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June 2014

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Logistics Industry Wish List h 14

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INDIAN WAREHOUSING

The Story So Far!

Logistics Times

CONTENTS

All about Transportation, Distribution & Infrastructure

Volume 5: Issue No.2 * June 2014 Raj Misra

Editor in Chief

rajmisra@logisticstimes.net Ritwik Sinha

Editor

ritwik@logisticstimes.net

GM (Marketing)

Rajiv Sharma

Sub Editor

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Sudhir Kumar sudhir@logisticstimes.net Editorial Advisory Board Paul Lim Founder & President, Supply Chain Asia Pawanexh Kohli CEO/Chief Advisor, NCCD Samir Srivastava 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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22 INDIAN WAREHOUSING THE STORY SO FAR! Edit Note

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News Brief

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Events

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IN FOCUS Logistics Industry Wish List

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CURTAIN RAISER India Warehousing Show

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AWARD Lifetime Achievement

EDIT NOTE

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A boxed story?

Just four-five years ago, an important takeaway of all conversation with people at the helm of LSPs used to be – “ we have very aggressive expansion plans for our warehousing services.” Every well established player wanted to add capacity in the million square ft denominator in the medium run. However, the severe manufacturing slowdown as witnessed in last couple of years seem to have taken that confident expression out of their vocabulary these days. The excitement of those days has been replaced by a cautious approach now.

But the recent trend could well be counted as a cyclical blip. Warehousing in past ten years or so has been a shining chapter of Indian logistics and supply chain growth story thanks to the demand momentum delivered by leading industry verticals like retail, consumer durables, automotive, etc. There is no gainsaying that after transportation it is the most important component of the supply chain space accounting for 20-30 percent of the total logistics cost. The good news is that the industrial warehousing segment has been making a rapid stride vis-à-vis the traditional food storage centric units and Indian landscape does have some vibrant signposts in terms of modern warehousing.

This edition is dedicated to the core issue of judging the evolution of Indian warehousing from ‘godowns to modern units’ and make a sense of the journey it has covered, its accomplishments and shortfalls and future challenges. With contributions from over a dozen leading stakeholders, the basic idea is to draw a holistic picture. And as you flip through the cover feature section, you would realize that while Indian warehousing canvas does have some bright spots, there are some strong restrictive factors which are probably keeping it boxed and not giving space to flourish. Take for instance, non-implementation of GST. Since there are taxation anomalies, the players in the fray do not have the leeway to dream big and aspire for creation of big and advanced boxes. The tight capital situation thanks to the recent slowdown is also acting as a deterrent to provision for automation. Free Trade Warehousing Zones (FTWZs) which have proved their efficacy in many matured markets have by and large been a non-starter here thanks to the wrangling between two key economic ministries on the issue of concessions to these units.

Going ahead, the recently passed (among the few last things which UPA 2 did) new Land Acquisition Bill could also be spoiler for new warehousing capacity creation since land prices for all purposes will be on a skyrocketing trajectory.

The new government under the stewardship of Narendra Modi is in place and that too with an absolute majority. And there are great expectations in all the corners of the marketplace since this government has all the luxury except one- of being a non-performer because of coalition pressure. Logistics and supply chain industry too has its wish list ready for the new government and you will get a glimpse of that in our in-focus section.

Waiting for your response Ritwik Sinha ritwik@logisticstimes.net

LOGISTICS TIMES August 2011

NEWS BRIEFS

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Frequent power cuts may lead 40% fall in IP

Continued power disruptions in northern, southern and western regions have forced industrial units to curtail their industrial production (IP) by about 30% in April and May 2014, the loss of industrial production is likely to exceed by 35-40% in June and July, as per feedback received by ASSOCHAM from its various constituents in these three regions. The chamber released its assessment paper recently.

The power deficit that thousands of industrial units suffered in April-May was estimated between 20-25%, the range of which would go beyond 35% in June and July, adds ASSOCHAM assessment.

As a result of this power deficit, industrial production in states of Uttar Pradesh, Andhra Pradesh, J&K, Haryana, Punjab, Rajasthan, Karnataka, Tamil Nadu, Maharashtra would have to be curtailed to the extent of 30-35% particularly in manufacturing units as these have no alternative means to produce power, adds ASSOCHAM paper.

The feedback is based on the latest power situation in leading states that have concentration of industrial presence at substantial level discloses that in states such as Uttar Pradesh Madhya Pradesh, Maharashtra, and J&K energy deficits which was around 20-25% in LOGISTICS TIMES June 2014

April-May would go beyond 30-35% in June –July.

Uttar Pradesh and Andhra Pradesh are two states in which power cuts exceed 10-12 hours a day and face the worst energy crisis which will further deepen in the absence of corrective measures and therefore industrial locations in these two states would have to curtail their industrial production to the extent of 45%.

Uttar Pradesh, which is one of the industrialized states in the country is facing one of the worst crises with energy deficit touching about 11.2 per cent, facing energy deficit of over 924 Million Units (MU). The state of Uttar Pradesh as per feedback given to ASSOCHAM by its constituents is resorting to an average load shedding of 10-12 hours a day.

The state of Uttar Pradesh, which has a power requirement of over 8,282 MU, has availability of little over 7,358 MU with deficit ranging over 11.2 per cent.

The situation is no better in Andhra Pradesh where the power deficit is approximately 12.1 per cent. The availability in the state is only 7,976 MU against the requirement of 9,070 MU. The Southern part of the country is likely to suffer energy shortage to the extent of 2,111 MU particularly in Andhra, Karnataka and Tamil Nadu.

Jammu & Kashmir suffered a power shortage of 20.3% in April which will go around 25% and the gap between power availability and supplies would be around 1000 MU, adds the paper.

According to the chamber power theft, leakages and transmission and commercial losses were the main reason for power deficit in these states. Use of non-conventional sources of energy especially for domestic usage and street lightning, is another shortterm solution recommended by opinion leaders.

Paradip Port plans significant capacity addition Paradip Port plans to add significant capacity to meet the ever increasing demand in the region. As a part of its capacity expansion program, Paradip Port Trust (PPT) intends to develop a Western Dock Complex comprising of 6 berths each with a capacity of at least 10 MTPA. In this regard, PPT recently conducted a conference for potential investors in Mumbai to present the opportunity and take feedback from the investor community.

According to a company release, the Port has planned several projects for expanding its capacity.

The construction of southern oil jetty of 10 MTPA capacity is in progress and is likely to be commissioned during this financial year. Port is planning for mechanization of EQ I,II & III to increase capacity to 30 MTPA, mechanize CQ I & II to increase capacity to 20 MTPA, develop a new iron ore berth of 10 MTPA capacity, a new coal berth of 10 MTPA capacity, a multipurpose clean cargo berth of 5 MTPA capacity, a LNG terminal of 10 MTPA capacity and an Inland Container Depot (ICD).

Furthermore, the Port has also envisioned the development of a Western Dock Complex comprising of 6 berths. All the berths in the Western Dock as well

as Multipurpose berth, Container berth, Iron Ore berth and Oil berth, will have a draft of 17.1 meters and will be able to accommodate cape size vessels of 1,85,000 DWT. In order to facilitate efficient operations at these berths, the Port has earmarked a total of 94 acres for stack yard. It is estimated that a total investment of Rs 6,000 to 6,500 crores would be required for development of the Western Dock.

The capacity expansion projects which PPT has planned entail an overall investment of Rs. 16,000 crore over a period of seven – nine years. Out of this, PPT is expecting Rs 15,100 crore of investment through PPP route.

LOGISTICS TIMES June 2014

NEWS BRIEFS

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NEWS BRIEFS

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Logistics Park at Pithampur Safexpress recently unveiled its logistics park at Pithampur. Spanning over an area of 75,000 sq feet, this ultra-modern logistics park is strategically located on NH 3.

Speaking at the launch ceremony, Pawan Jain, CMD, Safexpress said, “We feel great pride in having launched this state-of-the-art logistics park at Pithampur. This will help to raise the standards of supply chain & logistics in this region to a very different level.”

He further explained, “Pithampur is a major hub for automobile manufacturing industry. Majority of the vehicle-producing companies of India have their factories in Pithampur. It is a well-developed industrial area, which includes both large and small scale industries. Apart from automobile industries, Pithampur is home to various other industries like food processing, chemical processing, distilleries, manufacturing and textile industries. A large number

of Multinationals and Indian companies have their manufacturing base in this region. Therefore, it made a lot of sense to set up a logistics park here.”

DHL eCommerce names Monteiro CEO for APAC

DHL eCommerce, part of the newly re-named global division Post - eCommerce - Parcel (PeP) formerly known as the Deutsche Post MAIL division,has named Malcolm Monteiro as CEO Asia Pacific, DHL eCommerce.

Malcolm succeeds Patrick Martin, who led Global Mail Asia Pacific since 2009. Patrick becomes the new Senior Vice President, Markets and Products, DHL eCommerce at corporate headquarters in Bonn, Germany.

In May, Deutsche Post DHL re-named the Global Mail unit to DHL eCommerce.The business unit will focus more efficiently on e-commerce services – both crossborder and domestic – in Asia Pacific as well as in the Americas. Group-wide,Deutsche Post DHL aims to be LOGISTICS TIMES June 2014

the preferred global provider of e-commerce related services including e-fulfillment and e-facilitation.

Malcolm, formerly Managing Director of Blue Dart Express and CEO of DHL Express South Asia since 2006, will join the DHL eCommerce Management Board and be responsible for overseeing and steering the development of DHL eCommerce as the global e-commerce enabler in Asia Pacific.

Thomas Kipp, CEO, DHL eCommerce, said, “These are exciting times for Deutsche Post DHL as the DHL eCommerce business unit carves out a new benchmark for e-commerce logistics services around the world. Malcolm and his team will be responsible for building on existing solutions as well as developing new service areas – e-commerce solutions, e-fulfilment, domestic delivery and returns as well as cross-border B2C e-commerce.”

