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April 2014



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India’s first truck racing championship


THE GLOBAL FIGHT AGAINST PERISHABLE WASTAGE With new time-sensitive food product powerhouses emerging in the world, the issue of deploying efficient cold supply chain systems has become more prominent than ever before...

Logistics Times


All about Transportation, Distribution & Infrastructure

Volume 4: Issue No.12 * April 2014 Raj Misra

Editor in Chief Ritwik Sinha


GM (Marketing)

Rajiv Sharma

Sub Editor

Neha Richariya


Mohit Malik


Kausar Syed

Circulation & Distribution

Kamruddin Saifi

Legal Advisor

Rakesh Garg

Our Bureau Mumbai

Rahul Kumar


B Shekhar


N Raju


Sudhir Kumar Editorial Advisory Board Paul Lim Founder & President, Supply Chain Asia Pawanexh Kohli Principal Advisor, Cross Tree Prof. Samir Srivastava Associate Professor, IIM-Lucknow Prof. Akhil Chandra Institute of Logistics & Aviation Management Ramesh Kumar Member, National Committee on Supply Chain & Logistics, Govt. of India

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Highway Encounter



REPORT Signs of stability


PHOTO FEATURE Racing Championship





EVENT Air Cargo Symposium



Moving out of cold chamber? In India, we have probably learnt to live with this bitter truth. Going by a commonplace perception, every year the country loses about 35-40 percent of food products including fruits, vegetables and other time-sensitive items. For the wastage of temperature controlled products, we simply owe it to the poor cold supply chain systems. And while much debate and discussions have been taking place on this issue, the signs of contraction in the wastage ratio is hardly visible even as horticulture production has been growing up consistently. But unlike the conventional wisdom that prevails in the country which recognizes fruits and vegetable wastage as a typical Indian problem, this clearly is a global issue and no country in the world can claim to remain unaffected by it. At a workshop organized by National Productivity Council (NPC) which saw the participation of cold chain experts from over a dozen countries including the leading developed markets like the US and Japan last month in Delhi, the point that time-sensitive product wastage is as much a problem in the developed world as it is in the emerging and developing countries was unanimously emphasized (we gathered the vital inputs for our cover story in this edition from this workshop). While in the developed markets, the maximum wastage happens after the retail point, in emerging or developing countries it happens between the farm to the retail point journey. And according to a report of FAO, the quantitative worth of total food production wastage/loss amounts to a whooping $1 trillion. The moot question is: where is the world moving now in terms of checking out this serious menace? FAO report clearly states that collectively if this problem can be checked by even 25 percent, it would be enough to feed over 800 million people. The solution clearly has two parts. In the developed countries, the panacea lies in educating the consumers while in the developing markets, the response would entail putting in efficient cold supply chains. The good news is: the stakeholders in the emerging markets which are picking up major strength in fruits and vegetables, sea food, milk products, frozen meats, etc. seem to have better realization than ever before on the pertinence of adopting advanced cold chain systems. Take the case of India. In last two-three years, there have been a slew of initiatives including setting up a dedicated agency called National Center for Cold-chain Development (NCCD) which has drawn a holistic programme. “Cold chain does not begin and end with setting up a cold storage”, that seems to be the major mantra it is propagating. The task, no doubt, is daunting for all emerging countries because at the end of the day, cold supply chain is the ‘ultimate supply chain’ since it involves complexities galore. But then, losing out consistently on your asset is not an option any forward looking country would like to live with permanently. Additionally, there is a global clarion call to preserve our food products to ensure food security in the future. So there seems to be enough reasons to nurture the hope that the global fight against food preservation would get more decisive and this in turn would propel application of advanced cold supply chains to minimize perishable wastage. The growing prominence of organized retail in new markets is also slated to act as a catalyst. Waiting for your response Ritwik Sinha LOGISTICS TIMES August 2011



Upto 40% foodgrain stored unprofessionally Owing to extreme dearth of about 35 million tonnes (MT) warehousing capacity together with massive food grain storage shortfall of about eight MT, about 3040 per cent food grain is stored in an unprofessional manner during the peak marketing season in India, according to a recently concluded ASSOCHAM-Yes Bank joint study. “There is an urgent need to develop a strong warehousing system equipped with modern and scientific storage facilities like warehouses, silos, silo bags and others as the grain storage capacity in India has not been keeping pace with the marketable surplus,” highlighted the study titled ‘Agri-Infrastructure in India: The Value Chain Perspective.’

industrial warehousing. While the warehousing space clocking a CAGR of about four per cent and which was about 1.52 billion square feet in FY 11 is expected to grow to 1.84 billion square feet till FY 16 and only 29 per cent of this accounts for agro while the remaining for industrial warehousing. “India needs to recalibrate its strategy to mitigate the challenges of high food grain wastage due to lack of scientific storage facilities and high inflation due to lack of cold chain infrastructure like cold storages and refrigerated transport as it leads to wastages in fruit and vegetables,” suggested the ASSOCHAM-Yes Bank study. The warehousing capacity available in India, in public,

“In India, around 20-30 per cent of total food grain harvest is wasted due to inadequate storage capacity, regional imbalance in warehouses, lack of adequate scientific storage and inefficient logistic management,” said D.S. Rawat, secretary general of ASSOCHAM while releasing the study. “Each grain bag is handled at least six times before it is finally opened for processing which leads to higher storage and transportation charges and also adds to wastage of food grain during transit and handling,” said Rawat. “Much needs to be done to built additional storage capacity, renovate existing warehouses and implement a robust Negotiable Warehouse Receipt (NWR) system to make available more funds to farm producers and simultaneously provide security to the lenders.” Growing at a compounded annual growth rate (CAGR) of about nine per cent, the market size of warehouse was over Rs 22,800 crore in FY 11 which is expected to cross Rs 35,000 crore mark in FY 16 and only 12 per cent in this accounts for agro while the remaining is

co-operative and private sector is over 112 MT and another 35 MT of warehousing capacity is required during the 12th Five Year Plan for storing all major crops highlighting the huge demand-supply mismatch. About 70 per cent of warehousing space is owned by government agencies. “The warehouses in India lack in optimal size, adequate design, ventilation facility, inventory management and storage system as they have been built following the traditional norms and without proper specification and even some of the modern warehouses do not meet international standards,” further noted the ASSOCHAM-Yes Bank study. “There is an intense competition amid warehousing industry due to low entry barriers (lower capital outlay and lesser regulatory environment) and high fragmentation,” the study added. “Besides, unorganised segments pose a great threat and competition to modern warehouse because of lesser overheads and competitive warehousing rate in the country.”







Need for an Integrated Transport Ministry Infrastructure investment has to increase to 8-10% of GDP after the 12th Five Year Plan. Speaking in the Plenary Session- Indian Infrastructure: Realizing the Trillion Dollar Opportunity, on the second day of CII National Conference and Annual Session 2014 at New Delhi last month, Dr Rakesh Mohan, Executive Director, International Monetary Fund, showcased the India Transport Report, and said that to get the Indian growth story to the growth rate of 7-8%, total investments will need to increase to almost 40% of GDP out of which around 10% of GDP would be in Infrastructure. Giving projections for traffic load in the coming 20 yrs, Dr Mohan pointed out that the passenger traffic is poised to grow at a factor of 15-16 times the current load and the freight traffic is expected to grow by a factor of 6-8. To handle these huge numbers, the approach has to change from project centric to a more holistic approach. To overcome the serious erosion of traffic share of railways, investments in Railways needs to be ramped up to 1% of GDP. Dr Mohan further mentioned that growth at 7-8% per annum would result in quadrupled economic activity. To meet these requirements, the power usage will increase 4 times and coal usage will increase by 3 times. This will result in increase in imports of coal and thus better and more efficiently managed ports would be required. As all stakeholders need to have an integrated and more coordinated approach, there is merit to look at Unified Transportation Mechanisms and an Integrated Transport Ministry which will span out the Integrated Transport Policy.


Speaking at the same session, Anil Swarup, Additional Secretary & Chairman, PMG, said that there are a lot of people who are imagining, planning and thinking India and now we need to start “Doing India�. Swarup emphasized that since the establishment of the Project Management Group (PMG), 6 lakh crores worth of projects which were stuck at various stages of the process of clearances have been cleared for implementation. Ashok Lavasa, Secretary, Ministry of Civil Aviation, mentioned that Civil Aviation has three peculiar features, one of these being that airport construction and services provided by airlines are equal partners in Civil Aviation and both these parts provide a good opportunity for private partnerships. He highlighted the paradigm change in the civil aviation sector over the past decade as the airlines have discovered immense value at the bottom-of-the-pyramid, and this shift has resulted in quantum growth of the sector. He also strongly underlined that airport development should be integrated within the overall planning of the economic hubs. Dr Vishwapati Trivedi, Secretary, Ministry of Shipping, who also addressed the gathering said that there was no shortage of entrepreneurship or funds for the shipping sector but there was need to unshackle the economy by creating an enabling environment. Dr Trivedi also said that there has been increase in investment in the non-major ports (those not covered under the Port Trusts Act) and that the new ports which are getting developed are based on the design of Corporate Ports and these ports will be handling a major chunk of water freight traffic in the future.

