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VOL X ISSUE IV MARCH 2019 `20

12 Cargo

Security: Maintaining a Delicate Balance

40 Air

Cargo on Paperless Trail

48 IoT:

Intelligence in Supply Chain


YOUR VULNERABLE CARGO IS IN SAFE HANDS WITH TURKISH CARGO At Turkish Cargo, we transport your vulnerable cargo to the most countries with utmost care and commitment.

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Contents

Volume X • Issue IV • MARCH 2019

Publisher Smiti Suri Special Correspondent Upamanyu Borah Senior Reporter Smita Kumar Director Ajeet Kumar

40

20 COVER STORY

Air Cargo Poised to Grow Across Asia

SPECIAL FEATURE

Air Cargo on Paperless Trail

focus

feature

IoT: Intelligence in Supply Chain ............48 Infrastructure

INTERVIEW

IAS, Special Secretary (Logistics), Department of Commerce, Government of India ................58

Wilson Kwong

Chief Executive, Hactl ...................................60

Marketing Executive Akash Gupta

Sr Designer & Visualiser Ashok Saxena Designer & Visualiser Mayank Bhatnagar

Alaina Shum

General Manager, Aviation Logistics at Airport Authority Hong Kong .........................62

FRONTLINE ..............................................6 buzz ........................................................8 guestcolumn ......................................64 Technology ..........................................65 Shipper Speaks .............................66-68 NEWS ...............................................70-76 INTERNATIONAL NEWS .....................78-79 APPOINTMENTS .....................................80 UPCOMING EVENTS ................................81 events ............................................82-84

Bogibeel Bridge to ring in economic prosperity and bolster defence logistics ....................................54

Asst Manager Marketing Mehuli Choudhury

Accounts & Administration Nitish Kumar

N Sivasailam

Cargo Security: Maintaining a Delicate Balance ....................................12

Marketing Manager Rahul Arora

PEOPLECONNECT kruti jobanputra

Director, JWC Logistics Park Pvt Ltd ..............................86

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

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


frontline “Our government is giving importance to improve the highway, railway, airway and power situation in Arunachal Pradesh. Work is going on for projects worth `13,000 crore in the state. In the past 55 months, I have paid several visits to Arunachal Pradesh and today inaugurated and laid foundation of projects worth over `4,000 crore.” Prime Minister Narendra Modi asserted while laying the foundation stone for construction of greenfield Airport at Hollongi on Feb 9 this year.

“The rise of fuel prices has been an issue in recent times but can be dealt with through an exchange between the minds in the industry. Also there will be zero tolerance for any safety violation, and as the demand for air travel keeps rising, the industry need to ensure safer, sustainable and smoother trips.” Minister of Civil Aviation and Commerce and Industry Suresh Prabhu highlighted at Global Aviation Summit 2019 in Mumbai.

“To promote ‘Make in India’ initiative, the government has rationalised customs duties and procedures. Customs authorities are also introducing comprehensive digitalisation of export and import transactions, and leveraging electronic tagging technology to improve export logistics.” Finance Minister Piyush Goyal said while presenting the Budget for 2019-20.

“The Centre is strengthening the transport system in the state in all sectors – national highways, waterways and seaways – to enable Odisha realise its full potential as a mineral rich state. Investments worth `2.5 lakh crore will be pumped in to boost the infrastructure here but the state must cooperate by expediting land acquisition process.” Union Minister Nitin Gadkari expressed while launching a slew of highway and port projects worth `6,000 crore in Odisha.

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CargoConnect - march 2019

“Customs reforms have helped to make customs clearance in India much easier. India jumped 30 places in the Ease of Doing Business rankings, climbing to 100th in 2017. Reforms are in place for recapitalising banks, and there is a new strong bankruptcy law that helps to restructure stressed companies in an orderly manner. The introduction of national ID is an effort by the government to close loopholes in the tax system and to identify ‘shell’ entities, previously used to hide income or provide a shield for questionable activities.” points out Agility Emerging Markets Logistics Index 2018 report.

Opportunity lies for India to develop air freight corridor with land-locked countries. A corridor has been envisaged with 5 central Asian nations and the industry is welcome to participate in the development and further extending it to other parts of the world including South East Asia, Middle East, and Africa among others.. one of the key points that emanated from the discussions at LOGIX INDIA 2019- an International Buyer Seller Meet organised by Federation Of Indian Export Organisations (FIEO).


buzz

An outlook of India’s first-ever Air Cargo Policy

U

Mission

nion Minister of Commerce and Civil Aviation, Suresh Prabhu, recently unveiled a new national air cargo policy aimed at ensuring efficient flow of goods across India, facilitating all indigenous export and import of goods, and making India a transit cargo hub of choice to-and-from other parts of the world. The policy mandates integrating post offices to the air cargo value chain at the village post office level, and development of regional and state cargo hubs, which will act as gateways for the region and states, connected by domestic trade corridors to production hubs. Furthermore, the aim is also to leverage India’s geographical location as a transit hub between Europe and Southeast Asia and a gateway to the South Asian region. The government also aims to do away with paper correspondence and implement digital transactions wherever possible, which it hopes will reduce the time cargo is held up at airports, while also eliminating revenue leakage in the logistics chain. Use of new technology like Internet of Things, Artificial Intelligence and Blockchain, will also be encouraged.

Vision  Leveraging the Indian air cargo network to provide cargo transportation by air to the masses at an affordable cost and connect every village to the national and global supply chain.  Making air cargo and logistics in India the most efficient, seamless, cost and timeeffective in the world over a period of 10 years.

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CargoConnect - march 2019

The policy covers all three categories of air cargo transport: domestic cargo to ensure efficient flow of goods across India; international cargo facilitating all indigenous export and import of goods; and transit international cargo by making India the transit cargo hub of choice to-and-from other parts of the globe. The policy covers development and growth of all types of cargo.

 To consider whole of the trade value while implementing reforms across multiple logistics and trade and multiple institutions/ departments. The policy shall be fair to all supply chain participants, ensuring each stakeholder group’s concerns and issues are addressed where possible.  To integrate with global supply chains/ value chains to optimise domestic and international freight.  To ensure seamless movement of cargo at all the airports, tail-to-tail transfer of domestic and international cargo to reduce turn-around time, establish standard/ uniform business processes by standardising gate-in/gate-out processes and broader trade (approvals, documentation, timelines, etc.) processes across airports/water-ports/ land-ports/rail-ports.  To implement a fully automated paperless trade environment with minimum face-to-face interactions so as to increase process transparency whilst decreasing shipment delays, costs and dwell time.  To facilitate payments, communication, exchange of information, etc. digitally.  To transform among all stakeholders government departments, public sector, and private sector, a common shared goal.  To encourage greater participation of women in global and domestic air cargo chains.  To engage start-ups in cargo development process.

Objectives  The policy details out clear metrics on which the air cargo efficiencies will be measured, with creating key performance indices that will monitor the policy execution. These have been developed by bringing all stakeholders in creating this ecosystem.


People. Partnership. Performance...

Infrastructure & Advantages Custom bonded warehouse Import & Export hub Buffer yard & factory stuff Cold storage & cold chain

Entrance

Storage area 28,000 sqmt Direct access to the Naational Highway 4B leading to the JNPT port Ample space for parking of 10000 cargo trucks 24X7 CCTV monitoring CFS owned equipment: 4 top lifters, 80 trailers, 30 forklifts, 2 empty handles, 1 crane Distance from JNCH: 11 Kms

Covered Warehousing Facility

Distance from Belapur station: 7 Kms Zero toll, congestion & carting charges in the CFS Zero congestion on the approach road Carting & stuffing dine in covered area Ideal location for Exporters/CHA's/Freight Forwarders

Total Protection from Rains Carting & Stuffing area: Completely Covered.

Prompt carting of cargo Wi-Fi enabled CFS

Covered Carting & Stuffing Area

15-23, National Highway 4B, Panvel-JNPT HighwAay Village Padeghar, Panvel-410206, Maharashtra Ph: +91 22 66280700-98, +91 22 66280781 | Email :jwrcfs@jwllogic.com, raaj@jwllogic.com, hema@jwllogic.com, mgrops@jwllogic.com


buzz  The policy covers all three categories of air cargo transport and focuses on its development and growth: domestic cargo to ensure efficient flow of goods across India; international cargo facilitating all indigenous export and import of goods; and transit international cargo by making India the transit cargo hub of choice to-and-from other parts of the globe.

Policy Mandates  Integrating post offices to the air cargo value chain at the village post office level. The domestic and international air cargo network will dovetail with the postal network through a common user platform to provide first and last mile connectivity for air cargo. Any air logistics company will be able to connect with the Postal Network based on a pre-defined connectivity interface. This will connect villages to both the urban domestic market and international markets providing free flow of goods through air cargo that are aligned to processes implemented for its carriage and other emerging IATA UPU standards.  Developing regional and state cargo hubs which will act as gateways for the region and states, connected by domestic trade corridors to the production hubs.  Leveraging India’s geographical location to make it a transit hub between Europe and Southeast Asia and also as a gateway to the South Asian region. Additionally, a process of performance monitoring and continual assessment of national and international best practices, shall be instrumented to ensure constantly improving processes are being applied with internationally recognised benchmarking standards that will be monitored to assess performance.  Instituting a state ranking framework that will constitute identified and agreed metrics with Benchmarks that will be clearly

10 CargoConnect - march 2019

Short-term Goals for India Top 5 global air freight market by 2025. Ranked among the top 5 countries on e-AWB penetration by 2025. Ranked among the top 25 countries on Logistics Performance Index. 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 others. Perishable cargo, and any other specialised cargo to supplement the resources for effective utilisation. Emerging cargo markets with greater levels of investments like Africa, South East Asia, etc. Potential new market bolstered by long-term infrastructure that will sustain cargo growth in the next 10-15 years.

defined.  Reducing time and cost to trade, cycle times and eliminating revenue leakage by optimising and digitising each of the process within and across stakeholders, and embracing global e-Cargo initiatives that will be refined to suit Indian context.  Effectively realising the real benefits of digitisation by integrating digital platforms across stakeholders with re-engineering current processes and eliminating inefficiencies.  Aiming to create tariffs which are cost-effective, rewards investment and are simple to understand by all users, with instituting an efficient and transparent air cargo tariff process in the Air Cargo Supply Chain within the AERA approval mechanism and mandate.  Shifting towards fully facilitated “trust-based” clearance processes through state-of-the-art RMS with robust scanning and identification methodology. Cargo clearances, including those related to part shipments, will be significantly automated and human intervention will only be required on an exceptional basis.  Continuously monitoring logistics metrics at national and sub-national levels, including ranking of major air freight routes on key trade and logistics parameters that will be visible among relevant stakeholders by establishing proactive rectification steps designed to remedy service and performance failures before breaches occur.  Encouraging the deployment of latest technologies to reduce costs and maximising efficiencies and to accentuate the uptake of digitalisation. Usage of latest technologies, including Internet of Things (IoT), Artificial Intelligence (AI) and Blockchain for facilitating intelligent air cargo logistics.  Encouraging developments to consider global standards, highest levels of data security and privacy protections with efficient, agile architecture.


focus

cargo security Maintaining a Delicate Balance

While air cargo operations have continued to improve and develop all over the world, security of cargo is an area of concern, especially in India. As a consequence, regulators and industry have increasingly turned their attention to the security measures governing air cargo and have been exploring and implementing a variety of options including enhancing cargo screening methods and the introduction of steps to secure cargo upstream in the supply chain. Upamanyu borah

12 CargoConnect - march 2019


focus

U

p from the Ground

Aviation security is a subject comprising both passenger and cargo terminals. The passenger terminals also have a bearing on their safety if the cargo section is vulnerable.

