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VOL X ISSUE VIII july 2019 `20

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12 Project

Cargo: Carrying the Gargantuan Load

33 Interpreting

India's Logistics Costs

44 Play

it Safe while transporting Dangerous Goods

Will India be the future

Air cargo leader


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contents

Volume X • Issue VIII • July 2019

Publisher Smiti Suri Special Correspondent Upamanyu Borah Correspondent Saurabh Sharma Reporter Pallavi Jain

10

20

Director Ajeet Kumar

COVER STORY

SPECIAL FEATURE

Marketing Manager Rahul Arora

focus

technology

Marketing Executive Akash Gupta Rahul Jain

Will India be the future Air Cargo leader

Project Cargo: Carrying the Gargantuan Load

Accounts & Administration Nitish Kumar Lavish Thakur Sr Designer & Visualiser Ashok Saxena

Interpreting India's logistics costs ........36

Artificial Intelligence: The secret...........52 to success for Retailers

INTERVIEW

Feature

Play it Safe while transporting ..............42 Dangerous Goods infrastructure

sandeep chadha

Founder & CEO, Warehouster Capital Advisors India Pvt Ltd ......................................56

Achal paliwal

CEO- TML Distribution Co Ltd ...........................58

FRONTLINE ..............................................6 buzz ........................................................8 NEWS ...............................................64-71 EVENTS ............................................72-73 UPCOMING EVENTS ................................74 APPOINTMENTS .....................................76

All materials printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same.

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

SHIPPER SPEAKS

Dr Rakesh Sinha, Global Head - Supply Chain, ........60 Manufacturing & IT, Godrej Consumer Products Ltd Somnath Chatterjee, CPO, ITC Food Division ...........62

It’s critical to bolster infra to .................50 boost India's growth

PEOPLECONNECT madhav thapar

Vice President - South Asia, C H Robinson .................78

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


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frontline The world is moving faster and we are in the era of LPG — which is liberalisation, privatisation and globalisation. This is an opportunity as well as a challenge. Governance, management and delivery of services to citizens are also swiftly getting transformed. The fast-growing digitisation

of the Indian economy has the potential to not only boost sectors such as IT, digital communications and online retail but also transform several other areas of the economy such as logistics, financial services and agriculture. Digitalisation is

The

'Zero Defect Zero Effect'

an important driver of growth. It ensures transparency and builds confidence among investors.

Vice President M Venkaiah Naidu expressed

The mission ahead is to further propel the country's economic growth through concerted efforts. The blue print for highways is already in place. We plan to take up work worth

at least `15 lakh crore in highways that includes building 22 green expressways, rolling out all stuck projects in the next 100 days and creating a ‘grid of roads’ at par with power grid. My priority will be to roll-out all stuck highway projects within 100 days, which include many of the Infrastructure Leasing & Financial Services (IL&FS) projects.

The phrase which came with Make in India campaign has shown positive impact on the Micro, Small and Medium Enterprises (MSMEs) of India. As a result, many companies are manufacturing goods with 'zero defects' and ensuring that the goods have 'zero effect' on the environment. Hence sustainable development in the country is progressing by imposing highquality manufacturing standards while minimising environmental and ecological impact. Besides, the implementation of Goods and Services Tax (GST) and demonetisation has made the industry a whole much more accountable. It has brought about more transparency into the system.

Road Transport & Highways minister Nitin Gadkari noted

To target GDP growth up to 10 per cent by 2023-24, the total investment requirement is estimated at US$ 5.74 trillion (around `397 lakh crore) for the next five years. Of this, the total investment required for infrastructure sector is estimated at US$1.18 trillion (around `81.72 lakh crore) for the next five years, while for non-infrastructure including agriculture and industry to be US$ 4.56 trillion (around `315 lakh crore). Strong action to spur consumption, investments and net exports will take GDP growth rates much higher and this is the right time for India to think big and envision GDP growth rate of 10 per cent to greatly improve development outcomes.

CII President Vikram Kirloskar informed

6

CargoConnect - july 2019

The Indian Railways has set a target to get at least 50 per cent share of the country’s freight traffic by 2030.

In order to achieve this, the Railways is betting big on getting the existing expansion projects and dedicated freight corridors on track, and bringing in more private sector participation. This may include areas like ownership and operations of freight terminals and ownership of locomotives and rolling stock. In addition, NITI Aayog has suggested for bringing in private players into coach and locomotive manufacturing and repairs.


buzz

100-day agenda: Commerce ministry proposes to create

separate wing for logistics

T

he commerce ministry has proposed creation of a separate department for trade facilitation and logistics for better coordination among different government units. Currently, there is no single department to look at all the aspects related to logistics covering various modes of shipment such as sea, roads and railways. The proposal is part of a 100-day action plan prepared by the ministry for the new government, which took office on May 30. At present, a logistics division is functioning under the department of commerce and headed by a special secretary-level officer. "Creation of a separate department for trade facilitation and logistics will lead to better coordination," an official said. Logistics is a key component for increasing competitiveness of exporters and domestic traders by reducing transport cost and time, and expediting smooth movement of goods. The official said that the sector needs lot of coordination among different ministries and departments including railways, road and shipping. In January this year, Economic Advisory Council to the Prime Minister (EAC-PM) has suggested setting up a separate logistics depart-

A detailed Integrated National Logistics Action Plan will be rolled out covering over interventions, focussed on driving logistics development and logistics efficiency in the country. The identified interventions have the potential to reduce the logistics cost in the country by

20,000 crore.

`

ment to boost transport sector and improve ease of doing business. The ten-point action plan has also proposed rolling out of national logistics policy, multi-modal logistic policy, integrated national logistics action plan, and logistics planning and performance management tool. As per the plan, a Multi-Modal Transportation of Goods (MMTG) bill

will be introduced in Parliament, which will replace the existing MMTG Act, 1993. The new bill would introduce new concepts like regulation of self-regulatory agencies and facilitate smooth movement of products for domestic consumption as also foreign trade. Commerce and Industry Minister Suresh Prabhu has taken a series of steps to cut logistics time and cost to push both domestic and foreign trade. "A detailed Integrated National Logistics Action Plan will be rolled out covering over 60 interventions, focused on driving logistics development and logistics efficiency in the country," the official said, adding that the identified interventions have the potential to reduce the logistics cost in the country by `20,000 crore. The identified interventions would focus across the complete value chain of logistics including transportation, warehousing, processes, technology as well as skilling. The logistics cost of exports is very high, making Indian goods less competitive in global markets. According to a report, about 14 per cent of the total value of goods goes into India's logistics cost while in other major economies it is just 6-8 per cent. CC

According to a report, about 14 per cent of the total value of goods goes into India's logistics cost while in other major economies it is just 6-8 per cent.

8

CargoConnect - july 2019


SPECIAL feature

Project Cargo Carrying the Gargantuan Load As manufacturing industries flourish in India, and government continuously pushing the development of logistics infrastructure under flagship projects, the demand for project shipment is likely to leapfrog big time. Now, it remains to be seen how the consortium of Project Cargo and 3PL companies adapt themselves with pragmatic approach to this imminent disruption. Saurabh Sharma

10 CargoConnect - july 2019

P

roject cargo entails the movement of bulky, hefty and intricate commodities in and out of the territory regardless of their mode of transportation. Along with almost all the manufacturing industries, infrastructure and power industries rely heavily on Project Shipment. Though, it is more than just shipping, for instance, at certain times; it may include the moving of complete factory, a production line, electric/ natural gas systems, oil refinery machines, road


SPECIAL feature

India’s project cargo exports are dominated by steel pipes and sheets and machinery, and moves primarily to Europe, the US and China. Most Indian ports have facilities to handle multipurpose vessels, but break-bulk and project cargo is concentrated at Mumbai, Kandla, Mundra on the west coast and Chennai and Visakhapatnam on the east coast.

D

ynamics & challenges

construction machines, airport or marine port equipment and much more. According to Karthi Baskar, Deputy Managing Director, Kintetsu World Express (India) Pvt Ltd “Project cargo requires a detailed engineering process in order to stay within the projected budget, and be completed on time. It’s a mission in itself which manifests the domestic or international transportation of large, heavy, high value, or complex pieces of equipment. The materials can be sourced globally, or from one individual location. The oil and gas, wind power, mining, engineering, and construction industries

are heavily involved in this level of transportation.” “It can also be understood in terms of Overweight or Over Dimensional (ODC/OWC) goods which need special processes and equipment in order to be delivered to various project sites. Sometimes the ODC/OWC cargoes are transported in disassembled components and reassembled at Project Site and it caters to various industries such as Infrastructure, Petrochemicals, Refineries-Upstream/ Downstream, Power, Renewable Energy, says Dr Sharmila H Amin, Managing Director - South Asia India, Bertling Logistics India Pvt Ltd.

Logistic players in India have long perceived the quantum of opportunities in handling the transportation of gargantuan and complex goods. Both global and domestic supply chain firms are capitalising on this business. As it involves the movement of over sized commodities, higher demand for handling such cargo is driven primarily by infrastructure facilities in construction such as power, steel and cement plants, Metro rail systems, port development, construction of roads, etc. “As the need for global infrastructure increases exponentially on account of globalisation, the demand for Project Cargo will increase. It spans various industries as mentioned above such as oil and gas, power, mining operations, and wind farms. The sector is expected to grow at 1-1.3 times that of GDP However, freight traffic will grow 2.5 times by 2020 from the 2010 levels, according to a McKinsey and Co study,” informs Sharmila. Over the last decade the flourishing manufacturing sector and 'Make in India' initiative have propelled the break-bulk and project cargo trade to a remarkable extent. East Asia, especially China, accounts for the majority of India’s break-bulk inbound traffic, followed by Western Europe, Russia, july 2019 - CargoConnect

11


SPECIAL feature and the United States. India’s breakbulk exports are dominated by steel pipes and sheets and machinery, and moves primarily to Europe, the US and China. Most Indian ports have facilities to handle multipurpose vessels, but break-bulk and project cargo is concentrated at Mumbai, Kandla, Mundra on the west coast, and Chennai and Visakhapatnam on the east coast. The prime objective of the project shipment is to transport oversized cargo with the utmost safety and cost e f f e c t ive way, it m ay c o nt a i n a combination of different modes, routes, and arrangements than a regular cargo would require. Project cargos are quite

considerations. An analysis from a project cargo expert can help companies with all the regulative aspects, and the budgeting process. A project cargo expert can provide important insights into the cargo design process, can study the routing options based on the designed size of the cargo, and can also advise on dimensional and weight restrictions, upon completion of a survey,” adds Baskar. According to Harpre-

As the need for global infrastructure increases exponentially on account of globalisation, the demand for Project Cargo will increase. It spans various industries as mentioned above such as oil and gas, power, mining operations, and wind farms. The sector is expected to grow at 1-1.3 times that of GDP. However, freight traffic will grow 2.5 times by 2020 from the 2010 levels, according to a McKinsey and Co study. Dr Sharmila H Amin

Managing Director - South Asia India, Bertling Logistics India Pvt Ltd

a sensitive subject because of its strenuous and exacting nature. Baskar explai ns, “Successf ul project transportation practices require a smart planning process from the preliminary stages. This can have direct effect on avoiding extra costs for transportation, Delay of projects, duties, and taxes. It requires expertise to provide a detailed projection of cost. Project cargoes can be highly valuable and time bound. At this stage, choosing a provider with a capabi l it y, ha nd l i ng equ ipment, t r uc k i ng s olut ion s, e ng i ne er i ng designing solution, and proven record of success in the transportation of project cargo is a must.” “As countries have different regulations and challenges when it comes to Infrastructure, customs compliance, documentation, taxation, duties, exemptions, licenses, and many other

12 CargoConnect - july 2019

et Singh Malhotra, Chairman & Managing Director, Tiger Logistics India Ltd, “The project cargo needs to be pre-planned, perhaps even before financing, cargo design, and sourcing begins. The overall success of the project is directly related to how successfully the raw and finished project cargo is delivered. Pre-planning is the crucial step that leads to efficient operations. Maintaining efficiency in such complex cargo operations eliminate risks and reduce costs.” Apart from time constrains and optimisation of resources, there are other challenges also which are faced by companies handling project shipments, such as unsuitable infrastructure, slipshod attitude of unorganised sectors and lack of policy implementation. Sharmila puts it as, “The ports and the allied infrastructure are surely not

well equipped to handle the cargo at this point of time in this country. Demand has surpassed the expansion in infrastructure and the increasing dimensions of Project Cargo. Non-availability of infrastructure in terms of transport vehicles, smaller or old bridges, and narrow roads impedes it further. In addition we have the regulatory hurdles which significantly impede the free flow of project cargo. The unorganised sector hampers our competitiveness, since most of the services they provide lack quality. They can afford to cut corners since they have no policies and norms governing them. This translates into a lower price and hence customers looking for cost cutting find them attractive from a price perspective.” “The customers themselves need to be educated about the shortcomings of such an approach. The key to look at is Total Cost of Logistics Operations (TCLO) - and this means looking at damaged goods, delayed deliveries and lost sales due to poor logistics solutions delivered by these unorganised players,” adds Sharmila.

C

atching up with the surging demand

Demand for heavy equipments is increasing, especially in the mining, power and telecom industries because these sectors require gigantic and intricate tools that need to


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SPECIAL feature TO-DO LIST IN PROJECT CARGO TRANSPORTATION Pre-planning is key initial transportation advice to move over-dimensional or over-weight cargo can save shippers and costs, provide certainty, and reduce unexpected events. When preplanning, allow sufficient lead time to coordinate transportation details. Choose a quality transportation provider  With a quality engineering team  With the financial strength to assume a certain amount of risk and liability  With a proven track record, on-hand experience, and country knowledge  Stresses proactive communication that keeps the quick response time to changes/issues  With broad knowledge of equipment, local haulers, and manufacturers of equipment and materials, and fast, flexible access to specialised capacity  Accuracy and honesty in pricing  Impeccable execution Work on a contingency plan Unexpected events can cause the initial transportation plan not to work out properly, and during these scenarios an alternative plan should be put in place to minimise and resolve issues. Work on constant improvement There is always room for improvement in project cargo transportation. Tracking the results of finished project cargo moves, and developing potential improvement areas, can help future shipments to produce better outcomes.

14 CargoConnect - july 2019

India has the world’s second largest road network, spanning some 5.23 million kilometers (3.25 million miles). The government is very focussed on increasing the pace of development with the budget announcements but the role of private players can’t be overlooked. The public and private conglomerates in turnkey projects like in the Gulf and African regions can play a major part. Harpreet Singh Malhotra

Chairman & Managing Director, Tiger Logistics India Ltd

As countries have different regulations and challenges when it comes to Infrastructure, customs compliance, documentation, taxation, duties, exemptions, licenses, and many other considerations. An analysis from a project cargo expert can help companies with all the regulative aspects, and the budgeting process. Karthi Baskar

Deputy Managing Director, Kintetsu World Express (India) Pvt Ltd

be delivered to elusive destinations many a times, which demands for a large and trained labour force. “We have witnessed persistent demand for the project sector from such industries as aerospace, oil & gas and energy. The recovery and stabilisation of the oil & gas market has increased demand for oil and gas equipment, however, there remains a high level of volatility, with fluctuation in demand, fuel prices and the major world currencies, not to mention continuing political unrest and environmental issues,” explains Baskar. The government’s decision to attain self-sufficiency in power generation has resulted in the sanction of power plants, - small, large and very large - to be set up across the country. Even the OD cargo business has seen tremendous growth in India over the past few years. Especially ever since ‘Make in India’ has been launched, we have seen good increase in the OD cargo business as people have started exporting plant and machinery making goods from India. The ODC packages, constituting equipment and machinery for these projects are fairly large and quiet heavy in weight.

I

nfrastructure and Policy framework

Owing to the unprofessional approach in handling the project shipments in India, it is of utmost important to put in place the regulative policies and their effective implementation. Economic growth, infrastructure upgrades, energy-related projects, and efforts to weed out trade barriers and customs red tape are combining to make India a favourable spot for break-bulk and heavylift shipments but there are still many voids which need to be filled. Whereas in Europe and far western countries, things are more channelised and streamlined. As Andres Cadenas, Head- Sales & Marketing, Container Line Division, Marguisa-Madrid, Spain elucidates,” We have developed a regular service to the Caribbean and the Gulf of Mexico and has a wide range of maritime services accommodating all kind of cargo, using regular weekly full container services, monthly roll-on/roll-off (RO/RO) services and monthly MPV services for project cargo in West Africa and the Caribbean. It enjoys the support of five modern PC geared ships with a capacity of 3.600


SPECIAL feature TEU, fully celled and geared. PC is the faster and more reliable service on the market and It connects practically the entire world with West Africa via Valencia, Algeciras and Tangier Med as transshipment hubs.” But the dynamics are quite different in Indian landscapes and to keep competitiveness of industries, the government is bound to call the shots in order to assist the logistics industries. For instance, the idea of freight corridor provides the environment to promote logistics efficiency and to reduce the operation costs. However, it involves the implementation of large investments, laws and national policies Ac c or d i ng t o Ud ay Sh a r m a , Director- Sales, Spoton Logistics,” At the policy level, the government is doing its bit by promoting rapid industrialisation and self reliance across core industry segments such as power, defense etc. At the infrastructure level, establishment of dedicated freight cor-

India is investing in the upgradation of Iran’s Chabahar port through a special-purpose company set up by JNPT and Kandla Port Trust. Despite infrastructure challenges, India’s strong growth provides a respite for soft cargo environment. Contrary to the bleakness of global trade; the future looks promising for India.