Adani’s Mundra Port crosses 100 MMT mark Mundra Port, the flagship port of Adani Ports and SEZ, has achieved a new landmark of handling 100 million metric tonnes in FY 13-14. Mundra is the only commercial port in India to have achieved such a unique feat. According to a company release, the Mundra Port had signed the concession agreement in 2001-2002. And in a short span of just 12 years Mundra Port has created history by achieving 100 million metric tonnes of commercial cargo in a year. This is the fastest growth in the Port sector witnessed in the country and one of the best by global standards, surpassing all the Government as well as Private commercial ports of India (a compounded annual average growth rate of over 35%). Mundra port has deployed state-of-the art technology which ensures the highest levels of efficiency and productivity. The port today possesses capacity to handle over 200 million tonnes of cargo. Commenting on this momentous occasion, Gautam Adani, Chairman, Adani Group said, “This is a significant milestone for APSEZL’s journey. It reconfirms my faith in the passion and commitment of our employees. This coupled with our customers’ trust in our capabilities will help us in achieving our vision of handling 200 million metric tonnes of cargo much ahead of our original timeline of 2020. I see Mundra Port as a strategic harbinger which our network of ports on Indian coast will emulate, and grow exponentially.” The company developed India’s longest private railway line (64 km) to connect Mundra port with the national railway grid in November 2000. The first container

terminal of the current three, was commissioned in July 2003 and the first offshore single point mooring for crude oil, was commissioned in December 2005. State-of-the art Roll on Roll Off (Ro-Ro) automobile terminal with a floating pontoon (one of its kind in South Asia) was commissioned in January 2009. Mundra boasts of the world’s largest and fully mechanized coal import terminal with a capacity of 60 MMTPA which was commissioned in December 2010. This rapid pace of developments is what helped Mundra port to gallop to 100 million metric tonnes in just 12 years. Adani Ports and Special Economic Zone also operates terminals in Hazira and Dahej, in Gujarat, Mormugao in Goa and Visakhapatnam in Andhra Pradesh. It is setting up a bulk cargo handling facility in Tuna Tekra (Kandla Port) in Gujarat and a container terminal at Ennore in Tamil Nadu.

Tank Farm facility at Port Pipavav

The Aegis Group has inaugurated a new tank farm facility at Port Pipavav on the 1st of April, 2014, for commercial operations. This new infrastructure will act as a cost effective and efficient gateway to service industry’s feedstock requirements in specialty chemicals, hazardous chemicals, petro chemicals, petroleum and non-petroleum products for the key markets of North and Northwest India.

The Aegis Group facility is the first of 3 sub-lease agreements signed by the Port with Liquid terminal operators for setting up and operating tank farm facilities, while APM Terminals Pipavav will provide all port and marine related facilities on the waterfront to ensure seamless cargo handling. Commenting on the commissioning of the new tank farm facility at port Pipavav, Managing Director of APM Terminals Pipavav, Prakash Tulsiani said, “With the container and dry bulk business contributing steady volumes and revenue growth, commissioning of the liquid business will add another pillar for future growth of our port”. Phase I of Aegis Group’s plan is to build a capacity of 120,000 KL of Liquid Bulk and 2,700 MT of Bulk Gas facilities across 31 tanks by H2 FY2015. Out of the 31 tanks, 13 tanks with a capacity of 70,120 KL or over 50% of the planned capacity is now commissioned. LOGISTICS TIMES April 2014





New cargo route to Hyderabad Qatar Airways Cargo recently celebrated the launch of its new freighter service to Hyderabad (India). The first flight from Doha arrived at Hyderabad’s Rajiv Gandhi International Airport on 1 April and was welcomed with a traditional water cannon salute. In addition, a welcome reception was held at the Hyderabad Novotel Airport Hotel, to celebrate the start of the new, dedicated freighter service. “Hyderabad is a key destination for Qatar Airways Cargo, and we are delighted to start our scheduled freighter service this month,” said Qatar Airways Chief Officer Cargo Ulrich Ogiermann. “We aim to be a world-class air cargo service provider, and this is why we are constantly expanding our worldwide network.” Hyderabad is an important centre for the pharmaceutical industry, which is why main exports from Hyderabad will include pharmaceuticals. Qatar Airways Cargo will operate a twice weekly service, using the Airbus A330 freighter. Qatar Airways already operates a daily passenger flight between Doha and Hyderabad. In addition to Hyderabad, Qatar Airways Cargo will begin scheduled dedicated freighter services to London Stansted (UK) on 2 May 2014. Qatar Airways Cargo recently strengthened its product portfolio with the launch in January 2014 of two new

premium services that optimise the transportation of time and temperature-sensitive goods, including highvalue pharmaceutical products and perishables. The new services, QR Pharma and QR Fresh, add to the company’s substantial range of cargo services and further enhance its capacity and flexibility to effectively move sensitive commodities in line with the highest world-class standards. Qatar Airways Cargo serves more than 40 exclusive freighter destinations worldwide via its Doha hub and also delivers freight to more than 130 key business and leisure destinations globally on 131 aircraft.

ISO 22000:2005 certification for Kandla facility Mother Dairy Fruit & Vegetable, a pioneer in the Food Industry was recently awarded ISO 22000:2005 Certification by DNV Netherlands for its Kandla Port Tank Farms. The certification was awarded for services like Receiving, Storage and Dispatch of Edible Oils from Company’s tank farms. With this, Mother Dairy has been recognized as “the ONLY farm operator in India to have received this certification”. Speaking on the achievement, Sanjeev Giri, Business Head – Dhara, Mother Dairy Fruit & Vegetable said, “It’s a very privileged moment for the entire team of Mother Dairy. Being awarded for maintain such world class standards with services makes our brand unique, and encourages the team to come forward with more similar efforts in the edible oil segment. With a capacity of 53000MT and excellent back up facilities, our edible oil tank farms at Kandla cater the best services and are capable of meeting the requirements in the best possible manner.” According to a company release, Mother Dairy’s Kandla Port tank farm involves highly trained manpower and has computerised inventory system. With 18 gantry LOGISTICS TIMES April 2014

points, it is capable of delivering upto 2500 MT per day within normal working hours. The farm has been brought into action keeping in mind, all the necessary requirements, like a huge parking space and modern fire fighting systems. ISO 22000:2005 certification specifies requirements for a food safety management system where an organization in the food chain maintains its ability to control food safety hazards in order to ensure that food is safe at the time of human consumption.



Major contract for Mahindra Logistics Mahindra Logistics has won a five year contract with Volkswagen India for handling in-plant logistics which includes stores and linefeed activities for its Pune plant in Chakan. This is first time in the history of Volkswagen Group in India that in-plant logistics has been outsourced to a local player. Mahindra Logistics commenced operations at the Volkswagen Pune plant on 15th February 2014. The work involves supporting manufacturing operations for both domestic and export market. The solution incorporates various other value added and ancillary services such as Information Technology integration, HR, Training, Quality & Process Audits. MLL has also made significant capital investment to service this project; one of the largest inplant solutions it provides to date. Mahindra Logistics is India’s premier Automotive Logistics company servicing more than 20 manufacturing plants and transporting over a million units of finished vehicles annually.

The Volkswagen Pune Plant was inaugurated in March 2009 and has a manufacturing capacity of 1,50,000 cars per year. The plant caters to the domestic Indian market as well as exports to 32 countries across three continents - Asia, Africa and North America.

Allcargo joins hands with Scania Allcargo Logistics recently announced an agreement signed with world’s leading manufacturer of heavy transport vehicles, Scania headquartered in Sweden. In this first-of-its-kind arrangement in India’s transport and logistics space, Allcargo will be utilizing the world class trailers on operating lease from Scania. With Allcargo’s leadership in integrated logistics especially Project Logistics and Equipment hiring, these state-of-the-art trailers will result in more productivity, time-saving and efficient transportation services for customers within the hinterlands of India. Allcargo is already engaged with Scania for clearing and port services and with this agreement the association has further strengthened to create a new benchmark across India’s logistics space. With Allcargo’s world-class services and Scania’s advanced technology, customers’ consignments transported through these trailers will always be safe and reach its destination before time without any transit delays, thus increasing productivity and efficiency of transportation for customers in India. Allcargo presently owns and operates one of the largest owned fleet of over 1,000 equipments comprising trailers

(low/semi/high bed), complete range of cranes (Crawler, Telescopic, Truck Lattice and all-terrain), Hydraulic Axles and Self-Propelled Modular Transporters (SPMTs), Strand Jacks, fork-lifts, reach stackers, barges and Coastal vessels. The company also has an international tie-up with Mammoetin India for providing cranes above 750 Tons and self-propelled modular transporters (SPMTs). Commenting on the occasion, Umesh Shetty Executive Director of Allcargo Logistics Ltd, said: “Allcargo has always endeavored to provide best in class services to customers and will always strive for innovating, efficient and productive ways to make a difference to customers’ transportation requirements. This is our step to add value to our customers in making their business more efficient”. LOGISTICS TIMES April 2014