The last CISF induction in this domain took place in 2014, and intelligence agencies assessments have underlined that these facilities remain vulnerable to sabotage acts due to lack of uniform security measures as large and heavy goods consignments are loaded and offloaded daily. In May 2018, the Government of India constituted a special committee to suggest ways for better securing airport cargo terminals in the country against terror threats as it has a bearing on the overall safety of adjoining passenger terminals. The Home Ministry formed a committee under its special secretary (internal security). The aim was chalking out an anti-sabotage and counter-terror plan that can be deployed at the unguarded air cargo terminals and enhance such systems at those which have an armed cover of central paramilitaryCentral Industrial Security Force (CISF). The committee has representatives from the Home Ministry, CISF, the Bureau of Civil Aviation Security (BCAS), the Intelligence Bureau, and few other cargo handling agencies. Issues like lack of CISF workforce, cost of deployment and procedural delays have held up the implementation of true security at the airport facilities. Therefore, a big issue for the committee to consider ways to provide modern gadgets to the CISF personnel deployed at the nine terminals so that they can ensure foolproof checks. If their cover is enlarged to other facilities, such devices would be required in more significant numbers. Hopefully, the committee has been able to address this need. The CISF, which is about 1.80-lakh personnel strong, is tasked to secure 59 civil airports in the country at present. At present, nine air cargo terminals at Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Nagpur, Calicut, and Trivandrum have CISF protection while 28 other major such facilities are guarded by private security personnel. The committee has been chalking out ways as to how these cargo facilities can be effectively guarded as a massive volume of goods, of general and sensitive variety, is transacted from these avenues to country-wide and overseas locations daily. On the table is the old proposal to allow the CISF to take over security at all such terminals gradually or to devise some new measures as the CISF has a limited workforce and its safety comes at a cost. The committee has been in rigorous talks with all the stakeholders as to how a security arrangement can be made at the remaining cargo terminals so that they are not misused by the terrorist or other nefarious elements that may sneak in hazardous items. The Home Ministry has recently prepared a comprehensive note for the Union Cabinet to allow the force to take over the security at all 98 such operational airports, guarded by multiple state and central agencies at present.

march 2019 - CargoConnect

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focus

D

rive Insight

Worldwide, individual countries with the help of industry bodies like the IATA and the International Civil Aviation Organisation (ICAO) have been prompt in implementing regulations for safer transfer of goods by the air. The regulators adopt amendments to these from time to time. The rules are established by ICAO and are readily available to shippers who are obliged to comply. The rules cover what commodities can be carried on passenger aircraft and freighters, and in what quantities. The mandate also describes the percentage the batteries can be charged while

GASeP has the potential to strengthen security globally by providing governments with a global plan to which they can align their national efforts. The critical factor is implementation. It must be quick, comprehensive and global. Alexandre de Juniac, Director General and CEO, IATA

The increase in E-commerce, which has brought a large number of new shippers into the international air cargo sector that aren’t familiar with the international regulations related to the safe transport of certain goods, is one of the major challenges in the industry. Glyn Hughes, Global Head of Cargo, IATA

being transported. The measure is aimed to lessen the likelihood of an untoward incident. IATA urged all countries for the swift implementation of the first Global Aviation Security Plan (GASeP), which was established by the Council of the ICAO. “Flying is secure, but it is also clear that aviation faces security challenges. GASeP has the potential to strengthen security globally by providing governments with a global plan to which they can align their national efforts. The critical factor is implementation. It must be quick, comprehensive and global,” said Alexandre de Juniac, Director General and CEO, IATA. The safety of the consignment contents, is an issue the air cargo industry is grappling with, currently. The nature of goods transported through air cargo is versatile. The security screening of consignments is essential. It requires large investments. Though the industry is making investments in technology in terms of sophisticated screens equipment, it may not be sufficient enough. Industry stakeholders admit that there are loopholes that require urgent plugging. Majority of shippers fully

14 CargoConnect - march 2019

comply with regulations, however, a small number of shippers who may not be aware of the applicable laws as they are new to the industry and a few others who may be aware, although deliberately fail to comply. Glyn Hughes, Global Head of Cargo, IATA, pointed out that the increase in E-commerce, which has brought a large number of new shippers into the international air cargo sector that aren’t familiar with the international regulations related to the safe transport of certain goods, is one of the significant challenges in the industry. The other challenges are, he continued, “Non-compliant lithium battery shipments. By non-compliant we mean either not manufactured following accepted safe processes, or not declared according to regulations when entering the supply chain or not packaged and labeled as per required practices.” The electronics industry accounts for around 40 per cent of the value of the entire international air cargo industry. Airliners and safety experts continue to raise concerns about the transport of electronic goods via air cargo. “There are regulations put in by individual countries in association with industry bodies regarding the transportation of lithium battery by air. The challenge in this is physically verifying the presence of such material during the transportation,” said Ahmad Luqman Mohd Azmi, Chief Operations Officer, Malaysian Airlines, and Chief Executive Officer, MASKargo. Flight Safety Foundation, an international research firm has urged the air cargo industry to study threats from storing more electronics in cargo, which may overheat and cause explosions or leakages if unintentionally left turned on. However, given the surge of exports and imports of electronics pan globe, it is difficult to ban carriage of all electronic items completely. Vineet Malhotra, Director, Kale Logistics Solutions said, “Though they may be reported safe under standard conditions, in the course of air cargo transportation goods such as electronics are likely to explode or leak causing a potential threat to the carrying flight. In case of many smaller operators, sensitive goods like batteries, phones may not be tested under severe air cabin pressure conditions. Security compromise leading to such potential hazards can cause significant loss of capital and life to the air cargo value chain participants.”

H

ow safe is your cargo?

Safety remains public regulatory accountability. Implementation is critical in securing safety standards in air transport. Industry bodies, however, raise the point that countries put in regulation without consulting them. IATA representatives commented that the industry body responds to government safety and security amendments as and when they materialise. “All share the same objective which is safe and secure air transport; however many regulators still impose regulations without industry engagement. The industry consultation would ensure measures are workable and don’t add unnecessary complexities or restrictions.”


focus Malhotra further opined, “Worldwide trade controllers lack standard security and operation processes. It is a major lag. As global trade is fostering, air cargo industry players must come together to form a charter to encourage and support the standardisation of common security norms and safety practices across the air cargo segment. Very preliminary guidelines of commodity classifications into admissible or non-admissible commodities, regulations on what constitutes as safe or unsafe packages and; what can or cannot be air ported or how contents will be checked and verified under different conditions, need to be established.” Hughes continued, “We represent the industry in

Every organization has to put in extra efforts to train the staff to handle and ensure the content of the cargo is the same as it is labeled. It is a combination of human and technology, which secures the safety of air cargo. Ahmad Luqman Mohd Azmi, COO, Malaysian Airlines, and CEO, MASKargo

Very preliminary guidelines about commodity classifications into admissible or non-admissible commodities, regulations on what constitutes as safe or unsafe packages and; what can or cannot be air ported or how contents will be checked and verified under different conditions need to be established. Vineet Malhotra, Director, Kale Logistics Solutions

working with regulators to try and ensure effective measures are in place. We also engage in education programmes to reach out to e-commerce platforms to ensure they are aware of international regulations. We are also working with the UPU (Universal Postal Union) to ensure their customers are aware of regulations.” “Criminal penalties would be the appropriate action against individuals and companies who deliberately fail to comply with the safety regulations, which are designed to protect consumers, supply chain professionals and the air transport industry, in general. This would serve as the best deterrent against others considering deliberate noncompliance.” “Empowering the staff with the right skill set to handle security is very important,” says Luqman. “For this, every organisation has to put in extra efforts, to train the staff to handle and ensure the content of the cargo is the same as it is labeled. It is a combination of human and technology, which secures the safety of air cargo.” The industry experts also pointed out the need for

16 CargoConnect - march 2019

norms about the use of automated digital systems with high data safeguarding features to streamline and make air cargo transactions secure.