“India has the world’s second largest road network, spanning some 5.23 mn kms (3.25 mn miles). The government is very focussed on increasing the pace of development with the budget announcements but the role of private

We have developed a regular service to the Caribbean and the Gulf of Mexico and has a wide range of maritime services accommodating all kind of cargo, using regular weekly full container services, monthly roll-on/roll-off ( ro/ro) services and monthly MPV services for project cargo in West Africa and the Caribbean. Andres Cadenas

Head- Sales & Marketing, Container Line Division, Marguisa-Madrid, Spain

ridors, larger investments in multimode logistic hubs, simplified project financing norms are also helping.” Without the lead and support of government achieving the plan is difficult. However, increased private sector investment in strategic transport infrastructure will be essential. There is increasing support for green growth and a greening of transport. Important contributions can be made during infrastructure planning and development stages. Once developed, good management and use of innovative and energyefficient technologies can significantly increase those contributions

16 CargoConnect - july 2019

players can’t be overlooked. The public and private conglomerates in turnkey projects like in the Gulf and African regions can play a major part. India is investing in the upgradation of Iran’s Chabahar port through a special-purpose company set up by Jawaharlal Nehru Port Trust (JNPT) and Kandla Port Trust. Logistics service providers have benefited from these and other similar projects. Despite infrastructure challenges, India’s strong growth provides a respite for soft cargo environment. Contrary to the bleakness of global trade; the future looks promising for India,“ describes Harpreet.

In contrast to situation of project shipments in our country, Andres triumphantly mentions, “Thanks to our extensive network of agents and the dedicated team located in Calabar, we are committed to meeting customer requirements in terms of high-quality services, as well as smooth booking, operation and documentation processes. Our group, Sea & Ports, has made huge investments in Equatorial Guinea over the past few years. We have more than 200 employees in Equatorial Guinea and that’s the main reason why we’re leading this market. We are very professional and customer satisfaction is our goal.”

R

ole of Staff, Technology and Innovation

Trained and skilled workforce can only live up to the demands of a project or break-bulk cargo because it is susceptible to a huge loss of both money as well as credibility. A technology driven system can surely help reducing the chances of major slip outs while handling these shipments. Mathew Joseph Elenjickal, Founder & CEO, FourKites states,” When Artificial Intelligence (AI) and machine learning methods are applied to a vast pool or transportation data, managers can start to be more proactive and even prescriptive in their planning. They can make better decisions based on trends in the data analytics, and steer clear of future bottlenecks that they receive alerts on - even before a load has left the facility. Machine learning can then tell you which lanes, schedules and facilities will help you get your goods in on time and in full.” “The role of expertise is quiet important, without these support systems, successful project cargo movement will be full of risks. The most important thing is to choose a quality engineering team backed by financial strength in order to assume a certain amount of risk and liability with a proven track record. On-hand experience, knowledge of equipments and region are some indispensable aspects. The other important thing is to work on constant improvement; there is always room for


SPECIAL feature

When Artificial Intelligence (AI) and machine learning methods are applied to a vast pool or transportation data, managers can start to be more proactive and even prescriptive in their planning. They can make better decisions based on trends in the data analytics, and steer clear of future bottlenecks that they receive alerts on even before a load has left the facility. Mathew Joseph Elenjickal Founder & CEO, FourKites

At the policy level, the government is doing its bit by promoting rapid industrialisation and self reliance across core industry segments such as power, defense, etc. At the infrastructure level, establishment of dedicated freight corridors, larger investments in multi-mode logistic hubs, simplified project financing norms are also helping. Uday Sharma

Director- Sales, Spoton Logistics

improvement in project cargo transportation. Tracking the results of finished project cargo moves, and developing potential improvement areas, can help future shipments to produce better outcomes,” mentions Harpreet. “The platforms with the densest data networks will be the most impactful when it comes to revolutionising supply chains as projected. In the supply chain visibility space, for instance, a robust data network allows for a continuum from reactive like ‘Where’s my truck’ to proactive like 'When will my trucks be there?’ and eventually from

18 CargoConnect - july 2019

predictive as ‘What are the risks to my loads’ to prescriptive as 'These are the risks to my loads, and they will be fixed automatically'. This functional evolution is only possible for those platforms that are amassing huge quantities of data each and every day,” continues Elenjickal. Discerning the role of innovation and technology in the light of efficient last-mile delivery and emphasising the need of skilled workforce, Uday says,” Moving special cargo requires specialised knowledge and labour. From the preliminary stages to the last mile de-

livery, specialised staffs are a must. Some activities like route mapping and customs brokering requires extensive local and compliance knowledge. The staffs also need to be spontaneous, problem solvers and out-of-the-box thinkers. The industry as a whole works through a tailored-solutions model as each cargo is different and has different requirements. Underlining the key trends in logistics technology with the incredible growth of the Internet of Things (IoT), Baskar articulates the following advancements, espoused by supply chain industries in recent years. 1. Drones - One of the most innovative uses of technology in the supply chain is the growing idea that drones could used with delivery strategies. 2. Internet of Things (IoT) - The IoT is also helping organisations collect and use data across the supply chain. Radio frequency identification devices (RFID), for instance, can be attached to shipments to create better insights throughout the operation. RFID can increase visibility across equipment, inventory and business processes, making the IoT and related technologies an important part of the supply chain in today's technology-driven world. 3. Transportation Management Systems (TMS)- With all of the new ways to collect and use data within the supply chain, organisations are finding that they need a system to keep it all straight, and transportation management software is the


SPECIAL feature solution to that issue. By investing in TMS, organisations can decrease freight spend and become more efficient. 4. Business Intelligence and Analysis - Digitisation has brought about an explosion of data in businesses today. The logistics industry is undergoing a fundamental transformation with the inundation of data and devices. However, reducing costs by driving down excessive inventory, both staged and in-transit, proactively responding to inbound and outbound events and sharing assets has become critical in today’s supply chain environment. 5. 3D Printing - 3D printing technology has emerged as one of the most disruptive innovations to impact the logistics industry and the global supply chain. 3D printing technology is impacting professional and our personal lives, with some claim that the technology merely enhances some aspects of production process, while others argue that technology

will revolutionise and replace existing manufacturing technologies. Although, in the private consumer market, expansion of 3D printing is an interesting development in its own right, the biggest potential for disruption lies in industrial applications. It is striking to see how 3D printing will influence supply chains of the future.

P

erspective Industries

Though there are scores of industries which are involved in the project cargo transportation, yet over the past few decades the demand of project shipments has grown significantly in some specific industries. Demand for mining, power and telecom -related equipment is increasing, due to increasing demand for metal commodities. Natural gas consumption worldwide is projected to increase almost 50 per cent by 2035. Talking globally, the logistic networks are more intricate but yet technicallydriven outside India, demand is likely

CCI

to take a leap in industries like oil and gas, nuclear plants, global turbine, shale gas resource, wind farms, etc. Commerce Ministry is pushing for separate logistics department under its 100-day agenda. Official estimates put the size of the Indian logistics market at $100-125 billion and growing at about 5 per cent annually. According to the government, logistics services and infrastructure remain highly concentrated in just 15 states and Union Territories, which account for 90 per cent of the total exports by value. With increasing demand, we will be in the need of huge warehousing spaces facilitated with advanced technology A separate division, formed in 2017 under commerce ministry is mulling over the trade data collected from major ports in order to compute the logistics flow of major commodities such as coal, steel, and cement. India is still at developmental stage in infrastructure and industrial planning but rapidly growing manufacture industries throw a great prospect ahead. CC


cover story

will india be the future

Air cargo leader The present government under the leadership of Prime Minister Narendra Modi is framing progressive and development policies in order to keep pace with the global players. In an endeavour to provide impetus to the air cargo industry, the Ministry of Civil Aviation (MoCA) has recently released a National Air Cargo Policy Outline which has been well received by the industry. The air cargo industry is of the collective opinion that this policy could be a key facilitator and has all the ingredients to drive India as the future air cargo leader. Upamanyu Borah

20 CargoConnect - july 2019


cover story

july 2019 - CargoConnect

21


cover story

D

Total cargo at all Indian airports during 2017-18 witnessed a growth rate of 12.7 per cent with 3.35 million MT cargo trafIndia is set to become the 3rd fastest growing fic in FY’18. International air cargo traffic increased by 15.6 per economy in the world by 2030 and this will propel cent to reach 2.14 million MT in FY’18 whereas domestic cargo the Indian Aviation Industry as the 3rd largest in the movetraffic increased by 8 per cent to reach 1.21 million MT. At ment of both passenger and cargo traffic. However, India’s present, international cargo contributes 60 per cent to India’s total annual air freight volume stands at 3.3 million metric total air cargo sector, approximately double the growth rate tonne (MT) despite a continuous growth of over 10 per cent as compared to domestic air cargo business. year-on-year (YOY) and has not reached close to any one of India’s top air freight trading market is the UAE, which the top three world class airports, i.e. Hong Kong- 5 millon has a 30 per cent share; followed by Qatar at 11 per cent. MT, Memphis- 3.56 million MT, and Shanghai- 3.26 million The highest rate of growth was to and from Ethiopia, which MT, for the year 2017-18 owing to procedural bottlenecks. saw more than double the tonnage in 2017, YOY. Some 35 However, amidst challenges, the Indian air cargo sector flights a week are permitted between the two countries, and throws innumerable opportunities. In order to ensure smooth Ethiopian Airlines in August 2018 announced its intention flow of air cargo it is critical to enhance to expand its seven-year code share safety, improve security, strengthening with Air India. Despite a continuous growth the value proposition of air cargo, drivMumbai and Chennai were among of over 10 per cent year-oning efficiency through global standards, the world’s top 10 fastest-growing airyear, India’s total annual ports in freight terms, with 18.1 per cent improving quality, strengthening partair freight volume has not nerships, and building sustainability. and 17.2 per cent growth respectively, reached close to any one of Industry leaders also avow that while Delhi and Mumbai are among the top three world class India’s air cargo industry is poised to the top 50 biggest freight airports. airports, i.e. Hong Kong, achieve greater heights provided some Memphis, and Shanghai, for of the procedural bottlenecks are adthe year 2017-18 owing to dressed, which would aid to the cause procedural bottlenecks. immensely. This would require combined efforts in the field of infrastrucThe Indian air cargo industry is ture and technology to be able to take poised for tremendous growth in the advantage of the opportunities. Simultaneously, there should coming years. Air freight has registered a CAGR of 6.79 be liberal policy initiatives on the part of the Government. per cent between FY’10 to FY’19; Chhatrapati Shivaji Maharaj International Airport (CSMIA) itself has recorded a Regulation and technology both put their own unique pressures onto freight forwarders which mean that strategic growth of 6 per cent in FY’19 compared to the previous choices need to be made more carefully in order to succeed. year, informs Manoj Singh, Vice President– Cargo, Mumbai International Airport Ltd (MIAL). “Considering the current state of operations, we are optimistic that the When Spicejet, an Indian low-cost carrier, geared up for 737 sector will grow at a reasonable pace against the backdrop freighter operations in September 2018, India came under of an evolving pharmaceutical business model and robust scrutiny by the air cargo market. growth of E-commerce market. As per reports, the Indian

rive Insight

Growth Drivers and Facilitators

Ground Report

India Air Cargo Growth (in million metric tonnes)

Source: National Air Cargo Policy

22 CargoConnect - july 2019


cover story E-commerce industry is set to become the second largest E-commerce market in the world by 2034. The industry is expected to spend an additional $950 million to $1.9 billion on warehouses and logistics by 2020. Therefore, we can Manoj Singh Vice President– Cargo, undoubtedly say that the E-commerce market is one of Mumbai International Airport the major drivers of India’s air freight business across Ltd (MIAL) domestic and cross-border sales. Nonetheless, both pharmaceutical and E-commerce segments have been the key drivers in supporting CSMIA’s air cargo growth as well,” The Indian air cargo industry is poised for tremendous says Singh. growth in the coming years. Air freight has registered a The cargo trade has moved to finished goods, and CAGR of 6.79 per cent between FY’10 to FY’19; Chhatrapati product driving the growth includes pharmaceuticals, Shivaji Maharaj International Airport (CSMIA) itself has gems and jewelry, equipment and ready-made garments, recorded a growth of 6 per cent in FY’19 compared apprises Keku Bomi Gazder, CEO, AAI Cargo Logistics to the previous year. Both pharmaceutical and and Allied Services Company Limited (AAICLAS). “The E-commerce segments have been the key drivers transition of E-commerce is going to benefit the air cargo in supporting India’s air freight business and CSMIA’s air cargo growth as well. sector in India, as supply chains adapt to these new trends. Although, it is quite difficult to foresee where the market will be heading to, air cargo is likely to witness a moderate tive and also significantly higher in terms of value, will be growth of 6.7 per cent in 2019,” says Gazder. a key factor, complementing India’s air freight growth. Reportedly, India is the largest supplier of low-cost Given the fact that pharmaceutigeneric drugs globally, catering to cals, textiles, automotive components over 20 per cent of the global demand and leather goods are India’s top exby volume. As such, India is the chemMumbai and Chennai were ist of global trade and pharmaceuticals port commodities through air; ecoamong the world’s top 10 nomic development, technology adophave been its global commodity since fastest-growing airports tion, increase in airline/airport capac2013. According to Bharat Thakkar, in freight terms, with 18.1 ity, and liberal government policies are Joint Managing Director, Zeus Air per cent and 17.2 per cent the factors facilitating India’s air cargo Services, “India’s pharma exports rose growth respectively, while growth, believes industry veteran Ra11 per cent to reach 19.2 USD billion Delhi and Mumbai are mesh Mamidala, CEO, Çelebi Delhi during 2018-19 mainly driven by highamong the top 50 biggest er demand in regions such as North Cargo Terminal Management India freight airports. America and Europe. US Constitutes Pvt Ltd. about 30 per cent of Indian pharma “FDI in manufacturing, Government’s focus on Ease of Doing Busiexports followed by Africa and the ness, ‘Make in India’, export oriented manufacturing of European Union (EU). Going ahead, we see Africa and electronics, pharmaceuticals, etc. are helping facilitate InSouth America as the next frontier for India’s surge in air dia’s air cargo growth story,” says Mamidala. logistics.” Besides, among the various expansion and upgradaAlthough, Thakkar feels that the critical need to reduce tion initiatives taken up by the regulatory bodies, increastransit time of goods carried by air as they are time-sensiing investments to modernise and develop cargo projects by AAICLAS, expansion and upgradation of existing Freight Weight Load Factors for airports, development of low-cost airports by Airports Domestic Carriers Authority of India (AAI), expansion of Green-field projects, along with increasing private sector participation is currently driving the country’s air cargo growth, observes Gazder. However, to realise the potential, the industry must expand its reach by tapping unserved regions with smaller freighters and connecting them to mainland hubs. At domestic level, considering the continued growth forecast of passenger traffic, introduction of the Ude Desh ka Aam Naagrik (UDAN) scheme along with an increase in the number of airports, will accelerate the growth of Indian aviation sector and encourage airlines to add more fleet to their current network thereby producing an additional belly capacity for air freight, feels Singh. Source: DGCA

24 CargoConnect - july 2019


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cover story A similar response, Vipin Vohra, Chairman, Continental Carriers Pvt Ltd maintains, “Technology in the air cargo industry is moving into a new phase of digitalisation and this means more ability to move air cargo quickly, endKeku Bomi Gazder CEO, AAI Cargo Logistics to-end paperless transport processes, and improved transand Allied Services Company parent customs and regulatory frameworks. This certainly Limited (AAICLAS) gives customers a confidence, and is resulting in growth of India’s air freight industry.” Along with key technology ideas such as Blockchain, Among the various expansion and upgradation initiatives Artificial Intelligence (AI), completely integrated Electaken up by the regulatory bodies, increasing investments tronic Data Interchange (EDI) driven air cargo community to modernise and develop cargo projects by AAICLAS, portals, which Mamidala says are expected to drive and expansion and upgradation of existing airports, lead to encouraging growth for air freight in India; realdevelopment of low-cost airports by Airports Authority time data, proper planning of cargo, identifying hubs and of India (AAI), expansion of Green-field projects, spokes, analysing market trends and working in close colalong with increasing private sector participation laboration has streamlined India’s air cargo growth, beis currently driving the country’s air cargo growth. lieves Sailendra Kumar Thakur, Head- North and Gujrat, Aspinwall & Co Ltd. “Connectivity, cyber-security, AI and automation has the greatest impact at ecosystem level because they are the key enablers of movement along the value chain, leading to reinvention of operation and revenue generation models. Other technologies, such as green energy and new materiWhile new reports by global consulting major Deloitte and als, are important, but have limited impact on the emergence of new products,” says Thakur. industry body FICCI notifies that the Certainly, the Indian air cargo inair cargo industry in India continues dustry can save billions of rupees in to be dominated by paper-driven legacy systems and procedures which are costs if it automates transactions beThe highest rate of growth tween various players in the supply time-consuming and expensive to was to and from Ethiopia, chain. comply with, Jaideep Raha, Managwhich saw more than double ing Director, Jetex Oceanair Pvt Ltd “Automation can only result in the tonnage in 2017, YOY. reiterates saying that adoption of techbetter productivity if there is change Some 35 flights a week are nology has made India’s air cargo inin the mindset of Government offipermitted between the two dustry substantially paperless, thus cials and airport operators using the countries, and Ethiopian saving time and manpower which service. Automation in India’s air Airlines in August 2018 translates into economical pricing and cargo industry is in the process of announced its intention to faster processing of documentation being upgraded at major airports and expand its seven-year code and less clerical mistakes as part of the effect of such automation should share with Air India. Human Error factor. ideally result in higher throughput Clearly, there is a need to expedite and lower dwell times, but the results some of the technology initiatives to will need to be seen in the future,” not just automate all information systems but also to explains Vikram Kumar, Chairman, ACAAI-NR and streamline redundant processes and regulations. Director, CTC Air Carriers Pvt Ltd. Above all, the training and sensitisation of staff to changes in processes and Thakkar says, “The paperless era we all have been looking for post-Singapore Govt Model is now around the the acceptance of paperless, non-human intervened transactions will be the biggest factor to enhance and improve corner and my understanding is, margins will be tight. The the air cargo trade and take it to world-class levels, says only crucial determiner is Government must work in tandem with strategy to ensure all parties remain aligned to Kumar. improve operational effectiveness and deliver against the Here, the need is to increase the use of e-AWBs as a first ‘to-be’ state.” step to further digitisation of air cargo which will yield real According to Singh, “Indian air freight industry is perbenefits and efficiencies for the industry. Definitely, the haps the most innovative and progressive in terms of magnitude of volumes in the next couple of years, be it from technology as compared to other modes of transport. AdopE-commerce; or otherwise, will force all service providers tion of technology and digitalisation of processes have to not only adopt automated and digitised solutions but become much faster in the recent years. Though increasing also integrate them to have better transparency in the overall supply chain, exclaims Anil Mantri, Director, Sealair technology impacts the size of the workforce, it is critical Freighters International Pvt Ltd. for air freight to maintain its competitiveness.”