Eastern Europe to drive EU aftermarket growth While a major distribution group in France collects data to support a planned expansion in Poland and neighbouring countries, an established Tier-one supplier of mechanical engine parts in Belgium explores the potential launch of electrical components to customers in southern Europe. A major automaker at the same time commissions a study to analyse pricing and recommended inventory levels for spare parts in the former Russian territories. These are just a few examples taken from Frost & Sullivan research enquiries, that exemplify how in 2013, interest in the European automotive aftermarket was significantly higher than recent years. The European automotive aftermarket is a €100 billion industry for parts suppliers from Ireland to Russia, according to latest research from Frost & Sullivan), with total revenue increasing by approximately 2.4 percent annually. It has fully recovered from its dip in 2009-2010, when economic recession caused motorists to defer normal vehicle maintenance. “In the coming years, growth across the region will be driven by expanding vehicle ownership in Eastern Europe - led by Russia and Poland - with increased maintenance and life-of-vehicle repairs for aging automobiles supporting opportunities in Western Europe,” reports Frost & Sullivan Automotive and Transportation Analyst. Growth for routine maintenance parts such as tires and lighting will outpace the market as a whole. For electronic parts, including position and pressure sensors, yearover-year growth will be as high as ten percent. There is also a growing demand for remanufactured products, as successful cross-border core collection programs pave the way for lower priced starters/alternators and clutch parts, among others. Growth projections for the region are based on two key metrics - vehicles in operation and average vehicle LOGISTICS TIMES April 2014

age. There are approximately 290 million passenger cars and light trucks across Europe that will need ongoing parts and service to remain operational. The average age of these vehicles is 8.2 years - with those in Western Europe tending to be a little bit older due to higher new car sales in Russia and Poland. The mature Western European markets - the United Kingdom, Germany, France, Italy and Spain - are home to the highest share of these vehicles (about 166 million). However, vehicles in operation are only increasing in

those countries by one percent annually. Low economic growth has suppressed new vehicle sales, resulting in fewer cars and light trucks added to the car park. “In Eastern Europe, growth rates are significantly higher,” the Analyst continues. “Russia’s vehicles in operation are forecast to increase more than three times faster (3.3 percent) than the rest of Europe. In Poland, new vehicle sales grew 6.4 percent for 2013 - the highest in three years - boosting the automobile population there. Overall, Eastern Europe’s car park will grow by 2.6 percent annually - more than twice as fast as the rest of the continent.”

India Aviation 2014

Inaugurating the 4th International Exhibition & Conference on Civil Aviation – “India Aviation 2014”, organized by Ministry of Civil Aviation in association with the Federation of Indian Chambers of Commerce and Industry (FICCI) last month in Hyderabad, Ajit Singh, Hon’ble Minister for Civil Aviation, Government of India said that the rapidly expanding air transport network and opening of the airport infrastructure to private sector participation has fuelled the growth of air traffic in India. He mentioned that, currently, India is the 9th largest aviation market in the world handling 121 million domestic and 41 million international passengers with more than 85 international airlines operating to India and 5 Indian carriers connecting over 40 countries, He pointed out that the Indian Civil aviation industry has systematically evolved during the last 100 years of its existence. The sector is poised to handle 336 million domestic and 85 million international passengers by 2020, making India the third largest aviation market in the world. Moreover, the commercial fleet size is expected to grow from 400 today to 1000 aircrafts by 2020. He further said that 49% FDI by foreign airlines in Indian carriers has emerged as the biggest game

changer, resulting in two new scheduled airlines - AirAsia & Tata and Tata & Singapore Airlines - in the process of starting their operations in the country. Moreover, a number of global players have entered Indian aerospace manufacturing, ground handling, training & capacity building, cargo and MRO industries. He highlighted that considering the tremendous growth prospects of air traffic, potential for large scale acquisition of aircrafts by the carriers, and substantial investment projections, Indian civil aviation market offers tremendous opportunities for foreign investors to invest in India. He stressed that this show shall build on the results of previous shows with the goal of increasing international collaboration in the civil aviation in India. Earlier welcoming the august gathering, Sidharth Birla, President FICCI, brought out the anomalies of a tough tax regime in the country and said, “State surcharges on aviation turbine fuel vary widely from 4% to 30% making cost of ATF in India 60% higher than international levels, though the solutions are obvious. Service Tax on air tickets and discriminatory tax policies for India MRO players must be addressed.” For enhancing regional air connectivity, it is imperative LOGISTICS TIMES April 2014





that financial viability of airports in Tier 2 and Tier - 3 cities shoud be taken care of. To enable this, he called upon to look at an “Essential Air Services Fund’ as a support mechanism. He further said significant opportunities exist for promoting aircraft and related manufacturing in the country that can be encouraged through tax incentives to aerospace industry and speedy time bound licensing procedures. He further congratulated the Government to bring a bill to constitute an independent Civil Aviation Authority that will have autonomy in administering aviation safety and have oversight over air transport operators, airport operators and related issues. The Chief Guest, Governor of Andhra Pradesh, H.E. Mr E S Lakshmi Narasimhan assured the gathering that “should you choose to tap into the aviation potential of Andhra Pradesh, you would be our guest and partners in development”. He talked about India’s first Aerospace Special Economic Zone, 15 kms from Rajiv Gandhi International airport at Hyderabad, which offers a wide range of opportunities to meet the needs of aerospace, nuclear space and defense sectors. He further said “the civil aviation policy of Andhra Pradesh focuses on the development of non-hub airports across the province by cashing on the huge infrastructure base built over the years, in order to make them new magnets of investment for development and give a fillip to tourism.” Ashok Lavasa, Secretary Ministry of Civil Aviation, in his opening remarks, said that civil aviation industry in India is experiencing a new era of expansion driven by factors such as Low Cost Carriers (LCC), modern airports, FDI in domestic airlines, cutting edge information technology interventions, growing emphasis on regional connectivity, increasing involvement of private participation under PPP, the policy of developing greenfield airports, etc. This surge has fuelled the demand for support services. In addition to the Greenfield airports at Navi Mumbai, Goa, Kannur and Kushinagar, Airport Authority of India has indentified six airports for private management under the PPP route following the successful implementation of such models in Delhi, Mumbai, Bangalore, Hyderabad and Cochin. LOGISTICS TIMES April 2014

He further said the India Aviation Show is an essential part of the vision for India’s aviation industry and would provide significant business opportunities for the participants in the world’s fastest growing aviation market. I am confident that India Aviation Show, as a showcase of latest technologies, innovative ideas, best practices and partnership strategies, would enable the participants to glean the opportunities in the aviation sector. H.E. Mr Francois Richer, Ambassador of France - the Guest Country and H.E. Ms Leocadia I. Zak, Director, U.S. Trade and Development Agency, USA - the Partner Country for the show also addressed the gathering on the occasion. As per the FICCI-KPMG 'Indian Aviation 2014' report launched at the event, the Indian civil aviation industry is on a high growth trajectory, albeit with minor hiccups. The Indian civil aviation industry is amongst the top 10 in the world with a size of around USD 16 billion. The report points out that development of air transportation services and socio-economic development are highly correlated. The growth in Indian aviation has created significant employment opportunities. With passengers and aircraft fleet likely to double by 2020, the need to strengthen the human resource development infrastructure is immediate. As per KPMG estimates, the total manpower requirement of airlines is estimated to rise from 62,000 in FY-2011 to 117,000 by FY-2017. It is estimated that the sector will need about 350,000 new employees to facilitate growth in the next decade. Shortfalls in skilled labour could create safety issues and may see staff salaries rise, hurting India's cost competitiveness. The FICCI-KPMG 'Indian Aviation 2014' report concludes that Indian aviation has a huge untapped potential – we need to recognize it and go for it.



Signs of stability for the Indian Shipping industry



A recent report released by India Ratings & Research (Ind-Ra) projects a relatively stable scenario for Indian shipping business in the near run. In specific terms, a possible demand recovery in Europe and the US is expected to give a boost to the outbound container volumes from India. Here is the summary of the report: LOGISTICS TIMES April 2014




ndia Ratings & Research (Ind-Ra) has revised its outlook on the shipping sector for FY15 to negative to stable from negative. Many shipping companies had embarked on debt funded capex plans in 2007-08. Since then, global freight rates have dropped considerably due to over capacity across segments as well as moderation in demand growth which led to deterioration in the credit profiles of shipping companies globally. The agency believes that the credit profile of Indian corporates in the sector is unlikely to deteriorate further as the bulk of the ships owned by Indian shipping companies comprises of crude oil and product tankers (as on 30.09.2013: 61.9%), a segment in which freight rates are likely to remain at around current levels in FY15. Global trade volumes were muted in the first half of 2013 and only picked up tentatively in the second half led by an improvement in industrial activity in the United States and the European economies. Therefore, seaborne trade in 2013 is expected to have grown at a similar rate as the 4.3% growth seen in 2012. The agency expects a similar growth rate for 2014. Bunker fuel prices continued to remain high in 2013, around the same levels as witnessed in 2012. The high rates continued to hinder the revival in the profitability of shipping companies globally even in segments where freight/ charter rates had somewhat stabilised. The overall traffic at Indian ports (major & nonmajor) grew by a modest 2.2% yoy in FY13 (FY12: 3.2%). Shipments of crude oil and petroleum products, containerised goods and coal which together accounted for 71.8% of the traffic at major Indian ports grew by 5.1% in FY13 (FY12: 1%). This was driven by an increase in shipments of crude oil and petroleum products as India’s refining output grew and also due to an increase in inbound shipments of coal for electricity production and industrial activities. Container traffic (in TEU’s), at major Indian ports remained subdued in FY13 and grew by a mere 0.8% (FY12: 1.2%) hurt by weak external demand for Indian goods as well as poor import demand due to the slowdown in the domestic economy. The modest performance continued in 1HFY14 as total traffic handled at major ports grew by LOGISTICS TIMES April 2014