Malcolm said, “Establishing DHL eCommerce as the leading end-to-end e-commerce solutions provider and global e-commerce enabler in Asia Pacific is an exciting opportunity. Our clients will be looking to us to provide innovative products and services.

Malcolm will continue to oversee Blue Dart following the transfer of responsibility for Blue Dart from DHL Express to Post - eCommerce - Parcel. He will continue to represent Deutsche Post DHL on the Blue Dart Board of Directors.

IN-FOCUS

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LOGISTICS INDUSTRY WISH LIST LOGISTICS TIMES June 2014

Its not merely the case of salutation from the Dalal Street. India Inc. in general is enthused with the arrival of a new government (that too with an absolute majority) expecting policy paralysis witnessed in the recent years will soon become a thing of the past.

Representatives of evolving sectors too are hopeful that more aggressive economic initiatives of the new government would pave the way for their businesses to reach to the next level something which had become difficult in the last couple of years.

Here are some voices from the logistics and supply chain sphere underlining what the government precisely needs to do to push their growth story:

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Logistics as a derived industry of core economic sectors largely depends on the overall industrial growth and international trade of country. We hope that new Government understands the importance of logistics as core Raaja Kanwar, Founder infrastructure sector.

Apollo LogiSolutions The strong mandate enables Government to define firm reform policies in terms of global service tax (GST) and foreign direct investment (FDI). Infrastructure development to support logistics sector would be a key reflection of Government’s modus operandi to facilitate economic development. Contribution of maritime and logistics sector in growth of Gujarat for past few years builds strong expectations from this Government.

Private sector participation in growth of logistics sector is of paramount significance. Clear policy framework to support private participation, in terms of Land acquisition, regulatory clearances and financial support will surely accelerate the growth of this sector.

Government incentives aimed at promoting economic growth can make areas such as infrastructure i.e., development of Greenfield ports, airports, road, and rail logistics attractive for private investment.

It will also be of interest to assess the Government’s approach to liberalize the existing logistics and maritime sector of India. Importance of Sea ports development and ports led development needs to be explored in India. Ports in India are still waiting to achieve the global operational and commercial efficiency levels.

Corporatization of major ports, creating space for private port operators and development of support infrastructure in terms of road rail connectivity, dry ports, logistics parks, etc. are some of the key aspects to be looked in for this Government.

“India has voted for economic growth and prosperity in the hope for change. With great power comes great responsibility.

As a progressive business community, we should stress on strategic planning and dialogue Shashi Kiran Shetty Executive Chairman with the new government on Allcargo Logistics Ltd. revival of business and investors sentiment in the country. We are hopeful of policy moves like introduction of GST, fastracking of stalled projects and opening up of FDI which will give a new fillip to the logistics sector, the backbone of trade and economy. New and improved roads, rails, ports and freight corridors will make logistics and supply chain management more efficient

and boost coastal shipping. We are upbeat on this new wave and congratulate the nation to live up to the true spirit of democracy.”

Logistics infrastructure of the country needs urgent refurbishment. The sector is plagued with inefficiencies and high costs. The priority areas that we feel that can take the sector forward include: h An Industry status and Vineet Agarwal an Integrated Policy for the MD, TCI logistics sector Logistics itself is a large industry but is plagued with various inefficiencies and high costs. An integrated approach across multiple stakeholders across central and state governments is required. TCI suggests setting up a separate regulatory authority for the logistics sector on the lines of the Insurance Regulatory & Development Authority or Telecom Regulatory Authority of India. h Increased focus on Multimodal Transportation Logistics Infrastructure is a critical enabler of India’s economic development. The country’s network of roads, rail and waterways will be insufficient as freight movement is set to increase about 3 fold in the coming decade. This shortfall in logistics infrastructure will put India’s growth at risk. Since a large part of India’s future logistics network is still to be built, an integrated and coordinated approach in which the development of each mode- railways, waterways & roads- is matched to the needs is the need of the hour. h Long Term Planning and Financing for the sector Presently, Transportation and Logistics Cos are not eligible to go for cheaper Foreign Currency funding by way of External Commercial Borrowing. ECB borrowing should be allowed to transportation/ logistic companies for the purpose of investment into commercial vehicles, ships, construction of logistics warehouses, etc. Access to ECB will help save on interest part as margins in this highly competitive & fragmented industry are already too low and under pressure.

There is also a need to treat warehousing for nonagricultural commodities at par with infrastructure projects to encourage investment in warehousing industry.

GST should be implemented with immediate effect to enable the creation of the common market to permit free and unimpeded movement of goods and services across the country.

Warehousing & Logistics will be a gate valve that will control the ebb and flow of products between the

LOGISTICS TIMES June 2014

IN-FOCUS

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producing and consuming functions of an economic pipeline. In my opinion, a robust warehousing and logistics infrastructure is the life line of a fast growing economy.

There is a pressing need to S A Mohan CEO enhance cargo capacity at Maini Materials airports, create modern agro warehouses that are critical for sustaining agriculture, propagate integrated cold chain into rural & urban areas and establish quality standards and benchmarks, which I’m sure our new government has considered.

My expectations from our new government in warehousing & logistics front are: h Facilitation of ramping up of logistics infrastructure: India’s current logistics infrastructure is inadequate to meet growth aspirations. A 2.5 times increase in the freight traffic in the next decade will put further pressure on India’s Logistics future.

Ramping of logistics infrastructure will stimulate and sustain business growth. h Focus on warehousing sector: In the complete logistics value chain, warehousing forms a very important link as it constitutes over 20% of the total logistics market. Strength of India’s warehousing & logistics sector is likely to be one of the key determinant of the pace of future growth of Indian economy. There must be a specific focus to give a boost to the warehousing sector and modernize it to international standards. h Issue policies that bring about structure in warehousing & logistics industry: The immediate challenge is to define ways to extend support to the unorganized warehousing market – smaller players with limited resources, who are mired with several complexities as they can slacken this growth story. h Boost international trade: Demand drivers for warehouse development are increasing international

LOGISTICS TIMES June 2014

trade and the resulting planned investment in ports for upgrading container traffic handling capacity, increased use of containerization for inland transport, investment in manufacturing activity in Special Economic Zones (SEZs), planned investments in Free Trade Warehousing Zones (FTWZs), development of dedicated Freight Corridor, change in government regulations related to State Sales Tax, emergence of organized retail and its need for efficient supply chain management and growing trend of outsourcing logistics function to Third Party Logistics (3PL) service provides to reduce cost and increase efficiency, recognition of warehousing as a strategic tool, etc. Increased international trade will give impetus for strategic investments in warehousing sector to build Next Generation Warehouses and operate them in-line with global standards. h Implementation of GST: The Goods & Service Tax (GST) is expected to be the next big bang fiscal reform by the Indian Government. This will lead to the abolishion of almost all indirect taxes incurred by companies and customers. With the introduction of GST the key advantage for all logistics companies will be merging of small warehouses to one productive warehouse. We will witness centralized and large warehousing parks that are more agile, operate on economies of scale, present huge cost advantage to companies thereby contributing to countries economic growth. Perhaps, the onset of GST, with its potential to revamp the national warehousing network could be considered as the single largest industry-wide opportunity to consider smart warehousing as a cost-saving opportunity across the supply chain.

I am sure our new government will fulfill these expectations and create an environment for graduating Indian warehousing & logistics market to offer value propositions.

Namaskar, Pradhan Mantriji! akhand bharat. Those who ridiculed “Chai wala as PM?” had to eat their humble pie because a vast majority of Indians sensed the absence of dignity of labour in that inelegant remark and taught them the right lesson by gloriously sending you to

rule the entire nation from Delhi with a thumping majority.

Our country may have the best of trucks from Tatas, Leyland, Daimlers, Scanias, Volvo or whatever. But these trucks are just toys without the requisite men behind the wheels viz.,

Ramesh Kumar

Congrats on your incredible victory, Sirji!

Mujhe kuch kehna hai …. Nahi … kuch mangna hai, aapse..

No, no. Don’t worry. I promise I will not talk about GST. Every Gupta, Bansal, Agarwal, Goel and Chamber chaplains will be talking non-stop on this critical issue.

One issue that I am 100% confident they will not touch upon which is equally critical is what I want you to pay attention to.

The tea leaves of chai that you sold once upon a time at the Gujarat railway station came from some place. The stainless steel lota or glass tumbler (am sure, there were no disposable plastic cups those days, Modiji!) in which you had poured garam chai to delight your customer also came from somewhere. The cheeni that was mixed in that chai too came from some place. Tea leaves grown at one place, processed at another place travelled to your dukaan in Gujarat. Raw materials and finished items - be it chai powder or cheeni – all moved from Point A to Point B by rail or road.

Goods train or trucks.

This is what trade and commerce is all about. Production happens at one place, but consumption across length and breadth of our

LOGISTICS TIMES June 2014

OPEN LETTER

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OPEN LETTER

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truck drivers.

Sirji, your ministerial colleagues and officials will tell you that India is heading towards a massive shortage of truck drivers. Why? Nobody wants to be a truck driver. Why? Nobody respects them, in the first place. They don’t have any social security net. Izzat ka sawaal hai, Sirji!

Forget about these items. Sirji, there are no toilets on highways for these hapless truck drivers. So, they have perforce ‘defecate’ in open - behind bushes. Even though the Motor Vehicle Act boasts of provision for highway amenities such as rest room for them, nothing is done. Neither private sector shows any inclination.

Nor the governments – be it central or state governments.

Sirji, not only Indian villages are bereft of sanitation facilities. Even highways have no room for truck drivers to relieve themselves day in and day out.

What is the point of McDonalds, Cafe Coffee Days, Pizza Huts and several motels sprouting on the highways if they veto the entry of truck drivers into their parking lot?

Class consciousness is the root cause. How can an illiterate, shoddily dressed truck driver be given access to sit next to me – educated, well dressed and paisewala? Crude and rude attitude, but it is a ground reality. Trucks are shooed away from such highway eating out joints, Sirji!

Even National Highways Authority of India (NHAI) does very little to alleviate the sufferings of truck drivers – the backbone of any economy.