Streamlining Efficiency and Productivity

26 CargoConnect - july 2019


cover story

An emerging market After having achieved dominance in the service sector, India is now looking towards becoming a global manufacBharat Thakkar turing hub. This intention has been made clear by the Joint Managing Director, ‘Make in India’ initiative that has been launched by the Zeus Air Services government. As a part of this initiative, special concessions have been announced for multinational companies to create manufacturing bases in India. This has definitely drawn As an emerging South Asian hub, India in the future, will the attention of many multinational companies that are enable carriers who do not serve many counties in the looking to reduce the dependence of their supply chain on region, to consolidate the cargoes destined to various China. It would be inappropriate to say that within a short airports with Unit Load Devices (ULDs), and these cargoes span of time India will compete with the likes of Japan, can then be devanned and placed on individual aircrafts Germany, and China. However, the process for transformoperating to the many identified airports. Besides, ing the manufacturing sector has already begun. inbound cargo from many participating operators Definitely, Thakur says, the entire world is looking will also ensure a critical mass for servicing the regional airports. forward to deepening ties with India and companies are aggressive to set up their manufacturing units and export finished goods from the country. E-commerce giants are planning to join hands with Kirana stores as they feel the demand is more here. This will boost India’s air cargo busifor significant maturation on the back of India’s economic ness, as consumers are in a hurry to get their products as strength and many other drivers of growth in India’s comsoon as possible. Besides, market liberisation, favourable merce, trade, investment and consumption, which include Export Import (EXIM) policies, Free-trade Agreements significant demand from small and medium B2B segments. (FTAs), removal of trade barriers concerning a gamut of Going forward, simplification, modernisation and harformalities, will further facilitate the ideology of Indian monisation of export and import processes as well as endmarket as a potential destination for sourcing of services. to-end domestic supply chains are advantageous and will Considering its geographical location, India has the make India a growth spot for air cargo,” says Gazder, elabopotential to become a global hub for air cargo. Not only its rating the elements required to create a resourceful cargo geographical location but also the amount of international hub. Also, it is noteworthy to mention trade that the country is engaged in that a strong impetus has been pronow makes India a good location for vided through the holistic National such a hub. Even a place like Dubai, India has a geographical Civil Aviation Policy 2016, which has where there is any manufacturing, has advantage to operate as included a number of initiatives for made itself a good cargo hub destinaa successful hub, initially tion. There is no reason why India achieving growth of cargo volumes to serving the emerging with all its growth in manufacturing 10 million tonnes by 2027, adds Gazder. markets of South Asian sector and exports and imports could Agreeing to Gazder, Vohra also Association for Regional not become another global hub. observes that the Indian air cargo inCooperation (SAARC) and dustry has advantage of a growing “India has a geographical advancountries such as Myanmar, tage to operate as a successful hub, economy along with many other sigVietnam and Cambodia. nificant and parallel drivers of growth initially serving the emerging markets in India’s commerce, investment and of South Asian Association for Regional Cooperation (SAARC) and countries such as Myanconsumption, which include considerable demand from mar, Vietnam and Cambodia. This cautious start will small and medium B2B and B2C segments. “The muchprovide the requisite knowledge and expertise to take on awaited National Air Cargo Policy, improved international the other existing major Middle Eastern/Asian hubs and connectivity along with ever expanding cargo-handling expand its hinterland up to Japan in the east and Africa in infrastructure, both physical and digital are destined to the west. Besides, India offers a stable political environmake India a growth spot for air cargo,” adds Vohra. ment, skilled workforce, however existing airport infraThakkar views that as an emerging South Asian hub, structure and user charges is likely to act as a major disinIndia in the future will enable carriers who do not serve many centive to attract customers to use the hub,” feels Thakkar. counties in the region, to consolidate the cargoes destined to Open Sky Policy on air cargo and improved internavarious airports with Unit Load Devices (ULDs), and these tional connectivity coupled with expanding cargo-handling cargoes can then be devanned and placed on individual infrastructure, both physical and digital have sustained the aircrafts operating to the many identified airports. Besides, high growth of air cargo in India in the last few years, acinbound cargo from many participating operators will also cording to Gazder. “The Indian air cargo market is poised ensure a critical mass for servicing the regional airports.

28 CargoConnect - july 2019


cover story

Making a meaningful impact

“The development of new airports especially with a focus on making them cargo hubs, encouraging transshipment, While steady economic growth, domestic open skies and and the arrangement of a transportation network as hubindustry-friendly policies are termed as major drivers of and-spoke model, will result in economies of scale and better cargo traffic growth, it will be the immense untapped poutilisation of available resources,” further says Kumar. tential that will provide a big boost to the industry. Proposing a strategy, Raha hints that to have some sort India seemingly has all the ingredients to be one of the of price/rates control mechanism by the Government for the world’s great air cargo centres. Rapid growth of internaoperators will be a critical factor. Besides, efficient route plantional trade, a huge manufacturing engine and a population ning, use of right type of aircraft based on flying time and of more than 1.2 billion, all bode well for the industry. the type of cargo along with its movement, in a particular However, for a variety of reasons, India has not realised route to make it commercially viable, will be a sound step. this great potential to a broader extent. The historical chalAlso, to provide relief to the long winding queues of lenges facing India are well documented; inadequate infracargo near the airport gateways, Air Freight Station (AFS) is structure in particular has proved a major stumbling block a big initiative; it will not only help to decongest airports in further developing the country’s air cargo sector. but also offer value additions to cargo stakeholders. AFS, which replicates the CFS (Container Freight Station) “There is a significant untapped potential for air cargo model at the ports, ensures speed, safety and security. in India. An indication of the same can be gauged from the Counting on the prospects of AFS, Vohra says, “It will help fact that the total air cargo throughput handled by all Indian airports if put together is still less the airlines to plan their space allotment in time and cargo can be loaded than that handled by individual airTo provide relief to the long ports like Dubai, Hong Kong, Shangpromptly on arrival at the loading bays winding queues of cargo hai, Incheon, London and Paris,” woewithout any further loss of time. AFS near the airport gateways, fully adds Thakkar. will also bring down cargo handling Air Freight Station (AFS) The need of the hour is to have incosts.” is a big initiative; it will frastructure that will help reduce costs, Meanwhile, with a vision to create not only help to decongest save time, manpower and money to Mumbai International Airport Ltd airports but also offer make the Indian industry more com(MIAL) as the cargo hub of India, value additions to cargo petitive. Kumar expresses, “The indusSingh says, “We aim to develop comstakeholders. AFS, which try must witness faster movement of plete temperature controlled and replicates the CFS model at capital and lower interest costs, and digitalised pharma trade lanes bethe ports, ensures speed, tween Mumbai and the various Centhere should be less interaction with safety and security. ter of Excellence for Independant Government departments for licensing, Validators (CEIV) certified airports. permissions, etc. While the enhancement of rail, road and port infrastructure will lead to less MIAL have been recently awarded ‘CEIV Pharma’ certification by IATA, the first airport in India and third in Asia to congestion, more productivity and more flights and vessels achieve this quality milestone. Going forward, we are in coming in to increase business in the freight industry.”

Vipin Vohra Chairman, Continental Carriers Pvt Ltd

The Indian air cargo industry has advantage of a growing economy along with many other significant and parallel drivers of growth in India’s commerce, investment and consumption, which include considerable demand from small and medium B2B and B2C segments. The much-awaited National Air Cargo Policy, improved international connectivity along with ever expanding cargo-handling infrastructure, both physical and digital are destined to make India a growth spot for air cargo.

30 CargoConnect - july 2019

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

The industry is preparing for and concerned about the E-commerce giants venturing into airport logistics and freighter operations. This may benefit the industry but is not good news for the industry players. I would advise the industry to actively work together with the growing E-commerce players to understand the latter’s infrastructural, IT, technology and service needs to build better facilities, systems and processes.


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cover story

Anil Mantri, Director, Sealair Freighters International Pvt Ltd

The need is to increase the use of e-AWBs as a first step to further digitisation of air cargo which will yield real benefits and efficiencies for the industry. Definitely, the magnitude of volumes in the next couple of years, be it from E-commerce; or otherwise, will force all service providers to not only adopt automated and digitised solutions but also integrate them to have better transparency in the overall supply chain.

Sailendra Kumar Thakur Head- North and Gujrat, Aspinwall & Co Ltd

The entire world is looking forward to deepening ties with India and companies are aggressive to set up their manufacturing units and export finished goods from the country. This will boost India’s air cargo business. Besides, market liberisation, favourable Export Import (EXIM) policies, Free-trade Agreements (FTAs), removal of trade barriers concerning a gamut of formalities, will further facilitate the ideology of Indian market as a potential sourcing destination.

the process of further enhancing the Export Pharma Handustry as traditional business models are being challenged dling capacity by another 1,50,000 MT offering 120 addiby new thinking, often emanating from outside the sector. tional ULD storage positions taking the overall capacity to “E-commerce has transformed fulfilment and last-mile 2,50,000 MT. We are channeling our efforts towards India’s delivery; digital freight platforms are having a major impact largest ‘Airside Transport Solution’ which will be a first of on both road and freight forwarding markets and automation is transforming the warehousing industry. New techits kind for pharma shipments. It is currently under pilot nologies like low cost sensors are becoming more affordable run and will be commissioned soon. The airside transport even to the smallest companies, facilitating the growth of vehicle can accommodate two main-deck ULD positions online platforms and improving supand can offer temperature range of +15 ply chain visibility,” says Thakkar. to +25 and +2 to +8 degree celsius beAt domestic level, tween the airport’s pharma facilities “Today, a new breed of logistics considering the continued and the aircraft.” providers is pulling freight shipping growth forecast of passenger “Besides, enhancing pharma capainto the digital age and customers are traffic, introduction of the bilities, we have also commissioned a benefiting from their combination of UDAN scheme along with dedicated agro terminal for export best-in-class technology and proven an increase in the number perishables and enhancement of imlogistics expertise. New technologies of airports, will encourage port warehouse capacity by adding such as advanced analytics and maairlines to add more fleet chine learning is helping companies multi-level racking systems. The newto their current network ly commissioned state-of-the-art agro automate some of their back-end and thereby producing an terminal equipped with facilities like customer-facing processes and raise additional belly capacity for truck docks, dock levelers, weighing levels of utilisation while disrupting air freight. scales, X-ray machines, work stations the business of air freight forwarding for ULD buildup and weighment profoundly over time. The rise of the along with complete CCTV and security surveillance will digital freight forwarder is imminent in the air cargo sector offer annual capacity of 2,00,000 MT,” continues Singh. and soon will take over the entire system,” avows Thakkar. Kumar believes megatrends to be E-commerce companies dictating the formation of cargo hubs. For example: Amazon’s commitment of US$ 1.5 billion towards building an air cargo hub at Cincinnati Airport. Last-mile fulfilment In every field, the pace of innovation and discovery is has already been disrupted and transformed by E-commerce speeding up to an unprecedented level. What seemed like companies who can well take over even the first-mile market science fiction just a few years ago is today’s reality. Given presently dominated by freight forwarders. Also, the expansion of cold chain networks and steadily increasing demand all this change, companies are focussed on agility in order especially for pharma and fresh food will rise faster than to get ahead. Outsourcing of skills is one thing – outsourcing of physical work is a whole new level altogether! normal cargo. It will even be encouraged as it is a high yield Disruption is occurring in every part of the logistics ingenerating product for most in the entire supply chain.

Megatrends understanding Disruptions

32 CargoConnect - july 2019


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cover story

Jaideep Raha Managing Director, Jetex Oceanair Pvt Ltd

Vikram Kumar Chairman, ACAAI-NR and Director, CTC Air Carriers Pvt Ltd

The industry must witness faster movement of capital and lower interest costs, and there should be less interaction with Government departments for licensing, permissions, etc. While the development of new airports especially with a focus on making them cargo hubs, encouraging transshipment, and the arrangement of a transportation network as hub-and-spoke model, will result in economies of scale and better utilisation of available resources.

Kumar says that Brexit, US-China trade war, Middle East tensions and other socio-political aspects affect air cargo trade and the entire supply chain as has always been seen in the past. Analysing the current trends, Mamidala says, “The industry is preparing for and concerned about the E-commerce giants venturing into airport logistics and freighter operations. This may benefit the industry but is not good news for the industry players.” Mamidala advises that the industry should actively work together with the growing E-commerce players to understand the latter’s infrastructural, IT, technology and service needs to build better facilities, systems and processes. This may need significant investment but is required and of paramount importance. Highlighting market practical realities, Mantri feels, “From the perspective of trends, combination of multimodal is emerging and different flavours are being offered by providers. But, at the same time, Aviation Turbine Fuel (ATF) fluctuations and capacity constraints at times are leading to disruptions.” Complementing Mantri’s opinion, Raha says, “The trend of operating most fuel-efficient, most reliable freighter type with the best long-

34 CargoConnect - july 2019

To have some sort of price/rate control mechanism by the Government for the operators will be a critical factor. Besides, efficient route planning, use of right type of aircraft based on flying time and the type of cargo along with its movement, in a particular route to make it commercially viable, will be a sound step. Today, the trend of operating most fuel-efficient, most reliable freighter type with the best long-haul range by big players is what is being witnessed.

In order to ensure smooth flow of India's air cargo it is critical to enhance safety, improve security, strengthening the value proposition of air cargo, driving efficiency through global standards, improving quality, strengthening partnerships, and building sustainability.