2.3% (1HFY13: negative 3.3%). Tanker Segment: Per day charter rates across various vessel types in the tanker segment exhibited stability in the first half of 2013 and picked up in the second half driven by a rise in crude prices. Global fleet capacity (in dwt terms) in the crude oil segment increased by a mere 1.7% in 2013 (2012: 4.1%). Since the proportion of order book under construction at the end of 2013 declined to 17.3% (2012: 29.7%) and the global fleet order book continued to moderate, Ind-Ra does not expect a significant capacity addition in 2014-2015. As a result of this and the agency’s base case expectation of brent crude prices between USD104/bbl to USD108/bbl, Ind-Ra expects global charter rates to remain at around current levels in FY15. Additionally, stable global oil consumption and continued demand from Indian oil refiners, as well as the reduction in the size of tanker fleets owned by Indian shipping companies, mainly due to scrapping of old vessels could stabilise operating margins for Indian corporates with a significant presence in the tanker segment. Containership Segment: Container charter rates

have broadly remained steady since 4Q11 despite a significant moderation in global trade volumes since 2011 which may be attributed to cooperative capacity management by major players in this sector. Ind-Ra believes that the tentative demand recovery in Europe and the U.S could drive up global container trade as well as outbound container shipment volumes from Indian ports in 2014. On one hand while this would increase freight demand, the significant capacity additions over 2014-15 would keep international rates depressed at around current levels. Dry-Bulk Segment: China’s weakening import demand for iron-ore and coal is expected to keep pressure on dry bulk freight rates in the near term. Additionally, order book as a proportion of outstanding global fleet capacity at the end of 2013 was at the same levels as that reported in 2012 (19.4%), suggesting that overcapacity


is likely to continue in the near term. This will continue to pressure financials of Indian shipping companies with a substantial dry-bulk fleet size, in the near term. Other Segments: Performance of the offshore segment (rigs and support vessels) is expected to be healthy as crude exploration activities increase and prices remain high. A few Indian shipping companies that operate on unconventional business models (such as on a costplus basis) are also likely to sustain their credit profiles at the current levels. What can change the outlook

Revision unlikely till FY16: Ind-Ra believes that given the current order book in most segments and the unlikelihood of a rapid revival in seaborne trade, a meaningful improvement in freight rates is not likely in the near term. A sustained growth in international trade led by increasing demand from Europe and the US could lead to an improvement in container volumes, however likely capacity additions will keep freight rates under check. Global oil consumption is expected to remain at around current levels and therefore a rapid increase in rates in the tanker segment also seems unlikely. The dry bulk segment will continue to be influenced by demand from China, which has slowed down recently and the large capacity additions

will keep the freight rates under pressure in the near term. Therefore, an outlook upgrade to Stable is unlikely at least for the next one year. Aggravated demand supply mismatch: A higher than anticipated capacity addition in the tanker segment or a moderation in global trade activity could lead to the outlook being revised back to negative. LOGISTICS TIMES April 2014



THE GLOBAL FIGHT AGAINST PERISHABLE WASTAGE Irrespective of the size, scale and the level of technological advancement, minimizing perishable wastage is a common challenge for all economies in the world. And the fight against this common menace seems to be getting more decisive in the new LOGISTICS TIMES April 2014


millennium with a heightened level of awareness across Asia-the new hotspot of food products. The pertinence of putting effective cold supply chains is probably more pronounced today than ever before. Ritwik Sinha reports‌ LOGISTICS TIMES April 2014




t’s not everyday that you find yourself in the company of global experts on cold chain (sandwiched would be a better defining term) referring to fruits and vegetables as if they are living entities. That they breathe, go through different stages of maturity, change colours, etc. – sessions after sessions for two full days you come across an overflow of such expressions. So much so that at the end of the day, you start wondering: do I need to add suffix ‘ji’ (a mark of respect) to fruits and vegetables in the future? This is precisely how I could sum up my experience after attending the first two days of the five day long workshop on ‘Development of Cold Chain Systems For Perishable Agrifood Products’ organized by Asian Productivity Organisation (APO) in association with National Productivity Council and National Centre for Cold-chain Development (NCCD) last month in Delhi which saw the participation of cold supply chain practitioners and experts from nearly a dozen countries. The experience shared by all the experts unequivocally underlined that the need of putting in place more effective cold supply chains is more pertinent than ever before particularly in the context of emerging economies like China and India and other Asian countries gaining major strength in horticulture. There is a fast gaining realisation that Asia is to be the global food sourcetoday and tomorrow.India today is a glaring example. While not many are aware of this trend, the fact of the matter is: India seems to be witnessing a silent horticultural


revolution wherein the total production level of fruits and vegetables has jumped up from 210 plus million tons five years back to around 270 million tons now. This clearly exceeds the total foodgrains output today. But there is no evidence to suggest that the high wastage problem – estimated to be of the tune of 35-40 percent – is showing any signs of contraction. The case of colossal wastage globally But wastage of fruits and vegetables is not a typical Indian problem. It exists in some form or the other, mostly in a massive proportion, in all economies of the world. While the developing world is estimated to have a wastage percentage in the range of 30-40 percent, the developed markets like the US and Japan too are grappling with this issue, with a similar wastage ratio. In the case of the former, while most of the wastage is happening in the journey between farm to the actual point of sales, in the developed markets a substantial chunk of wastage is happening at retail end and in the hands of the consumers. So while educating the farmers in emerging economies is a strategy advocated by many, there is no dearth of analysts who demand educating the consumers in the developed countries. Here is the magnitude of the problem as a report released by UN Food & Agriculture Organisation (FAO) in 2011 had underlined: “Roughly 1.3bn tonnes of food is either lost or wasted globally due to inefficiencies throughout the food supply chain. Industrialised and developing countries waste or lose roughly the same


amount of food each year – 670m and 630m tonnes respectively. But while rich countries waste food primarily due to socio-cultural habitsat the level of the consumer, the main issue for developing countries is food lost due to weak infrastructure – including poor distribution, storage, processing and packaging facilities with the capacity to keep fresh produce fresh. Food losses mean lost income for small farmers and higher prices for poor consumers in developing countries. The average European or North American consumer wastes 95kg-115kg of food a year, above all fruits and vegetables. In contrast, the average consumer in subSaharan Africa, south Asia or southeast Asia wastes only 6kg-11kg. Food wasted by consumers in rich countries (222m tonnes) is roughly equal to the entire food production of sub-Saharan Africa (230m tonnes).” And here are more glaring micro facts which put the magnitude of the problem more blatantly. Another study undertaken by FAO points out that every year 20 percent of Dairy products are lost, the wastage quantum for fish and seafood category is 30 percent and for fruits and vegetables it is as high as 45 percent (refer to graph 1). Additionally, of the 263 million tons of meat products produced annually, about 20 percent is lost. According to an estimate, food losses and waste amounts to roughly US$ 680 billion in industrialized countries and US$ 310 billion in developing countries. And even if just one-fourth of the food currently lost or wasted globally could be saved, it would be enough to feed 870 million hungry people in the world. Cold supply chain as a panacea Needless to say, of a staggering $1 trillion (approx.) worth of food products losses, the lion’s share clearly goes to fruits and vegetables. Given their inherent time-sensitive nature, handling them qualitatively requires supply chain precision probably of a kind which is not warranted in any other product category. And that explains why there is an increasing emphasis on deploying more efficient cold supply chain systems. Says Dr. Navam Hettiarachchy, Professor,

University of Arkansas, USA, “An effective cold chain means ensuring the refrigerated preservation of perishable commodities successfully employed from the farm to fork. The cold chain is a science, a combo of technology and processes used at different stages like harvesting, cooling, temporary storage, transportation to the market, handling at destination and handling at outlets.” The good news is: the idea to have more efficient cold supply chain systems have begun to find prominence in the ‘must do’ scheme of things of policy makers in several countries. At this APO workshop India today