Less said about the level of corruption on highways, the better, Sirji! Transport being a state subject, every single state has converted the transport department into a milch cow. Targets are set to collect ‘penalties’! Overloaded vehicles are allowed to ply on state and highways

for a few thousand rupees as ‘bribe’, despite the Supreme Court ban on overloading pronounced way back in 2005.

Sirji, Gujarat is possibly the only exception. In fact, you had spoken about the highways corruption at your maiden Mumbai election meeting in the run up to the General Elections. You know these issues very well.

While unveiling the Ten point agenda of your government, you did harp on giving a big boost to infrastructure.

However, the emphasis is going to be on building more highways. Please go ahead build super highways and expressways and also convert 2 lanes into 4 lanes and 4 lanes into 6 or 8 lanes. It is a welcome move. But, your government is equally silent on wayside amenities for truck drivers.

Truck drivers, Sirji, are as lowly as tea vendors on roadside or railway platforms in our society. They are not demanding the Right To Education. They are not demanding the Right to Information. They are not even demanding the Right to Health. All they demand is the Right to Respect or Dignity. Is it too much offer?

Sirji, believe it or not, everybody is self-centred. Heavy Commercial Vehicle manufacturers’ interest lies in higher sales. Fleet owners’ interest is focused on getting better freight rates. Transporters and brokers are interested in better margins, because they are practitioners of light asset format. HCV manufacturers lobby under Society of Indian Automotive Manufacturers (SIAM).

Transporters, fleet owners and agents lobby under AIMTC, AITWA or ACOGOA. But truck drivers have no such umbrella and therefore no lobbying power. Even political parties – including your own Bharatiya Janata Party – do not look at them with care because they

are not ‘vote banks’.

Why not give truck drivers ‘postal ballot’ facility because 24x7 they have to be behind wheels far away from their home towns where they are registered as voters to serve you and I with essentials and life-saving drugs and what not? Election Commission, when approached says, truck drivers do not fall under the exclusive category who can exercise ‘postal ballot’. Sirji, millions of truck drivers are deprived of their Right to Vote.

Great injustice is done to millions of truck drivers in our country.

Unless and until the working and living conditions are bettered, we are heading for a gigantic economic breakdown in the near future. In the absence of drivers, manufacturers will bear the brunt in accessing raw materials from ports or warehouses. Equally challenging will be distribution of items – essential and non-essential – right across the nation without drivers.

Without due respect, no amount of coaxing – monetary or otherwise – is going to help the nation to build a strong army of truck drivers. No drivers, no food on the table. No drivers, no healthcare. Simply put, living will become hell. Truck drivers are as critical as our soldiers on the international borders protecting our national security. Truck drivers, in a way, are soldiers on Indian highways.

Give it a thought and do something to enhance their self worth and help build the nation with an army of trained truck drivers. That’s very critical to achieve the laudable GDP growths we are all talking about non-stop.

An erstwhile chai-wala is the Prime Minister of Mera Bharat Mahan, Sirji!

If this is doable, conceding the lowly truck drivers’ demand for izzat should pose no challenge.

Jai Hind!

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 ramesh@ krkfoundation.org1

LOGISTICS TIMES June 2014

COVER FEATURE

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Indian Warehousing

The story so far!

LOGISTICS TIMES February 2014

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T

he criticality of the warehousing units in the entire logistics and supply chain operations is quite an evident fact. The analysis of supply chain operations in matured markets clearly underline that modern warehouses (could be easily defined as big boxes with advanced processes) not only result in making the entire process more efficient but ultimately also result in cost benefits. To put it simply: a win, win proposition for all stakeholders.

Indian warehousing sector too has been a vibrant and growing segment of the Indian logistics landscape in last one decade or so. But it would probably be a folly to believe that it has reached to a matured stage when compared with the global benchmarks even as there are some visible signposts on the Indian turf now that testify that Indian warehousing journey from ‘godown to modern units’ is getting a push from a selective list of players. But if we look at the entire spectrum, the advanced units have a minuscule share.

Leave aside the quality part, a lot of catching up is needed in terms of bridging the demand and supply gap. A joint report published by ASSOCHAM and Yes Bank this April had clearly underlined a gap of 35 MT warehousing shortage(read the box item – 35 MT shortage).

“The warehousing capacity available in India, in public, 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,” the report had pointed out. Though the government agencies have a sway in terms of market share in the ownership and management of warehouses thanks to their stated mandate to preserve agricommodities, the private sector too has come up quite aggressively in last ten years. And this has given a defining push to the industrial warehouses with sectors like retail, consumer

durables, automotives, etc being the flag bearers of the growing demand.

“From the opportunity perspective, the demand for warehousing services in India was estimated at approximately INR245–270 billion in 2011–12. The market consists of industrial and agricultural warehousing, with both segments expected to witness a significant evolution in their shares (by value) over the next five years. The share of the industrial segment, which includes both bulk and nonbulk commodities,is expected to increase from about 86 percent in 2010–11 to around 90 percent in 2015–16. This is likely to be at the cost of a corresponding decrease in the share of agricultural warehousing,” noted consultancy and research firm KPMG had maintained in a report ( Logistics Game Changers) released earlier. Quite clearly, industrial warehousing is the space where maximum action is expected.

And that could well mean some serious qualitative improvement in the operations and processes too.

But to reach to the next level, there still are some serious issues which need to be resolved (over a dozen guest columns by senior industry representatives in the following pages point out at these irritants). GST implementation is hanging fire for close to a decade, a recent land acquisition act cleared by the parliament is all slated to jack up the prices of land quite significantly, imperative to adopt automation has not completely dawned, complex tax structures have made units like Free Trade Warehousing Zone (FTWZs) more or less a non-starter, etc.

However, with the advent of a new government at the center (that too with an absolute majority) with its core promise to re-energise the economy and all its evolving segments, stakeholders in the warehousing sector are filled with the hope that “acche din jarur ayenge.” How much of their hopes would translate into reality, only time will tell!

LOGISTICS TIMES February 2014

COVER FEATURE

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MARKET TRENDS

35 MT warehousing capacity shortage Owing to extreme dearth of about 35 million tonnes (MT) warehousing capacity together with massive food grain storage shortfall of about eight MT, about 30-40 per cent food grain is stored in an unprofessional manner during the peak marketing season in India, according to a recent joint study conducted by ASSOCHAM-Yes Bank.

This study was released in April.

“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.’

“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,” a senior official of the chamber had said while releasing the report.

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 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 LOGISTICS TIMES June 2014

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.

According to the report, the warehousing capacity available in India, in public, cooperative 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.”

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COVER FEATURE

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INDUSTRY VIEW

New momentum for warehousing need to obtain approval from 70% of There is no denying the fact that there the landowners for getting land for has been a noticeable slowdown in a greenfield project. This is delaying the logistics (including warehousing) many infrastructure projects and business in the recent past as it is large-scale private projects; and has directly linked with the GDP growth. created obstacles in setting up bigger The recessive economy in the last manufacturing facilities and logistics couple of years has severely impacted parks.These complications met while the manufacturing and projects/ purchasing land, engaging labor or infrastructure industries. But I believe raising capital have adversely impacted that the Indian business community as the growth of warehousing industry in a whole is feeling optimistic today and Milind Shahane India. there is lot of hope and expectations CEO, DIESL that the new Government will bring Automation in major changes in policies and push infrastructure projects and manufacturing in India over Cost of ownership of equipment is the biggest factor the next few months. This should reflect positively on which deters warehouse operators from investing in the GDP growth rate for FY 14-15 which is expected to automation. Automation also drives up operational increase to 6-7% from a current level of 4-4.5%. This will certainly give the much needed momentum to the warehousing.

The existing laws and GST- A game changer It was the Vajpayee government that first proposed the GSTwhich seeks to incorporate various indirect taxes like excise, sales and service tax; the Congress-led UPA government also supported it. The government will want to take material steps in implementing the GST since it will enable creation of a common market for goods and services in India by removing all barriers among states; but the implementation date could be pushed to April 2015. The possibility of momentum on this reform is definitely higher today; it’s going to be a big game changer for the logistics industry, and for warehousing in particular.

regulations also do not offer security and assurance to LSPs and enterprise sector; there is a lot of interference from local bodies and warehouse providers face many hindrances in operating trade licenses.

Investment Scene The relationship between economic pace and development of infrastructure is a bit of a chicken and egg story; while infrastructure development is a catalyst to economic growth, investments in infrastructure do not happen in a sluggish macro-economic environment. This was evident last year when many infra and PPP projects were stalled. However, given that both manufacturing and services industries need the support of logistics infrastructure to grow; we may see investments in warehouse clusters pick up.

expenses due to cost of fuel and maintenance; labor is far more affordable in India. Moreover LSPs and consumers alike do not recognize fully the return on investment on technology; either in terms of operational efficiency or cost savings in the long run.

So, even if warehouse operators are nudged to become more proactive on the issue of automation, in a cost sensitive market like India, it may be very difficult to get customers to pay for it.

Impact of new legislation The new Land Acquisition Act that came into force in January 2014 has made cost of land almost three times expensive than their actual market value. This legislation is skewed in favor of landowners, PPP protagonists will

Challenges in setting up FTWZs As mentioned before restrictive laws like the recent Land Acquisition Act impede investments in FTWZs and logistics parks. Further to emerge as game changers, logistics parks need to come with state-of-the-art

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infrastructure and mechanization which are capital intensive propositions and tend to pay returns over a long term. LSPs also face risks related to selling and optimizing space utilization in larger facilities. FTWZ and logistics parks necessitate large scale employment of manpower which comes with its own set of complications related to labor union and local issues.

Until these factors are addressed customers and LSPs alike may not see significant advantage in investments in FTWZs and logistics parks.

Standardization It is a constant challenge to pay high rentals and obtain land at reasonable prices for building warehouses in India due to mounting valuations in the vicinity of major cities. Moreover various states in India have their own set of laws and regulations which hinder warehouse operations, which has serious cost and time implications for the supply chain. Policy makers can step in here to create more standardization. The existing laws and regulations also do not offer security and assurance to LSPs and enterprise sector; there is a lot of interference from local bodies and warehouse providers face many hindrances in operating trade licenses.