Short-term Goals for India

• Top 5 global air freight market by 2025 • Rank in the top 5 globally based on e-AWB penetration by 2025 • Rank in the top 25 globally based on the Logistics Performance Index, which is an interactive benchmarking tool created by the World Bank to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance. • Air cargo transshipment hub at all major airports by 2025. • Region wise Warehouses and Hubs linked to regional airports for E-commerce cargo, Agro and Perishable cargo, and any other specialised cargo to supplement the resources for effective utilisation. • Invest in emerging cargo markets like Africa, South East Asia, etc. The potential in the new markets needs to be explored with long term infrastructure creation in order to sustain cargo growth in the next 10-15 years at least. Policies need to be devised in order to execute the plans.

haul range by big players is what is being witnessed, while disruption or impediments are ever escalating ATF prices. Besides, the shutting down of Indian domestic carriers like Jet Airways who were operating on international routes, definitely gave lot of price advantages to customers.” Mantri says that they have set up vertical selling functions which focus on the core growth of the products they handle helping get the targeted profitability in the organisation. Disruptions at the organisation level are always controllable and to focus on value selling is what they encourage in the team. Raha affirms that they are prepared to understand and leverage the trends by adopting more technologies and making the organisation lean and slim, along with monitoring per employee and shipment ratio. Of the same perspective, Vohra says that they are continuously investing in new technologies to maintain pace with ever growing digitisation. “Our in-house training to raise skilled work force is a part of giving best to the ever changing needs of customers. Due to our global presence, we are always ready to serve our customers with customised solutions to provide them competitive rates,” asserts Vohra. CC


focus

Interpreting

India's logistics costs

Logistics—moving goods and connecting producers with consumers—is a critical part of the modern economy. In India, this sector comprises 14 per cent of gross domestic product (GDP), much higher than in the US or Europe, where it is 8-9 per cent, according to McKinsey research. That matters; High logistics costs hurt Indian competitiveness. Although, experts believe that logistics cost in India will come down to match global average in the next two years. Pallavai Jain

36 CargoConnect - july 2019

I

ndian logistics cost is approximately $309 billion, which is nearly 14 per cent of the gross domestic product (GDP). Undoubtedly, India’s logistics cost is much higher than the global average of 8 per cent due to highly unorganised and inefficient logistics sector as compared to the global competitors, unorganised sector shares almost 90 per cent of the logistics markets. While the transportation cost in India is approximately 40 per cent of the total logistics cost, the inventory cost is estimated to be around 24 per cent and the warehousing cost to be 26 per cent. The root cause of higher transportation cost is intracity gridlock, abysmal quality of roads and regular postponement of deliveries.


focus Forecast

India has a complex and giant roadways web which is inconsistent, resulting the logistics of long-haul freight routes to be 25-30 per cent more exorbitant than the railway which is even costlier than the global standards. The Indian roadways infrastructure is constructed with complexities like single-lane access in most areas, unsatisfactory traffic management, bad road quality, and deferment in deliveries due to toll tax and octroi. These inefficiencies lead to fewer work hours of truck drivers and distance per day, which directly hikes the freight transportation time. Besides, India is suffering from highly shattered warehousing market as predominance of warehouses are less than 10,000 square feet. Unorganised players of the market control about 90 per cent of the warehousing space with smallsized warehouses and minimal mechanisation. The suppliers were entailed to have warehouses in all those states so that the tax evasion could be prevented unlike the previous tax regime. McKinsey estimates that coal and steel account for about 12-16 per cent of India’s total logistics costs; the figure for agriculture is about 25 per cent. Moreover, inefficiencies in the agricultural supply chain, such as improper transportation and storage, are rife, leading to wasted food and quality control problems. There is a great deal of room for improvement in warehousing and storage. Refrigerated trucks, for example, aren’t all that useful if the warehouses at either end don’t have cold storage.

Reducing Logistics Cost to Less Than 10% of GDP by 2022

Logistics cost in India will come down to match global average in the next two years, according to Deepak Bagla, Managing Director & CEO, Invest India. Logistics cost in India is in the range of 18-20 per cent. Currently a truck going from Delhi to Kolkata will take between 13-16 days. “But, with the kind of road projects and infrastructure development being done, the trucks will be able to move in four days from Delhi to Kolkata by 2019, when our lo-

Sectoral contribution in Logistics Cost (%)

Indian logistics cost is approximately $309 billion, which is nearly 14 per cent of the gross domestic product (GDP) while global average is 8 per cent. India’s logistics sector is packed with complexities with more than 20 government agencies, 40 partnering government agencies (PGAs), 37 export promotion councils, 500 certifications, 10000 commodities, 160 billion market size. It also involves 12 million employment base, 200 shipping agencies, 36 logistic services, 129 ICDs, 168 CFSs, 50 IT ecosystems and banks & insurance agencies. Further, 81 authorities and 500 certificates are required for export-import (EXIM). McKinsey estimates that coal and steel account for about 12-16 per cent of India’s total logistics costs; the figure for agriculture is about 25 per cent. The earning per tonne from a container is higher for coal, which constitutes 50 per cent of the Railway’s freight traffic. In the last four years, the earning per tonne from container traffic has grown at a CAGR of 8.3 per cent as compared to 3.8 per cent from coal.

gistics cost will meet the global average of 10-12 per cent,” informed Bagla. A study by Assocham-Resurgent India (2016) stated that the country can save $50 billion if logistics costs reduce from 14 per cent to 9 per cent of GDP. Reduced logistics costs would bring down prices of products. Transportation services form a third of the cost of a logistics chain. Improving transportation would require the coordinated development of railways, roads and waterways. Roads carry about 60 per cent of the freight cargo in India. As rail transportation is more energy efficient than road, movement of goods via the road-cum-rail mode could reduce logistics costs considerably. The earning per tonne from a container is higher for coal, which constitutes 50 per cent of the Railway’s freight traffic. In the last four years, the earning per tonne from container traffic has grown at a CAGR of 8.3 per cent as compared to 3.8 per cent from coal. This is a pointer to the higher revenue which can be earned from moving high-value and time- sensitive cargo. Meanwhile, as per the Economic Survey 2017-18, more than 22 million people are being provided livelihood by the Indian logistics sector and imjuly 2019 - CargoConnect

37


focus

To improve efficiency, the ministry is working on bridging infrastructure gap, doubling rail tracks, electrification of tracks, and construction of separate corridors for freight. The Railways is looking to increase track-related work to 12,000 km in this fiscal, as compared to 9,000 km carried out in 2018-19. Ashwani Lohani

Chairman, Railway Board

proving the sector will facilitate 10 per cent decrease in indirect logistics cost leading to the growth of 5 to 8 per cent in exports. The Survey also estimated that the worth of Indian logistics market would be around US$215 billion in next two years compared to about US$160 billion currently.

Implementing Standards

As per an update from the Department of Commerce, GoI, the country is aiming to abate its logistics cost from 14 per cent of Gross Domestic Product (GDP) to less than 10 per cent by the year 2022. India’s logistics sector is packed with complexities with more than 20 government agencies, 40 partnering government agencies (PGAs), 37 export promotion councils, 500 certifications, 10000 commodities, 160 billion market size. It also involves 12 million employment base, 200 shipping agencies, 36 logistic services, 129 ICDs, 168 CFSs, 50 IT ecosystems and banks & insurance agencies. Further, 81 authorities and 500 certificates are required for exportimport (EXIM). The Ministry of Commerce and Industry is developing a portal to ensure

38 CargoConnect - july 2019

As per the Economic Survey 2017-18, more than 22 million people are being provided livelihood by the Indian logistics sector and improving the sector will facilitate 10 per cent decrease in indirect logistics cost leading to the growth of 5 to 8 per cent in exports. The Survey also estimated that the worth of Indian logistics market would be around US$215 billion in next two years compared to about US$160 billion currently. As per an update from the Department of Commerce, GoI, the country is aiming to abate its logistics cost from 14 per cent of Gross Domestic Product (GDP) to less than 10 per cent by the year 2022. A study by AssochamResurgent India (2016) stated that the country can save $50 billion if logistics costs reduce from 14 per cent to 9 per cent of GDP. Reduced logistics costs would bring down prices of products. Ratings agency Crisil Ltd estimate that the implementation of GST is expected to save costs to the tune of 1-1.5 per cent of sales over 3-4 years. Eliminating delays at check posts will yield an additional savings of 0.4-0.8 per cent of sales.

ease of trading in domestic as well as international market. This portal will link every stakeholder of the exportimport (EXIM), domestic trade movement and all trade activities on a single platform. In this year's budget speech, Finance Minister had announced that the Department of Commerce will create a portal which will be a single window online market place for trade and will connect business, create opportunities and bring together various ministries, departments and the private sector. Stakeholders like traders, manufacturers, logistics service providers, infrastructure providers, financial services, Government departments and groups and associations will all be on one platform. The drop in logistics cost will make operating in India more competitive and attract manufacturing investments into India. This is the objective of the ‘Make in India’ exercise, under which India will be turned into an industrial hub. “With so much happening around in terms of the ‘Make In India’ programme, GST, traction on industrial corridors and the infrastructure status to the logistics sector, warehousing as a real estate constituent would be a real beneficiary in the times to come,” said Samantak Das, Chief Economist & National Head (Research), Knight Frank India. Sources also revealed that after the rollout of GST, there has been a spike in demand by almost 100 per cent as the sector is witnessing the consolidation and expansion of warehousing space. This increase in demand from sectors like E-commerce, third-party logistics providers (3PL), consumer durables, FMCG and manufacturing for la rger si zed wa rehouses has opened up the sector. The implementation of GST is expected to save costs to the tune of 1-1.5 per cent of sales over 3-4 years, said ratings agency Crisil Ltd. Eliminating delays at check posts will yield an additional savings of 0.4-0.8 per cent of sales. These cost savings are, however, more likely to be gradual and back ended, as corporates must realign their supply chain while ensuring minimum business disruption, it added.


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39


Railways ministry is working on several projects including construction of dedicated freight corridors to cut logistics time and cost of the industry.

issue will result in a very low return on investment. Logistics firms are beginning to address this issue by opening driver training schools, boosting wages and benefits, investing in their drivers’ skills, using on-board sensors to monitor driving patterns, and then giving real-time feedback.

Way Ahead Logistics cost in India is in the range of 18-20 per cent. Currently a truck going from Delhi to Kolkata will take between 13-16 days. But, with the kind of road projects and infrastructure development being done, the trucks will be able to move in four days from Delhi to Kolkata by 2019, when our logistics cost will meet the global average of 10-12 per cent. Deepak Bagla

Managing Director & CEO, Invest India

India’s ministry of road, transport and shipping estimates suggest a 22 per cent shortage in the number of commercial drivers. Coupled with the low skill level of many commercial drivers, that means more delays and more damages—the root cause of the high indirect costs. Improving roads and truck quality without solving this

40 CargoConnect - july 2019

The Dedicated Freight Corridor Corporation of India (DFCCIL) needs to develop logistics parks as points for aggregation/disaggregation of cargo for movement by DFC. Logistics parks planned by the Ministry of Road Transport and Highways would also be ideal points for interface of cargo between road and rail modes. These parks should ideally be developed along the alignments of the DFCs and corridors identified by the Railways for movement of containers and ‘RoRo’ trains. Cargo moved by inland waterway transportation (IWT) would provide similar opportunities. Ashwani Lohani, Chairman, Railway Board said that the railways ministry is working on several projects including construction of dedicated freight corridors to cut logistics time and cost of the industry. “To improve efficiency, the ministry is working on bridging infrastructure gap, doubling rail tracks, electrification of tracks, and

construction of separate corridors for freight. The Railways is looking to increase track-related work to 12,000 km in this fiscal, as compared to 9,000 km carried out in 2018-19. We are on our track to do this work," Lohani said adding that the work on eastern and western freight corridors would be completed by March 2020; and electrification of entire railways would be done by 2022. The widely practiced lean inventory approach favours minimising inventory costs at the expense of transportation costs, due to the requirement for small and frequent shipments. In an environment where transportation costs are high, however, managers have become more astute in regard to shipment size, migrating from lean inventory to a hybrid transport/inventory strategy. They engage in freight consolidation (either among their own business units or by leveraging third parties), and select transportation modes that facilitate less-frequent, larger shipments of freight when it is appropriate. Another initiative that could help, however, is the government’s `8 trillion Sagarmala project, launched in 2015. This goes in an entirely different direction, by investing in ports and coastal areas, with the goal of increasing the use of domestic shipping in moving goods. If Sagarmala works as intended, it could lower the cost of logistics noticeably. CC


feature

Play it Safe

While Transporting Dangerous Goods

While

moving hazardous material, a shipper cannot just pack it and send it across to the party. Transporting hazardous goods has always been a precarious task in supply chain industry as it runs the risk of not only the monetary loses but the loss of lives too. Especially in a country like India where there are no stringent policies in place for the identification and regulation of such commodities. Human Predicament continues to loom over the workers engaged in the shipment of dangerous materials until the consignment is delivered to the end point because of the inefficient training and safety provisions. When moving hazardous materials, shippers can't just send them packing. From preparing for compliance to keeping employees in the loop, here's how shippers plan for risk-free travels.

42 CargoConnect - july 2019

Identification is the key

Many a times, ambiguities may arise about the nature of certain materials, for instance Lithium-ion batteries, as cargo in a passenger aircraft are seemingly innocuous but may prove to be detrimental on the occasion of getting ignited. Therefore identification of hazmat goods is of utmost important. International Civil Aviation Organisation (ICAO) has drafted the rules & measures for hazardous commodities. Shippers need to understand the enormity of identifying the hazmat materials. "Shippers need to realise that many items, such as lithium batteries, are considered hazardous materials when offered for transportation. To offer such goods, shippers generally have to be trained and/or educated in the requirements to ship that item, “says Bob McClelland, Dangerous Goods Manager, UPS Airlines.


Given the unorganised nature of supply chain industry and no stringent regulations enforced by the government with regard to hazmat transportation; the nonchalant attitude towards the shipment of hazmat commodities makes the training of the employees a novelty in India. Saurabh Sharma tries to delve deeper in the problem to explore the scopes of improvement. july 2019 - CargoConnect

43


feature

Hazardous goods can be divided into two categories: hazardous materials and hazardous waste. Any material or waste confirms to certain threshold in one or more criteria such as degree of toxicity (extremely or highly), flammable (flash point of 20 degree Celsius), explosive (under the effect of flame, heat or photo-chemical conditions), acidity (with pH ≤ 5), alkalinity (pH ≥ 9) and carcinogenicity (causing cancer) is classified as hazardous. Material or waste contains or contaminated with certain hazardous constituents are also called hazardous materials or waste. According to Globally Harmonized System of Classification and Labeling of Chemicals (GHS), internationally acknowledged system of classification managed by United Nation for the clas-

sification of chemicals which fall under hazardous testing criteria, the main elements of classification of such goods are on three accounts Physical, Health and Environmental. It’s a complex system of classification though.

Regulations and Safeguards

Organisations that want to safely ship or transport hazardous materials need educated employees and effective processes and systems. Failing to act with care and follow applicable regulations can cause injuries and fatalities. It also can ruin a company's bottom line. Penalties for violating the rules can run into hundreds of thousands of dollars. The government intends to bring a new comprehensive legislation for movement of hazardous goods.

At present, there are a number of regulations from different ministries making things difficult for effective implementation. Accordingly, it has been planned to bring a single, yet comprehensive regulation, for transportation of hazardous goods. “Unlike India, United States has established a regulatory body responsible for regulating and ensuring the safe and secure movement of hazardous materials to industry and consumers by all modes of transportation, including pipelines, the Pipeline and Hazardous Materials Safety Administration (PHMSA), which plays a vital role. PHMSA's mission is to establish national policy, set and enforce standards, educate, and conduct research to prevent incidents similar to a manager, handling the project in hand.

The government intends to bring a new comprehensive legislation for movement of hazardous goods. At present, there are a number of regulations from different ministries making things difficult for effective implementation. Accordingly, it has been planned to bring a single, yet comprehensive regulation, for transportation of hazardous goods. 44 CargoConnect - july 2019


feature

In a country like India, where the unorganised sector still shares a chief part of the supply chain industry and consequently the chances of risk are thick, so it is incumbent on the shippers, not only as their professional but moral duty to make the provisions for the training of employees handling such treacherous assignments. For intermodal transportation of hazardous material, there are certain rules and terms, laid out on the basis of United Nations Recommendations on Transport of Dangerous Goods (the Orange book) within a political or economic trade zone. Some of these regulations are enshrined in the below mentioned rulebooks.

Shippers need to realise that many items, such as lithium batteries, are considered hazardous materials when offered for transportation. To offer such goods, shippers generally have to be trained and/or educated in the requirements to ship that item. Bob McClelland

Dangerous Goods Manager, UPS Airlines

46 CargoConnect - july 2019

• European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR), • European Agreement concerning the International Carriage of Dangerous Goods by Inland Waterways (ADN), • Regulations concerning the International Carriage of Dangerous Goods by Rail (RID), and • Title 49 of the Code of Federal Regulations of the United States. “The placards are ‘amazingly important’; for the emergency response crews, the placards are life or death. They let responders quickly identify the substance that spilled or ignited or otherwise started an accident, so they can determine how to act,” says Glenn Riggs, Senior Vice President- Corporate Logistics Operations and Strategy, Odyssey Logistics. Talking about the transportation of dangerous goods by roads in India, logistics players are bound by certain rules promulgated through Hazardous Substances (Classification Packaging and Labeling) Rules, 2011 and The Central Motor Vehicles Rules, 1989. Though pharmaceutical and cosmetic end products, available in packages designated

for consumer use are exempted. Dangerous goods in packaged form domestically transported must be classified packaged, marked, labeled and the vehicle carrying the goods appropriately marked according to above said rules. CMVR also enumerate the responsibilities of driver carrying the dangerous goods regarding the Equipment and Maintenance of Motor Vehicles, route planning and emergency information panel to avoid any forthcoming disruption.

Training and Risk Mitigation

A shipper has to take into consideration a lot of things before he takes up a consignment of transporting risky materials. Appropriate training of the employees ought to be the topmost priority of the shipper as it may in fact be the matter of life and death. In a country like India, where the unorganised sector still shares a chief part of the supply chain industry and consequently the training of the employee is still a novelty, the chances of risk are thick, so it is incumbent on the shippers, not only as their professional but moral duty to make the provisions for the training of employees handling such treacherous assignments. According to United Nations regulations any person engaged in the the transport of the dangerous goods shall be trained in the contents pf good dangerous goods requirements commensurate with their responsibilities. Employees should be trained in accordance with the following guidelines: General Training: It includes the knowledge of general dangers presented by various classes of dangerous goods and the way to prevent exposure


SURECOM MEDIA


feature aircraft containers, fire containment covers for cargo pallets, and quick-donning full-face oxygen masks for crew positions on every aircraft. "These steps and others provide a multi-layered approach that drastically reduces the risk of a significant incident due to an issue with lithium batteries or other hazardous material on an aircraft," McClelland says.