Source: FAO LOGISTICS TIMES April 2014



stood out as a vibrant example where a dedicated nodal agency- National Center for Cold-chain Development (NCCD) has been created with the mandate to bring all stakeholders on a common platform to ensure the optimal value accrual of the country’s rising might in the horticulture business. According to D K Jain, Additional Secretary, Ministry of Agriculture, “Cold Chain is all about quality, timely delivery and consumer satisfaction. It, therefore, requires a very strong interface with skilled and knowledgeable people.” Says Sanjeev Chopra, Joint Secretary, Agriculture Ministry, “The harnessing of the power of Fire was a major turning point for humankind. It allowed agriculture to take off during the early stages of human civilization. Now is the time to capture the power of ice. For modern civilization, controlling the cold will play a very critical role in ensuring food safety in our future journey.” Adds Pawanexh Kohli, Chief Advisor & CEO of NCCD, “There is no doubt in my mind that the cold supply chain is poised for a quantum jump in India. And by this, I do not just mean setting up new cold storages. We have quite a holistic plan covering the entire gamut of cold supply chain services.Implementing temperature controlled logistics and allied aspects is key to makingfood production sustainable.” (Refer to his box piece) While in an emerging economy like India, many of the interventionsto give a facelift to its cold supply chain initiatives would be in the missingfacets, in a developed market like Japan, the issue is to fix the problem at an intermediary level. “In Japan, the cold-chain breaks are because wholesalers normally avoid to invest in cold distributionfacility which is a major anomaly. The Japanese government is now trying to fix this problem,” informs Taneo Moriyama, MD, Insight Inc. Even in a country like Iran, there has been some noticeable action in past one decade with the number of cold storage jumping to 1140 (2012) from a much lower base ten

years back. “ Iran today has 34 hypermarkets with 5300 branches and they are mostly acting as the catalyst for the expanding cold chain units,” Dr. Hassan Rashidi, Associate Professor, Jahad-e-Agriculture, Mashhad Center points out. Success Stories Even as cold supply chain is believed to be the ‘ultimate supply chain’ given the set of complexities involved and therefore difficult to accomplish, there is no dearth of examples from the global arena which clearly earmark that right-intentioned initiatives can pay off big time if the stakeholders (both public and private) undertake it diligently. Take the example of Kawakami village in Japan which comprise about 1250 household of lettuce farmers. It may shock many in a country like ours where farmers’ suicide continues to remain an issue, but the average annual earning of Kawakami household is a staggering $2,50,000. “Kawakami village is a model example of how farmers community can benefit if they come under the co-operative umbrella. It’s the responsibility of the co-operative to run pack houses and take care of all arrangements involving harvesting, packing, pre-cooling and shipping in a meticulous manner and the result is there for everyone to see,” Moriyama narrates the story. Saizeriya restaurants in Japan, is another tell tale example of how integrated cold supply chain with minimum intermediary intervention can do wonders. Saizeriya restaurant chain which specializes in Italian and Western delicacies has a cumulative annual revenue of around $1 billion and according to Moriyama, there are three pillars of success of this enterprise – central buying, direct sourcing from farmers and processing at central kitchen. “Saizeriya’s success owes to its operational pattern wherein it picks up at the farm gate and then take the produce to the cold chain section of (Continued on Page 33...)



Cold Supply Chain poised for greater glory

Pawanexh Kohli CEO/Chief Advisor, NCCD To begin with, let me point out the numbers which make India a powerhouse in the world today in terms of horticulture and other time-sensitive production lines. We are the second largest in fruit production (81million tones) and

vegetable production (162million tones). India is the largest producer of milk (150million tonnes) and in fish products, our ranking is third with more than 8 million tonnes. We also have a huge buffalo livestock(105 million), and are the largest exporter in the world with1.52 million tons last year. But there is no denying the fact that we have to achieve more in exploiting the benefits of our assets in case of fruits, vegetables, milk, fishery or meat products in terms of adequate cold supply chain support system. We have around 200 ports to boast of but there is not a single perishables gateway. Only 8000 actively refrigerated trucks ply on the roads of a geographically vast country like ours and reefer rail options are very limited. However, despite recent slowdown spell, our market continues to remain in a dynamic state vis-Ă -

vis other countries. So much so that some economists attribute Inflationary trend in recent years tofood items as the prime driver, with perishables contributing highest.There are clear evidences to suggest that this demand trend would continue and the need for cold-chain services will multiply. We have already become 5th largest retail market worldwide and according to a projection there would be 1,968,000 consumer food outlets by 2015. These trends simply point out that our battle to harness the potential of our rising agricultural production especially perishables would get increasingly intense and definitely, the most critical response would be creating multiple robust cold supply chain systems that stretch pan-India and link our regions together. That is what NCCD is mandated for and we are responding to this




challenge. We have provided clear direction through the government support mechanisms to create enabling infrastructure. India’s initiative for appropriate infrastructure development includes fiscal and financial support systems - Mega food parks scheme; Integrated cold chain scheme; State level Initiatives; National mission for Food Processing and the recently launched Mission for Integrated Development of Horticulture. The government has also facilitated a host of tax benefits for the private stakeholders in the cold chain industry.NCCD has to play pivotal role to correlate between industry expectation and policy direction as well as provide the necessary domain expertise. Traditionally, setting up a cold storage has been viewed as the ultimate solution brought in the name of effective cold supply chain and this is what we are committed to end. ‘Not just cold LOGISTICS TIMES April 2014

Traditionally, setting up a cold storage has been viewed as the ultimate solution brought in the name of effective cold supply chain and this is what we are committed to end. ‘Not just cold storage’ is our key mantra storage’ is our key mantra and our holistic picture involves: many more production units or coldchain initiators-modern pack Houses; more Reefer transport units; cold stores as Distribution hubs; Ripening Facilities; Farmgate or source point cold storage; Merchandising equipment; Energy efficient technology; Standardized handling-packing, unit loads and Multi-modal direct access; all cojoining into a continuous flow of fresh food. I have no doubt in my mind that the Cold Supply Chain is

poised for a quantum jump in India and it will have several vibrant pillars in terms of training establishments; appropriate & integrated development; and with a greener bias.I see it undergoing a transition from mass storage to direct access storage and the management and development of multiple markets across regions. I see cold-chains stitching together the Indian landscape, enabling a producer in one corner to market her harvest within days, across a thousand kilometres.


Wholesale is the pain point Even in a developed country like Japan, fruits and vegetables wastage happens to be to the tune of 10 percent or above due to lack of cold chain facilities all across the value chain. We have Taneo Moriyama a well organized cold chain MD, Insight Inc. system from the production side and also packing houses and distribution mechanism through refrigerated trucks. But most of the fruits and vegetables are taken to the wholesale markets where the cold chain system is not well organized. That is why the government of Japan’s focus is on wholesale markets in terms of installing more temperature controlled sections or cold storages. Most of the farmers belong to the co-operatives and they sell their fruits and vegetables through

the central kitchen via refrigerated trucks. It could be a major lesson for aspirants in this line of business,” Moriyama sums up. Malaysia, which among other things also has frozen meat exports as its economic strength, is another case where consistent efforts to improve the processes including those in the cold supply chain are reaping rich dividends now. Dr. Moktir Singh, Senior Veterinary Officer, Department of Veterinary Services, Malaysia explains, “The frozen food industry had taken off in Malaysia in 1960s. But in last ten years, it has witnessed tremendous growth. We have a vast network of hypermarkets and with demand growing, a number of new processing units have come up which are modern in all respects. We provide certification to these units and this certification is mandatory if the unit is export-oriented.” On a more micro-basis, Fiji has met with considerable success in its experiments to optimize sea freight exports of its key fruit offering Papaya without loss of quality. And Taiwan which has a fishery industry of around $3.5 billion is making the most of one of its key economic asset by ensuring an adequate ice chilling and refrigerating sea products mechanism. Action Assured “Cold supply chain would be a very active space going ahead everywhere,” assures Dr. Navam. “While in markets like the US, the concentration would be to educate consumers to bring down the wastage after sales; action in the developing or emerging markets would be more defined by setting up of new systems and processes.” Dr. Navam assurance finds apt reflection in the response of

co-operative distribution channels. Co-operatives operate cooling systems at the production sites. As I said, we have very rare problems on the production side. But theoretically, fruits and vegetables are not meant to be stored at the wholesale markets. These markets are the transition points from where retailers pick up. So operators of these wholesale markets have been reluctant to invest in cold chain systems. Due to this gap both retailers and consumers suffer. To cover up the losses, both wholesalers and retailers have to jack up their margins on the selling price. If Japan develops better cold chain facilities at the wholesale point, then the prices are bound to come down. Cheaper prices would definitely stimulate more demand at the consumer side which will benefit all stakeholders in the chain. the representatives of different countries who were present at the workshop. Indonesia for instance, which boasts of strength in tropical fruits and where wastage is of the tune of over 15 percent, is now focusing on Horticulture Development Zones. “These zones have been planned to improve the productivity and quality to compete in exports and global markets. Our overall plan also includes facilitating the establishment of packing houses network,” Dr. Sutrisno Suro Mardjan, Lecturer, Faculty of Agricultural Engineering and Technology, Kamp is lIPB Darmaga, Bogor underlined. Sri Lanka, too is nurturing big-ticket ambitions to take its thriving milk product industry to the next level and is ready with a comprehensive plan to enhance its cold chain capabilities. On a more macro basis, the expanding wings of the organized retail especially in developing countries is touted as that next big catalyst which would make the necessity of efficient cold chain systems more imperative than ever before. Joselito Cruz Bernardo, Director (Agriculture Department), Asian Productivity Organisation maintains, “Organised retail would clearly be one of the critical game changers for cold supply chains. They mostly indulge in buying directly and are a stakeholder in managing the supply chain all through the journey of the produce. In many countries, in fact, they are even setting up the safety standards of the products.” So in clear terms, today there are enough catalysts for cold supply chain to move out of the closet (especially in developing world) and help the nations to capture the power of ice which if translated effectively (even with partial success) would result into a major win,win proposition for all. LOGISTICS TIMES April 2014