A

ligning Technology

The role of technology in safeguarding security lines is as important as the human interferences. The standardisation of documents and techniques used are also imperative to improve the secured line in air cargo. Malhotra was vocal about adapting technology. He said, “Certainly, in my opinion, utilising standardised and quality information procedures are key to enhancing security, expediting clearances, optimising resources and facilitating global trade. Adopting cutting-edge enterprise and community platforms designed especially to cater to a gamut of air cargo operations can drive much-needed standardisation and cohesion. Such adoption has the potential to amplify the security and safety standards across the domain.” The best example of such standardisation is IATA’s Cargo-XML messaging standard, which is integrated in the World Customs Organisation (WCO)’s Cargo Targeting System (WCO CTS), a risk assessment tool, which is available to WCO member countries worldwide. This integration has enabled electronic communication between airlines and customs using the IATA Cargo-XML standards format. Not only has this facilitated more accessible interface, but has also allowed more accurate risk assessments by capturing advance electronic cargo manifest information. Agreeing with Malhotra, Harald Zielinski, Head of Security and Environmental Management, Lufthansa Cargo AG asserted that the integration of Cargo-XML in the WCO CTS had enabled electronic communication between airlines and customs authorities using the IATA Cargo-XML standards format. IATA’s Cargo-XML eliminates the constraints posed by the traditional Cargo Interchange Message Procedures (Cargo-IMP) standard and is designed to promote broader and seamless data interfaces. Zielinski added, “It is important to build a convergence zone. We need to move away from blanket prescriptive measures about security towards a risk-based approach, on the part of the airlines, forwarders, and handlers. From a security perspective, passenger screening is one of the current major concerns for airports, and this shall be the same for cargo screening.” Zielinski predicted that over the next ten years, the emphasis on security would move closer and closer to the airport. “It is better to screen the cargo from near the airport than to rely on someone else to screen the cargo from far away. In that way, air carriers and handlers will develop ‘a very close partnership’ with forwarders, based on the actual risk situation,” according to Zielinski. Malhotra further added, “In addition to technology, trade controllers like customs and government authorities must become more assertive in their expectations of proper


focus cyber hygiene across businesses and national/international infrastructures. EU General Data Protection Regulation (GDPR), with its data protection provisions, and the EU Security of Network and Information Systems (NIS) Directive are other examples. Though Cyber threats cannot be completely eradicated, they can certainly be managed by establishing stronger collaboration between governments and key industry stakeholders, and by adopting a strong information security framework.”

L

eading Lines

In 2017, Brussels Airport started using Z Backscatter van to scan aircraft. The van is fully equipped with built-in Z Backscatter X-ray imaging technology that can scan planes from the outside to check various forms of contraband which could otherwise not be detected. The General Administration of Customs and Excise Duties (GAC&E) expanded the usage of this scanner to the airport. They had already bought a similar device in 2014 that is used mainly to inspect containers and vehicles in the port of Antwerp. Companies like Kale Logistics has developed a community and enterprise platform - GALAXY that offers a secure, safe and automated flow of operations. GALAXY helps air cargo value chain participants to carry out transactions in conformity with e-freight, e-AWB, and e-CSD initiatives. Adrian Palagyi, Cargo and Property Marketing Specialist at Budapest Airport said, “Cargo security at Budapest Airport meets all industry standards to the highest level. The security authorities in Hungary and the airlines are quite strict in security control, but in a co-operative way, so that it doesn’t hinder the operations of logistics companies. The airport itself has a so-called Security Restricted Area with the highest level of control for persons and vehicles entering. The entire airport is fenced around and monitored with cameras; intrusion alarms systems, and armed security guards. The cargo handlers are required to have regulated agent licenses for cargo handling, and they are controlled continuously by the authorities. On top of these, our airline partners have their security standards which are sometimes even higher than the international regulations.” Also, Yoann Maugran, Cargo Sales Manager of ParisVatry Airport clearly stated that their staff is thoroughly trained and acts as regulated agents in terms of security of air cargo. Maugran shared, “We do cargo screening by ourselves, and work with local partners if we need sniffer dogs or RASCargo TM method for specific cargo. Our cargo warehouse is equipped with alarm systems and continuous surveillance cameras. Once the cargo is positioned airside, we can dedicate staff for security measures during the ramp handling process.” Meanwhile, Kelvin Ko, GVP & Head of Logistics Technology-BPS Global Group, and former CEO-Cathay Pacific Services Ltd said, “We’ve created a system that balances commerce and security and makes sure it’s the safest possible environment.” “At just over a year old, the new Cathay Pacific Terminal

has not experienced any security issues, but safety was built into it from the ground up,” according to Ko. “More than 1,000 HD security cameras have been installed in the US$6 billion facilities, designed to handle 2.6 million tonnes of cargo per year. Automated storage and handling systems ensure that very few people have to enter the building, except for a limited number of engineers and the few who are allowed in the facility, must be permit holders with a scan card and photo ID. Each worker’s card is

We need to move away from blanket prescriptive measures about security towards a risk-based approach, on the part of the airlines, forwarders, and handlers. From a security perspective, passenger screening is one of the current major concerns for airports, and this should be the same for cargo screening. Harald Zielinski, Head of Security and Environmental Management, Lufthansa Cargo AG

Cargo security at Budapest Airport meets all industry standards to the highest level. The security authorities in Hungary and the airlines are quite strict in security control, but in a co-operative way so that it doesn’t hinder the operations of logistics companies. Adrian Palagyi, Cargo and Property Marketing Specialist, Budapest Airport

checked against the main database for each entry, with photo analysis software used to confirm the person’s identity. There are also metal detector machines for anyone going in or out of the cargo area. The scanning machines used at Cathay’s terminal have two X-ray generators, so they can view a pallet from two angles as it passes through, providing a more detailed picture of the contents. To some extent, it is effective,” Ko said. Ko also mentioned, “A lot of what we can do is transshipments. Many of the airlines are in the Cathay Pacific Group and use a common protocol, so the risk level for air-to-air and air-to-land transfer is OK- at least it’s manageable. However, cargo coming from a truck has far more variables to consider and is therefore considered a higherrisk, so it is subject to US-style 100 per cent screening.” Ko said their perspective as a cargo terminal, is that they were the last gate before the shipment was put on board an aircraft. They like to go over and above the minimum regulations. “If everyone took security seriously, the minimum legal requirements would be sufficient. However, it was only if everyone took it seriously,” Ko expressed. Outlining Lufthansa Cargo AG’s initiative in the segment, Zielinski said, “Lufthansa Cargo set considerably march 2019 - CargoConnect

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focus higher standards which even exceed legal and other binding requirements. Our premium security hubs offer the same level of security as other cargo centers, fulfilling all of our security regulations and security level requests. However, the ‘package’ that we offer within the premium security service is of an extremely high standard including internal security, digital CCTV and exceptional customer service. As mentioned, we still fulfill our security needs but within a ‘premium’ environment.”

Our staff is fully trained and acts as regulated agents in terms of security of air cargo. We do cargo screening by ourselves and work with local partners if we need sniffer dogs or RASCargo TM method for specific cargo. Our cargo warehouse is equipped with alarm systems and continuous surveillance cameras. Yoann Maugran, Cargo Sales Manager, Paris-Vatry Airport

Our perspective as a cargo terminal is that we were the last gate before the shipment was put on board an aircraft. We like to go over and above the minimum regulations. We’ve created a system that balances commerce and security and makes sure it’s the safest possible environment. Kelvin Ko, GVP & Head of Logistics Technology- BPS Global Group, and former CEOCathay Pacific Services Ltd

We comply to and implement security standards set by the Bureau of Civil Aviation Security (BCAS), Transport Security Administration (TSA) and Department of Transport (DFT). We are also a CustomsTrade Partnership against Terrorism (CTPAT) complaint terminal. Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India Pvt Ltd

Similarly, Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India Private Limited, underscores few security measures/procedures available at the airport terminal which ensure the safety of cargo at IGI airport.  Being a Customs-Trade Partnership against Terrorism (CTPAT) complaint terminal. CTPAT is a supply chain security program led by US Customs and Border Protection focused on improving the security of a private company’s supply chains concerning terrorism.  Installation and management of around full HD CCTV

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cameras with the best of the video analytics available.  Complying and Implementation of Bureau of Civil Aviation Security (BCAS), Transport Security Administration (TSA) and Department of Transport (DFT) security standards.  Access control & Inspecting Cargo entry. Explosive Trace Detectors (ETD) machines, X-ray Baggage Inspection Systems (XBIS), 100 per cent screening of cargo, deployment of sniffer dog to search explosives.  Managing overall location-wide safety and security education and awareness programs for both employees and security personnel. Preparing incident written reports on all significant events happening at the institute.  100 per cent CCTV coverage. Active monitoring of all the vital installations of cargo and external vendors, efficient vigilance control over outsourced workforce, including incentives and penalties. Information security and robust surveillance systems in place.  Proper and periodic background checks of workforce involved — security awareness training of all the employees of the supply chain as a regulatory directive.  Stringent Access Control measures like 100 per cent Frisking/Biometric access controls, Optimum deployment of trained security workforce (ranging from security marshals to security officers), 100 per cent staff uniform/ID Biometric Access control implementation.  Having the NFS- National Fire Services complied safety standards, as a cargo terminal is prone to accidents due to various reasons such as speed breach, irregularity in handling, etc. Moreover, implementing multiple steps to ensure an accident-free environment.

W

ay Forward

Airlines is a well-regulated segment, and measures are well in place in this segment to safeguard the safety of the cargo. However, there should be a single code that can be followed by all countries. This would make the process easier for the operators. It’s all about working with regulators to achieve reasonable and workable regulations that enhance safety without restricting trade. In parallel, stakeholders should look at educating all those involved in the supply chain regarding the applicable rules, and finally working with law enforcement and other regulatory agencies about compliance oversight. While a cross section of the industry feels that, GASeP, if comprehensively implemented, would address four key elements to improve security. They are:  Closer government-to-government cooperation to eliminate the long-term challenges of extraterritorial measures;  The universal application of global standards;  Better information-sharing among governments and industry; and  The efficient implementation of new and existing technology capabilities. It is clearer now that risks attached to safety and security in air cargo may intensify going forward as cyber security also comes into play.


cover story

poised to grow across Asia 20 CargoConnect - march 2019


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As per the Boeing 20-Year Forecast, while global air cargo would reach 509 billion Revenue Tonne Kilometers (RTKs) by 2035, i.e. twice that seen in 2015, at an annual average rate of 4.2 percent, Asia would lead the growth with China, intra-Asia, and Indian market expanding at the highest rates of 6.2 per cent, 5.5 per cent and 6.7 per cent per annum respectively. Here, we try to decipher the trends driving Asia’s air cargo ascent with articulating the voices of industry experts. Upamanyu Borah

march 2019 - CargoConnect

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cover story

O

There has been exponential growth in India’s air cargo traffic. We are working with partners around the world to create aviation logistics hubs. The government plans to develop Nagpur as the central location for global MRO (Maintenance, Research, and Operations) in aviation.”

ver the last two to three decades, Asia has become the epicentre of economic gravity and a major manufacturing region, with more and more carriers opening up new destinations to serve growing appetites of European and American consumers. Industries that require transport of time-sensitive and high-value commodities such as perishables, consumer electronics, high-fashion apparel, and pharmaceuticals, depending on the unique capabilities that air cargo provides, are offering a new phase of air cargo growth in the Asian region. Asian airlines have an outsized role in air freight, accounting for nearly 40 per cent of the global market as the region is a major manufacturing hub and growing E-commerce. Strong E-commerce demand is fueling Asia’s air cargo market. The sector is growing at a tremendous pace, driven by Chinese behemoth Alibaba Group and rival JD.com, as well as others such as Japan’s Rakuten

Suresh Prabhu Union Minister of Civil Aviation, Government of India

Inc, Amazon, and India’s Flipkart. “E-commerce is changing the way people are buying stuff, especially in countries such as Indonesia and the Philippines,” says Jean Francois Laval, Executive Vice President - Sales Asia, Airbus Group. “It is coming from China, Korea, and other parts of the region. Therefore, you need a huge

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22 CargoConnect - march 2019

amount of cargo space,” adds Laval. According to Andrew Herdman, Director General, Association of Asia Pacific Airlines (AAPA), “Asia-Pacific air cargo volume rose 4.8 per cent in January-August 2018, showed data from the Association of Asia Pacific Airlines (AAPA). That was lower than last year’s


cover story 9.8 per cent but came off a higher comparison base at a time of record shipments.” He adds, “During 2017, we have witnessed stable demand for exports from Asia (up 12 per cent), but what is even more important is that the growth rates for imports to Asia to the majority of stations have reached double digit growth and reached 20 per cent from Europe, including high growth of automotive goods and medical equipment, as well as healthcare products.”