Traceability and Accountability

Throes of Ennore oil spill at Kamarajar Port LTD (KPL), Chennai haunt us till date. The fiasco was reported to have occurred owing to container leakage.

The placards are ‘amazingly important’; for the emergency response crews, the placards are life or death. They let responders quickly identify the substance that spilled or ignited or otherwise started an accident, so they can determine how to act. Glenn Riggs

Senior Vice President- Corporate Logistics Operations and Strategy, Odyssey Logistics

48 CargoConnect - july 2019

to those hazards by the use of available equipment and protective clothing. Function Specific Training: Each person shall be trained in specific hazmat material he or she is dealing with as required in both storage and transportation. Safety Training: Each person shall be trained in the method for accident avoidance, such proper use of package handling goods. Emergency Response Training: immediate process to be followed in the event of accidental leakage or any other adversity. “Managing the myriad, changing regulations governing the movement of hazardous materials starts with educated employees. It is vital for carriers and shippers involved in the transportation of hazardous materials to have personnel on staff that is knowledgeable about the federal hazmat regulations and make safety a top priority," says Megan Bush, manager of safety policy with the American Trucking Associations. Containerisation of dangerous materials is another key attribute which can’t be treated conventionally as it may pose a great threat on the occasions of propulsions in transit or accidental leakage. Throes of Ennore oil spill at Kamarajar Port LTD (KPL), Chennai haunt us till date. The fiasco was reported to have occurred owing to container leakage. Unites Parcel Services (UPS) has devised and implemented fire-resistant

For an unimpeachable and reliable transportation of dangerous goods, it is first and foremost that the consignment is traceable in real time basis and bearer should assume the responsibility for any unforeseeable mishap. Traceability helps shippers track down goods in case of a recall, visibility allows them to see where the materials are, and accountability lets them know who touched the product and who has the authority and skill to move it. Hence the accountability and traceability are the two aspects in hazmat transportation which need to be keenly taken in account before dispatching any shipload. Internet of Things (IoT) will always be influential in tracing the hazmat shipment in real time as GPS enabled trucks and ships are detectable while on the move. As this technology advances, and as the cost of sensors drops, it will be possible to monitor shipments to ensure, for instance, that those requiring controlled temperature condition. While technology and training help companies’ ship hazardous materials more safely, logistics professionals also need to continually review their supply chains to identify ways to reduce inherent dangers

Way Forward

As logistics professionals look for ways to reduce these dangers, they also need to ensure the hazardous materials in their supply chains move safely, efficiently, and in compliance with regulations. That requires informed employees; processes and systems that provide visibility, facilitate compliance, and streamline recordkeeping; and packages and containers that keep their materials safe. It's high time shippers realised that sometimes it is more important to reach safer than to reach fast. CC


The Highest Circulated/Read & Referred Logistics Industry Magazine


infrastructure

It’s critical to bolster infra to boost India's growth

T

he infrastructure sector was one of the major focus areas in the FY19 budget and saw massive spending on roads, railways, water, irrigation, and urban infrastructure. With all eyes on the upcoming Union Budget, the Government should focus not only on allocation of funds, but also setting up a road map for clearly outlining the private and government sectors' role in infrastructure creation and operations over the next year. Some interventions which may be considered by the Government for boosting the transportation logistics sector in the country are proposed below:

Railways Indian Railways should judiciously invest in track creation to strengthen stressed routes and also open up intrinsically remunerative routes. The government should attract private sector investment in various areas such as station development for effective passenger management and unlocking non-fare revenue, freight terminals for common use mainly through redevelopment of strategic goods sheds, construction of Private Freight Terminals (PFTs), and owning and maintenance of rolling stock.

50 CargoConnect - july 2019

There has been heightened focus on increasing the modal share of railways for the movement of inland freight. Improving network capacity through signalling projects, upgrading loop line infrastructure to enable running of longer trains (2x-4x of current size) and completing ongoing line expansion projects on time would go a long way in improving average speed of freight trains. The government should create an effective ecosystem for the Dedicated Freight Corridors (DFCs) to become game changers in freight logistics. Apart from speedy completion of the eastern and western DFCs as well as sanctioning additional 4 DFCs already planned, there is a pressing need to focus on developing enabling ecosystem such as marketing, commercials and operational strategies to optimise utilisation of this entire new infrastructure.

Aviation To bring down the high taxation on aviation fuel among the highest in the world, the Government could consider bringing aviation turbine fuel (ATF) and other related fuels (used for commercial scheduled/nonscheduled operations and training purposes) under GST. To provide a fillip to its marquee Regional Connectivity Scheme to improve air connectivity to remote areas, the Government should provide incentives/ budgetary support in terms of promoting use of smaller aircrafts under the scheme, providing additional funds for VGF support under the scheme, and developing airport and seaport infrastructure in Tier II and Tier III cities of the country.


High taxes have led airlines to outsource 80-85 per cent of the country's $1.4 billion MRO business to international providers. The government must focus on reducing the tax burden impacting the growth of MRO industry by reducing GST rates, and removing instances of tax on certain items which attract an import duty as well as a GST over and above that.

Logistics There has been a thrust on development of multimodal logistics parks (MMLPs) in the past few years to boost multimodality and integration of logistics services in the country. In addition to the proposal for developing 35 MMLPs across the country, the government has also drafted an MMLP Policy to serve as the guiding document for the development of MMLPs in the country. Issues such as regulatory overlap between multiple agencies for MMLP development, acquisition of land for the construction of the infrastructure among others have been impediments to the development process. Some measures that may be undertaken by the government to foster logistics infrastructure development include: Setting up and empowering an independent department for Logistics and Trade/Freight Facilitation. Instead of the present context where multiple agencies undertake development of MMLPs - leading to inefficiency in infrastructure

planning and regulatory delays in approvals, this department should act as the nodal agency for providing approvals for all kind of terminal infrastructure, including MMLPs, ICDs, CFSs, PFTs, and logistics parks. This new department should develop perspective plans and vision documents for development of such facilities at non-competing locations to bring in efficiencies in the infrastructure planning and development process. Delineation of a dedicated land bank for logistics facilities could be considered across all states to streamline and speed up the land acquisition process. There is a need to boost private sector participation in logistics infrastructure creation. The focus should also be on developing and operating common user terminals with the government playing a facilitative role for easy access to land, providing road/rail connectivity to the facility, and supporting infrastructure in terms of water, electricity and fuel. The availability and adequacy of storage infrastructure across different commodity groups, especially for industrial goods, is a constraint in the country. Also, the lack of minimum quality standards prescribed by a government agency has led to mushrooming of facilities across the country with sub-optimal utilisation. There is scope for prescribing minimum standards/norms for establishment of quality facilities, ensuring ease of seeking approvals through a single window mechanism, etc. CC

july 2019 - CargoConnect

51


technology

l a i c i f i t r A : e c n e g i s l s l e c e c Intsecret to su The tailers for re

A

rtificial Intelligence (AI) will profoundly impact all aspects of business in the coming years, across many industries. In the retail sector, the impact of AI can already be seen on a broad scale. It’s more than likely that you’ve interacted with a chatbot on a retailer’s website, which is a prime example of AI in action. Behind the scenes, many retailers are using AI and analytics to gain marketing and sales insights from the vast amounts of data that consumers produce during their physical and digital interactions with brands and social activity online. A recent Capgemini report found that many retailers (74%) are centering their AI strategy on customer-focused use cases. In addition to these customer-focused deployments, AI holds another big opportunity for retailers in operations, and it’s a $340 billion opportunity. The next step for retailers is to utilise AI in operations – across areas of the supply chain such as demand planning, procurement and distribution.

52 CargoConnect - july 2019

Below, we look at three prime use cases for AI across operations and explain their benefits.

Demand Planning and Replenishment AI can optimise demand planning and replenishment in several ways – from product catalogue management to advanced demand planning. For example, advanced demand planning involves predicting product sales trends so that

retailers can meet sales/customer needs at the right time with the correct service or product in the right location and AI can be used to accurately predict future product demand. The technology works by analysing both historical company data and the data produced by numerous complex factors that influence product demand, both structured and unstructured, based on socially influenced dynamic attributes. The AI technology then automates replenishment triggers so that retailers


technology

consistently have the right amount of product in stock. This result in less waste reduced out of stocks and increased sales. Improved demand plans even impact distribution. For example, an international multichannel retailer integrated merchandise and demand plans for collaborative demand planning, including key margin metric planning and reporting, in-season planning of sales, stock and open to buy, resulting in greater control of stock and ultimately leading to an overall 8 per cent improvement in instock position and a 7 per cent increase in sell-thru.

Procurement and Sourcing

Sourcing is one area where AI can bring about transformed efficiency. For example, AI-driven image recognition technology and blockchain can be used to solve significant problems related to product quality and provenance. In the grocery and food segments, in particular, we can evaluate food safety and quality of perishables using imagebased recognition software to evaluate and predict product shelf life using visual recognition factors. Robotic Process Automation (RPA) can also be used to reduce human error and increase productivity in procurement. An example of this is Coca-Cola Philippines and its procure to pay process automation innovation. In 2016, Coca-Cola Philippines moved away from paper and people-based invoice processes to utilising RPA. Using RPA, invoices are automatically captured and sorted according to pre-specified rules. Verified invoices are automatically posted for payment and exceptions are routed to a workflow where assigned personnel are alerted to take actions on the flagged entries. After deployment, the company improved goods receipt on time to 99 per cent in less than 18 months. There was also a significant reduction in invoices with issues from 25 per cent per month to below 10 per cent, out of the average of 24,000 invoices processed monthly.

Distribution and Logistics

AI has a huge role to play in distribution and logistics, particularly when it comes to warehouse and backroom automation, and fleet management. Today’s consumers want deliveries to be quick and arrive when and where they want them. For delivery vehicles, this demand is putting increased pressure on human insights used to inform the delivery processes. AI can help to optimise delivery routes using means such as satellite imagery and intelligent algorithms. Mechanising store backrooms allows for hands-free picking near the customer’s home. AI can also be used to monitor product conditions to ensure they are of satisfactory quality. Capgemini is delivering a proof of concept for a company deploying a “smart container” management system based on blockchain technology. Smart containers are transportation containers equipped with sensors that transmit quality related data (e.g. temperature, pressure, vibrations) to all affected members of the supply chain. The monitoring of real-time quality data enables the company to minimise their response time to events. For example, if the temperature drops below a certain threshold during transport and spoils the goods, a shipment of replacement products can be triggered in real-time. These “smart containers” are improving transparency and efficiency across the supply chain. These use cases demonstrate just a handful of the opportunities presented by AI to improve retail operations and retailers’ bottom lines. As well as deployments focused on the customer, it’s clear to see that there is huge potential for retailers to optimise and streamline operations utilising AI. By implementing use cases across planning, procurement and distribution, retailers will improve efficiency and maximise profits. Such ‘quick win’ projects are also easy to implement, easy to scale, and provide a quick return on investment. When implemented with purpose, AI can deliver value from day 1 and lay the

Today’s consumers want deliveries to be quick and arrive when and where they want them. For delivery vehicles, this demand is putting increased pressure on human insights used to inform the delivery processes. AI can help to optimise delivery routes using means such as satellite imagery and intelligent algorithms. foundation for sustainable process and culture shifts in organisations. Ultimately, retailers still have a long way to go in realising the full potential of AI. To gain momentum with their deployments and stay competitive, it is important that retailers not only solely focus on consumer-focused projects, but also explore the huge opportunity presented by AI in operations. By Tim Bridges, Global Sector Leader, Consumer Products, Retail and Distribution, Capgemini

july 2019 - CargoConnect

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Special Secretary Logistics, Ministry of Commerce & Industry, Government of India

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GM- Demand Chain Management Mahindra & Mahindra Ltd

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Interview

We ensure profitable exits with What makes your products or services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages you will need to overcome?

Customised, built to suit warehousing development is our forte. I would say the strategic locations we are present at, the globally compliant standards that we are known to deliver for, and the superior tenant mix, sets us apart. Our competitive advantage is the consistent track record we have in ensuring profitable exits with incredible asset management.

With three pronged strength in Asset Management, Development Execution and Investment Deployment, Warehouster Capital Advisors is already involved in execution of warehousing projects estimated 7 million for sectors such us Manufacturing, E commerce, FMCG and Retail, from its overall portfolio target of 15 mn sq ft warehousing space over a period of 3 years. Logistics industry veteran, Sandeep Chadha, who founded the company and is at the helm of affairs, informs Upamanyu Borah about their deliverable capabilities while creating long term values.

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incredible asset management There is no disadvantage as such. We have most of our processes in sync with our vision and mission. However, being relatively newer on the horizon, it will take its time to get the superior brand recall that we aspire for.

There has been a rapid increase in the number of large organised players in the market. They are investing and building warehouses faster and with higher quality (moving from Grade B to A and A-plus), as their customer’s demand upgrades. What is the sudden surge behind this?

I would say there are a couple of things: the implementation of GST has expedited the horizontal integration and helped in the consolidation of smaller unorganised properties to larger Grade A level offerings. At the same time, the evolution of E-Commerce in India has been rampant and propelled the demand with an impressive surge. I think a couple of favourable policy measures by the government including the industry status to the logistics sector have also added towards the momentum.

So far, to what extent has Warehouster been responsive to the dynamic market and innovating its core- ‘the area of alternate asset investment’?

Well, with the kind of the versatile and strategic portfolio that we have been able to sync together in such a short span, underlines our focus towards diversity and innovation. One has to differentiate one’s product/services keeping in mind the competition as well as the best practices available. Besides, alternative asset investment in

warehousing in India is getting a lot of traction in view of the ever-evolving demand, and we are at the juncture where we intend to scale it up further.

With 24 per cent share of total platform level investments in India in 2018, warehousing and industrial segment is expected to retain strong momentum over the next few years. What according to you are the immediate actualities that would propel the sector?

This sunrise sector of warehousing is on a roll on the back of strong business tailwinds. The rising demand, the rising level of aspiration

open to acquiring promising assets on a pan-India level. We are not region specific.

Cold chain infrastructure being a capital-intensive business with longer gestation period sometimes acts as a deterrent for the investors. But, it surely makes economic sense with bigger and better warehouses. Do you also agree to the fact cold storage yields are big inducement for investors? Do you plan to leap any step in this direction in future?

Well, at the moment our plate is full in our already targeted segment of Superior Grade A warehousing.

In India, alternative asset investment in warehousing is getting a lot of traction in view of the ever-evolving demand, and we are at the juncture where we intend to scale it up further.

among the consumers and the ever-growing online and offline marketplaces in this emerging economy of ours, are sure to add to this traction.

Is Warehouster already considering investments into the investable grade real estate anytime soon?

Currently, the share of organised Grade A warehousing in India hovers around 10-12 per cent and there are only moor growth ahead. Well, Warehouster as a niche asset manager is already on its way as far as building a suitable, viable and lucrative portfolio is concerned. We are always

However, in future, if the opportunity knocks, we would dedicately look into it. At the moment, cold storage is too asset heavy for a starter like us.

Along with targeting to develop a portfolio of 15 mn sq ft warehousing space over the next 3 years, what are your other expansion projects in the pipeline that you believe will further align your services?

It will be too early for me to say. 15 mn sqft in three years in itself is a challenge and an organisational goal. However, we are open to both organic as well as inorganic mode if the opportunity lies therein. CC

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Interview

Consistent with the commitment to maximum value addition for TML business What was the ambition behind origination of TMLD?

TMLD was carved out from TML in 2008, as a 100 per cent subsidiary company to manage distribution and logistics for commercial as well as passenger vehicle products at the time of introduction of TATA Nano in the Indian market. TMLD was entrusted to provide countrywide distribution network and logistics strategy, lean, agile yet extremely competitive. This required specialisation and focus on utilisation of every resource or mode of transportation available at our disposal. Challenge was to fit logistics cost and time into the frame, every TML customer would expect from us.

How big is India’s automotive logistics domain for TMLD?

TMLD has been managing distribution of TML products primarily for Sanand Plant, and logistics management for all commercial and passenger vehicles through its presence across 6 plants, 8 regional offices and 23 regional stockyards, which post-GST consolidated to 12. In terms of numbers, this amounts to distribution of almost 1 lakh units to nearly 285 channel partners and logistics management for nearly 5,00,000 units per annum through road, rail, car and chassis carriers.

To what extent has TMLD been responsive to India’s dynamic market and innovating its automotive logistics management process?