The case for Gold Chain One of the main reasons for galloping (2709), Gujarat is the second (639), rate of food inflation in India is the lack followed by Maharastra (579) and of supply chains for food, of which Punjab (553). These look pathetic if cold chain plays an integral part. Robust we see the commodity-wise storage cold chains are the need of the day to capacity. benefit from larger production capacity As the nation develops, its dependence and passing it on to the consumers on cereals for dietary energy reduces and in the form of reduced prices as well demand for meats and fresh vegetables as the producers in terms of reduced increases; which really means that wastages. demand for perishables like fruit and Dr. Veni Mathur According to CIPHET report, nearly vegetables, milk and dairy products, Ex-faculty, IIT, Delhi 133 billion rupees worth of food is meats, ice-cream and confectionery, Dean, Million Minds wasted in India due to lack of storage pharmaceuticals and floriculture will and proper transportation capacities. go up. The need of the hour is to There are about 6,300 cold storages, create economically viable cold chain spread unevenly throughout the country with an solutions linking production centres to consumption installed capacity of 30.11 million MT; this is just half centres; thereby reducing physical wastage of perishable the amount of storage needed in India. Some of the commodities and in turn leading to the development of significant perishable commodities produced in India processed food industry. are – MILK - 115 million MT (1st in the World) Looking at the cold chain process, it becomes evident FRUITS & VEGETABLES - 200 million MT that we need to carry out every step of the operation in (2nd in the World) The Process of Cold Chain FISH - 6.4 million MT MEAT - India has the largest cattle population in FARM PRE-COOLING  COLD STORAGE the world and is 8th in the world for production (pt. of Harvest)  of meat and meat products. To prevent wastages, India needs to build cold RETAIL PROCESSING & STORAGE/ storage with proper thermal insulation and (pt. of Sale)  DISTRIBUTIONCENTRE PACKAGING refrigeration system in which such perishable foodstuffs can be stored for various lengths of time in set conditions of temperature, humidity and appropriate environment to slow down deterioration a logical way. and spoilage. Along with providing cold storages there • Identify the product to be stored is urgent need to enhance the processing capacity as • Understand the optimum storage conditions of temperature, humidity and environment well. At present only 14-15% of fruits and vegetables are processed; this shows a great scope that exists in the • Packaging the product and using the correct racking system for storage economy. • The quantum to be held will decide the size of the Growth of Cold Chain Capacity in India storage YEAR No. COLD CHAINS INSTALLED CAPACITY(‘000MT) • Location and its ambient conditions; the need 1955 83 43 for energy resources, water resources and most 1965 600 682 importantly labour resources. The labour handling 1975 1615 1994 such products need to be carefully trained and should 1986 2607 5402 locally available to carry out all technical, operational 2006 5101 21694 and control as well as expert handling and general 2011-12 7486 34820 maintenance work. This is a very critical job, where adherence to specifications are very important or Uttar Pradesh has the highest number of cold stores will cause spoilage and losses; as can be seen from 








the following table – VERTICAL


QSR (Fast Food) 2 -8 C Pharma -22 C (vaccines) Meat & Poultry -20 C Processed Food -18 C Ice-cream -25 C Dairy 2–4C Chocolates 16 – 18 C -18 to -22 C 2 – 8 C Retail This requires specialized training and skill, besides, the construction of the cold storage also needs to meet specific requirements. An ideal cold storage should look like – Structure Of COLD STORAGE

A state-of-the-art cold storage must be a – • Pre-fabricated steel building, and • Pre-insulated factory finished sandwich panels, with 1. Energy efficient refrigeration system 2. Insulated doors, 3. Loading docks, 4. Racking system, 5. Energy efficient lighting and controls, and lastly 6. Forklift trucks. With growth in the awareness and demand of the people the other areas needing an evolved cold chain are Pharmaceuticals and Floriculture. There is growing demand for cutting edge medical technology as well as fresh flowers. The biggest hurdles in the development of a smooth cold chain in India are –

1. Lack of uniform technology and standards 2. Uneven distribution of cold stores and their location which are generally close to production centres and


the commodities have to travel long distances to reach the consumers. Acute shortage of reefer/ refrigerated lorries. 3. Lack of logistical support and speedy means of transportation. 4. Lack of capital investment for modern technology. 5. Lack of awareness of the best practices 6. Lack of training of human capital and domain skills. Thus, there is urgent need of training of manpower, investment in modern technology for cold store/ warehouse construction and supply chains to reap the benefits of higher production and demand of fresh fruits and vegetables leading to higher domestic consumption and export. Due to under-developed

logistics and transportation there is a huge gap between prices at first and final point of sale. Encouraging investments, rationalizing tax laws (uniform VAT/ GST), providing grants and subsidies and above all ease in foreign investments will benefit the farmer/producer. All such efforts will convert the Cold Chain into a Gold Chain in India.


 Crystal Group a leading third party logistics service provider offering end to end supply chain solutions.  Specialized in Cold Chain covering warehousing and distribution for temperature sensitive products on pan India network.  Has exponentially grown since its inception expanding its fleet size from 1 truck to over 125 trucks today, in a very short period of time.  Our services focus on time & quality to meet customer needs.

Top notch Material Handling Equipments. 100% Power back-up at all

times. Sealed Docking system ensuring temperature


 Collection centre at Farm Level.  Portable Cold Room at Farm level.  Pre-cooling Mobile Van.  Refrigerated Vans for transportation of temperature sensitive products.


Cold Store Facility equipped to handle Frozen chamber (Temperature -18 to – 25 Drgree Celcius.) Chiller storage (Temperature + 1 to + 4 degree Celcius.) Ambient storage (Temperature + 18 degree Celcius.) Dry Warehousing.

Features of Cold Room

Modern power driven moveable racking system to handle EURO standard Pallets. Palletised handling of Goods ensuring no damage to products. LOGISTICS TIMES April 2014








compliant. Environmentf r i e n d l y Refrigerant gas.

IT Infrastructure :

State of Art ERP System. 24/7 Online Temperature & Stock Tracking facility. LIFO, FIFO & FMFO as per Customer requirement. Customised Automatic alerts.


 Warehousing facility suitable for different temperature sensitive products.  3PL activity.  Implant Operation  Transportation through Refrigerated vehicles suitable for different temperature Sensitive products for City delivery and/or Pan India basis.  Cargo Express Service for temperature sensitive products.  Portable Cold Room of different capacity.


The products handled

• Warehousing, transporting and distributing them with care  Ice-cream  Poultry, sea-food  Dairy products  Meat, fruits and vegetables  Retail food chain  Healthcare and

pharmaceutical products  Frozen and chilled products


 Provides comprehensive transportation solutions through a robust fleet of company-owned and leased reefer and ambient vehicles.  Crystal team of well-trained, experienced drivers and technology ensures food safety, reliability and prompt delivery of products.  Reefer Services.  Customized milk run, door pickup and delivery.  Dedicated run for the customer.  Part cargo consolidation and movement.  Facilitates last mile distribution, multi-mode shipment.  Fleet size of more than

150+.  Vehicle tracking (GPRS) and temperature monitoring (data logger)  Plug-in support available at all facilities  Process-driven approach  Best technology  Greater efficiency

3PL Activity in cold chain through:

1. Logistics - Reefer Vans. 2. Handling Perishable Cargo. 3. Temperature Controlled Warehousing (Cold Storage). 4. Ripening Chambers. 5. Pre - cooling Chambers. 6. Value Added Service –  Repacking.  Labelling. 7. Invoicing. 8. Banking. 9. MIS Reporting. LOGISTICS TIMES April 2014



FACING A PROBLEM WITH COLD STORAGE? can be controlled with the Remote Control. By pressing a button on the remote control unit, any aisle can be opened by choosing the corresponding radio frequency. At the same time, the travel paths of the mobile racks and the forklifts are coordinated without any delay.

Suunil Dabral Country Head SSI Schaefer-India

The cost of building a cold store is about 3 times that of an ambient store which depends upon the degrees of temperature required for the storage of particular types of products. The second considerable cost is the cost of running the store (the colder it needs to be, the more costly). In order to optimize the operation costs, the Volume V/S Space equation needs to be balanced in a scientific manner. This balanced can be achieved to its best with the help of an ideal storage solution specially designed by SSI Schaefer. The maximum space utilisation for optimum cold store performance becomes one of the major objectives of all the cold stores. Mobile Racking System from SSI Schaefer is an ideal storage solution for more space on less surface area. With the installation of Mobile Racking, 80% of the warehouse floor space is utilized, having maximum 2 aisles: Picking Aisle and Cross Aisle. SSI Schaefer mobile racking system LOGISTICS TIMES April 2014

Whole rows of rack are moved forward together, eliminating aisles. Special features integrated into this system include the picking function, allowing the customer to concurrently open 2 or more aisles and enable picking for orders, as well as automatic lighting via


the system’s control panel which switches the roof lights on for the active aisle only, while all other lights are kept off. This undoubtedly serves in considerable cost savings on what is today arguably the most expensive running cost in this country, electricity. Essential Strengths of Mobile Racking System  Maximum storage capacity

Warehouse Comparison

*Mobile racking system offers double storage capacity as compared to Selective racking system with multiple aisles.

within a given space  Minimum space requirement for a specified storage capacity  Floor space utilisation up to about 80%  Direct Access to all pallet locations results in higher selectivity  Considerable reduction in staff cost through intelligent storage

Accepting that human error and accidents occur even in the most organized and safety conscious work places, SSI Schaefer has always given priority to Safety measures.  The shape and quality of the Rail System for mobile racking are the distinguishing features of durability and safety.

strategies.  Highest economic efficiency  Easily expandable due to enlargement of the vehicle fleet  Can be adapted flexibly to current handling rate and storage capacity requirements. * Mobile racking system offers double storage capacity as compared to Selective racking system with multiple aisles.

