Bengaluru.

This Logistics Park will serve as a nodal point for supply chain & logistics in South India. This facility is based at a strategic location, and has strong connectivity with all South Indian states.”

Explaining about how this Logistics Park will enable economic growth in the Karnataka region, Rubal Jain said, “We have made

a significant investment to set up this world-class Logistics infrastructure in Bengaluru. The development of Safexpress Logistics Park in Bengaluru has been done on a land area of over 1.25 million square feet. This Logistics Park is enabled with stateof-the-art transhipment and 3PL facilities.”

AFI to brainstorm upon challenges and opportunities before air cargo at FWC 2018

Snehal Parikh

Vandana Aggarwal

Andrea Gruber

In view of the increasing opportunities and at the same time new challenges before the air cargo industry across the globe, Air Freight Institute (AFI) of FIATA will provide a very effective platform at FIATA World Congress (FWC) 2018 to elaborate on the subject matter on the occasion of its 99th Meeting.

Hosted by FFFAI and scheduled to take place from September 26-29, at Hotel Pullman, Aerocity, New Delhi, with the theme “The Future Starts Here”, FWC-2018 will witness more than 1200 delegates’ participating from 150 plus countries. The AFI’s Session on Air Freight, on the morning of September 28, is expected to be one of the most interesting and learned sessions in the history of FWC.

Kirsten De Bruijn

Ashwin Bhat

Significantly, the session will be moderated by veteran air cargo personality, Snehal Parikh, Managing Director, Lemuir Group. Panel speakers include Vandana Aggarwal, Economic Advisor, Ministry of Civil Aviation, Government of India; Kirsten De Bruijn, VC, Cargo Pricing and Interline-Revenue Operations, Emirates SkyCargo; Ashwin Bhat, Head Swiss WorldCargo; Andrea Gruber, Head Special Cargo, IATA and Bill Gottlieb, Past President, FIATA. The Panel Discussion titled “Disruptions & Opportunities” related to the Global Air Cargo scenario will also adequately focus on Q&A from the house to make it truly beneficial for all. september 2018 - CargoConnect

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events

CII Realty and Infrastructure Conclave: ‘Indian real estate sector in positive territory’ As per a CII-JLL report called ‘India’s Real Estate Milestones – A 20 year narrative’, the January to June period of 2018 witnessed inflow of institutional investment of $3,616 million (24,011 crore) into the real estate sector, a majority of which was into the IT & Commercial sector. The IT & Commercial sector attracted close to $2,000 million (13,151 crore) while the retail space received $300 million (1,898 crore).

From 2013 to 2017 institutional investments in real estate increased at a CAGR of 63% to a cumulative of $ 20,971 million by end of 2017, as per this report which was unveiled at a real estate Conclave.

According to real estate developers and experts the sector is in the positive territory. “Housing for All by 2022 is a game-changer with a difference. While new infrastructure which is being created will enable growth of housing, the government’s new policies are supporting creation of housing stock for the end-user,” said Niranjan Hiranandani, MD, Hiranandani Communities.

Addressing the CII Realty and Infrastructure National

Conclave in Mumbai, Mr. Hiranandani said RERA, the new regulatory regime, was effectively “short term pain for long term gain”. He said infrastructure growth would enable improved access to new, peripheral areas near existing cities where ‘Smart Cities’ would be created. For instance, he said the Mumbai TransHarbour Link would open up a huge chunk of land across the harbour, which could be an extension of South Mumbai. He said real estate is now heading towards affordable pricing.

ACCD organises gala night for its members The new Managing Committee of ACCD recently organised an event at Nueva at Sangam Courtyard, RK Puram. The endeavour behind was to host quality events along with the board members and their spouses.

The evening was complemented with topnotch line of drinks and authentic Pan Asian and European cuisines. The new President of ACCD, Sajan Kallra’s further efforts to turn the event into a lasting impression for all the atte ndees was appreciated by the club’s present board members.

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events

TRUCK-TRAILER-TYRE EXPO 2018 held in Gandhi Nagar A 3-day long event, Truck-Trailer-Tyre Expo 2018, was organised in Gandhi Nagar, Gujarat from August 3 - 5. The expo, a one of its kind exhibitions that is meant to bridge the gap between the buyers and sellers, brought them at one platform to explore the Truck, Trailer and Tyre market. The event provided a one-stop platform with bringing together buyers, sellers and manufacturers from across India and provided new opportunities to tap into this growing business potential in India.

profile

Gandhi Automations- India’s No.1 Entrance Automation and Loading Bay Equipment Company offers High Speed Doors High Speed Doors designed and manufactured by Gandhi Automations are sturdy, dependable and are the ideal solution for medium and large entrances. The doors are manufactured with European collaboration and technology with innovative and creative engineering.

Fast moving functional and reliable doors are needed in industrial and commercial contexts. Gandhi designed and manufactured High Speed Doors are versatile and solid ensuring long-lasting reliability.

The modular structure of the curtains, assembled and joined by anodized aluminium extrusions, provides for a wide range of polyester sections available in a variety of colours. Wide, full-width window panels ensure a safer traffic and allow more light in. Their fast and easy replacement, in case of accidental tearing, saves money and time.