The core strength of TMLD has been its agility and ability to quickly adapt to the dynamics of the automotive market and its logistics needs. I can proudly say that TMLD is the first company which has used rail as bulk mode of transportation in the era before Automobile Freight Train Operator (AFTO) scheme, to its advantage and set records in logistics cost efficiency, when Nano itself was setting a benchmark in terms of cost competitiveness. However, it was not possible without support and commitment of its logistics partners, especially TCI, to the cause. Our long relationship with TCI is glaring example of trust and mutual value creation at Sanand plant. On other side, we successfully managed multi vendor environment at Pune, Pantnagar, and Dharwad plants. More

To hive off the logistics and distribution part of its business to a fully owned unit, TML Distribution Co Ltd (TMLD), which was incorporated on March 2008 by India's largest automobile firm TATA Motors, has today become a big entity in itself. Achal Paliwal, CEO- TML Distribution Co Ltd, in a one-to-one interaction with Upamanyu Borah, elucidates more about their line of business, and how operational agility has enabled them to nimbly adapt and upgrade their existing products and services to meet rapidly changing customer needs, with efficiency gains and quality improvements.

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importantly, TMLD has been closely working as part of SIAM Logistics Group, on various issues of national logistics interests, e.g. inter Original Equipment Manufacturer (OEM) collaborations, development of AFTO policy and rail wagons and amendments in Central Motor Vehicles Rules (CMVR) Act for insertion of definition of car carriers and its specifications, which never existed since 2 decades.

How has the investments been since the genesis of TMLD and what will it be going forward?

In order carry out distribution business, we were formed with a precise paid up capital of 225 cr. However, being part of Tata Group, investment has never been a concern or constrain for us. Logistically speaking, we have consciously remained an asset-light company, focussed at maximum value addition to TML business through distribution and logistics.

In order to maintain a stronghold of India's automotive logistics market, have you laid out any collaborative business strategy?

TMLD has been all about collaboration between OEMs and LSPs. We were amongst the first to advocate OEM to OEM collaboration for logistics efficiency through SIAM Logistics Group. In Logistics domain, we have close business tie up with 3PLs like TCI, NYK and APL-VASCOR. We have always believed that synergy and logistics advantage can be best availed by creating value in our respective domain through experience and expertise for a common cause which is 'Customer'.

After you took to the role in 2016, how have you approached things differently than your predecessor?

Developing the network or

leveraging different modes of logistics was never a major challenge, thanks to my able predecessor. Perhaps, a new set of challenge was waiting for me– process and network redesign due to introduction of GST, major change in carrier capacity due to dimensional restrictions under CMVR. If I speak of change in fundamental approach, it will be– Customer Focus. Having come from Maruti Suzuki and Honda background, I was very clear that no logistics can be successful unless it addresses customer expectations. For me, it was always dealer or the end customer. Therefore, end-to-end supply chain visibility, business process transpar-

How do you foresee the future of Indian Automotive Industry with regard to development of infrastructure catering to efficiency in logistics and transportation related operations?

When speaking of infrastructure, Govt has been doing a great job in terms of expanding Highways, reducing barriers, improving rail infrastructure and easing out AFTO policy, making it affordable for interested parties. This has undoubtedly contributed to improvement in logistics efficiency, and reduction is wasteful waiting, etc. If transit time is taken as an example, our LSPs have been able to reduce it by atleast 30 per cent compared to the year 2016.

We have always believed that synergy and logistics advantage can be best availed by creating value in our respective domain through experience and expertise for a common cause which is 'Customer'. ency and simplification were my foremost concern. We strengthened out logistics portal, integrated with automated GPS driven location data feed, redefined our ‘Business Allocation’ to link with fleet performance, introduced mobile APP based tracking and e-POD solutions, and aligned ourselves with emerging market demands and customer aspirations. Integrated CV and PV Logistics on the same portal and brought similar sensitivity levels in terms of delivery quality and efficiency. The best example I can cite of customer focus is that, we are one of the few Auto OEM who independently conducts ‘Logistics Satisfaction Survey’ every six months to capture customer’s key concerns and find ways to address them through process or efficiency improvement. Most recent is our ongoing project to redesign logistics strategy wherein every dealer is served within no more than 72 hours, irrespective of their location in India.

However, fluctuations in fuel prices, skewed demand and surplus capacity is equally affecting OEMs as well as LSPs. While regional imbalance in manufacturing capacity is improving, role of railways, especially under AFTO, will be a scenario to be watched very closely. Recent efforts of inland waterways, although at a nascent stage, will also remain as an area of keen interest being the most environment friendly mode. In a nutshell, long haul by bulk carriers and short runs by smaller carriers will be new norm for auto OEMs. Furthermore, after GST, we experienced consolidation of stockyards, which were primarily created to address different tax regimes in different states. Now is time for the industry to redesign their stocking and distribution strategy from market and customer perspective. With above, logistics industry will certainly not remain untouched. In future, I foresee ample business opportunity for 3PLs and specialised LSPs for value creation. CC

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Shipper Speaks

Efficient logistics is at the heart of our strategy of ‘Agile Fulfilment’ In FMCG environment, value is created for consumers when products are available on the shelves and are fresh. Godrej CP, India’s leading consumer goods company has used these two parameters to design and run their entire supply chain. Dr Rakesh Sinha, Global Head - Supply Chain, Manufacturing & IT at Godrej Consumer Products Ltd, informs Upamanyu Borah on the need for effective supply chain management, and how they employ global best practices.

Overview

Godrej CP is a century old company operating in the FMCG industry especially focussed on the categories of household insecticides, soaps, hair colours and air care. We offer world class quality in our products at an affordable price, thereby making them available to a large mass of consumers. Our products are available in about 50 lakh retail outlets in India.

Supply Chain Strategies

Our supply chain is designed to maximise availability and freshness of our products on the shelf. It is based on the concepts of ‘Agile Fulfilment’ to cater to the volatile demand of consumers. Our customer service levels as well as obsolescence levels are current industry benchmarks. We use the principles of Theory of Constraints (TOC) to run our entire supply chain based on actual demand signals coming from the market everyday. The entire supply chain, right from the vendors to our customers, runs without the need for an explicit or accurate demand forecast. Our supply chain requires high level of flexibility in distribution, manufacturing and sourcing with small batch sizes moving on various lanes on a daily basis.

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Warehousing Tactics

Warehouses provide strategic inventory buffers at predetermined locations and serve as shock absorbers in matching supplies to consumer demand. As per TOC principles, these buffers need to be dynamic in nature, based on velocity of consumption and its acceleration or deceleration. Frequency of resizing these buffers is an important design parameter to ensure both availability and freshness. In our supply chain, we resize these buffers every day on the basis of changes in consumer demand pattern. Warehouse capacity needs to be flexible, with lean layout for fast turnaround of orders. We code each and every case of our products with a unique bar code for better traceability, FIFO compliance and minimising obsolescence.

Ensuring Coordination

Our replenishment algorithm generates distribution requirements across the entire supply chain, including vendors and our manufacturing plants. These are derived from demand sensing of the market. We have, over a period of time, worked on improving flexibility of operations in our logistics, production as well as vendor deliveries. The entire

end-to-end supply chain is now geared to provide small batches of assorted products at a short lead time. Our suppliers and transporters are aligned to the replenishment requirements and they participate in it wholeheartedly.

Tackling Challenges

The way we have designed our supply chain using TOC principles ensures that none of our internal processes becomes a constraint in fulfiling consumer demand. The constraints remain external, such as natural calamities causing supply disruption. A judicious mix of inventory buffers and network redundancy helps us in overcoming these problems without affecting service levels in a significant way.

Creating Value

In FMCG environment, value is created for consumers when products are available on the shelves and are fresh. We have used these two parameters to design and run our entire supply chain.

Importance of Logistics

Efficient logistics is at the heart of our strategy of ‘Agile Fulfilment’. We have designed our supply chain in a unique manner to ensure that every warehouse in the chain responds to changing con-


Best-in-class Practices

Introducing best practices across geographies to become more agile: Demand-driven Supply Chain, Theory of Constraints (TOC), Total Productive Maintenance (TPM), Lean, Six Sigma, and Low-Cost Automation Strengthening supply chain processes in international businesses: integration into one SAP ERP, Lean, and Kaizen Extending shop floor employee engagement initiatives to international businesses

Sustainability Global strategic sourcing with significant benefits to the bottom-line; Godrej Green Purchase Policy rolled out to key business partners Sustainable manufacturing and supply chain practices, resulting in significant improvements in energy and water consumption, carbon footprint, waste generation, and renewable energy use

Mapping cutting-edge replenishment practices to the Advanced Planning and Optimisation module of SAP Responding to constantly changing consumer demand patterns, leading to high fill rates; now an industry benchmark, with 95%+ customer service levels across key geographies Improving 'freshness' of products at time of sale, better logistics practices, better product traceability, and reduced obsolescence through the project on bar coding shippers Enhancing manufacturing capacity across geographies Piloting the Internet of Things (IoT) in manufacturing and logistics Leveraging the Goods and Services Tax (GST) in India through redesign of the distribution network Commissioned a state-of-the-art hair extensions facility in Mozambique Agile manufacturing through smart automation and robotics

sumer demand pattern within 24 hours. It means that we can’t afford to miss any shipment on any lane. On the other hand, each vehicle carries large assortment of our products, which needs to be optimised for weight and volumetric capacity of the vehicle.

Fostering Relationships

The entire planning is done by us internally as it is key to the replenishment process. Transportation is outsourced.

Agile Fulfilment

Future-ready Investments

Our way of working, which is based on TOC and replenishment, requires that Logistics Service Providers (LSPs) are as flexible as our factories and vendors. LSPs without this flexibility would be a drag on our system. We expect our LPSs to be flexibile and committed. As of now, we are still on the lookout for such LSPs. In the mea nt ime, we work wit h several transport companies who offer this flexibility.

Megatrends

Supply chains need to be focussed on serving the needs of their consumers, which can’t be forecasted. As a result, the focus shifts to demand sensing on a continuous basis coupled with superfast response to match supplies to the actual demand. We do expect our consumers to get even more demanding in future in terms of variety, availability and freshness. Industry 4.0 tools will be important in future for better tracking and efficient running of vehicles. Warehousing automation using robotics and drones will help in speeding up deliveries. CC

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Shipper Speaks

Investment in Technology is need of the hour for optimising supply chain visibility Real-time information and supply chain visibility are the two aspects which no company can afford to overlook, be it FMCG, lifestyle or a retail company. Somnath Chatterjee, CPO, ITC Food Division briefs Saurabh Sharma on some of the best and unique practices undertaken by the company, with the objective of standing out in the food logistics sector.

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ot w it h st a nd i ng t he humble beg i n n i ngs, ITC's existence arose from a leased office in Kolkata's Radha Bazar Lane to one of Kolkata’s most venerated landmarks, the company’s headquarter building ‘Virginia House’. ITC’s multiproduct portfolio encompasses a wide range of Fast Moving Consumer Goods (FMCG) products comprising Foods, Personal Care, Cigarettes, Apparel, Education and Stationery Products, Incense Sticks and Safety Matches. These products are used by each and every household for their daily needs, and this makes ITC the most popular among customers In 2001, ITC forayed into branded packaged foods under ‘Kitchens of India’, ready-to-eat Indian gourmet dishes met with the delight of millions of households. In just over a decade and half, ITC's food business has grown to a significant size with the roll-out of numerous distinctive brands like 'Aashirvaad' atta, 'Sunfeast' biscuits, 'Sunfeast Yippee', etc.

Best Practices

Over the period of time, we have adopted some of the practices which had been long overlooked by many indus-

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tries. For instance, e-Choupal, a market-led supply chain business model can invigorate the competitiveness of Indian agriculture which unfortunately, is characterised by fragmented

Tracking the movement of goods, and automatisation of warehouse activities after considering multiple real-life constraints and existing historical data like traffic, shipment volume, shipment and vehicle type, stop duration, delivery times is influential to enhance the efficiency of the whole process. farms, weak infrastructure and the involvement of numerous intermediaries. e-Choupal can also trigger a virtuous cycle of higher quality and productivity, higher income, enlarged capacity for farmer risk management, larger investments. Real-time information and customised knowledge provided by e-Choupal enhance the ability of farmers to take decisions and align their farm output

with market demand, helping secure quality and productivity.

Innovations and Warehousing Strategies

Technology plays a vital role in supply chain visibility, database planning and communication. Tracking the movement of goods, and automatisation of warehouse activities after considering multiple real-life constraints and existing historical data like traffic, shipment volume, shipment and vehicle type, stop duration and delivery times, is influential to enhance the efficiency of the whole process. For companies to stay competitive, they must carefully evaluate the areas of their operations that have delayed their order picking and delivery processes. The below standards can help companies efficate operations to receive orders, find merchandise and increase staff productivity.  Adopting technology: It has to be the first order of business for better warehouse management. Warehouse management has even gone automated with mobile RFID and barcode reader apps for smartphones and tablets. Warehouse staff can use the apps online and offline to record inventory information and update data instantly, increasing the workflow productivity for your sales team to take orders and handle customer service calls. Personalised warehouse inventory apps on mobileapplication development platforms. This enables staff to have easy access to back-end data services at the touch of an app.  Right storage options: Fast-moving items that move in bulk can be kept in cartons and pallet racks on the floor level for easy handling when placed into the store or out to deliv-


ery trucks. Items that are slow movers can be put in the appropriate bins on shelves. Heavier products will need to be put on lower shelves or on pallets.  Flexible Warehouse Design: Built-in flexibility allows warehouses to make best use of space and ensure efficient work flow, helping warehouses keep up with the ever-changing customer demands for new and better products  Keep standard equipment in working order: A productive warehouse is one where all standard equipment is kept in working order. Developing a standard equipment maintenance schedule where all equipment is serviced during off times must become a top priority ITC foods developed va r ious unique technologies for better supply of products. One such initiate is 'ITC VARADHI' connecting buyers with potential suppliers. The same kind of technology is being used for mapping inventory levels with final sales of the products at market place.

Managing Supply Chain Network

For agile and timely movement of goods, logistics networks have to be designed and managed in such a manner that the whole process of delivering incurs minimum cost and maximum efficiency. Our logistics network is crated with fewer hierarchies, multi-commodity flows, consolidation-in-transit, direct shipping, cross docking, and supply-flow optimisation concepts. All our factories/warehouses are located near to consumption points so as to improve service levels and reduce average travel time to customers. It also helps reduce outbound transportation costs in order to offer better value to customers. Besides, as ITC outsources the transportation of both pre-finished and finished goods, in-plant logistics at factory level, storage of finished goods within own as well as in outsourced facility, Logistics Service Providers (LSPs) are of vital importance to us.

LSPs are a multi-layer or multi-tier integration of various players who have the niche segment expertise to manage one or many functions of logistics which is impossible for companies to coordinate and manage. LSPs manage flow of goods from point of origin of raw materials through the manufacturing cycle to the point of consumption, by eliminating unnecessary trade barriers and optimising transportation and customer feedback. They also offers value added services like labeling, packaging, palletising.

Mitigating Challenges

A supply chain is basically the conglomeration of people, resources,

All our factories/ warehouses are located near to consumption points so as to improve service levels and reduce average travel time to the customers. It also helps reduce outbound transportation costs in order to offer better value to customers.

knowledge, and activities which help in transporting the products from source to destination. FMCG sector in particular is faced with some peculiarit ies. For i nsta nce, ITC foods launched potato chips under the brand name 'Bingo'. The main raw material is chip grade potato. The availability and quality of chips grade potatoes is a major constraint. Being a seasonal commodity, managing its supply chain and ensuring timely connectivity was managed through specialised and customised transport movements from farm/cold store. Besides those, some of the other challenges are:  To ensure on-time delivery of products including all SKUs at market place.  Transportation of customised products.  Seasonal commodities and their movement/timely connectivity.  Managing sudden surge of demand/ slowdowns in new product launches. However, robust adaptation of latest technology for storage, distribution and tracking, coupled with efficient transportation and planning for determining the best delivery routes, can help allay the risk of inordinate delays in delivery and also helps furnish better customer satisfaction. CC

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Govt to pick O&M operator for `2,904 cr Kaladan project

India, Nepal to amend trade treaty

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ndia and Nepal have agreed to amend the Trade Treaty, Transit Treaty and the Railway Services Agreement (RSA) on a reciprocal basis. A twoday meeting held on June 6 and 7 in New Delhi has paved the way for the amendment of the aforementioned treaties and agreement to address some of the issues raised by Nepal. "There is a clause in the Indo-Nepal Treaty of Trade and Transit, 1991, which only

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allows present movement by road and rail from India to Nepal. This clause is now being amended, which is at a very advanced stage. The Union Ministry of Commerce is taking the lead in the amendment," Inland Waterways Authority of India Chairman Pravir Pandey said. "Three water routes- the Kolkata-Sahebganj waterway

and then to Nepal's Biratnagar by road, Kolkata-Kalughat near Patna by waterway and then to Birgunj and the Kolkata-Varanasi (waterway) and then to either Nepalganj or Mahendra Nagar, have been accepted by both the countries. There is in-principle approval of all these agencies of India and Nepal on the three routes," Pandey said.

Government to integrate FASTags with e-way bills to check GST evasion

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he government has informed the Lok Sabha that it proposes to integrate a FASTag Bank Mechanism with e-way bill and Logistic Data Services to track movement of goods and check GST evasion. “The Government is contemplating integration of e-Way Bill mechanism of GST with FASTag System of National Highway Authority of India (NHAI). The aspect of Logistic Databank integration with FASTag System is being examined,” Union Finance Minister Nirmala Sitharaman said in a written reply.