 In order to avoid accidents SSI Schaefer offers an unbeatable complete system with Security of global system area with access light barriers and Security of local system area with foot-level safety light barriers.  The sensors are placed at all the critical points thus making the system the ‘Most Safest’  The four wheel travelling mechanism reduces the load which affects the floor.



We can’t mess up the second chance



In the pre-2008 phase, when Indian economy was firing on all cylinders, air cargo business was viewed as a major evolving business. But according to Keshav Tanna, VP, International Federation of Freight Forwarders Association (FIATA), the country lost a golden opportunity due to a flawed strategy which lacked a broader vision. In a candid conversation with Ritwik Sinha on the sidelines of ACAAI-ACFI Air Cargo Symposium last month in Delhi, Tanna however emphasized that the second growth wave for the air cargo industry is round the corner. Edited excerpts… LOGISTICS TIMES April 2014


I would like to get a pointblank response from you on this. In the pre-2008 phase when the economy was firing on all cylinders, there were many enthusiasts who were predicting that Indian Air Cargo industry would evolve big-time and that India will become an international air cargo hub. But we all know how things have unfolded. So my pointed question is: have we missed the bus? Definitely, I would think so. There are no two ways about it because in

my mind other countries have taken the benefit which India could have derived at that time. Just look at the new Dubai international Terminal Airport which is the second terminal. I would say they timed themselves perfectly. They have come up with a trans-shipment hub - sea- cargo to air cargo is connected the same day. As against that, we are still struggling to connect air to air the same day. So we have definitely missed the bus. But I still strongly believe that there would be more opportunities going ahead if we can pull up our socks. However, if

we talk of immediate past, then we have certainly not capitalized on the available opportunity. Where precisely do you think we went wrong? Did we get too nervous because of 2008? We have missed the bus primarily because of our shortcomings in developing infrastructure. I don’t think the recessionary impact was too severe on India. Its true that Indian LSPs have felt the pain between 2011 to 2013. But between 2008-10 even during the peak of the recent global recession, they were




by and large doing well. It baffles me as why the bureaucracy did not take a note of developments and trends pertaining to the logistics industry. They could have definitely put in more efforts to create right infrastructure. Look at the case of Mumbai airport. Today to unload a truck even in low peak spell takes 6-7 hours. How can it attract customers? We have been repeatedly emphasizing on the need of establishing Air Freight Stations (AFSs)- off airport locations with customs availability to service the air cargo industry. But the dwell time for our export cargo stands at 48 hours. Which part of the world we are living in? The problem lies in the fact that we do not have a broader outlook on the required infrastructure for the air cargo business. In airport development, our entire approach is passenger centric. Do you subscribe to the theory that because of our flawed strategy, we have allowed other destinations to become international hubs at our own expense? You certainly know what I am referring to. I wouldn’t disagree with this notion. Today in difficult times which we are facing, just imagine if we had cargo hubs with us we could have got additional volume which might not have been our own business. But at least it could have been transshipping through India from the other countries. In difficult times, this business line could have provided a major boost. Today, you are noticing a decline in your own business as well as you haven’t developed the transshipment business originating from/ to other countries. Trans-shipment business could have been an added incentive if you had infrastructure in place. I firmly believe in one thing: build it and they will come. Build infrastructure and business will be there. LOGISTICS TIMES April 2014

So much hype was created over Nagpur but what is the end result? Nobody knows. It hurts international sentiments and they lose faith in you which is very difficult to be retrieved. That is the typical Chinese model you are referring… Yes. We as private entrepreneurs can’t contribute too much. We can participate in public-private partnership programmes. But there is a limitation. So it is government’s responsibility to provide the infrastructure. In your first response, you candidly admitted that we have missed the bus. But is there still some hope that if all stakeholders come together, at least they can try to develop one international hub. For instance, Delhi could be that ideal location. Why not? But if you remember, some years back they were trying to develop Nagpur. Everybody was only talking about Nagpur and industry stakeholders were buying offices and positioning themselves there. Everybody was saying that since it is at the center of the country, it would be an ideal hub. But that did not fructify. The need of the hour is: through conscious planning and efforts at least one hub should be promoted so that people outside can recognize that India has an international hub worth talking about. Then only you can aspire for business from

outside India in terms of transshipment business. Llet’s do some serious work. So much hype was created over Nagpur but what is the end result? Nobody knows. It hurts international sentiments and they lose faith in you which is very difficult to be retrieved. You heard FIEO president speaking in the morning today and he almost spoke in a very blunt manner underlining that air cargo business is more or less in a laggard mode. Do you think, that line of argument is valid? Ans: I would love to offer him a solution. I have got an equally active ocean freight department. But I have the leeway to offer solutions on the ocean freight side to our customers because there are certain options. Bombay Port Trust was there for decades and then Nava Sheva came up (it is also getting saturated now). But Nava Sheva came up because they realized that Bombay Port Trust would not be able to take care of the needs of exim exports cargo out of Bombay in the future. It has not happened in the case of air cargo business. At most of our key hubs, take the example of Mumbai, we are mostly in a fire-fighting

mode. FIEO president was right when he said air cargo industry is not offering him solutions but I need to have some possibility to offer solutions. In India it has often happened in the past that suddenly emerged robustness in certain sectors has acted as the catalyst to bring the changes in many ways. From the standpoint of air cargo industry, do you envisage that happening going ahead? For instance, pharma industry exports growth can become that much needed catalyst for the air cargo business. That is the only way our system works. When we are under pressure, they will come up with solutions. Pharma is the right example. As we saw an increase in pharma exports, they came up with temperature controlled warehouses in locations like Delhi and Mumbai. I think, one such facility has been created in Ahmedabad as well though it is yet to be commissioned. We clearly need to have a vision and plan in mind. If there is any segment that can push the business, the responding infrastructure needs to be created. But I would like to see it happening the other way round. Our infra-related initiatives should be pro-active and not reactive. Apart from pharma, do you anticipate push to the Indian air cargo business coming from some other segments as well? As far as India goes, I think we will probably be looking at textiles and garments industry again. In the past, it was the driver of the air freight business. Automotive too looks a very promising segment. It has already been growing in a major way.



The feeling in FIATA is definitely positive. But at the same time they are afraid a bit as well. As I said, there have been instances in the past where the experience has not been good.

What is the feeling within FIATA? Does it believe that Indian air cargo business will attain the required maturity during the course of this decade? The feeling in FIATA is definitely positive. But at the same time they are afraid a bit as well. As I said, there have been instances in the past where the experience has not been good. Promises have been made but not fulfilled. I am sure while we would get a second chance, it shouldn’t be messed up also. So as far as sentiment goes, there will be a second wave coming in. Now since you have talked of a second wave, do let me know how we need to do things differently this time to ensure that we capitalize on the new opportunity? What are those critical lessons emanating out of the mistakes of the immediate past which need to be considered to get ready to make the most of the second wave? Like I said we need to have a proactive approach rather than a reactive one. One should have the clear vision. As an entrepreneur, I have the vision for my company

for the next ten years. Does the government know how evolving businesses like air cargo will actually shape up in the next ten years? They should, in fact, have vision for a couple of decades. For the exim trade as a whole, we need to have a progressive and pro-active plan. Any shortcoming on that front will have offshoot effects like what happened to the currency exchange, exports decline, etc. This Air Cargo Logistics Promotion Board - is it giving answers to the issues which the air cargo fraternity has been raising from time to time? From the government’s standpoint, this agency has a very crucial role to play. They have the answers but solutions are not forthcoming. In all fairness, good intentions are there which are unfortunately not translating into action. For instance, we have been talking of Air Freight Stations for last three years. Air freight stations have been demarcated in Chennai and Mumbai. But they have not been commissioned as yet. Space has been given, areas have been demarcated- every thing has been done. But no action is visible for reasons best unknown to us. LOGISTICS TIMES April 2014