Mumbai airport is the most efficiently managed airport in India. We’ve started building an airport in Navi Mumbai, and it will be operational by early 2020. The new airport will have the capacity to add 1 per cent to our GDP. More new airports are also being planned in Pune, Nagpur, and Shirdi.”

Expressing similar sentiments, William Flynn, President & Chief Executive Officer, Atlas Air Worldwide Holdings Inc says, “Growth in Asia and an expansion of the global middle class are transforming the global economy. Increased disposable income will support a strong future for global trade and the consumption of goods.”

“Our strategic focus on express and E-commerce service and the faster growing Asian markets position us for further business growth as we carry through the balance of 2017, into 2018 and beyond.”

India’s Preparation India seemingly has all the ingredients to be one of the world’s great air cargo centers. Rapid growth of international trade, a huge manufacturing engine

24 CargoConnect - march 2019

Devendra Fadnavis Chief Minister- Maharastra, Government of India

and a population of more than 1.2 billion all bode well for the industry. And with the recent launch of the National Air Cargo Policy, India is set to realise this great potential. India’s Air Cargo Policy aims to leverage the country’s geographical location as a transit hub between Europe and South East Asia and a gateway to the South Asian region, making India a transit cargo hub of choice to-andfrom other parts of the world. The policy covers all three categories of air

cargo transport: domestic cargo to ensure efficient flow of goods across India; international cargo facilitating all indigenous export and import of products; and transit international cargo by making India the transit cargo hub of choice to-and-from other parts of the globe. The policy covers the development and growth of all types of cargo. In India, international cargo comprises of 60 per cent of total air cargo tonnes handled in India and grew at 15.6 per cent in 2017-18. One of the strategic ob-


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cover story

jectives of the policy, is to invest in emerging cargo markets like Africa, Southeast Asia, etc. The potential in the new markets needs to be explored with long-term infrastructure creation to sustain cargo growth in the next 10-15 years at least. Suresh Prabhu, Union Minister of Civil Aviation, Government of India stated, “There has been exponential growth in India’s air cargo traffic. We are working with partners around the world to create aviation logistics hubs. The government plans to develop Nagpur as the central location for global MRO (Maintenance, Research, and Operations) in aviation.” “The air cargo market in India has the potential to become a global hub,” said Shailendra Seth, Director - India at Chapman Freeborn Air Chartering Pvt Ltd. “The Indian charter market is

rapidly growing. Trade has grown over the past five years as a greater share of trade moved towards finished goods. Products driving the growth include pharmaceuticals, gems and jewelry, transport equipment and ready made garments. We feel the long term growth potential is quite positive,” Seth adds.

Airports/Airlines march towards innovation Airports and Air cargo carriers alike need to differentiate themselves. One unique advantage can be realised by embracing technology to leverage the full-customer experience throughout the air cargo life-cycle and streamline processes for efficiency. The second is the optimisation of all available assets. This requires having deep insight into

Mumbai

26 CargoConnect - march 2019

how all those assets work together and how each affects the bottom line. Fatih CIĞAL, Senior Vice President for Cargo Marketing at Turkish Cargo agrees that air cargo industry needs to cooperate and integrate data and material flows as this will lead to transparency, speed and customer satisfaction. He adds, “Players in the market are looking for ways to integrate Blockchain, Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning and Big Data to their processes. On the other hand, perishable, temperature controlled and E-commerce shipments are on the rise. Shippers shape the industry by educating themselves and demanding the best service with the lowest possible cost. This is why our Mega Cargo Facility at Istanbul Airport will have a capacity of 4 million tonnes per year, which is almost the double of industry giants. We will be catering perishable, live


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cover story animal, express, E-commerce shipments at separate operation areas. Having an easy connection to a nearby seaport and being located strategically between Europe and Asia, the new hub is convenient for costeffective intermodal transportation. Automatic storage systems to be used in the hangar at Istanbul Airport’s main cargo terminal will play a major role in achieving our operational objectives by enabling an increase in speed, efficiency, and quality in our warehouse operations.” Fatih adds, “Turkish Cargo grew above

India’s Air Cargo Policy aims to leverage India’s geographical location as a transit hub between Europe and Southeast Asia and a gateway to the South Asian region, making India a transit cargo hub of choice to-and-from other parts of the world. 20 per cent in 2018. In 2019, we will be focusing on improving our services even further to meet the needs of our customers in the Asian region. The order of three additional B777 freighters was confirmed last month to keep up with developing trend.

Asia-Pacific air cargo volume rose 4.8 per cent in JanuaryAugust 2018, showed data from the Association of Asia Pacific Airlines (AAPA). That was lower than last year’s 9.8 per cent but came off a higher comparison base at a time of record shipments.” Andrew Herdman, Director General, Association of Asia Pacific Airlines (AAPA)

Our fleet will have a total of 8 Boeing 777F cargo planes in 2019.” With the view that Air cargo must evolve to adapt and improve its value proposition, Sanjay Khanna, Chief Executive Officer at Ras Al Khaimah International Airport opines “The airfreight industry is evolving faster though it continues to face challenges of sustainability, profitability and customer satisfaction. It is far from being immune

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28 CargoConnect - march 2019

to global shocks such as Brexit. Competition is stronger than ever with other transport modes such as shipping, rail and road offering new products. Customers are also looking at mixing transport options to balance costs and speed. In parallel, the industry has been slow to adapt to an increasingly electronic world that demands more transparency, speed and efficiency. Airlines and Airports together have to be a part of this transition and adapt to the changing dimensions of the air cargo industry. Paper airway bills are being fast replaced by electronic way bill to increase the efficiency, speed and precision, although, global implementation of electronic airway bill to date is just around 50 per cent. StB Cargo by IATA is an effective programme in this direction.” Khanna says, “With the increasing shift of freight from air to ocean, shippers are increasingly opting deferred air services and multi- modal transport system; airlines and airports need to provide the facilities needed for this transition. The air cargo landscape is changing with more freight forwarders taking control of freighter operations and hence the traditional ways are changing.” “Amazon leasing aircrafts from Atlas Worldwide and DHL, Panalpina and Danzas leasing freighters from Cargolux are a few examples of the changing pattern. Many major cargo GSAs in the Middle


cover story East prefer to operate their own freighters, and the association of the airport with the GSA and freight forwarders, is key for any airport to grow.” P Balasubramanian, Founder & Chief Executive Officer, Air Cargo Consultancy International Services (ACCIS), believes that Collaboration and Digitalisation will drive the future of the air cargo logistics chain, and that stakeholders need to move from an ego-system into an eco-system. Balasubramanian says, “Advent and almost compulsion of getting into the digital way of doing business has created 3 large distinct groups: one is leading the charge by using all modern techniques such as E-freight, Blockchain, AI, AR/VR, Drones and so on. The other extreme of the spectrum has players who still struggle and resist embracing basic digital techniques, whether it is e-AWB or e-CSD, or similar initiatives. Then there are players trying to embrace the digital world with varying levels of conviction and application. This period of great change can claim some place in history if all these initiatives lead to cost, time and process efficiencies in air cargo chain leading to a significant reduction in cargo transportation times.”

The Indian Government has announced that they will be investing over $120bn in airport infrastructure in a combination of existing expansion and new green-field airports as the country looks to become the 3rd largest aviation market in the world by 2020. Here, G Mu ra l id ha r, A r ea Manager, Jetair Pvt Ltd shares, “Going 100 per cent paperless will also be a valueadded service. The airlines should ensure that the flight details and bookings are honoured without any change or sending the consignment in parts – only those airlines which do both these will be able to get more shipments and be a success.”