The GST council has formed a Committee of Officers comprising officers from Central government, State governments, GSTN (Goods and Services Tax Network), NIC (National Informatics Centre), GST Council, to examine the issue of the use of RFID data for the strengthening of

E-way bill mechanism under GST. The representatives of NHAI and NPCI (National Payments Corporation of India) were also co-opted in the committee. Sitharaman said, “The representatives of NHAI and NPCI (National Payments Corporation of India) were also co-opted in the committee. The Committee of Officers has submitted its report to the GST Council, recommending integration of FASTag system with E-way bill mechanism.”

he Ministry of External Affairs (MEA) will pick an operation and maintenance (O&M) contractor through a tender for commercial utilisation of port and inland water transport facilities developed under the Kaladan Multimodal Transit Transport Project (KMTTP). The `2,904.04 crore Kaladan Multimodal Transit Transport Project seeks to create an alternative access route to the North-Eastern region by developing a multi-modal mode of transport for shipment of cargo from the Eastern ports of India to Myanmar as well as to the North-Eastern part of India through Myanmar. The project linking Sittwe Port in Myanmar to the India-Myanmar border is expected to contribute to the economic development of the North-Eastern States, by opening up the sea route for products. It also provides a strategic link to the North-East, thereby reducing pressure on the Siliguri Corridor.

SpiceJet commences Durgapur-Mumbai UDAN flight

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piceJet has flagged off a daily direct flight on the Durgapur-Mumbai route, under the regional connectivity scheme—Ude Desh Ka Aam Nagrik (UDAN). The under-served market of Durgapur is the airlines 13th destination under UDAN and with with the launch SpiceJet now operates a total of 45 flights connecting 25 cities under UDAN, the airline said. The route was awarded under UDAN III and is exclusive to the airline thereby making it the only carrier to offer flight services on the sector.

Tropical Transport Systems (I) Pvt. Ltd SERVICES

Air freight Sea Freight Door to Door Warehousing Project movements (Complete Global logistics supply chain service providers) OFFICE: Khasra No. 10/10, Near Karan Dharam Kanta, Old Gurgaon Road, Samalkha, New Delhi -110037 | TEL: +91-11-25061111,13,14,15,16,18 | MOBILE: +91 9810087187, 9999176262 | EMAIL: info@tropicalindia.com | WEBSITE: www.tropicalindia.com


n ews Warehouse leasing witnesses 77 per cent growth in FY19: report

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he wa rehous e space leasing has witnessed a growth of 77 per cent year-on-year from April 2018 to March 2019 period, according to a report launched by a real estate consulting firm Knight Frank. The report titled, 'India Warehousing Market 2019' mentioned that the manufacturing sector which accounts for 80 per cent of warehousing market is estimated to be at 68 million sqm (739

million sq ft) in 2019 and is expected to grow to 86 million sqm (922 million sq ft) by 2024. According to the report, Kolkata witnessed highest year-on-year surge with 191 per cent in the warehousing leasing volume followed by Bengaluru and Hyderabad which witnessed growth of 147 per cent and 96 per cent respectively. While cities such as Coimbatore, Guwahati,

Ludhiana, Nagpur and Lucknow are also gaining prominence in terms of the growing demand for warehousing space. The report further mentioned that 83 per cent of the investments in warehousing asset went into new developments while 10 per cent was made into ready assets and the remaining 7 per cent was into combination of ready and under construction assets.

Logistics sector to add 1.49 lakh new jobs in April-September period of FY20

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he logistics sector is likely to add 1.49 lakh new jobs in the April-September period of this financial year mainly triggered by the growing online seller base in smaller cities, according to the TeamLease Services biannual

‘Employment Outlook’ report. The report for the April-September 2019-20 estimated that the logistics sector will witness a growth of 3 per cent adding 1.49 lakh jobs. As per the findings of the report, with 31,480 new jobs Mumbai tops the list of cities with maximum opportunities for talent in logistics sector followed by Delhi with the addition of 28,510 new jobs in the same period. Tier II cities witness a

huge rise of five per cent in hiring sentiment in the AprilSeptember 2019-20, followed by tier-III towns and rural areas of two per cent growth each, it said. Further, the report revealed that all tiers of the hierarchy in the sector, except the senior levels, will witness a healthy increase in hiring sentiment. The hiring outlook for mid-levels is expected to grow by four per cent and the entry and junior levels by three per cent each, it added.

My Logistics Gurukul to prepare job-ready talents for the Cargo Industry

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ith the aim to train and scout the best talents, and prepare them for successful careers in the logistics industry, India’s leading airfreight forwarders- Skyways Group has launched a training institute ‘My Logistics Gurukul’, which recently completed its 35-day training of the first batch of students. The intensive training course, ‘MLG 001 Freight Forwarding Basics’ included modules specially designed by industry experts. The students worked on case studies and were educated on the execution of documents, giving them the opportunity to learn the several aspects of air and ocean freight. Yashpal Sharma, MD, Skyways Group launched the initiative in the wake of the Team Lease report which predicted skill gaps, lack of knowledge and awareness about the logistics industry and its functionalities among people.

Rivigo launches national freight index ivigo, a technology-enabled RNational logistics company, launched the Freight Index (NFI) with an

aim to bring transparency to the road freight market place and transforming the logistics sector. It provides a live spot rate on over 7 million lanes and vehicle type combinations. The NFI is the barometer of the road freight market in India and is based on Rivigo rate exchange. Both the index and the exchange are based on Rivigo’s machine learning and economics powered pricing algorithms, which are continuously improving on accuracy.

SERVICES

A World One Team

International air freight, International ocean freight, Multi-modal service, Cross border road freight, Domestic transportation, Bulk freight shipping, Customs entry, Cargo insurance, Integrated logistic services, Warehousing

AWOT Global Logistics (India) Private Limited

4 Floor, M.R. Arcade (Opp Vijaya Bank), Near Byrathi Cross, Hennur-Bagalur Road, Bengaluru 560077 Tel/Fax: +91-80-28445044 ext 111 Web: www.awotglobal.com GLOBAL NETWORK: CHINA, HONG KONG, TAIWAN, KOREA, USA, CANADA, SINGAPORE, VIETNAM, THAILAND


n ews Compliance with security standards earns Allcargo Mundra CFS C-TPAT certification

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Air freight demand may touch 1.1 million tonnes by 2025: report

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he domestic air freight demand is expected to touch 1.1 million tonne by the fiscal 2025 at a compounded annual growth rate (CAGR) of 7-9 per cent propelled by rapidly growing Ecommerce activity, increasing capacity and improving airline connectivity to smaller cities, according to a research note. However, cargo capacity of airlines is expected to grow

at a higher CAGR of 13-15 per cent, given the impending fleet expansions. This will further shift the market towards airlines, ratings agency Crisil said. The estimated `600-700 crore domestic dedicated air freighter market stood at 0.8 million in 2019, logging a CAGR of 8 per cent in the last five fiscals, it said. Ironically, the domestic dedicated freighters fleet cur-

rently stands at just seven planes compared with about 680 passenger aircraft, including of the grounded carrier Jet Airways, it said. According to Crisil, shorter lead distances compared with global freighters, lack of significant niche cargo, and intense competition from airlines which also carry cargo in aircraft belly are expected to continue restricting growth of domestic dedicated freighters.

Essar Ports clocks 9.2 MT throughput in April-May 2019

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ssar Ports, which operates four terminals on the east and west coasts of India, has registered a 29 per cent growth in cargo volumes in the first two months of the current financial year (April-May 2019), with a throughput of 9.2 MT (million tonnes). The growth has been driven by a 131 per cent increase in third-party cargo when compared to the same period in the previous financial year. Cargo volumes from captive customers also grew by 11 per cent, according to a company statement. The overall cargo it handled in the first two fiscal months in 2019-20 was 9.2 MT (7.2 MT in April-May 2018), while captive cargo was 6.7 MT (6.1 MT), and third party cargo stood at 2.5 MT (1.1 MT).

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In May 2019 alone, the four terminals cumulatively handled about 4.8 MT of cargo, a growth of 34 per cent when compared to nearly 3.6 MT of cargo handled in May 2018.

llcargo Logistics Ltd's Mundra container freight station (CFS) in Gujarat recently received the Customs-Trade Partnership Against Terrorism (C-TPAT) certification for complying with global security standards. The Allcargo Mundra CFS has scored in the high 90s to win the prestigious C-TPAT A rating. The Allcargo Mundra CFS has scored in the high 90s to win the prestigious C-TPAT A rating, which is supported by the Department of Homeland Security and U.S. Customs and Border Protection. The C-TPAT certification covers the inbound and outbound cargo handling at the CFS

FarEye announces AI-based Real-Time Dynamic Routing

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igital logistics platform, FarEye, has announced the launch of its AI-based real-time dynamic routing feature to empower on-time and cost-effective deliveries which will majorly impact the hyperlocal and grocery delivery industry that demands quick turn-around-time. The technology empowers businesses to minimise empty mile journeys, eliminate vehicle idling time and optimise the productivity of delivery executives by assigning them highly efficient routes. FarEye’s real-time dynamic routing capabilities help enterprises by automatically dispatching on-demand orders. The orders are assigned based on capacity, driver proximity and service time constraints. It also ensures that ad-hoc delivery requirements and cancellations are met while keeping costs, SLAs and ETAs intact.


n ews India-Japan research project to ease traffic congestion

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joint research project “Multi Modal Smart Tra n spor t at ion (M2Smart)”, by Japan and India under a scheme of “Science Technology Partnership for Sustainable Development (SATREPS), was launched at Indian Institute of Technology, Hyderabad (IIT-H), in order to develop low-carbon scenarios through research and demonstration, human resource de-

velopment through mutual human resources exchanges. Designed collaboratively by Japan Science and Technology Agency (JST) and Japan International Cooperation Agency (JICA), and jointly undertaken by IIT-H, Nagoya Electric works Co Ltd, Nihon University and Tokyo Institute of Technology, this joint research project aims to establish a reliable and common

approach for grasping the traffic situation in cities by building a system that effectively utilises mobile devices, traffic sensing, big-data analysis and network technology. The team has launched the field test bed system in IIT-H campus and NH-65. This field test bed system comprises of several key components of traffic management system such as real time traffic flow monitoring cameras, speed detection safety system, traffic signal lights and remote environment gas sensing.

Palakkad rail division to get additional coal traffic from New Mangalore Port

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senior official of the Southern Railway Zone has asked the Palakkad division of the zone to be ready to handle additional coal traffic from New Mangalore Port. S Anantharaman, Principal Chief Operations Manager of Southern Railway, said the launching of Chettinad Mangalore Coal Terminal Pvt Ltd at New Mangalore Port will improve coal loading. He asked the Palakkad division to be ready to handle additional traffic. It is to be mentioned here that the Chettinad group’s director, V Chandramoleeswaran, who was in Mangaluru recently to attend the inauguration of the newly constructed termi-

nal for mechanised handling of coal at berth no 16 of New Mangalore Port, had stated that the fully automated coal terminal is capable of handling 10 million tonnes per annum (MTPA) of common user coal. At present, the port is handling around 4 MTPA of common user coal.

Mobile technology investment key to improving business performance: Zebra study

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n increasing number of organisations across s e c tor s l i ke r e t a i l, transportation and logistics, manufacturing and healthcare are betting on mobile technology to enhance employee productivity, improve order fulfilment accuracy and increase revenues, a report by Zebra

Technologies said. Zebra, which offers hardware and software solutions like printers and bar code scanners, in its study said 58 per cent respondents in the Asia Pacific region had stated they are expanding mobile technology to enterprise-wide use.

This number is expected to reach 97 per cent by 2023, it added. Also, 74 per cent respondents said they rely on paper-based systems for over one-fifth of their field operations and this is expected to reduce to almost 35 per cent by 2023 as more organisations embrace mobile technology.

Vistara to launch international flights in second half of 2019

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mid a global crisis in the aviation sector, full-service carrier Vistara plans to launch international services from the second half of 2019. “We see India as a growing market. We are here for the long run,” Leslie Thng, CEO, Vistara said on the sidelines of the annual general meeting of airlines’ grouping IATA. Without providing specific details, he said the airline plans to start out international operations in the half of 2019. It had planned to launch overseas flights in the half of this year.

Mahindra Logistics awaits nod to use drones in warehouses

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ahindra Logistics, which has done trials using drones at one of its warehouses, is awaiting regulatory approvals before it starts using unmanned aerial vehicles (UAVs) to improve the accuracy of the inventory and lower labour cost. The move comes at a time when warehouses are getting increasingly bigger and logistics companies are trying out newer technology to offer better services to their customers. The drones will not only count the number of products being stored, but will also scan them to determine their nature much faster.

Ramco Systems bags order from Air Caledonie

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viation software provider Ramco Systems has won an enterprise, resource, planning (ERP) modernisation programme from Air Caledonie, the domestic airline of New Caledonia. As per the agreement, Ramco Systems would implement its advanced modules for supply chain management, compliance management, flight log management, employee records among others. The maintenance and engineering solution would be used to integrate all of Air Caledonie’s business operations into a single system. july 2019 - CargoConnect

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International

Saudia Cargo launches new flights to Athens and Marrakesh

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audi Airlines Cargo Company launched two new cargo routes from-to Athens, Greece and Marrakesh, Morocco starting June 2019, aiming to meet the growing demand for cargo operations & stimulate trade movement to/from both destinations. Athens is Saudia Cargo’s new destination to be operated year-round, with four weekly flights from Riyadh starting in June on-board

the Billy-capacity of Saudia A-320 aircraft. Furthermore, Marrakesh destination is operated by Seasonal flights from the 2nd of June till October 25th with three weekly flights from Jeddah through the Billy-capacity on board Saudia 787 aircraft. Through these flights Saudia Cargo aims to increase its presence in the African and European continent.

Emirates eyes more seats on Dubai-India route

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ulf carrier Emirates is looking for more seats to offer on the Dubai-India route, which has not seen an increase in bilateral rights for the last five years, and expects discussions to restart bet ween t he t wo gover nments, a top official said. Bilateral rights refer to an agreement between two countries that allows each

other's airlines to operate services with a specific number of seats. The existing bilateral rights allows carriers from Dubai and India to offer nearly 1,30,000 seats per week on their flights to each other's territory.

AirBridgeCargo expands its passive pharma solutions

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irBridgeCargo Airlines (ABC) and Zurich-based cold-chain ULD manufacturer SkyCell have sealed their partnership for the lease of all types of SkyCell containers to meet the demand for evolving volumes of passive pharmaceutical shipments, which reached around 3,500 tonnes for 1Q 2019 YOY and demonstrated a two-fold increase. The SkyCell line of passive containers is capable

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of keeping the internal temperature within the range of +2° to +8°C and +15°C to +25°C under external temperature excursions from –35°C to +65°C to meet the requirements of various pharmaceutical manufacturers, as well as logistics companies involved in a complex transportation process. “With SkyCell containers we have increased the total number of cold-chain special

"The bilateral (air traffic) rights between India and Dubai is the biggest single problem. There has been no seat increase between India and Dubai for the last five years... Dubai-India is (one of) the most profitable routes,” Emirates Airline President Tim Clark said. Against this backdrop, he said it makes a whole lot of sense for the Indian government to open up the opportunity. packaging solutions partners till three, aiming at embracing all leading manufacturers to cater to the needs of different customers. SkyCell data-collection enablement supports our intention to move further with ‘Internet of Things’ penetration into the industry and step aside from peer-to-peer data sharing to information transparency and availability. On top of this, it fosters an extra piece of mind for our customers to have real-time data in one click,” – stated Fedor Novikov, Deputy General Director, Products, AirBridgeCargo Airlines.

Korean Air inks ULD management agreement with Unilode

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orean Air has inked five-year ULD management contract with ULD management solutions provider Unilode Aviation Solutions. As part of this agreement, Unilode will manage Korean’s air entire fleet of more than 16,000 containers and pallets. This new agreement creates one of the largest ULD management partnerships in the industry and will see the setup of a regional ULD management office at Korean Air's hub in Incheon and the takeover of Korean Air's existing ULD maintenance and repair facility at Incheon International Airport. Unilode will provide additional services including the management of Korean Air's cool containers and horse stalls, and will also take care of the supply of pallet accessories within Korean Air's global network. Unilode will supply pallets and lightweight AKE containers from its global ULD pool.

Geodis opens new logistics facility in Northern France

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EODIS, a leading global supply chain operator, has opened its new 48,000 square metre logistics campus in Douvrin, Hauts de France. This facility, located near the relevant regional distribution hubs, will primarily serve retail and textile customers. Also, it will handle three million e-commerce orders yearly, according to the company. The site is equipped with new state-of-the art technology such as corrugators, pick-to-light equipment, automated conveyors, and others. More than €3 M has been invested in equipping this campus which is classified as lower-tier according to the EU’s Seveso Directive, allowing GEODIS to manage seasonality and specificities of regulated products.