Funding Options Logistics industry needs funding to finance its working

capital and capital expenditure to cover investments in assets, security deposits, operational costs, etc. Due to the largely unorganized nature of this industry, one of the most serious challenges faced by the logistics sector is availability of sufficient and opportune credit at reasonable costs. Quite often, SMEs are not in a position to provide adequate security to obtain loans and are therefore denied credit. Moreover as we have witnessed in the last two years, infrastructure development projects are plagued with many delays and escalating costs. Financial institutions therefore perceive logistics as a high-risk sector.

Cohesive cold supply chain has big potential in India.

Warehouses offering various levels of cold storage facilities (freezers, cold boxes,refrigerators, cold stores) if combined with temperature-controlled distributionlinking farm with factory and retail outlets will increase efficiency and substantially reduce wastage. Across the globe consolidation drives cold-chain logistics; providers typically boast of big fleet sizes and large warehouses with state-of-the-art technology. While currently this trend is yet to pick up in India due to prohibitive costs, the thrust on development of FTWZs and logistics parks will give momentum to cold chain capacities in India. Developers may have to bring in initial expertise from more developed markets for efficient cold logistics and we could also take various initiatives to reduce the skill gap in this area.

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Multi-user sites will be in demand constraints but can be decided based There is renewed optimism in the on demand and supply patterns, centre air and the expectations of young of gravity, long term logistical and real aspirational India are riding high on estate considerations in short cost to the new government, whose principal serve basis. agenda is to drive economic growth and development. The logistics sector Multi Client Sites(MCS) is a fundamentally important enabler Large scale shared facilities with of the success of the Indian economy multiple users will set the platform and a significant business in its own for consolidation in the post GST right. scenario. GST will make large regional Facilitating conditions for growth in Vikas Anand the logistics sector is therefore critical MD, DHL Supply Chain India warehouses economically viable as opposed to the multiple small ones to the Government’s development set up to deal with the current tax agenda. If the real barriers to growth are identified and the right conditions created to structure. DHL Supply Chain is well ahead of the curve leverage investments in important pieces of logistics having begun its outlay in Multi-User sites two years infrastructure, this industry can service and support the ago, when it announced an investment of Euro 100 growth that we are expecting to see across the economy as a whole.

Logistics Service Providers (LSPs) can provide Large scale shared facilities immense value to firms in managing complex supply chains by outsourcing logistics activities to experienced with multiple users will set the LSPs who are moving from being considered as mere “warehousing” or “transportation” agents, to “value platform for consolidation in creators”. This allows companies to concentrate on the post GST scenario. GST their core activities and enables them to develop and will make large regional grow those successfully.

Some of the key issues impacting the logistics sector warehouses economically are: Goods & Services Tax (GST) Amongst the most urgent issues that need to be addressed quickly are tax reforms. Clearly on the agenda will be simplification of the tax structure with a quick move towards implementing the Goods & Services Tax (GST).

Current supply chain structures in India are engineered to harness fiscal benefits arising from difference in tax structures across regions. A single unified tax on both “goods” and “services” with the objective of eliminating tax cascades will bring about a transition from the existing origin-based to a destination-based taxation regime. Hence, under the proposed GST scenario, every distribution-intensive company has an opportunity to re-look at their supply chain structure and gear up for the proposed tax reforms, to align their supply chain distribution network to customer markets moving away from tax issues.

Simplifying the distribution network and merging smaller warehouses to regional centres will result in economies of scale being generated where the location will no longer need to be fixed depending upon CST LOGISTICS TIMES June 2014

viable as opposed to the multiple small ones set up to deal with the current tax structure.

million in 2012, to strengthen logistics infrastructure.

Four of these large sites are already functional, with another four expected to go live between Q4 of 2014 and 2015.

Built to world class standards with state of the art features customized to suit specific requirements of customers, these MCS facilities can consolidate, store shipments and re-distribute them to several distribution channels in the country.

These large shared Distribution Centres offer not only strategic, operational and financial benefits, but allow for better cost control, forecasting, inventory rationalization and synergies for consolidation in transportation. There is great value for corporates in utilizing these MCS facilities as the innovative solutions

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help manage costs with faster delivery and reliability.

Transportation Due to increased outsourcing, the 3PL market in India is growing at a faster pace than GDP, and will account for 13% of the total logistics market in 2015, from 6% in 2008, according to Datamonitor India Logistics Outlook 2007. Thus transportation forms a significant part of this market. To meet this growing demand, we have been expanding our transport branch network at a rapid pace, having recently opened 20 branches which provide dedicated full truck load services (FTL) across the country. Equipped with a transport management system (TMS) and specialized staff, our services bring higher standards of reliability to a largely fragmented FTL market.

Technology In order to provide customers safe, compliant and consistent integrated logistics solutions which would create competitive advantages for them, it is imperative to equip facilities with integrated IT solutions and warehouse management systems (WMS). In addition to

advanced IT solutions, our MCS facilities are facilitated with primary and backup high bandwidth Multi-Protocol Label Switching (MPLS) connectivity and offers bestin-class processes for operational excellence.

People Development There is a critical need for well trained, professional and skilled employees who will be in a position to fulfill the growing demand for higher levels of operational and quality compliance.

To meet this demand, DHL Supply Chain has rigorous training and development programs in place to grow the local talent pool and deploy industry leading practices in the country. We run Gurukul, ourspecialized training centres aimed at developingthe skills of blue collar workers by imparting a consistent and standardized training on several aspects of warehouse operations, which would include the critical subjects of Safety, Health and Environment at their warehouses across the country. There are also plans to shortly launch the DHL Supply Chain Transport Academy which aims at developing the skills for the Transport team on various strategic, functional and behavioral areas.

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Warehousing is a happening segment First things first. Not too long ago, India was having warehousing only at the producer’s end. But today the scenario has changed drasticallywarehousing concentration has shifted from producer’s end to distributor’s end. What has brought this change is the realization of the stakeholders that distribution to the ultimate consumers should be swift. This is the most defining change which we have noticed in last 10-15 years and this has changed the whole concept of warehousing.

Vinod Asthana MD, CRWC

My point is: warehousing has evolved as a happening segment. But still there are some serious challenges. Location is clearly a major issue. Considering the market dynamics and growing demand of goods, now we need more big boxes. Here GST implementation can provide a big boost as it will pave the way for mega warehousing complexes with the capability to support multicommodity segment.

We have particularly seen the addition of quality inputs in the industrial

Now within a warehousing unit, you will notice multiple activities- preservation, m a i n t e n a n c e , aggregation, packaging, coding, etc.

As against the earlier days, when a warehousing unit was particularly attached to a specific unit, now it has become a business vertical in itself. Today, we are noticing warehousing units being put up with a capacity base which can cater to not just one customer but multiple customers. And with the businesses like retail growing by leaps and bounds, the demand for warehousing has been on a consistent rise.

Their basic character has also changed. They are no longer just meant for storages now. They are an integral pillar of your supply value chain. Needless to say, this has also triggered a distinctive qualitative change. Now within a warehousing unit, you will notice multiple activities- preservation, maintenance, aggregation, packaging, coding, etc. The new units are equipped with the WMS (warehousing management system) which provide that critical linkage between the warehouse and the distribution and selling points.

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warehousing units. And the rationale is simple. They are not meant to store the goods on a long-term basis.

They have rather assumed the character of vibrant distribution points. Industrial warehousing would always be more competitive and be more agile to respond to qualitative requirements of its customers vis-à-vis traditional warehouses where foodgrains are primarily stored. In the latter, the primary focus continues to be on preservation.

In the past we have come across noticeable buzz pertaining to new concepts like FTWZs which are believed to play a crucial role going ahead in the domains of storage and distribution. But it is no secret to anybody that they have not taken off in a major way. And that is because there are two serious issues – infrastructural as well as taxation. But I believe going ahead these bottlenecks will be removed and we may see these mega units really getting off the ground.

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E-com will play a major role Growth in the demand for warehousing is directly related to the GDP trends but a dip in growth in recent years has not made much of an impact.

This has primarily been because of IT capabilities and flourishing e-commerce businesses which have been driving the secular growth in the demand for consolidated warehouses.

With the increased confidence in the stability of the new government, more and more investment in warehousing capacity addition is likely to be routed.

Cyrus Katgara

Partner, Jeena & Co.

But for this, GST need to be rolled out quickly.

GST will result in consolidation of warehouses as transacting interstate direct deliveries will become easy and economical and this will not require multiple warehouses for trading in each of the state.

I do expect more warehouse clusters to come up with growing e-commerce business. The storage locations would be chosen in the economical areas with transport and other support infrastructure and need not be closer to the final consumer.

A question which is often asked these days is – how will the land acquisition bill cleared early this year will impact

the warehousing sector? Especially in terms of creation of new units with fresh land buyout. My feeling is: warehousing will grow away from the urban locations where land prices have already become prohibitive.

Automation is another serious challenge for the warehousing sector and it is generally believed that operators here generally are averse to it. I think this issue will be sorted out in the due course of time. Warehousing and logistics business is increasingly

becoming IT and technology driven and there is no option but to eventually give up the old ways of doing this business.

Coming to the issue of why FTWZs have not been so successful in our country, my response is simple.

FTWZ could only work if you have the larger vision of creating an international trading hub. The benefits of FTWZ to promote growing trading activity also requires other regulatory and infrastructural support such as ports, roads , customs and other regulatory agencies that give confidence to the global players to use India as a global hub.

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Low cost vs right cost We have seen a major slowdown in investments in the warehousing units in the recent past. With the increased land cost, unrecognized operating costs and high risk of utilization in the warehousing and distribution operations, it has become an unattractive business model. There are very few industries/organizations who understand the difference between a RIGHT COST and a LOW COST. And hence, there is always a threat of losing money in warehousing.

Another major reason for slowdown is

Sunil Nair CEO, ColdEX

global standards. The recent recession has further made it difficult wherein the demand cold storage have been muted as the user industries have been struggling go grow.