30 CargoConnect - march 2019

E-commerce is changing the way people are buying stuff, especially in countries such as Indonesia and the Philippines. It is coming from China, Korea, and other parts of the region. Therefore, you need a huge amount of cargo space.” Jean-Francois Laval, Executive Vice President- Sales Asia, Airbus Group

Growth in Asia and an expansion of the global middle class are transforming the global economy. Increased disposable income will support a strong future for global trade and the consumption of goods. Our strategic focus on express and E-commerce service and the faster growing Asian markets position us for further business growth as we carry through the balance of 2017, into 2018 and beyond.” William Flynn, President and Chief Executive Officer, Atlas Air Worldwide Holdings Inc


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Present Opportunities and Bottlenecks

High-tech production facilities are growing at a very high speed in the Asian region, including aerospace, automotive, medical, etc. and this pushes airfreight volumes to/from Asia, while raising the bar of quality performance for airfreight transportation by implementing latest industry technologies and adapting best practices and more highly skilled personnel. Even though the 2018 market grew at a slower pace compared to the robust 2017, a solid and stable growth was seen in the first months of 2018, after backlogs were cleared, while the Europe-Asia trade lane will continue its momentum and generated needed volumes. Balasubramanian shares, “Despite the late 2018 marginal decline, it is true that 2018 witnessed an overall good performance in air cargo growth in Asia. This is commendable, given that ICAO had dubbed 2018 as the year of ‘solid passenger

E-commerce is expected to continue dominate Asian air cargo growth story, partly due to unintended political challenges on the other side of the globe, be it Brexit or protectionist tendencies.” P Balasubramanian, Founder, and CEO, Air Cargo Consultancy International Services (ACCIS)

E-commerce is expected to continue dominate Asian air cargo growth story, partly due to unintended political challenges on the other side of the globe, be it Brexit or protectionist tendencies. growth and moderate air cargo growth.’ The ever-challenging US-China trade talk’s scenario, particularly its direct effect on the tariffs and retaliatory tariffs, did not help the cause either and still, markets did brisk business. Granted that those tariffs related issues have a larger significance for ocean freight than air. A view exists that this uncertainty associated with the potential fallout triggered more air cargo movement, either to beat the calendar or to overtake the uncertainty curve, thus showing a healthy upbeat growth trajectory. It is a child’s knowledge that E-commerce has played a stellar role in this growth story, further keeping the graph gaze towards the sky rather than the ground. China is the engine of the world

32 CargoConnect - march 2019

is an oft-repeated but irrefutable cliché. However, the direction of US-China talks, any resultant currency volatility – not just normal movement, the progress of its belt and road Initiative would determine the rate of growth of air cargo in Asia. Ecommerce is expected to continue dominate Asian air cargo growth story, partly due to unintended political challenges on the other side of the globe, be it Brexit or protectionist tendencies.”

Increasing Production fueling Air Cargo Demand Growth across advanced and emerging market economies was maintained in the first quarter of 2018, driven by positive business and consumer sentiment. “Correspondingly, world trade activity continued to expand, underpinned by increased investments and higher manufacturing output in the region, in response to


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cover story increased new business orders. These positive factors continued to support growth in both air passenger and cargo demand for Asian airlines,” says Herdman. Looking ahead, Herdman said, “Asian carriers overall saw a significant improvement in earnings performance last year, on the back of the strong growth in air passenger and air cargo demand. However, the airline operating environment remains challenging, with competitive pressures including higher fuel prices and labour expenses.” Fatih agrees that production is fueling demand and shares, “Most carriers have tight freighter schedules, so it is hard to supply enough capacity to increasing demand. We are moving our current facility comprising an area of 75,000 square meters to our new Mega Hub, which is built on 165,000 square meters. Also, Turkish Cargo has included 14 new destinations to its flight network in 2018, including Mexico City, Toronto, Houston, Miami, Bogota, Brussels, and Liege. We will continue reaching new destinations in 2019.”

Asian carriers overall saw a significant improvement in earnings in 2018, backed by strong growth in air passenger and air cargo demand. Sanjay echoes a similar sentiment. He says, “Air transport is vital for manufacturer’s trade, particularly trade in components, which is a major part of cross border trade today. Moving perishable goods from one side of the world to the other will not be possible without air transport. The pharmaceutical industry relies on air transport for its speed and efficiency in transporting high-value, time and temperature sensitive cargo, particularly vaccines. Most people have personal electronic devices that were built using a global supply chain linked by air. Amazon, Alibaba, eBay, and other E-commerce companies rely on the express delivery services made possible by aviation to get those devices, and so much more, to their customers.”

34 CargoConnect - march 2019

Turkish Cargo grew above 20 per cent in 2018. In 2019, we will be focusing on improving our services even further to meet the needs of our customers in the Asian region. The order of three additional B777 freighters was confirmed last month to keep up with developing trend. Our fleet will have a total of 8 Boeing 777F cargo planes in 2019.” Fatih CIĞAL, Senior Vice PresidentCargo Marketing, Turkish Cargo

Air cargo growth in 2019 looks confident with the growth in E-commerce, pharma trade and perishable trade increasing across continents, especially in Asia. The transport of pharma and other premium cargo services will drive output for the year 2019. The growth in air cargo is brightening majorly due to the diminishing trade tensions and decreasing fuel prices.” Sanjay Khanna, CEO, Ras Al Khaimah International Airport


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cover story On the flipside, highlighting the bitter prospects, Gohar Ali Shah, Business Development Exec ut ive Commercial, Sharjah Airport expresses, “Production industry, world trade and transportation are deeply connected. There will be an obvious adverse impact on air cargo business, when cost of production increases. When demand for airfreight will drop, airlines will have to adjust their pricing to lower market trends and that will eventually result in lesser yields. This will in turn leave a negative impact on the airfreight industry.”

2019 and beyond With the volatility of the air cargo landscape over the last four to five years and with a dependence on one-off events, it has become quite hard to forecast where the market is headed. However, Air Cargo is likely to witness a reasonably moderate 2019, given the high uncertainties associated with political developments globally, both in the developed and not so developed worlds. Sanjay opines, “Air cargo growth in 2019 looks confident with the growth in Ecommerce, pharma trade and perishable

36 CargoConnect - march 2019

trade increasing across continents, especially in Asia. The transport of pharma and other premium cargo services will drive output for the year 2019. The growth in air cargo is brightening majorly due to the diminishing trade tensions and decreasing fuel prices. During the year 2019, the overall market seems to get more segmented into freight forwarding, warehousing, express delivery market, third-party logistics market, and Ecommerce market and thereby, the leading players of each of these segments will be the crucial associate of air cargo industry.” “While global air freight growth moderated in 2018 after unusually strong growth in 2017, many indicators show that the air

cargo market is fundamentally well positioned to sustain the growth momentum at or above the long-term trend. ACMI providers also referred to as wet-lease providers, offer cargo operators the flexibility to obtain lift, augment existing markets, and provide service in markets that are highly seasonal— all with no capital equipment investment required. Large freighters in long-haul markets account for the most significant segment of the air cargo ACMI business. The ACMI business is sensitive to changes in the overall air cargo business, but it has been an established industry subsector and will continue to play a significant role in the year 2019.”


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Production industry, world trade and transportation are deeply connected. There will be an obvious adverse impact on air cargo business, when cost of production increases. When demand for airfreight will drop, airlines will have to adjust their pricing to lower market trends and that will eventually result in lesser yields. This will in turn leave a negative impact on the airfreight industry.” Gohar Ali Shah, Business Development ExecutiveCommercial, Sharjah Airport

The air cargo market in India has the potential to become a global hub. The Indian charter market is rapidly growing. Trade has grown over the past five years as a greater share of trade moved toward finished goods. Products driving the growth include pharmaceuticals, gems and jewelry, transport equipment and ready-made garments. We feel the long term growth potential is quite positive.” Shailendra Seth, Director- India, Chapman Freeborn Air Chartering Pvt Ltd

38 CargoConnect - march 2019

Fatih shares, “We expect the trend will remain strong in 2019. Turkish Airlines cargo brand, Turkish Cargo, provides air cargo services to more than 300 destinations in 124 countries with a fleet of 330 aircraft. The freighter carried 1.4 million cargoes in 2018, and the growth rate is expected to continue in 2019. While the growth rate of the market is expected to be around 4 per cent, Turkish Cargo will continue double-digit growth heading towards the target of being among the top five air cargo carriers by 2023.” It’s no secret that air cargo demand is deeply tied to the reliability of ocean cargo. Supply chain managers typically build in some buffers into their lead times, but as cost-saving initiatives continue to encourage low inventories, the risk of logisticsbased disruption increases. Port strikes, congestion, crippling cyber attacks and shifts in service routes over the past few months likely led many shippers to find alternative means of transportation. In these cases, air cargo exists to save the day. Yet, the question remains: How much new demand can the air freight industry retain going into peak shipping season? If high growth is truly due to seemingly isolated disruptions, as ocean shippers self-correct and reinforce reliability, shippers will continue to prefer lower prices. Similarly, are tighter fulfillment timelines — tied to trends including fast-fashion, shorter design-to-market cycles and Ecommerce — worth the increased cost of air freight in the long-run? The transition to E-commerce seems to benefit air cargo as supply chains adapt to these new trends, and carriers are similarly adapting to service these needs. However, the industry is clearly hedging its bets against high sustained growth, considering the slow investment in increased capacity. Rates, in turn, will remain high or increase. For now, as demand continues to rise, the industry seems to prefer inflated rates, which allow them to invest in business expansions including international alliances, freighter-belly partnerships and cold chain airport capacity. Once demand subsides, airlines can release new services to attract a more diverse customer base.


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special feature

air cargo on paperless trail By Ritika Arora Bhola

Drive insight Going paperless would allow those in the air cargo industry to stay connected and up-todate throughout all processes, no matter where they are. The idea is that if one person uses electronic updates, everyone will be able to see what step in the supply chain process that package is in, which means there would be no surprises when it comes to shipping time. Not surprisingly, most companies and customers place value on being able to track their packages and knowing exactly when a shipment is expected to arrive. For quite a few years since the Indian air cargo Industry is diligently working on eradicating paperwork focusing on going digital – which is said to be the ultimate dream of the industry. Today, when most of the Indian industries have either digitised their operations successfully or are working to move into the digital space, Indian air cargo industry is leaving no stone unturned to eliminate paper documents, on which the air cargo industry relied mainly only till a few years ago. Commendably, in the last few years, various positive initiatives have been taken up by the Ministry of Civil Aviation and Airports Authority of India (AAI) to introduce and adopt digitisation in all ways possible. The industry has

40 CargoConnect - march 2019

heartily welcomed this positive change and took advanced technologies like IoT, Blockchain, Artificial Intelligence, Robotics and Automation, to facilitate operations efficiently and effectively and boost overall productivity. As per the reports, The International Air Transportation Association (IATA) is also making strides to eliminate paper documents. The IATA’s goal is to have an efficient air cargo industry that relies on an entirely paperless process and smart data sharing, which enables innovative and value-added services for customers. IATA is pushing for air cargo to go digital for several reasons, including the fact that going paperless would allow those in the air cargo industry to stay connected and up-todate throughout all processes, no matter where they are. Apart from this, automatic updates and cargo tracking applications have also made it easier for the customers to track and trace their products. It builds trust between the service provider and the customer. IATA has now made e-AWB the default contract of carriage for all air cargo shipments from January 1, 2019. The e-Air Way Bill streamlines the process, aims to enhance the accuracy of data, safeguard confidentiality, minimise paper handling costs, and accelerate delivery times.