International Amsterdam, Atlanta airports ink cargo trade and investment MoU

Amazon expands air cargo fleet with 15 more planes

fter signing a Memorandum of Understanding (MoU), Amsterdam Airport Schiphol (AMS) has collaborated with Hartsfield-Jackson Atlanta International Airport (ATL) to promote cargo trade and investment between metro Atlanta and the Netherlands. The MoU will enable an exchange From L to R: Ben Harris, Director, Supply Chain Ecosystem of data between AMS and ATL to Expansion, Metro Atlanta Chamber; Bart Pouwels, Head of Cargo, facilitate end-to-end planning and Amsterdam Airport Schiphol; Elliott Paige, Director of Air Service Development, Hartsfield-Jackson Atlanta International Airport; Amar More, capacity optimisation, extend the Director, Kale Logistics; Nanne Onland, Chief Executive Officer, Cargonaut. benefits of the AMS Cargo Community system to ATL, and boost trade flows with the aim to increase exports from ATL to between the respective air cargo gateways. AMS of agricultural and manufacturing From September 2019, and throughout goods produced in Georgia, which will be 2020, AMS and ATL will be working on the measured by an economic impact assessment formation of the Atlanta Cargo Network, study due in 2021.

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A

FedEx Ground to deliver 7 days a week year-round

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he US-based package shipping company, FedEx Ground, is set to deliver seven days per week all year-round from the beginning of January 2020. Having been launched as an extension to its current offering, the company has confirmed that the expansion will allow FedEx to meet the

increasing demand for parcel shipments. In a statement, FedEx president and COO Raj Subramaniam commented: “The average daily volume for small parcels in the U.S. is expected to double by 2026.” With 3PL making six-day weeks the norm for deliveries, the company introduced an

Extra Hours service, which ships retailers’ afternoon orders on the same day. The firm has continued to increase its operational capabilities in order to handle large package deliveries, which are usually followed by more fees and white glove services. “These large packages now comprise more than 10% of FedEx Ground’s volume, and the growth is expected to continue” Subramaniam added.

MASkargo flies four tonnes of frozen durian to China

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urian exporter BEHO Fresh Sdn Bhd MASkargo appointed Malaysian Airlines’ cargo subsidiary Maskargo to deliver 4 tonnes of frozen whole durian fruits to Shanghai. The freighter aircraft departed KLIA at 0600hrs and touched down at the Shanghai Pudong International Airport at 1735hrs

after a scheduled stop in Kota Kinabalu. Jason Thomas, chief commercial officer of MASkargo said, “The boom in durian export follows the deregulation by China which now allows whole durians from Malaysia to be imported. The fruits are a big hit in China and we are happy to be part of this demand.”

Thomas says that MASkargo is working closely with the Malaysian Quarantine and Special Services Department to ensure that all stringent export requirements are met.

ollowing news from earlier this month that FedEx was dumping Amazon from its air cargo service, the latter has announced the expansion of its own air delivery network, Amazon Air. The retailer says it is leasing an additional 15 Boeing 737-800 cargo aircraft from partner GE Capital Aviation Services (GECAS). These will join the five Boeing 737-800’s already leased from GECAS, announced earlier this year. The aircraft will fly out of more than 20 US air gateways in the Amazon Air network. The Amazon Air network, then called Prime Air, was first launched in 2016, with the goal of speeding up Amazon’s E-commerce deliveries, particularly for its Prime members. But over the years, the competition with partners-slash-rivals like FedEx has heated up — and not only on air cargo, but also in newer areas like ground delivery robots and drones. At the end of last year, Amazon announced more aircraft additions for Amazon Air, bumping the network from 40 planes to 50. Today, it says it’s on track to reach 70 planes by 2021.

Lufthansa Cargo unveils new E-commerce unit

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he Germany-based cargo airline, Lufthansa Cargo, has confirmed a new wholly-owned subsidiary that is set to serve the crossborder E-commerce market. The new subsidiary, called heyworld, will integrate into Lufthansa’s existing cargo services and include offerings such as heyworld API that will enable customers’ existing ERP systems to be tailored pricing options and customised shipment tracking “at the package level.” Lufthansa says, “Ongoing digitisation has resulted in new standards with multiple layers, especially in the E-commerce segment, that go beyond the conventional core business of a cargo airline.” july 2019 - CargoConnect

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EVENTS IWS 2019 heralded the boom in India’s Warehousing Industry

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he 9th edition of India Warehousing Summit (IWS), the country’s most relevant and unique conference on the intra-logistics industry, from June 21 22, 2019 at Pragati Maidan, New Delhi, brought together 200+ delegates from sectorsFMCG, retail, E-commerce, electronics, and many more verticals making the conference truly versatile and relevant for all. The conference a l s o ho s t e d ove r 5 0 ke y speakers- govt officials, industry veterans, eminent personalities and think tanks who brought their knowledge and expertise to the floor. The

carefully curated agenda of this two-day conference was derived based on meticulous industry feedback and survey that the organisers of India Warehousing Show, Reed Manch Exhibitions team carried out. Day 1 of the conference witnessed White Paper Launch by JLL India. The White Paper themed ‘Indian Logistics and Warehousing: Tracing the Lifecycle’ aimed to display India’s position in the currently transforming phase of logistics. It gives a snapshot of current trend and market dynamics that will boost growth and pave

the way for the future. The sessions that followed touched upon the rapid rise of E-commerce, phenomenal growth of warehousing space and increased demand for smarter warehouses in the country, and also highlighted the changing market trends with regard to

CMA CGM launches the inaugural edition of Mov’India

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he CMA CGM Group with support from The IndoFrench Chamber of Commerc e a nd I ndu st r y (I FCCI) launched the first edition of its Mov’India conference on May 29, 2019 at St Regis, Mumbai. A first-of-its-kind initiative by the CMA CGM Group in India, the conference aimed at bringing together key stakeholders of the shipping and logistics fraternity for brainstorming and discussions into the relevant direction with key influencers

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decisive in shaping the course of the industry in the coming decade. The conference commenced with a spectacular unveiling of the logo and was based on 3 main themesintervention of new environmental technologies towards a cleaner shipping industry, digital disruption: the next wave of initiatives, and beyond the box: new horizons for the over dimensional cargo. The event was attended by approximately 250 members.

availability of warehouses in preferred locations and capacity requirement. On Day 2, discourse shifted from Warehouses towards the nuances of Last-Mile Delivery in FMCG sector, which concluded with thought provoking remarks from domain experts.


EVENTS

ESR presents Warehousing Excellence Awards 2019

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SR, a leading pan-Asia logistics real estate developer, owner and operator, presented the 2nd Wa r e h o u s e E xc e l l e n c e Awards on June 20, 2019 at Shangri-La Eros Hotel, New Delhi. This annual event which aims to highlight companies that are driving innovation and encourages industry leadership, was hosted on the first day of the India Warehousing Show and attended by over 350 stakeholders and industry leaders. A carefully selected independent panel of judges made the awards extremely niche. The awards hon-

oured the front-runners in intralogistics across 20 exclusive categories. Abhijit Malkani and Jai Mirpuri from ESR presented a set of awards to companies who are redefining the dynamics of India's warehousing and logistics sector. ESR congratulated their clients- Hondo Motor India (A unit of Honda Cars Ltd) for winning the Best Distribution Network Strategy award, Flipkart FC Team for receiving the State-of-theArt Warehousing Facility award and Amazon Seller Services Pvt Ltd for winning the award for Innovation in Last-Mile Delivery.

july 2019 - CargoConnect

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UpComingevents Logistics

EVENT: AUTOCONNECT 2019 ORGANISED BY: Surecom Media DATE: September 19, 2019 WHERE: Gurugram, India

AutoConnect is an yearly conference on the automotive logistics and supply chain industry of India. AUTOCONNECT 2019 is expected to bring together more than 200 leaders and key stakeholders from India’s auto supply chain who will deliberate on the various factors that affect India’s growing automotive logistics segment, future prospects and new avenues of automotive logistics business to propel India’s automotive supply chain to worldclass performance levels. To know more visit www.autoconnect.com

Warehousing

EVENT: Logmat & Warehousing South 2019 ORGANISED BY: Smart Expos & Fairs (India) Pvt Ltd (SEFIPL) DATE: July 11 – 13, 2019 WHERE: Chennai Trade Centre, Chennai Logmat & Warehousing South 2019 is the only exhibition of its kind in the southern region that is focussed on Material Handling, Storage, Warehousing, Logistics and Transportation. Visitors have the opportunity here to provide themselves with the latest information from the industry. For exhibitors, the fair is an excellent marketing tool to introduce new products, to establish business contacts, to strengthen their own brand and to maintain existing business contacts. To know more visit www.logmat.in

Road Transport

EVENT: 15th Annual 3PL & Supply

Chain Summit: Europe ORGANISED BY: Eye For Transport DATE: October 14 – 16, 2019 WHERE: Sheraton Brussels Airport Hotel, Brussels, Belgium European 3PL & Supply Chain Summit is an annual meeting which brings together the leading C-Level 3PL executives and their manufacturer and retailer supply chain counterparts to explore the future of supply chain and logistics. Over 450+ senior supply chain and logistics executives attend the event every year. To know more visit www.events.eft.com/eu3pl

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Event: World Road Congress Organised by: World Road

Association (PIARC)

Date: October 6 - 10, 2019 Where: Abu Dhabi, United

Arab Emirates With more than 1,200 international experts, leaders in the field of transport and active in the 22 Committees of PIARC, this Congress will focus on “Connecting Cultures - Enabling Economies.” To know more visit www.aipcrabudhabi2019.org

Cold Chain EVENT: All India Cold Chain Seminar 2019 ORGANISED BY: Reed Manch Exhibitions DATE: July 12 - 14, 2019 WHERE: Kunjamal 'N' Convention Center (KNCC), Agra The All India Cold Chain Seminar (AICCS) is an initiative by Federation of Cold Storage Associations of India. The seminar will host cold storage holders and the solution providers from the industry and the congregation will act as a catalyst for future trends in the cold chain industry. AICCS is expected to witnesses over 2000 delegates and more than 100 technological solution providers showcasing their innovations, products and services in the presence of policy makers. To know more visit www.aiccs.in

EVENT: 2nd International

RAC India ExCon

ORGANISED BY: PHD

Chamber of Commerce and Industry, NIRATA, and Orange Marcom Services DATE: October 17 – 19, 2019 WHERE: NSIC Grounds, Okhla, New Delhi RAC India ExCon is North India’s major exhibition of HVAC&R and Cold Chain. The exhibition is focused on the manufacturers and suppliers of Refrigeration, Air-conditioning, Cold chain and allied industries. The comfortable environment facilitates holding negotiations, meetings, signing of contracts. To know more visit www.racindiaexcon.com

EVENT: 8th India Cold Chain Show ORGANISED BY: Reed Manch Exhibitions DATE: December 04 – 06, 2019 WHERE: Bombay Exhibition Centre (BEC), Mumbai, India India Cold Chain Show brings together Indian and international manufacturers and suppliers to meet end-users, distributors, consultants and other key industry players from across the globe. The show allows visitors and exhibitors to build new and strengthen existing contacts, learn new industry trends, technologies and upgrade their products and services. To know more visit www.indiacoldchainshow.com


2019

AICCS

12-13-14 JULY 2019 Kunjamal N Convention Centre (KNCC), Fatehabad Road, Agra

All India Cold Chain Seminar

National Seminar & Expo for the Cold Chain Industry

Source new technologies for your cold storages ! Federation of Cold Storage Associations of India & Reed Manch Exhibitions invites cold storage owners to attend the 14th edition of All India Cold Chain Seminar, an annual seminar and exhibition on cold chain industry.

2000+

80+

100+

2500+

3600

Delegates

Speakers

Exhibitors

Visitors

Sqms of area

Have you registered yet to visit AICCS ?

REGISTER NOW

www.aiccs.in FOR EXHIBITING, CONTACT:

Neeraj Negi M: +91 96541 81043 E: neeraj.negi@reedmanch.com

PRESENTED BY

EVENT MANAGED BY


APPOINTMENTS SpiceJet chairman Ajay Singh elected to IATA Board

Achim Martinka named as VP Germany by Lufthansa Cargo

India’s low cost carrier SpiceJet’s Chairman and Managing Director Ajay Singh was recently elected to the board of the International Air Transport Association (IATA), less than three months after the airline joined the global grouping. SpiceJet in a release has said that Singh has been appointed for a three-year term to the IATA board. He would participate in providing policy directives and guidance to IATA industry committees and to their subsidiary bodies. In March, SpiceJet became the first Indian low cost carrier to take membership of the IATA, a grouping of around 290 airlines.

Achim Martinka has been named as the new VP Germany, according to the official statement from the German carrier. Martinka began his career at Lufthansa Cargo in 2000 as its senior manager global accounts. After various positions in Europe, he moved to Atlanta in 2010 as VP responsible for the Americas, before being appointed VP Europe & Africa in Frankfurt in 2016. Since 2017, Martinka has been responsible for One Cargo, a project that aims to strengthen the cooperation between Swiss WorldCargo and Lufthansa Cargo.

Sanjeev Gadhia to take over as vice chairman at TIACA

Nicola Caristo new secretary general of Cool Chain Association

CEVA appoints new Executive Vice President Global Automotive

Niki Frank is DHL Global Forwarding’s new head of India business

Carsten Spohr is the new IATA Board chairman

Sanjeev Gadhia, founder and chief executive officer (CEO) of Astral Aviation, will become the vice chairman of The International Air Cargo Association (TIACA) starting next month. Gadhia has over two decades of air freight experience, and became the first African member of the TIACA Board in 2017. He is also vice chairman of the African Airline Association (AFRAA)’s Cargo Committee.

DHL Global Forwarding (DHL GF) has appointed Niki Frank as managing director for DHL Global Forwarding India. Frank has spent the last seven years leading global transformation initiatives for DPDHL Group and DHL Global Forwarding. Most recently, he served as Senior VP for Global Business Strategy, and led the Certified International Forwarder (CIF) program across DHL Global Forwarding’s operations worldwide.

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Nicola Caristo of Alha Group has been named as the secretary general for the Cool Chain Association (CCA). Caristo has worked in a variety of roles during a 22-year career for the Alha Group, an Italian air cargo logistics provider. He is also one of the 25 members of the International Air Transport Association’s Time and Temperature Working Group, which develops and maintains standards for the transport of healthcare goods.

Lufthansa Group chief executive officer Carsten Spohr has been appointed as chairman of the IATA Board of Governors (BoG) for a one-year term effective from the conclusion of the 75th IATA Annual General Meeting in Seoul, Republic of Korea. Spohr, who is the 78th chair of the IATA BoG, is also chairman of the Executive Board of Deutsche Lufthansa AG since May 1, 2014. In this role, he manages the Lufthansa Group comprising the business segments Network Airlines, Eurowings and Aviation Services.

Dave Dudek has been promoted to the new role of executive vice president Global Automotive sector for CEVA Logistics. Dave brings a wealth of automotive experience to his new role having previously worked on both the manufacturing and logistics sides of the business. He already has excellent working relationships with CEVA’s core customers and will be immediately focused on further developing the company’s automotive reach.

Thomas Sonntag Takes Over the Management of Jettainer

Thomas Sonntag will take over at the helm of Jettainer GmbH, the leading international service partner for outsourced ULD management. Sonntag holds a degree in mechanical engineering and has spent more than ten years in various management positions at Lufthansa Cargo acquiring comprehensive industry know-how and an excellent network of relevant stakeholders throughout the world. Previously, he held various management positions at Siemens and ABB, among others.


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PEOPLECONNECT Madhav Thapar

Vice President- South Asia, C H Robinson Tell us about your journey so far! My entry into the logistics industry happened accidently in 1983. Having completed my Master’s degree in English literature, I was all set to pursue my career as a novelist or journalist. Plans changed after I called on a family friend upon his request, and then he asked me to join his logistics team in Kolkata. I accepted the offer on impulse and in my first month at work, I had many occasions to question my decision. Multiple factors like 18/7 working days, an ‘office’ in a leaky tin shed, and alien terminology, made me want to run away. However, before I could realise it, I was hooked. Decades have passed and I have never thought of leaving the profession. The excitement of learning something new every day, working with customers to serve all their transportation needs, and facing diverse challenges remains as fresh today as it was so many years ago. How has the industry changed from the time you stepped in? What major transformations have you observed in the industry in terms of

technology, manpower, practices, government regulation, etc.? Technology has been the biggest change. From the days of the telex to Skype, many things have changed. On the work front, EDI and automation of systems has resulted in much faster processing and turnaround times. Where do you see the graph of the logistics industry moving in the coming decade? Logistics is an essential piece for local and global businesses alike. Therefore, as long as commercial activity continues, the logistics graph would persist to rise. Any specific belief or value you work and live by? How do you define success? Never have regrets. Always look forward. Success is defined by what people remember you for. Apart from work, what are your other interests and hobbies? Recently, I have embarked back on my love of writing. I am the author of two novels. Besides, I am an avid reader. I also have a love for sports and travel. Any message you would like to give to those who aspire to work in this industry. Logistics is not the most glamorous place to be. However, if you want to learn constantly, interact

globally and evolve continuously, there is nothing to match this industry. Experts around the globe who helps to manage customer’s logistics from start to finish and make sure all potential problems are resolved in real-time, creates an exciting environment with multiple opportunities to learn and adapt to. CC

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Interviewed by Upamanyu Borah

Success is defined by what people remember you for!


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Cargo Connect July 2019  

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