India, unlike China, believe in small but multiple setups. While China worked on large warehousing setups, India today appears to be focusing on small and medium sized, multiple setups. This has its own advantages.

However, I expect to see some change in this post GST. It would be ideal if the Government realizes this need and

India, unlike China, believe in small but multiple setups. While China worked on large warehousing setups, India today appears to be focusing on small and medium sized, multiple setups. the much delayed GST implementation. The warehouse users have been waiting for the decision on GST so that the network optimization can be done accordingly. I only hope, with the new Government in place, that too with majority, the decision on GST takes place. This should give a lot of visibility and clarity to the investors to invest on warehousing and distribution infrastructure.

This should also help the warehouse users reduce their existing cost and accept the right cost of storage and distribution.

I have been in the cold chain industry for last 20 years and believe me situation has never been so scary. The land costs are shooting up even without much demand.

In spite of subsidies and Government promotions, setting up a good quality purpose built cold storage still appears to be an unattractive business model, if you want to run it fully compliant to legal requirements and LOGISTICS TIMES June 2014

earmarks land portions for such expansions in future.

I will be happy to see this industry recognized as a service industry, where services are recognized and paid for, where every legitimate cost is addressed and there is no scope of unhealthy competition or price war by cutting the corners. Furthermore, where clients look at optimization, utilization, process control, compliance and future readiness, a 3PL partner is treated as an extended arm of the user industry, a 3PL partner constantly work on re-engineering of processes and activities to ensure improvement in service levels and costs and there is a good intent of demonstrating long term partnership on ground.

It is not that we don’t see these expectation actually fructifying on the ground. There are many examples of successful partnerships within India. However, they are not enough for the size.

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Warehousing needs more vibrant financing regime gradually changing over the past few FFor more than a decade, effective years.. When it comes to business, warehousing and inventory implementing new technology management has been an emerging solutions to mitigate company component in the national and functions and increase workflow global business scenario. Over the efficiency is a must. Operators should years, several valuable concepts have not hesitate at adopting methods that been added to the earlier trends of will make their jobs easier; enable them warehousing to make this unit even to cut down on time and operating more beneficial to various segments costs, and prepare goods for on-time of business. In spite of that, there shipping and delivery. .Radio tagging are major obstructions that have Atul Kumar ( RFID), automated racking and pick made its rising way to stagnation. It Director, Sigma Supply Chain system, mechanized handling, bar would be further late if we don’t mull coding are all contributing positively to over relevant issues now and address them as a whole. GDP, which plays a major role in the the health of the inventory as well as optimal utilization economic growth of a country, stumbled upon a slow- and distribution. The bigger end users are also now down in India in the year 2011-12. In the year 2013-14, it was 4.9%, which was fairly less than 7.5% considered to be in the year 2011-12. A As per the current soaring major setback in GDP has stagnated business development and hence the warehousing unit land rate, warehousing growth is affected. is found to be significantly The existing tax structure in India is quite complicated - there are central level taxes in hampered at the present time. the form of excise, customs duty and CST; Over a short period of time and there are also varying state level taxes in the form of VAT, and other levies like Octroi, while a positive sentiment will state level cess etc. It seems the manufacturer/ see new investments still coming supplier pays taxes on taxes. Therefore, most industries, like manufacturing and third party in, for a long term plan, the logistics players generally have warehouses government needs to seriously in each state, increasing the inventory and operating costs as well as spreading inventory look at effectively subsiding the unevenly. The movement of critical inventory warehousing infrastructure and between stock points is also severely restricted by such a tax regime. Definite planning should tax breaks. be driven by logic of eliminating multiple taxes thereby increasing operational efficiency. Also at the same time, the government should take a specific willing to pay to use VAS( Value added services) and move on the simplified GST tax structure to make it it is percolating down the chain to traditionally run further simple to help drive the warehousing trade to businesses and small and medium users also.

The warehousing is a capital intensive sector and the next level.

Warehousing in India has had a “godown” kind of without availing finance from the banks and financial approach for a long time and a short term view about institutions, warehousing facilities cannot be created storage of inventory from the users has not helped either. by the entrepreneurs. Therefore, the Government is Challenge is also people driven as changes are harder required to encourage private sector participation in to implement both with mindset and way of working. the construction and operation of warehouses. Various New technologies are met with questions .As a result PPP need to be considered. Besides, land requirements even the users are not willing to pay” effective prices” for constructing the warehouse are difficult to meet due for the kind of quality they really need or the demand to high rising cost of land in urban, semi urban and that their inventory requires from them. However with rural areas. Tax incentives and other financial benefits companies employing trained SCM professionals this is are not encouraging.

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Marching to a matured stage In many ways, this is a good thing - Indian warehousing is marching towards maturity stage. A balanced & defined growth of warehouse industry in any environment. Recession, recovery & stagnation are the phases of economy and will come after each other but a matured industry will ensure that fundamentals are in place and stakeholders can be spared of rude shocks from time to time. Today, the situation is exactly that.

Today, majority of companies are not looking for Go-down (read: Godown)

Amit Kumar

HEAD (Logistics), Indo Arya

later that will further consolidate and mature warehouse market and create zones closer to the customer. There will be now big boxes wherein users will enjoy cost sharing and will be situated little far from cities. It will also be interesting to see what happens to small warehouses located within city limits without proper infrastructures and that of government’s so called legal warehouse whose rentals are double of market rate.

To strengthen warehouse further , Government must form industry

Majority of companies are not looking for Godown (read: Godown) but are looking for specific warehouse facility with 40 feet of roof height, 9 MT tons of static floor strength, 120 feet of apron area. but are looking for specific warehouse facility with 40 feet of roof height, 9 MT tons of static floor strength, 120 feet of apron area, docks with leveller, bumper & automated shutter and fire sprinkler. Logisticians today know their specifications before they start visiting to the market and hence in most of the cases they have to get it built or collaborated to get such a specific or tailor made facility and that takes time.

All of a sudden, warehouse industry has been transformed from a go-down being made on the empty land in backyard to a well-planned, connected & GST proof warehousing zone, it has now become a science with a troupe of consultant, architect, engineer & investors getting into it. Surprisingly, there are few PEs (Private equity firms) who are only keen on warehouse segment.

What will transform warehousing further, is the advent of GST with the strong central leadership with progrowth intentions. We will have GST sooner than LOGISTICS TIMES June 2014

specific regulations to fortify it. To make sense out of it, a 50,000 sqft warehouse employs around 110120 people including transporter; it also contribute about 11-13 lakh rupee to government’s kitty annually by way of taxes etc. That’s good number to get our policymaker’s attention.

To make warehouse more animated or vibrant, automation has been waiting in wings since long now and one decisive factor is throughput which cannot be generated with state specific warehouse as they are only catering to the local market. With GST & zoning a warehouse will generate throughput and that will conducive to make automation happen successfully, another decisive factor is cost and that will be addressed by amortisation or hire purchase or rental mode by seller or 3PL. To conclude, warehouse can be a significant contributor to the economy if it will be given proper attention in terms of policy, finance and legislature.

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Automation is in nascent stage state (multiple locations) to reduce tax The warehouse operators in the country burden of Central Service Tax (CST). are now exploring the hidden pearls in With fewer margins on a turnover warehouse automation. Warehousing of few millions, implementation of in today’s world has become more warehouse automation at multiple than just creating and managing warehouses is costly affair. Hence, storage space. Rather it an important most small to medium businesses activity in the supply chain strategy in this space have stayed away from of a company and is considered to warehouse automation. be a competitive advantage. Growing .Implementation of GST will definitely demand, increasing output rate and take warehousing to the next level. simplifying storage and retrieval Suunil Dabral GST will bring all the current taxes activities has always been a challenge Country Head, SSI Schaefer on goods and services under one which drives most of the companies roof which will thereby reduce the tax to look for innovative solutions that fit in their business model. What better than warehouse burden and encourage the manufacturers to focus on matters like facelift of the warehouse, up-gradation in automation can solve these challenges?

But the fact remains that warehouse automation is technology, automation in material handling. Instead still in its nascent stage and is yet to achieve complete of maintaining small warehouses in different states to acceptance in the Indian market. How do people save tax, companies will then focus on having few large normally react when a new automated warehouse warehouses in the most productive and logical locations solution is introduced in the market? “Wow! This with new technologies and innovations. is an interesting solution.

Pallets are automatically stored and removed via vertical lifts. This will surely increase the efficiency of my warehouse. But this looks complicated and must be expensive. I need quick returns, so why not continue to store in the same conventional store.� We cannot really fault them for this attitude due to various reasons.

Being a price sensitive country, there are many small players who are under the impression that implementing warehouse automation means high investment and will not yield immediate returns. Complex tax structure is the reason why most of the companies consider tax saving as an important factor while planning their warehouse strategy, thereby implementing economic solutions rather than achieving operational efficiencies. The problem is that, state level taxes are applicable on top of central taxes. This means the manufacturers are paying double taxes. The only way they see to avoid this multi tax scenario is to have small warehouses in each

Being a price sensitive country, there are many small players who are under the impression that implementing warehouse automation means high investment and will not yield immediate returns.

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New Clusters Would Come Up We can easily forget last few years initiative will also improve bottom line which were marked with direction of logistic companies. less approach from the government Taking from where Vajpayee led NDA and the only visible regular feature government had left, I am sure this was the regular increase in the cost of government will focus on highways petrol and diesel. After a long time, the and better roads. Power generation scene seems to be drastically changing. is also expected to be given major Sensex is soaring to record highs and priority. Both these will make drastic the exchange rate outlook more stable improvement in logistics operation as than any time in the recent past. poor highway / roads and power at Ramesh Krishnan New government has shown positive city’s outskirts where the big modern Head (Supply Chain), response to the issue of GST warehouses are expected to develop Sahara Q Shop implementation. Probably it will see often face extreme problem in smooth the light of the day finally. The track operations. record of Modi is excellent in attracting global player I look forward to good employment generation and investment. In spite of US dictatorial approach, opportunity for all sectors in general and for logistics the new PM has taken right steps in the direction of bilateral relationship not being diluted by ego hassles. Modi also has been close to China and would learn from Chinese example to develop world class infrastructure.