Digitisation: Need of the Hour

By reducing the amount of physical paperwork, and replacing it with digital processes, shippers will save precious time otherwise wasted on what may seem like busy work. The Indian air cargo industry is moving in the right direction when it comes to going digital, but there are certain limitations and challenges which the industry needs to address at the earliest. However, the air cargo experts believe that the industry has the potential to overcome these limitations to create paperless air cargo supply chain. On a positive note, Amar More, CEO, Kale Logistics Solutions expresses that there is a lot to gain from going paperless, for all the stakeholders of the air cargo supply chain. More articulates, “It is a known fact that the industry’s supply chain is disjointed and siloed; assimilating processes and data, along with standardizing and automating key procedures will present an attractive value proposition. Data-driven decision making takes the process a step further and enables the entire supply chain to access data required to optimise efficiency. It is also essential to have a roadmap that outlines a shared end-to-end industry approach, with clear leadership roles. Like, engaging regulators and governments worldwide to create an ‘e-freight route network’ with fully electronic customs procedures and where regulations support paperless shipments. Then, the industry can start collaborating to digitise the

core industry transport documents, beginning with the air waybill.” More adds, “The next level will necessarily include the development of cross-border paperless trade systems, which will empower the electronic exchange of data and documents amongst stakeholders situated in different countries in the end-to-end value chain. The regional trade gains from effective implementation of such structures would likely be over US$ 230 billion per year, per UNESCAP. So, as a business opportunity as well, participation in paperless air cargo makes complete sense.”

Agreeing with More, Arindam Banerji, Aviation Consultant, and Former Vice President - Cargo Operations,Jet Airways India Ltd suggests that a logical way of taking the paperless cargo project forward would be to focus on the basics and then gradually get the buy-in from the regulatory authorities to accept the proposed changes. One can start with domestic cargo and then extend to the international area. Banerji jots down certain points to create a system which allows: 1. Direct transaction between customers, service providers, and carriers of his/ her choice. 2. Service providers to establish direct relationship with the airline and its customer.

march 2019 - CargoConnect

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special feature 3. Booking facility for customer. 4. Customer to prepare shipment and in create documentation. 5. Allow the deputation of an Agent/ CHA/Forwarders to pick up/drop off the shipment. 6. Collections/settlement of payment directly. Besides, Banerji lists down the advantages of the proposed system: • Service providers can establish a relationship with the customer directly. • Another channel for sales for the service providers. • Can transform the traditional model. Banerji says that technology applications like IoT and AI can effectively address the following areas: 1. Deputing the right agent for the right cargo – the system can create master lists of agencies with their cargo handling capabilities. 2. The ability of service providers to collect right payment. 3. The ability of the customer to correctly define the cargo – provide info – wikis, manuals, videos and call center support. 4. Integration of Sales data to back-end Revenue Accounting Systems – by APIs/Web Services for consumption. 5. Overcome resistance from established agents to move to newer models – keep agents part of the system on a “friends with benefits” model.

Parvinder Singh, Managing Director, Hans Infomatic Pvt Ltd observes that to create paperless air cargo supply chain, we need to overcome the on-going paperwork processes.

IATA is pushing for air cargo to go digital for several reasons, including the fact that going paperless would allow those in the air cargo industry to stay connected and up-to-date throughout all processes, no matter where they are. Apart from this, automatic updates and cargo tracking applications have also made it easier for the customers to track and trace their products. It helps build trust between the service provider and the customer.

Singh asserts, “The industry can overcome these limitations when each stakeholder in the trade cycle takes initiatives by themselves. Although the air cargo industry still relies largely on paper, IATA is making strides to eliminate paper documents. The IATA’s goal is to have an efficient air cargo industry that relies on a fully paperless process and smart data sharing, which enables innovative and value-added services for customers. Additionally, a paperless air cargo industry means having full access to electronic customs procedures and regulations at your fingertips. For supply chain management companies, this will provide employees access to answers regardless of where they are in the world. The idea is if one person uses electronic updates, everyone will be able to see what step in the supply chain process that package is in, which means there would be no surprises when it comes to shipping time.” Meanwhile, Prithviraj Singh Chug, Director, Group Concorde says that in the last decade, the industry has seen a breakthrough shift in business operations. For almost all industries owing to the technology revolution; unfortunately, in airfreight industry, it is not the same case, even though technology is ready and available, the air freight industry is still decades behind other industries. He shares, “We are living in the era of digital information, but air cargo still struggles for the basic update of shipment status. There is a definite reluctance to embrace this technology transformation but, we cannot pin it on a single reason. On the contrary, there are multitudes of reasons acting together. One of the prime reasons I can think of though, is in the complexity of air cargo business model itself which involves many different stakeholders having a different business vision and financial capabilities. If the industry needs to

42 CargoConnect - march 2019


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special feature change, then all of these stakeholders, starting from forwarders, airlines, airport authorities, cargo handler, and even customs, need to think alike and converge onto one platform and decide to invest in the technology upgrade. An airline investing millions on the latest technology helps very little if its handlers are still using legacy technology.” Chug further points out what is stopping all the stakeholders to upgrade? Moreover, according to him, the answer is different financial and organisational capabilities. “Investment for a change of system or upgrade from manual to automation is not an easy decision,” says Chug, adding, that the investment required is not financial but also of human resources who will be part of the implementation/upgrade project along with management time and energy, and a typical system change needs at least 6-8 months of time. He stresses that not all companie’s shareholders are willing to invest, especially where they don’t see immediate monitory returns. The solution is for IT service providers to come up with systems, that can be implemented with minimal investments both human and capital. For example, Cargo Flash has introduced nGen Lite, an effective, lowcost cloud tool that will offer Airlines, Cargo Ground Handlers and GSSA’s, a convenient and cost-effective medium to manage their entire Cargo Cycle without having to worry about investments. The e-AWB is an excellent initiative by IATA, but I feel the progress is still plodding as the enabled trade lanes in itself are very less, and even on these lanes, very few selected agents are using e-AWB.” He continues by saying that in order for the e-AWB to be successful, we need to think about the small players of this industry. This includes airlines doing about 500-600 AWBs a month or small cargo handlers, handling one or two small carriers or small forwarders who are still doing the complete process manually on excel or other such database application. “If e-AWB needs to be successful, then these small com-

44 CargoConnect - march 2019

panies need to be involved, and for this, we need IT service providers who can take the step to get the system to these players. Cargo Flash is committed to providing the air cargo Industry with low-cost cloud solutions with the aim of enabling all level of stakeholders to upgrade to e-AWB,” affirms Chug.

Amar More CEO, Kale Logistics Solutions “The next level will necessarily include the development of cross-border paperless trade systems, which will empower the electronic exchange of data and documents amongst stakeholders situated in different countries in the endto-end value chain. So, as a business opportunity as well, participation in paperless air cargo makes complete sense.”

Arindam Banerji Aviation Consultant, and Former Vice President - Cargo Operations, Jet Airways India Ltd “A logical way of taking the paperless cargo project forward would be to focus on the basics and then gradually get the buy-in from the regulatory authorities to accept the proposed changes. One can start with domestic cargo and then extend to the international area.”

Analysing the above, Ram Menen, Independent Director, Expo Freight avows, Digitisation is one area that the air cargo industry has never really taken to heart. Though there are several initiatives in the pipeline, the fundamental element, the e-AWB, which in today’s world, should be easy to achieve, remains a challenge. In over a decade of campaigning, the penetration remains under 60 per cent. The industry will only benefit from digitalisation once it executes digitisation. The only way forward is for all parties to put aside their differences and single-mindedly focus on getting the basics implemented.” On a similar note, industry veteran Vipin Vohra, Chairman, Continental Carriers Pvt Ltd opines, “It is a well-known fact that air cargo industry has played a key role in cross-border trade due to the critical factor underlying including the express deliveries, long-distances and efficient transportation of goods. The air cargo industry has suffered decades of stagnation concerning swift procedurals now due to the hefty paperwork involved in the entire cargo ecosystem. There was always a need for hybrid solutions to support its growth. With the strengthening of exports orders, booming E-commerce that purely relies on express deliveries which can be achieved only with high-value specialised cargo, digitisation is indeed a savior to have that trust in the air cargo industry.” Vohra exclaims that the need to deliver incremental value to the end customers, digitisation was indeed the next big leap to drive the air cargo business efficiently. “The complex eco-system of Air Cargo where there are many stakeholders at each vertebrate, there has been a very slow adoption to digitisation and are still relying on the tradi-


special feature tional methods, involving call centers and lots of paperwork for any shipments. This gradual and slow adaptation is not matching up to the customer’s expectations, who is more pro-active towards personalised mobile services to track and trace their shipments. This trend goes explicitly to the hopes of being offered price transparency, visibility and status of goods in real time. The ongoing growth of digitisation in cargo industry has given mixed speculation on how it shall be a boon to the industry but could be a bane for small businesses who are struggling to match up with the current demands.” According to Vohra, forwarding specialists who have gone digital are providing value-based services to the cargo business by including booking and information platform that provide price and market transparency while enabling track and trace services to customers through their database services. Carriers using digital technologies can gain small business from forwarders as digitisation cuts the cost to serve and automated processes enable proactive, individualised customer services. Forwarders can provide a wide range of services by going digital, as it slashes down the intermediary costs and increases market transparency for customers with slashed prices once breakpoint volume is reached. He feels, “The future of going paperless will depend upon the adoption rates of the technologies that influence the pace and extent of automation and collaboration that cargo industry needs to adapt and penetrate in the entire ecosystem soon.”

Technology to Bring Revolution in Air Cargo The way the industry players are making the maximum use of technology in operations and supply chain, it seems, it can bring significant revolution in the air cargo industry in the coming years. Buzzwords such as Blockchain, Artificial Intelligence, Big Data and Internet

of Things (IoT), are now indeed an integral part of the technology adoption plans of most air cargo players in the industry. Such technologies can increase the efficiency and transparency of supply chains and positively impact everything from warehousing to delivery to payments. Commenting on the same, Singh emphasises, “When we talk about revolutionising the air cargo supply chain then IoT and Blockchain can push supply chain management to the next level.

Parvinder Singh Managing Director, Hans Infomatic Pvt Ltd “A paperless air cargo industry means having full access to electronic customs procedures and regulations at your fingertips.”