The alternating metal tubular structure there inserted ensures high wind-resistance.

PrimeHigh Speed Doors are the ideal solution for internal and external entrances and effectively operate in any situation, even when strong winds are blowing and in rooms with high volume traffic.

Sturdy and dependable, Prime is the intelligent door for medium and large entrances.

High Speed Doors for external entrance are equipped with spring steel wind lock in curtain pocket that ensures silent door travel, higher wind loads and curtain stability. september 2018 - CargoConnect

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upcoming events Automotive Supply Chain 2018 One-day event to be held on September 09, 2018, at Hotel Hilton, Chennai. Organised by CII Institute of Logistics, the conference focuses on the recent trends and developments directly impacting automotive supply chain, and future outlook in the rapidly evolving global supply chain.

To know more visit varghese.john@cii.in FTR Transportation Conference Scheduled from September 11-13, 2018, at the Historic Union Station in Indianapolis, Indiana, The FTR Transportation Conference, with over 80 speakers and panelists, and 450 attendees, is expected to bring together all the different aspects of the freight transportation world into one place.

To know more visit www.indiawarehousingshow.com MARITIME NATION INDIA Three-day event scheduled from September 20 - 22, 2018, at CIDCO Exhibition Centre in Mumbai. The event will offer a unique global platform for exhibitors to demonstrate their expertise and secure business opportunities in the Indian Maritime Sector.

To know more visit www.maritime-world.com/mni2018 FIATA WORLD CONGRESS Four-day world level conference from September 26 - 29, 2018, to take place at Pullman New Delhi Aerocity. The conference will provide logistics industry leaders from around the globe remarkable insights to industry challenges with sustainable solutions.

To know more visit www.maritime-world.com/mni2018 AUTO CONNECT 2018 - Automotive Logistics Conference Organised by Surecom Media, Auto Connect conference scheduled on October 15, 2018, in Pune, will bring together all the stakeholders of the Indian automotive logistics industry under one roof, with offering an excellent networking and knowledge sharing opportunity for the attendees.

To know more visit www.autoconnect.co.in THE INTERNATIONAL AIR CARGO ASSOCIATION - AIR CARGO FORUM 2018 - TORONTO Three day event scheduled from October 16 - 18, 2018, at Metro Toronto Convention Centre, Canada. Over 4,000 air cargo decision makers and more than 300 exhibitors from around the world is expected to gather at this premier air cargo industry event to network and address current industry challenges and opportunities.

To know more visit www.tiacaevent.org PHARMACONNECT 2019 Organised by Surecom Media, PHARMACONNECT 2019 is a one-day conference to be held in Mumbai on January 17, 2019. Dedicated to the pharma supply chain professionals, the conference will offer knowledge sharing & networking, all Under one Roof. To know more visit www.pharmaconnect.in E-COMCONNECT 2019 Deemed to be India’s biggest event for e-commerce logistics professionals - E-COMCONNECT 2019, organised by Surecom Media is scheduled on March 24, 2019. The event will offer great opportunity to meet and network with over 200 e-commerce supply chain professionals. To know more visit www.e-comconnect.in

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PEOPLECONNECT Shashidar Reddy

MD, Shakti Hormann Pvt Ltd

1. Tell us about your journey so far!

I joined Shakti Hormann in 1994 and over the last 24 years have thoroughly enjoyed the journey. We started our operations in India as Shakti Met Dor Ltd (now Shakti Hormann (P) Ltd) the same year, and since 2012 have been operating as a Hörmann subsidiary. We have developed a reputation for excellence in the Indian market with high quality products, prompt delivery, and a service paradigm that has become an industry benchmark.

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

In my opinion, the industry has not dramatically changed but expanded.

What is evident since the last 5-6 years is that there has been a better awareness. People today don’t exhibit a surprise factor when you utter the word ‘dock leveler’ because today

they understand what the function of a dock leveler is. Today, when we say high-speed door, rolling shutter or sectional door, people know what their application is, which in itself is a huge positive development.

3. What is the biggest challenge you have faced being in this industry?

With the right products and right amount of efforts that we put in, for us the challenge has always been on how to get customers to invest at the time of project inception in something that can actually give the desired output or service over a period of time. In India, especially, people always tend to look at costs of products and services from a project implementation perspective and not on a running cost, and in the process fail to understand the potent ia l of long ter m bene f its thereof. For instance, one is reluctant to understand that in the next 5 years

what singular advantage he would get when he uses a set of better quality products by spending a little more!

4. Your success Mantra!

Always do business honestly. Well, it might be a bit taxing and one might not make as much margin as one could, but one would still have the satisfaction of having done the Right thing. In business, honesty is not only about doing things the right away, but also about expressing the values in which the company was founded.

5. Any message you would like to give to those who aspire to work in this industry!

There is a great potential in this business, especially for people who are creative and can introduce innovative products. Moreover, with the kind of technologies that are coming in, there is much more to explore and develop in this industry. CC

IN BUSINESS, HONESTY IS NOT ONLY ABOUT DOING THINGS THE RIGHT WAY, BUT ALSO ABOUT EXPRESSING THE VALUES ON WHICH THE COMPANY WAS FOUNDED 114 CargoConnect - september 2018