Once FDI, GST is in place and dollar to rupee conversion is stabilized, economy is expected to bounce back with the new government’s strong resolve to boost production and improve infrastructure which would also benefit the logistics sector. Not only good infrastructure and roads improve the logistics operation, new

We will have better and bigger warehouses due to consolidation near production units. Since warehousing will happen more near the manufacturing base, new clusters will also be developed around that.

sector in particular. I hope we will have better and bigger warehouses due to consolidation near production units. Since warehousing will happen more near the manufacturing base the warehousing cluster will also be developed around that. Small last mile warehouse would reduce and it would develop into long haul movement direct to door of consumer/ traders.

One can also look forward to more international players getting in the fray and better facility and practices coming into the play as the world rediscover India as a growing giant.

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We need a sustained approach the India economy; policy paralysis “Between the cup and the lip, a morsel of the last few years in India, belt may slip�, goes the old adage. The tightening by potential customers understanding of this seems to define due to the wait and watch attitude. the sentiment currently prevailing in However, as always the expectation the warehousing sector. from the future is very heartening for While the leading economic indicators like- clear mandate to the new the mechanized, high rise warehousing government, its declared focus on sector. There are both the leading and infrastructural development and the the lagging indicators, which point in positive sentiment that this has ensued this direction: in the marketplace; have also touched Leading indicators: It is a Vineet Mehrotra the struggling Warehousing sector; foregone conclusion that the internal MD, Fonty SCS the real action is yet to follow. Yes, consumption of the country is bound these are early days but the hope has to grow, the land prices would continue surely returned to the sector, although with a touch of to rise, the labor costs would continue to outstrip caution. the general CPI, resulting into modern warehousing In the past too, we have had expectations like construction and usage picking up. implementation of GST, which have remained Lagging indicators: With the expectation of the unfulfilled for more than a decade now- despite the advent of GST, modern and organized Retail to pickup, fact that all, across the political spectrum seem to agree the Automotive market to grow comprehensively after that it would be good for the warehousing industry in the lull and the FMCG companies expected to go back particular and the country’s growth in general. Thus, to their typical double digit growth, many have invested the industry is at a stage, where caution seems to be still in building the big boxes. These big boxes would need pre-dominating the general euphoria. to be racked and managed through automation, thereby A few things, which I feel are must for the warehousing strengthening the industry. sector to develop in a sustained way rather than sporadically There is a lot to learn from the immediate mushrooming in an unorganized history of the warehousing sector in fashion, are: 1. Very clearly defined India, wherein we have had the worldNATIONAL regime on regulatory requirements and its class FTWZs coming up, but saw the implementation companies that made them struggle to 2. Clarity on GST implementation with well defined timelines keep their heads above water.

3. Clarity on FDI in Retail 4. Ease of Institutional financing for the sector 5. Belief in the user community that cheap is not always costeffective There is a lot to learn from the immediate history of the warehousing sector in India, wherein we have had the worldclass FTWZs coming up, but saw the companies that made them struggle to keep their heads above water. Some of the reasons that have been responsible for this are the slowdown in the general global economy and in particular LOGISTICS TIMES June 2014

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Warehousing story could move to the next level boost to warehousing demand in the It is quite evident that sluggish region. economic sentiments in last couple But if one has to look at the larger of years have impacted warehousing national scene, a stable government business too. But that is a general at the centre is a good news for us like trend. If you take a look at some of several other segments. Businesses the noted warehousing clusters, the in general are believed to get back on level of activities has not considerably the growth curve again and I see no dipped as many would like to believe. reason why warehousing will not be Take the case of warehousing cluster part of this overall upturn. I am quite development in Bhiwandi. It’s a 50 optimistic that new government will Km long corridor on NH-3 and it has L V Rathi finally give the green signal to the come up well. The cluster has plenty Chairman, Antariksh Group implementation of GST which has to boast of in terms of PEB/ Prebeen pending for quite long. This Engineering Buildings set up and the reason it bucked the slowdown trend is its proximity to critical move would expedite the process of new warehousing clusters emerging in the country, most Mumbai & Thane City.

I believe this zone will continue to consolidate its certainly in proximity to state capital & emerging positioning as a major warehousing hub in the country business centres. The possible roll out of the mega thanks to the policy push from the local government. projects like DMIC and Dedicated Freight Corridor The Mumbai Metropolitan Regional Development in next few years could be another major booster for Authority (MMRDA) has now proposed various the Indian warehousing story to reach to the next infrastructure projects that are likely to give a further level.

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EXPERTS CORNER

It isn’t about four walls and a roof anymore Logistics, especially warehousing in India.

India, is transcending on a growth The National Bank for Agriculture trajectory driven by renewed focus and Rural Development (NABARD) on improving agricultural storage & has recently entered private sector supply, manufacturing and multimodal financing (NABARD Warehousing transportation infrastructure.

Scheme 2013-14), approved by the Warehousing forms an integral part Union Finance Ministry and has been in the overall logistics value chain. designed to suit the INR 5,000 crore The warehousing capacity available special fund, that will offer direct in India, in public, cooperative and loans to public and private sectors for Asok Mookerjee private sector is 10.87 crore MT. construction of warehouses, silos, cold CMD, A Square H Presently, warehousing accounts for storages and cold-chains.

Financial Consultants 5% of the Indian logistics market States like Madhya Pradesh have (excluding inventory carrying costs, announced plans to develop a total which amount to another 30%). The segment has grown warehouse capacity of 34 lakh metric tons with a total at a CAGR of 15% from 2007 to 2011. Steady recovery investment of INR 1,300 crores. Emerging sectors like in international trade and a rapid rise in containerization ecommerce is expected to allow warehousing to become levels have led to high demand for warehouses. a key support factor in the success of both the existing The need for large scale modern warehousing is fast and new entrants. catching up in India.

Currently, the market is mostly fragmented and unorganized, dominated by many small players.

India has more than 2,000 million square feet of warehousing space out of which only 8% is accounted by organized sector and the rest by unorganized sector consisting of 3PL, individuals among others.

As per the Working Group Report on warehousing development, an additional 35 million MT of warehousing capacity is required during the 12th Five Year Plan period for the storage of all major crops.

The new Government is expected to play a crucial role by promoting the warehousing sector through special tax benefits and other incentives. Critical factors such as The future of the warehousing is bright and is expected the introduction of GST (Goods and Service Tax), the to witness exponential growth in the coming years. adoption of the PPP model (Public Private Partnership) The increased participation of both public and private and the National Policy on Storage and Handling can sector is crucial for developing logistics and improving further contribute to the growth of warehousing in supply chain management.

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Share of modern warehousing is growing overall warehousing segment in the In recent times, the Indian warehousing coming years. segment has evolved significantly, Below table shows a brief comparison resulting in a gradual metamorphosis of traditional ‘godown’ and modern from the traditional concept of godowns into modern formats. While warehouses on select parameters.

India’s warehousing industry is still From a location perspective, while at a nascent stage and traditionally Mumbai, the National Capital Region been characterized by basic ‘godown’ (NCR) and Nagpur are most attractive facilities with poor infrastructure, locations for modern formats, other Prahlad Tanwar the share of modern warehousing is attractive locations lie in major western Director expected to grow from 15 percent (62 and southern cities.

Transport & Logistics, million sq. ft.) in 2010 to 30 percent While growth in the domestic KPMG India (178 million sq. ft.) by 2015. Highest manufacturing and retail segments has growth in demand for the modern given added impetus to the demand warehousing space is expected from the engineering for efficient warehouse management services, the Key parameters Size (footprint) Height Storage Flooring Structure

Traditional godowns Usually up to 5,000 square feet (sq. ft.) ~12 ft Floor stacked on pallets Standard paved Standard brick structure

Material discharge/ loading IT

Single-point entry/exit Limited

Material handling

Usually manual

Value-added services (VAS) capability

Limited

Cargo safety/security

Limited

Modern warehouses <12,000 (sq. ft.) <20 ft.

Floor + racking option available Reinforced hi-grade concrete Reinforced walls + prefab sheets and bespoke roof design Multiple docks/ bays with levelers Full-fledged warehouse management system Extensive machine-handling equipment usage Significant scope for palletization, bar coding, MRP labeling, pick and pack, and shrink wrapping Fire extinguishers, ventilators and surveillance are standard Source: KPMG in India analysis

goods and IT, electronics and telecommunications sectors, with other sectors such as pharmaceuticals, automotive and components, chemicals and food also expected to contribute to its growth.

Further, interest and traction in evolved formats of storage such as Free Trade Warehousing Zone (FTWZ) and multi-user facilities has been increasing.

The introduction of various government schemes such as Gramin Bhandaran Yojana, Private Entrepreneurs Guarantee and negotiable warehousing receipts and initiatives such as granting infrastructure status to cold storage facilities are expected to propel growth of the

warehousing sector continues to attract little investment.

Current spending on organized warehousing in India constitutes 9 percent of the total logistics spending, as against 25 percent in the US. Existing small warehouses need to be replaced by large, modern warehouses that incorporate global standards such as tall designs, modular racking systems, palletization and the use of automation and IT. High price sensitivity among customers and infrastructure issues, which tend to limit the ability of service providers to offer superior services, hamper the warehousing sector’s growth potential. Some other challenges LOGISTICS TIMES June 2014

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include service providers’ underdeveloped capabilities to offer industry-specific solutions, the asset-heavy nature of their businesses, need for substantial capital and concerns related to land acquisition.

While the full potential of FTWZs in the Indian context is still at a premature stage and remains largely unexplored, the concept has been timetested across multiple geographies with significant success. If the current status is benchmarked against globally successful examples in Dubai, China and Singapore, India is about 5–10 years away from the development of a supporting ecosystem for the larger FTWZ market.