Prithviraj Singh Chug Director, Group Concorde “If the industry needs to change, then all of these stakeholders, starting from forwarders, airlines, airport authorities, cargo handler, and even customs, need to think alike and converge onto one platform and decide to invest in the technology upgrade.”

Moreover, the transportation process would be like multiple sensors track things like location, delivery stages, food storage conditions, temperature, humidity, and blockchain provides decentralisation thus, removing the need for intermediaries. Additionally, it has no single point of failure because everyone in the blockchain has access to the same information; the Blockchain is transparent and highly resistant to corruption. Also, Blockchain technology on cryptographic algorithms is designed to prevent data distortion. Each block includes a hash to the previous block, so it’s impossible to substitute an intermediate block in the ledger.” Explaining benefits of new technologies, Singh further adds, “For enabling secure data exchanges, IoT devices can leverage smart contracts to create an online agreement between all parties, where the terms and conditions are written into the lines of code. Thus, companies achieve an autonomous functioning of smart devices with no need for a centralised authority, or a single administrator. Wireless technology, Blockchain, IoT and Big Data can make this identification much quicker than before, since all that historical data is available to every member of the supply chain due to the distributed database. Having this level of transparency with all suppliers increases accountability and creates trust across the supply chain, because everyone can see what every partner is doing.” Observing the same, Vohra comments, “New hybrid technologies, Big Dat a a nd IoT sh a l l be t he ga me march 2019 - CargoConnect

45


special feature changer in the air cargo industry, i mprov i ng c a rgo h a nd l i ng w it h improved accuracies.” He continues, “Predictive maintenance, routing and asset management optimisation will also get streamlined and standardised while the data-driven process will benefit customer with real-time alert, selfmonitor and cargo journey. The air cargo industry is still at their internal operations end, need to look out for optimisation of capacity utilisation, where the capacity predictions and business solution for revenue management will consolidate the fluency of the entire system.” Keeping the current scenario in mind, Vohra stresses that air cargo need to evolve and reinvent itself to the digital environment and adopt new tools of not just booking portals but also revenue and capacity optimisation, as IoT and Big Data is enabling overall excellence and stability in the value chain. “This would require reaffirmations to establish air cargo industry at par to other digitised modes of transport and substantiate the overall growth of the entire value chain in the immediate future,” states Vohra. At present, wireless technology such as RFID is already making the warehouse processes much automated, providing real-time visibility and security in the supply chain. However, the two biggest inhibitors for adaption of RFID in the supply chain are cost and accuracy, but now the cost of RFID tags has come down and is expected to go down further. Also, the new generation readers have the capability for reporting near-perfect accuracy within certain distances. Therefore, a significant step forward may finally deliver the enormous potential that RFID offers. Blockchain originally developed as an absolute secure mode for financial transactions, especially cryptocurrency but can be adapted to record everything of value, including the sensitive data in the supply chain; this finally offers the possibility of secure and seamless connectivity between all the stakeholders

46 CargoConnect - march 2019

in the supply chain and every process or milestone, adding itself to the complete chain.

Ram Menen Independent Director, Expo Freight “In over a decade of campaigning, the penetration of e-AWB remains under 60 per cent. The industry will only benefit from digitalisation once it executes digitisation. The only way forward is for all parties to put aside their differences and single-mindedly focus on getting the basics implemented.”

Vipin Vohra Chairman, Continental Carriers Pvt Ltd “Forwarders can provide a wide range of services by going digital as it slashes down the intermediary costs and increases market transparency for customers with slashed prices once breakpoint volume is reached.”

IoT can revolutionise air cargo supply chain by ensuring total connectivity between Human, Software and Hardware, allowing real-time business processing and visibility. Imagine the ULD telling the system its location or if there is damage on its body and unfit for loading! Shipment can say to the consignee when it’s reached the destination and ready for delivery, or it got offloaded or misrouted, or any other milestone achieved or missed. Menen concludes by saying, “Outside of the transportation process, which is still struggling with digitisation, the wireless technology has largely improved operational aspects within logistics, where implementation of automation has had a lot more success within the individual components of the supply chain. IoT, in combination with Big Data helps in building Artificial Intelligence by creating better analytical capability. This brings in better efficiencies by deploying predictive modeling techniques for more proactive inventory and logistics management. The latter is a key to a successful supply chain operation. Robotic technology supported by AI, also brings in better resource management capability, speeding up the repetitive process in physical handling environment. Apart from the advantages in the financial transaction areas, the Blockchain technology is great for building better transparency/sharing of data by reducing the paranoia of security and data manipulation at any stage within the supply chain operation and management. It will help create and strengthen the partnership amongst all players/partners within supply chain operations.”

To sum it up! It seems the way technology is revolutionising the Indian air cargo industry and its operations, the day is not far when there won’t be any more paperwork, and the leaders will witness the ultimate dream of the industry ‘going digital’ coming true.


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feature

IoT: Intelligence in supply chain The value of a connected logistics network is exciting for logistics. Intelligent transportation solutions can increase transparency and integrity in the supply chain through innovative, smart concepts. IoT has the potential to connect virtually. A report by IDC and SAP predicts that IoT will lead to a 15 per cent productivity increase in delivery and supply chain performance. Whether by air, ground or sea, transportation and logistics are essential components of many enterprises’ productivity, and access to real-time data is critical. How is IoT affecting the logistics industry? Here’s we try to know. Ritika Arora Bhola

A

ccording to the DHL trend report, IoT presents an immense $1.9 trillion opportunity in logistics. However, till now, only a few IoT applications in logistics have experienced widespread adoption, due to the total cost of deployment, security concerns, and an absence of standards in the fragmented logistics industry. By leveraging IoT's Connected Intelligence, transportation and logistics can dramatically improve the following areas:

48 CargoConnect - march 2019

Delivery

One of the most significant areas in which it can make a difference is vehicles and fleet management. Rvind Kavuru, Director, Prospecta Technologies feels that IoT is at the cusp of change in the logistics industry. He says, “With E-commerce coming into play, the shipment volume is on the rise each day. Given the volume of shipments being moved and tracked by humans and machines, it is a no brainer that IoT has become an integral part of the logistics industry.”

Kavuru jots down below certain benefits of IoT implementation:

Tracking

RFID tags can connect to the Cloud and share data on location and eliminate the need for staff to do anything other than loading the delivery. RFID tags can also be used within the warehouse to track inventory and help to cut down on unnecessary costs too. IoT devices can drastically improve supply-chain visibi l it y at r elat ively low pr ic e. A simple 3G-connected IoT device can


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feature

Prevent loss and theft

Cameras attached to the gateways canalso be used for damage detection, by scanning pallets for imperfections.

Asset Optimisation

With E-commerce coming into play, the shipment volume is on the rise each day. Given the volume of shipments being moved and tracked by humans and machines, it is a no-brainer that IoT has become an integral part of the logistics industry.� Rvind Kavuru Director, Prospecta Technologies

identify, track, and monitor an asset in real time.

Visibility in end-to-end delivery

With GPS and location data from RFID tagging, a fleet can be proactive rather than reactive and utilise technology to stay informed and avoid possible delays.

Analytics

Big Data can help see which routes are the most efficient for drivers- seek out preferred routes and identify inefficiencies. This helps increase fleet efficiencies and demand forecasting

Saving Time

Manual counting and volume scanning of pallets are time-consuming and a lengthy process. Instead, IoT readers can be installed to capture data transmitted from each pallet as it arrives through inbound gateways. This data can include weight, volume, and dimensions, etc., which can then be aggregated and sent for processing.

50 CargoConnect - march 2019

A variety of sensors can be deployed to monitor how often assets in a sorting system such as conveyor belts, are in use or idle, and when. Analysis of the data can then identify optimal capacity rates and tasks for the assets.

Financial Planning and Decision Enablers

With real-time access to data points received from IoT devices, logistics companies can prevent/tackle claims in a timely fashion. For example, in the case of temperature-sensitive cargo, where the optimal temperature is not maintained, alerts can be sent to concerned stakeholders, thus preventing losses to the stakeholders. “We have a proven use case where IoT, coupled with Blockchain and RFID, fast-tracked the invoicing process without a need for manual intervention, at a major Cargo Handler,� avows Kavuru.

Enhanced Customer Experience

With the introduction of IoT, real-time metrics and alerts are made available to customers, thus improving the entire experience of their cargo movement. Many large corporations have already started implementing IoT to enhance their customer experience. For quality management, sensors monitor the condition of an item and alert warehouse managers when the temperature or humidity thresholds are about to be compromised, will allow warehousing staff to take corrective action, ensuring service quality and higher customer confidence.

Fleet Management

Real-time fleet management has become quite essential to ensure fleet optimisa-

tion and reducing maintenance costs. Implementation of IoT for fleet management provides the required metrics in ensuring the safety of the fleet and helps reduce fuel and workforce costs.

Predictive Maintenance

IoT sensors coupled with Artificial Intelligence and Machine Learning allow logistics operators to monitor vehicles, machines and predict quality issues and upcoming maintenance, thus ensuring huge savings by minimising disruptions. Sensors can be placed on a sorting machine to detect levels of physical stress by measuring throughput or the temperature of the device and also, calculate the expected lifetime of the machine at its current level of usage.

Health and Safety

IoT can drive higher levels of worker health and safety through a combined workforce and connected vehicles. Citing facts, Kavuru further elaborates, "Statistics from the Industrial Truck A s s o c i at io n ( I TA) a nd t h e U. S. Occupational Health and Safety Administration, estimate that there are about 855,900 forklifts in operation in the United States alone. Those forklifts are estimated to contribute to more than 1,00,000 accidents per year, which causes 94,750 injuries. Almost 80 per cent of forklift accidents involve a pedestrian. When multiplied on a global scale, this demonstrates the potential scale to improve safety within the warehouse. Introduction of proximity sensors, etc. can help prevent accidents. Many accidents also result from workers loading the pallet incorrectly. Also, using pressure sensors to detect when a load has become too heavy, and when an uneven load is on the forklift, could avoid such accidents." Rajesh Kapase, Director IT & Special Projects, Spoton Logistics Pvt Ltd points out that the IoT features a variety of ranges concerning tech solutions,


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feature which includes embedded sensors, hardware, software services, cloud computing, and data analytics. One of the main challenges for enterprises pursuing to conduct business in this space is to choose an appropriate business model.