India’s first truck racing championship



T1 Prima Truck Racing Championship, concluded in grand style with an actionpacked 45 minute final race with Stuart Oliver winning the debut championship. The massive Tata Prima trucks proved to be a treat for motorsports fanatics in an intense race that witnessed a lot of edge-of-the-seats overtaking and high speed corner action. The debut season of the Championship on India's F1 track, Buddh International Circuit, witnessed an audience of over 25000 screaming enthusiasts who cheered on the speeding Prima trucks. The winning Team Castrol Vecton was followed by Team Cummins and Team Tata Technologies Motor Sports in the final Team points standings. The event which was organized on 23rd March, comprised two races, a 5-lap Sprint Race and a 15-lap Main Race, with the Champion Award granted to the winning driver on the basis of combined points from both the races. The Team Championship was awarded on the basis of the combined scores of the two drivers of the respective teams from both the races. The series used12 heavily-modified Tata Prima beasts capable of putting out 370 horsepower and reaching a top speed of 110 km per hour driven by experienced international drivers. The sight of these mega trucks racing with each other was enough to set any motorsports enthusiasts pulse racing. Stuart Oliver, T1 Prima Truck Racing Champion 2014 said "It was an amazing experience. The track is beautiful and trucks were performing great. I am thrilled to have won the first ever Truck racing championship in India, among the enthusiastic crowd who were cheering each time we drove past the grand stand. I see a lot of potential of this sport here and would love to come back and race again." Besides the winning drivers, there were top British truck racing drivers, including Bran John Burt, Dave Jenkins, Paul McCumisky, James Horne, Simon Ashley Reid, Richard Collett, Steven Powell, Steven Thomas and Graham Powell, showcased their driving skills during the event. The spectacle, the first-ever truck racing championship held in India, will certainly mark another small step forward for Indian motorsport as the country increasingly asserts itself on the global motor-racing stage. LOGISTICS TIMES April 2014



The Balloon Trick!


an you believe by the time, you have stood up – right now, and walked half way through to the water cooler for a sip of water, a few precious lives have been extinguished, courtesy accidents on roads/highways. World Health Organisation’s 2013 Burden of Diseases study reveals that 1.24 million have lost their lives last year due to accidents. Significantly, this figure is likely to triple to 3.6 million by 2030 – hardly 15 years away. As of today, HIV/AIDS, Malaria, Tuberculosis and other familiar killers top the dubious table. Soon, accidents will occupy this slot, a concerned WHO says. Sourabh Sircar, an IIT-Kharagpur alumni and founder-chairman of Kolkota-headquartered Karmyog, a business enterprise focused on creating education network – including imparting soft skills to drivers – cab and truck – says that almost a planeload of people die every day due to speed factor alone in India.”That serious is the issue of lack of training,” laments he. India is fast emerging as the global capital of death due to accidents as well. A dubious distinction it can avoid. Truck drivers, plying commerce and trade across Indian highways are simply don’t care about their safety. Nor about their assets (vehicle). Nor about the cargo they ferry. Ask them about the presence of seat belts in their seats, they will look at you with a bemused smile, as if an ‘irrelevant’ query has been raised. Assuming they concede that seat belts do exist in the vehicles they drive, they would proudly declare that they are ‘mard’ (manly enough) not to wear them! Nonetheless, the fear LOGISTICS TIMES April 2014

Ramesh Kumar

of being “challaned” (penalised) by traffic police once they enter city limits would compel them to abide by the law of land. Yes, there is a law demanding compliance on wearing seat beat always. Why? Because India is a signatory to the UN charter on reducing road accident How to make them realize the importance of their own lives? Is a major challenge. They need to be ‘convinced’ in a manner that remains etched in their mind forever. That’s where the balloon trick has come in handy. What’s it? As I travel across the length and breadth of India, halting at dhabas frequented by truck drivers, transport hubs where they halt on the outskirts of any city they would be entering, I invariably distribute balloons to drivers for two reasons: one to lighten the prevailing sullen mood and secondly to ‘educate’ them about road safety in an innovative way. Let me explain. During a recent Kolkota-Jamshedpur-Kolkota road trip as part of “Safer Roads. Safer Lives” and “Donate Sleep” Initiative under KRK Foundation – focused on im- proving the working and living conditions of truck drivers and their families living in remote villages of India, we halted at the training centre of

Indian Oil Corporation, Hoglaberia in Haldia district, West Bengal, the hall is packed with 30 plus truck drivers who were waiting for the mid-March afternoon sun to go down and lunch. Picking up a young kalasi (wannabe driver and undergoing training under a senior driver), a balloon is handed over to him with a request to fill it up with air and... burst it. Yes, the command is to blow out the balloon! He collects the balloon, stretches it and begins filling it with his breathe. He is cautious. So, the process is slow and the audience is giggling and making fun of him. “Why is he taking it so long?” asks Aloke Sadhukhan, Branch Manager of this IOC training centre. Just not him, but several other drivers in the hall also ought to be wondering. Why so long?. Now they begin to egg the kalasi on. “Worry not. Nothing will happen. Just blow. Fast,” instructions and advice are pouring in. Some begin to clap trying to create a carnival atmosphere. Claps become louder. The wannabe driver is unmoved by these cheerleading exercises. He continues to be cautious. So it is a slow process. After three minutes, the task is completed. Yes, the balloon is blown out. Torn pieces lie all around. He giggles. Now, the audience goes berserk and clap more enthusiastically. A senior most driver in the audience is called out and asked to honour his junior colleague with an ASDC cap as a reward. Before bestowing the cap, the kid is asked: “What were you afraid of ? Why it so long?” Pat comes the response: “What if the balloon blows into my face while filling it with air?” That’s it. The psychological fear of being hurt.


Therefore the extra caution of blowing the balloon slowly. Interestingly, the blower is fully aware that his task is not over until the balloon is blown. The end result is crystal clear. And the human tendency of preservation at any cost is in full play. If so, how come wearing the seat while driving is not viewed as a life-and-death issue on highways? Surprising, indeed. Like my friend and co-traveller on such trips Pradipto Bhattacharya, Senior Manager with Karmyog – a business enterprise promoting soft skill among drivers – fond of gently admonishing them with this gem: “Tell me, did accidents send you SMS before they arrive?” Audiences, wherever he hurled this query, responded by shaking their heads sideways, indicating a clear ‘No’ – the Indian style. A senior officer of a renowned 3PL

at Jamshedpur, watching a similar balloon exercise at Transport Park of Tata Steel with a 40 plus driver audience, asks the inevitable question: “Is this balloon trick effective? Why don’t you make a bullet points in a power point on the same issue. That would be more effective.” Bullet points and power point

presentation to truck drivers, most of whom cannot read and write? I ask him. He has no answer. Nor do I have a clear ‘yes’ or ‘no’ to his genuine query. What is being attempted through the balloon trick is to ‘educate’ or ‘convey’ the message in an innovative way.

The writer is the author of 10,000 KM on Indian Highways, Naked Banana! and An Affair With Indian Highways. He also runs KRK Foundation, a registered Trust, focused on improving the working and living conditions of truck drivers and their families living in remote villages of India. He is reachable at





Air Cargo Symposium

First time in the history of air logistics supply chain industry in the country, the two premier associations ACFI & ACAAI jointly organized a cargo symposium with the theme on ‘’Progressing Air Cargo- Challenges & Opportunities’’ on 26th March 2014 at ShangriLa’s Eros Hotel, New Delhi. The event saw participation by key decision makers from the government, from Airlines, Freight Forwarders, Cargo Terminal Operators, Airport Operators, Customs House Agents, Express Operators etc. with more than 200 delegates from across the country participating in the deliberations. The business sessions were so designed to ensure that this symposium will be highly beneficial to all the stakeholders of Air Cargo Logistics trade and to prepare itself to convert the challenges into opportunities for growth. The symposium started with the welcome speech by S.L. Sharma president ACAAI & Pradeep Panicker President ACFI.. Sharma & Panicker informed that the decision of organising this symposium was initiated at the behest of M Kannan, the Economic Adviser Ministry of Civil Aviation during their joint meeting with him in his office. The event comprised four business sessions which were moderated by Amber Dubey (KPMG in In-






dia); Sam Katgara (Partner, Jeena & Co.) and Keshav Tanna ( VP, FIATA). The eminent speakers at the event included: M. Kannan, Economic Adviser, Ministry of Civil Aviation; J.K. Dadoo, Jt. Secretary (SCOPE), Ministry of Commerce; Prof. G. Raghuram from IIM (Ahmadabad); Rafeeque Ahmed. President, Federation of Indian Export Organisation (FIEO); T.A. Khan Controller of Certifying Authorities, Ministry of Communication & Information Technology; Vipan Jain, Chairman, Bar Cargo & Regional Manager Logistics, Lufthansa Cargo; Sanjiv Edward, Head Cargo Business, DIAL; Yashpal Sharma, Director, Skyways Air Services; Mr. V.G.S. Mani Director (Customer Logistics) Nokia India; Pravin Singh, Area Commercial Head (Manager), South Asia British Airways(Cargo); B.N Puri, Member Secretary – National Transport Development Policy Committee; Tushar Jani, Chairman, Delhi Cargo Service Center and VP, CFI and Sunil Arora, Member, Managing Committee of ACAAI.

National Quality Excellence Award APM Terminals Inland Services South Asia (APMT IS SA) was recognized during the National Quality Excellence Awards in Safety & Environmental Sustainability and Best Start-up Business Process Excellence Program. National Quality Excellence Awards 2014 was presented by Stars of the Industry Group in a glittering ceremony on 14th February 2014 in Mumbai. The National Quality Excellence Awards are instituted to encourage competition in Quality Management and aimed at recognizing organizations across industries for registering higher productivity, profitability, safety and environmental sustainability during the period under review. The award is conferred to organizations in recognition of their implementation of best in class standards in business process excellence for their respective industries.


RNI No. DELENG/2011/39329

Regd No.: DL(E)-20/5380/2014-16

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