However, KPMG expects that the existing landscape of fragmented, unorganized small godowns will undergo significant reorganization with the rollout of the much overdue uniform Goods and Sales Tax (GST). The development of large hubs in key locations, coupled with smaller spoke warehouses closer to production and consumption centers, are expected to emerge following the rollout. This change in legacy tax structure is expected to be the largest driver of modern warehousing infrastructure in the nation. While several companies have initiated the consolidation and rationalization of existing warehouse networks, confirmed rollout dates have yet to be declared.

Also, the rapid transformation of warehousing infrastructure would improve with the adoption of supporting IT. Technology is expected to constitute the backbone of a strong and efficient modern warehouse that encourages accuracy, inventory tracking and lowered operational costs. Today, the market offers multiple forms of warehouse-management systems, and service providers can select off-the-shelf solutions that best suit their level of complexity.

With a new government at the helm, it is expected that

The introduction of various government schemes such as Gramin Bhandaran Yojana, Private Entrepreneurs Guarantee and negotiable warehousing receipts and initiatives such as granting infrastructure status to cold storage facilities are expected to propel growth of the overall warehousing segment in the coming years.

LOGISTICS TIMES June 2014

the completion of large-scale infrastructure projects such as the Dedicated Freight Corridor (DFC) and the Delhi-Mumbai Industrial Corridor (DMIC) would be expedited. This is likely to generate significant demand for the warehousing infrastructure in near future.

Moreover, since a quick implementation of GST is among the major points on the new government’s agenda, the warehousing sector is expected to become more organized and achieve economies of scale.

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A major take-off may happen soon What could be in store?

A warehousing facility, by virtue of it The Warehousing Development & providing for a break in the flow of Regulatory Authority created in 2010 cargo, could as such add to logistics can be expected to play a key role cost. However, an efficient warehousing with standardization of warehousing operation can also serve to add far more activities in the country, guidelines for value by absorbing quantum and timing infrastructure, technological platform, variations between production and efficient price discovery for warehoused consumption volumes, taking products products, and use of negotiable nearer to markets, and facilitating other warehousing receipts – contributing to value-adding activities like consolidation, Peeyush Naidu competitiveness of the industry. deconsolidation, palletisation, barcoding, Senior Director, Implementation of the proposed unified repacking, labelling etc.

Deloitte Consulting tax structure (GST) in expected to Warehousing in India has typically targeted encourage improvement in the state of storage requirements for agricultural commodities – primarily dominated by government entities industrial warehousing – development of mechanised large including FCI, CWC, SWCs, etc. Industrial warehousing facilities / clusters, and logistics benefits. Also, warehousing has generally been in-house with manufacturers, except for activity in the country could most certainly benefit from storage facilities in CFSs and some third party warehouses better planning – as a concept in town planning with land built over the last two decades partially bridging the demand- allotments being made exclusively for warehousing along supply gap. Further, some specialised warehousing by way with allotments for residential, commercial and industrial of Controlled Atmosphere Warehouses, Silos for dry bulk developments as well as integration of warehousing with and tank farms for liquid and gaseous cargo etc. has also transport systems.

These developments could propel effective warehouse been built whilst being limited in scale. planning and architecture with proper scale, connectivity Here and Now of Warehousing Aggregate size of the Indian warehousing industry and internal storage and circulation areas; use of (excluding inventory carrying cost) was estimated to be proper structural (appropriate roof height, insulation, around INR 560 billion in 2013, nearly 5% of the total canopies, ventilation, etc.) and equipment systems; logistics spend by the country. This industry segment is installation of surveillance and security systems; growing at around 10% annually. Despite this double digit adoption of information technology in different areas growth, presence of 3rd party modern warehousing is of warehousing, etc. limited to roughly 15% of the total industrial warehousing In this context, the entry of global third party logistics demand. This limited presence can be attributed to players is changing the logistics idiom in the country. low outsourcing in the industry – estimated at 30% as Logistics is emerging as a strategic function involving endagainst over 70% globally. Further, until now, the focus to-end solutions that improve efficiencies. on cost minimization has promoted usage of low quality With growth rebounding in future, and focus on retail, warehouses. As per industry experts, these warehouses are food and automotive sectors, warehousing industry mostly built on non-commercial land with rudimentary would be well placed to take-off. For stakeholders, this would mean focus on development of additional services and low charges.

Total agricultural warehousing under the central pool is facilities. Additional FTWZs or large logistics parks estimated at around 72 million tonnes against a total capacity with warehousing facilities could be developed in of about 112 million tonnes. Of the total capacity, only close proximity to modern ports, as has been done in 30% to 40% is dedicated for agricultural commodities with countries like Dubai and Singapore, as well as large the rest also being used for storing other goods. To meet demand / consumption centres. These facilities could the growing need for storage of agricultural commodities, increasingly be focused on through Public Private the Working Group report on 12th Plan highlighted an Partnerships especially through programs like DMIC, additional capacity requirement of about 35 million tonne DFCCIL, etc. Investors would also have an important by 2017. Further, cold storage capacity in India is estimated role to play in development of warehouses, particularly at 29 million tonnes, with a large part used for storing high-end facilities with third party clients, as well as for potatoes, against a total demand of about 61 million tonnes. agricultural produce given the incentives on offer. The In this context, it is important to note that post harvesting small base of Controlled Atmosphere warehousing for losses are nearly 30% of the total production of fruits and fruits, vegetables and other perishables also has a great opportunity to expand from the existing low base. vegetables in India.

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Switching Centers of the future E-tailing in big way. Talks are also In his famous book titled â&#x20AC;&#x2DC;The world going on for increase of FDI in railway is flat,â&#x20AC;&#x2122; Thomas Friedman describes and the defense sector. This is bound future warehouses as switching centers to increase demand for warehouses - switching the incoming supplies equipped with latest technology from manufacturing companies to involving Robotics, Automation outgoing movement of material in and information & Communication shape of demand to be met towards technology and countries like Japan respective retail outlets. He narrates and china are eying the big market further in the book giving example potentials opening up under the new of world leader retailer, Wal-Mart in terms of how they achieved the Prof. Akhil Chandra government.

Another new kid on the horizon seamless equilibrium between demand Consultant Logistics and Supply Chain Management is E-Commerce which requires and supply by Automation through robotics, conveyer belts, RFID tags and ICT technology.

What he establishes is the fact that objective of the warehouse is to cut down inventory time ideally to zero and they are to stay in future as switching centers and have a very important role to play to make supply chains seamless, robust, dynamic and transparent keeping supply and demand balanced.

Coming back to the Indian scenario, growth of warehouses has followed traditional curve and there has been no significant growth especially during last five years due to policy paralysis in the Government, heightened current account deficit and warehouses like never before because of their sole slow growth of manufacturing being a mere fifteen dependency on them. The demand for E-Commerce is per cent of GDP and global recessionary trends. Cold on the rise and it is witnessing an exponential growth chain warehouses and others have still a long way to and is expected to increase by leaps and bounds in the immediate future. The E-Commerce business is growing catch up with global trends.

With the new Government at the helm, there are some at an average annual rate of 34 percent since 2009 and positive signals in terms of a new confidence among was expected to touch $13 billion by end 2013 according investors brought by new government both within to a report on e-commerce by the internet and mobile the country and outside by merging of shipping and association of India and audit firm KPMG. road transport ministry and a firm resolve by the new New government also seems to be serious to give a go government to promote manufacturing. Lately the new ahead to GST which shall result in the consolidation of Prime minister in his ten point program has put lot of warehouses in a big manner equipped with state-of-thefocus on the improvement of infrastructure. Though art technology and with the new positive mood with new government is not very enthusiastic for allowing foreign and local investors,it is hoped that warehousing FDI in multi-brand retailing but shall permit FDI in sector will invite large investments.

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WAREHOUSE MANAGEMENT

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PROBLEMS OF INVENTORY RECONCILIATION The management of a warehouse includes all Returns – Workers need to access a great deal of information in order to efficiently processes – from goods received, stock put away, and properly process returns. internal replenishment control, picking, packing h To identify the item when it is not in its and preparation of all freight related documents original packaging to goods issue. The application of IT for the h Determine how to process the returns management of a warehouse results in shorter – return to stock, return to manufacturer, lead times, reduced safety stock, better on-time recondition, scrap or return to customer delivery performance, increased productivity, Packing, Staging and Shipping – This is picking accuracy and complete transparency of Dr. Veni Mathur the last mile activity in the warehouse. all inventory.

Ex-faculty, IIT, Delhi The inefficiencies can be: Economic uncertainty, paired with market Dean, Million Minds h Processing delays in shipping that ripple volatility, creates multi-faceted challenges for a into carrier detention charges warehouse manager. To this if you add shifts in demand and distribution strategies; the whole process h Lack of ability to meet emergency deliveries h Increase in shipment costs becomes a very complicated one.

Inventory or Stock Reconciliation is the biggest problem in warehouses that have manually driven procedures. The Solution for the Problem Areas The use of automation and Information technology like operational challenges could be – h High levels of errors in information due to the double- WMS (warehouse management system) helps to reduce the pain areas. The advantages could be – touch (handwritten followed by data entry) h Slow movement of information resulting in reduced h Processes across the warehouse are streamlined, reducing cycle times visibility throughout the warehouse operations h Reduced employee productivity due to time wasted in h Worker productivity is increased, reducing cost of labour paper work and locating information on labels h Orders are fulfilled more accurately improving customer h Reduced customer service levels services and satisfaction levels. h Increased cash to cash cycles due to slow movement of h The cost of sales attributed to movement through information warehouse is, thus, reduced. h Increased capital expenditure due to lack of visibility of real-time inventory, which leads to keeping high levels In order to effectively manage the warehouse, a manager needs access to business systems and business of stock to prevent against out-of-stock conditions Pain Areas: communications. With the use of automation and mobile Receiving – When shipments arrive the manual process technology managers can remain on warehouse floor to presents a number of issues: ensure productivity and throughput, yet maintain realh Manual reading of labels and reconciliation on paper time connection with co-workers, vendors, associates and form takes time besides due to some inventory errors business information needed to achieve maximum on-thesome product may show in stock while it is actually out job efficiency and effectiveness. of stock.

A warehouse using RFID technology has RFID mounted h Labels of shipments may get damaged and become carts, where workers can take full and error free cycle counts illegible causing delays and congestion. in less time; work that takes weeks will get done in half a h Poor inventory visibility prevents the ability to streamline day. and reduce cost in receiving process via cross docking.

A quick scan of an item barcode or RMA label can Put Away- Manual process has a variety of issues: instantly validate the return and quickly update the h Errors in put away can result in misplaced inventory customer credit. h Poor utilization of limited warehouse space Access to real time information ensures that the right h Poor utilization of material handling equipments such shipment is delivered to the right dock and loaded on to as forklifts a right truck, driving labour costs down.

Cross Docking – When paper based processes are Last but not the least is the importance for training of the used in cross docking then manpower handling the software and hardware needed h Lack of real time processing results in delays as well as to automate the warehousing processes. The warehouse delivery of shipment to wrong deck managers along with his staff need proper training from h Inability to provide updated order status to the customers time to time to equip themselves with the latest trends in impacts customer satisfaction and retention. technology and their applications.

LOGISTICS TIMES June 2014

CRYSTAL GROUP Introduction Cold Chain Industry is poised for a phenomenal growth of around 25.8% CAGR making the value of cold chain industry to reach a figure of Rs. 640 billion by 2017.

As per Government estimates, the total investment committed for cold chain is $1.2 billion. Department of Industrial Policy & Promotion has reportedly backed financing to the tune of 75% of the cost of cold chain. Finance Ministry is favourably considering duty concession.

Crystal Group is committed to be involved in the development of cold chain in the State of West Bengal and also other Metro towns of the country.

Crystal Group has a successful business track record offering logistics solutions on pan India basis for over 5 decades and recently migrated to cold chain since 2007. Crystal Group has set up global standard state -of-art multi-purpose integrated cold chain at Sudharas Food Park, Sankrail, Howrah and has planned setting up similar Cold Storage in the neighboring States by 2017.

BUSINESS PROFILE X Crystal Group a leading third party logistics service provider offering end to end supply chain solutions. h Specialized in Cold Chain covering warehousing and distribution for temperature sensitive products on pan India network. h Has exponentially grown since its inception expanding its fleet size from 1 truck to over 150 trucks today, in a very short period of time. h Our services focus on time & quality to meet customer needs.

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

COLD CHAIN INFRASTRUCTURE h Cold Store Facility equipped to handle X Frozen chamber (Temperature -18 to

â&#x20AC;&#x201C; 25 Drgree Celcius.)

X Chiller storage (Temperature + 1 to + 4 degree Celcius.)

X Ambient storage (Temperature + 18 degree Celcius.)

X Dry Warehousing. h Features of Cold Room X Modern power driven moveable racking system to handle EURO standard Pallets.

X Palletised handling of Goods ensuring no damage to products.

X Top notch Material Handling Equipments.

X 100% Power back-up at all times.

X Sealed Docking system ensuring temperature compliant.

X Environment- friendly Refrigerant gas. h IT Infrastructure : X State of Art ERP System.

X 24/7 Online Temperature & Stock Tracking facility.

X LIFO, FIFO & FMFO as per Customer requirement.

X Customized Automatic alerts.

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

CRYSTAL SERVICES SUITS h Warehouse Services The products handled X Warehousing, transporting and distributing them with care h Ice-cream h Poultry, sea-food h Dairy products h Meat, fruits and vegetables

h Retail food chain h Healthcare and products

pharmaceutical

h Frozen and chilled products h Transportation h Provides comprehensive transportation solutions through a robust fleet of company-owned and leased reefer and ambient vehicles. h Crystal team of well-trained, experienced drivers and technology ensures food safety, reliability and prompt delivery of products. h Reefer Services. h Customized milk run, door pickup and delivery. h Dedicated run for the customer. h Part cargo consolidation and movement. h Facilitates last mile distribution, multi-mode shipment. h Fleet size of more than 150+. h Vehicle tracking (GPRS)and temperature monitoring (data logger) h Plug-in support available at all facilities h Process-driven approach h Best technology h Greater efficiency h 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 â&#x20AC;&#x201C; h Repacking. h Labelling.

7. Invoicing.

8. Banking.

9. MIS Reporting.

LOGISTICS TIMES October 2011

COMPANY PROFILE

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COMPANY PROFILE

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TOSHI AUTOMATIC SYSTEMS

Toshi Automatic Systems Pvt Ltd, established in 1992, is a one stop shop for the automation needs. We deal in three segments - Entrance Automation Systems, Security and Logistic Automation Systems and Hygiene Automation Systems. Our Product basket includes Automatic Doors, Automatic gates, Boom Barriers, Dock Levellers, Dock Shelters, High Speed Doors, Clean Room Doors, X-Ray Room Doors, BRTS doors, Metro gates, Flap Barriers, Security Bollards, and Residential Garage Doors etc. All of these products are imported and come with quality and security certification and are tested and approved in labs. Vast range of every product helps us to meet the specific requirement of our clients.

Stationed in Ghaziabad of Uttar Pradesh, Toshi operates across India to give local support to its clients. Toshi has joined hands with leading and prominent companies of Automation Industries like RIB-Italy, EFAFLEX – Germany, DYNACO – Belgium, DOORHAN –

Russia, PAW – Turkey, MANUSA – Spain, DORTEX – Taiwan etc. Our installation includes airports, hospitals, chemical and pharmaceutical plans and laboratories, petroleum plants, car and lorry parking premises, theme parks, hotels, hospitals, warehouses, shopping centers, automobile and manufacturing plants, retail parks, corporate offices, and government as well as private facilities.

The entire team works with one focus to give a higher degree of satisfaction to

its customers. And so, we have a record of not losing our existing customers at any point of business. Toshi intends to give most affordable and high quality automation products with most committed after sales services. We believe that our major work begins after the sale is done and hence we do our best to deliver excellent and committed after sales services. Therefore We live automation and Service Commitments which is Toshi’s USP. And we deliver the same.

For further details, Contact: You can visit www.toshiautomatic.com to gather more information about Toshi or call on 08287116904 for any query.

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CURTAIN RAISER

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4th India Warehousing Show The India Warehousing Show scheduled from 8-10 July 2014 at Pragati Maidan, New Delhi will bring together Warehousing, Materials Handling, Logistics and Supply Chain sectors together. Every year, IWS gathers more than 8,000 industry professionals and offer them complete range of solutions under one roof. Taking place in concurrence with India Material Handling & Logistics Show and a two day conference – Intralogistics Summit India, the event gives you an opportunity for business, education and networking.

With a large variety of products, solutions and technologies on display, the exhibition is particularly beneficial for decision makers from agro & food, pharmaceutical, heavy engineering, automotive, automobile, electronics and electrical, glass & paper, paint, petrochemical, cement & fertilizer, steel and many other sectors which are regular users of warehousing, materials handling and logistics technologies.

Visit India Warehousing Show if you wish to procure latest equipments, see live product demos and learn industry trends.

What will you see at IWS 2014?

h More than 500 live material handling, storage, racking, AIDC, warehouse infrastructure equipments and solutions. h Meet 200+ exhibitors, 350+ representative brands from more than 20 countries.

LOGISTICS TIMES June 2014

h Connect with your industry colleagues and meet industry thought leaders from over 35 visiting countries. h Learn industry best practices, latest trends and meet potential recruiters. h Explore innovative technologies at Supply Chain, Automation4Logistics and Packaging4Logistics Zones.

Indospace Logistics Parks, the leading player from warehousing and logistics parks segment is again supporting IWS as the Foundation Partner. Indospace has been associated with the event since its first edition in 2011. Indo Arya, Gandhi Automations, Safexpress India and Fresh Food Technology are some of the other leading sponsors.

India Warehousing Show is officially supported by US Commercial Services and will

have a USA Pavilion during the show. National Small Industries Corporation (NSIC) and United Kingdom Warehousing Association (UKWA) are also supporting.

Among other supporting associations are Indian Private Ports and Terminals Associations, SCLG, ISCEA and Supply Chain Asia.

Adding value to your visiting experience will be the Intralogistics Summit India 2014, a two day conference taking place in concurrence with India Warehousing Show. Previously popular as India Warehousing Conference, the conference has been renamed to cover a larger scope of segments and to become more comprehensive.

Intralogistics Summit India will take place on 8-9 July 2014 at Pragati Maidan on the theme of ‘Logisticate Your Business - Better Logistics is a Key to Profitability’.

EVENTS

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ACCD AGM

The Air Cargo Club of Delhi ( ACCD) held their 37th AGM at Hotel Taurus on 23rd May 2014. The event was attended by approx 100 members of the club. The members elected the new Managing Committee for the year 2014-15.

Mr. J.P Singh, who completed his tenure of two years as President, thanked the members for their participation in the club events and also his team for supporting him with full commitment in his term. The new committee was elected unopposed.

The new President Yashpal Sharma, who is the youngest ever President of the club, addressed the members after taking over the position and promised to carry on the good work of the past committees. He said one of his top endeavor will be to enhance the membership of the club in his tenure.

The new MC shall also select another two members into the committee as a Co-Opted members in its first official meeting.

LOGISTICS TIMES June 2014

EVENTS

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Award for BITZER CEO

LOGISTICS TIMES June 2014

Senator h. c. Peter Schaufler, CEO of BITZER SE, received the 2014 BadenWürttemberg Gründerpreis (founder’s award) in the category “life’s work” in Stuttgart recently. The award was presented by Dr. Nils Schmid, patron and Minister of Finance and Economics.

The award presented to Senator h. c. Peter Schaufler honors a lifetime of achievements, with a focus on entrepreneurial thinking and a high level of dedication to social issues. With the Schaufler Foundation, which he founded in 2005, Senator h. c. Peter Schaufler plays a key role in uniting entrepreneurship, vocational training and work placements with research, science and art in the refrigeration segment.

RNI No. DELENG/2011/39329

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