IoT: facilitating growth

IoT enhances in-transit visibility of the vehicles, therefore, bringing more orders. IoT can also predict immediate issues and difficulties that may inhibit the development of all the aspects of the logistics industry.” Rajesh Kapase Director- IT & Special Projects, Spoton Logistics Pvt Ltd

DHL Trend Radar’s Opportunities and Challenges of IoT adoption in Logistics KEY OPPORTUNITIES • Increases the transparency, traceability, and reliability of logistics operations. • More operational effciency and low cost with automated decisions in complex environments. • Real-time connectivity helps to improve service quality, optimize asset utilisation, and increase operational security. • Creation of more dynamic and customised delivery services for customers. KEY CHALLENGES • High levels of fragmentation within the logistics industry require the development of a logistics IoT standard. • Data and security concerns in the IoT-powered supply chain. • Achieving seamless indoor and outdoor tracking and roaming at a low cost of deployment. • IoT hardware needs to be further ruggedised for large deployments in logistics, especially in terms of battery life.

52 CargoConnect - march 2019

IoT is considered to be the central pillar of logistics. From traffic management to fleet management, from enhancing customer experience to predictive maintenance, IoT is said to be writing the growth story of the logistics industry. When implemented correctly, in conjunction with other technologies like Blockchain, RFID, the logistics companies are bound to reap huge benefits. According to Kavuru, IoT provides NEXGEN tracking. Telematics sensors in trucks and multi-sensor tags on items t ra n sm it data on locat ion, condition (whether any threshold is crossed), and if a package has been opened (to detect possible theft). Kavuru says there are some changes required in this process of IoT, such as: a. Standards for message formats to exchange sensor information in heterogeneous environments b. Establish trust and ownership of data and overcoming privacy issues in IoT-powered supply chain c. Change in the business mindset to embrace the full potential of IoT.

On the other hand, Kapase feels that with the help of IoT driven solutions, organisations can connect all the devices being used across all locations to cloud network to capture and share the business-critical data, thereby, allowing business users to have real-time visibility of the operations. “By implementing IoT driven solutions, real-time fleet management plays a vital role in managing long-haul vehicles, their routes and positions can also help opti-

mise the routes,” shares Kapase. He further elaborates, “Adequate Integration of IoT and transactional data in logistics will be a game-changer, concerning enhancing the accuracy of organisation’s predictive demands, patterns, and by making the data available with various stakeholders (internal & external).” Focusing on the investment in IoT business, Kapase informs that it can help organisations increase the overall ef f ic ienc y d ra mat ic a l ly. “It a l so enhances in-transit visibility of the vehicles, therefore, bringing more orders. IoT can also predict immediate issues and difficulties that may inhibit the development of all the aspects of the logistics industry,” he suggests.

Value

IoT i nc r ea s e s t he t ra n spa r e nc y, traceability, and reliability of logistics op erat ion s. IoT of fers ple nt y of opportunities to boost growth and enhance the efficiency of logistics operations and supply chain. Kapase highlights the main IoT business models that enterprises are considering and conc ludes by say i ng ,“Embedded sensors, hardware, software services, Cloud Computing, GPS devices, and Data Analytics are the main IoT models. The IoT in logistics is set for growth, as the enterprises already adopting embedded devices and software solutions to help monitor people and equipment are witnessing efficiency in processes. It enables key business users to examine and understand ongoing activities in a plant or company, such as the performance of machines and equipment, energy consumption, ambient conditions, the status of inventory levels, and the flow of materials dynamically.” Diving into the logistical revolution may seem intimidating, especially for those unfamiliar with IoT, AI, and Blockchain. Advances in mobile technology and IoT are dramatically improving the way transportation and logistics businesses operate-connected intelligently; facilitating safe, steady, and successful operations.


march 2019 - CargoConnect

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he Bogibeel Bridge, an offshoot of the Assam Movement which culminated with the signing of the Assam Accord in 1985, is recognised as Asia’s secondlongest bridge with three-lane roads on top and a double line rail below. The Bridge was inaugurated by Prime Minister Narendra Modi on December 25. Spanning over the river Brahmaputra, connecting Dibrugarh and Dhemaji districts of Assam, the Bridge will facilitate quicker movement of vehicles and easy access for the people of Dhemaji to major hospitals, educational institutes, and the Dibrugarh airport. The Bridge also provides direct connectivity from Dibrugarh to Itanagar in Arunachal Pradesh. Also, its railway track will reduce the travel distance by 705 km. Delighted with the completion of the Bridge during his tenure, Assam Chief Minister Sarbananda Sonowal said, “The Bogibeel Bridge is a dream come true. It will not only connect Dhemaji and Dibrugarh districts, the north and south banks of Brahmaputra River, but will also play a major role in the economic growth of the region, s t r e n g t h e n s e c u r it y a n d b o o s t c o n n e c t i v it y f o r t h e p e o pl e o f neighbouring Arunachal Pradesh. Further, because of the technology used

54 CargoConnect - march 2019

to build the bridge, the Indian Air Force will have three landing strips.” According to a defence official, “This Bridge is a part of infrastructure projects to improve logistics along the border in Arunachal Pradesh. This includes the construction of a trans-Arunachal highway on the north bank of the Brahmaputra, and new road and rail links. So far, troops moving between Dhemaji and Dibrugarh were travelling over 500km via the Kaliabhomora Bridge in Sonitpur to reach the other side.” Un ion mi n ister Piy ush Goyal termed it a historic event for the Indian Railways when the first trial train journey on the bridge was conducted from Dhamalgaon railway station in Dibrugarh to Tangani railway station of Dhemaji. The Northeast Frontier Railway (NFR) piloted the first freight train on December 2. The NF Railway has announced to introduce two new Intercity Express trains connecting Tinsukia and Naharlagun via the new bridge. While one train will run five days in a week, another will run weekly. The trains will have stoppages at New Tinsukia, Dibrugarh, Dhamalgaon, Dhemaji, Gogamukh, North Lakhimpur and Harmuti during the journey on both ways. The train will have one AC chair car and nine second-class day coach with sitting accommodation.

“The Bogibeel Bridge is not just any other bridge but a lifeline for lakhs of people of Assam and Arunachal Pradesh. The Bridge was a dream for generations, now a reality. Economic development has been a key part of our government’s “Act East” policy, which is looking to push the India’s economic cooperation, cultural ties and develop strategic relationship with countries in the Asia-Pacific region through continuous engagement at bilateral, regional and multilateral levels, and wherein India’s northeastern states are active stakeholders.” Narendra Modi, Prime Minister, India


Significance of the Bridge Location

The Bridge is located 17 km downstream of the town of Dibrugarh. It will connect Dibrugarh in the south to Lakhimpur in the north. The River Brahmaputra runs to the north of Dibrugarh and spans 10 km. Since Dibrugarh is an important centre of healthcare, education and commerce in the region, the people living north of the Brahmaputra, can now access this city, more conveniently.

State-of-the-art construction The Bridge’s lower deck has double line broad gauge rail tracks and the upper deck is a road of three lanes. It is the country’s only bridge to have full welded steel-concrete composite girders.

National & Regional connectivity

The Bridge will reduce Delhi to Dibrugarh train travel time by about three hours to 34 hours as against 37 hours presently. It will also significantly reduce the journey from Dibrugarh in Assam to the Arunachal Pradesh capital Itanagar. It will benefit tourists, trade goods and those seeking medical treatment.

Defence

It will enhance national security of the eastern region of India by facilitating swift movement of troops

and equipment to areas near the India-China border. It will also provide a shorter and alternative railway route to Dibrugarh via North Bank of Brahmaputra.

International Relations

With increased intra-North-East connectivity and transnational linkages like trilateral highway connecting Manipur to Thailand, rail connectivity through Bangladesh between mainland India and Tripura, etc. will open up unprecedented economic opportunity in the region.

Transformational Infrastructure projects

The Bridge is part of infrastructure projects planned by India to improve logistics along the border in Arunachal Pradesh. This includes the construction of a transArunachal highway on the north bank of the Brahmaputra, and new road and rail links over the mighty river and its major tributaries such as the Dibang, Lohit, Subansiri and Kameng. The road project includes the construction of 29.45 km of road to be undertaken by the Assam Public Works Department (Assam PWD). Approximately `30.87 bn ($576m) worth of works are being executed by the Northeast Frontier Railway while `2.91 bn ($54m) worth of works are being undertaken by Assam PWD. The rail project

“It is a historic day as it has fulfilled a long-cherished dream of the people of Assam. The bridge will revolutionise the economy of the region in a major way.” Sarbananda Sonowal, Chief Minister, Assam

comprises the laying of 74 km of railway line, including the rail links on the south and north banks of the river. The rail line will be linked to Chowalkhowa, which is 5.83 km from Dibrugarh, on the south bank and between Sisi Borgaon and Sirpani on the north bank. The work on the railway line is being undertaken by Northeast Frontier Railway.

march 2019 - CargoConnect

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16 JANUARY, 2020 MUMBAI POWERED BY

Avail 20% Early Bird Discount on Delegate Registration till 31 April 2019

DELEGATES: 400+ PANELS: 5+

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More than 400 representatives from the Indian Pharmaceutical sector- manufacturers, tier suppliers, logistics service providers, infrastructure operators, airlines, shipping lines, airports, ports, government authorities and technology solutions specialists, are expected to attend PHARMACONNECT 2020 conference.

PANELISTS AT PHARMACONNECT 2020

ADVISORY BOARD

Yogesh Lawania Head- API Planning Global Logistics BIOCON

SPONSORS ATSPONSORS PHARMACONNECT 2020

REGISTRATION PARTNER

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Ajeet Kumar: +91 9810962016 ajeet@surecommedia.com Smiti Suri: +91 9711383365 smiti@surecommedia.com Mehuli Choudhury: +91 8700292866 mehuli.surecommedia@gmail.com Rahul Arora: +91 9818395942 rahul.surecommedia@gmail.com Gagan Kumar: +91 8587852810 gagan.surecommedia@gmail.com


2019 ATTENDEE REVIEWS It was a great event. Very well organised and a lot of knowledge exchanging took place on the logistics of pharmaceuticals related topics.”

Sanjay Kulkarni, Glenmark Pharma

It was indeed a pleasure being part of PHARMACONNECT 2019. The conference was very interesting, especially talking about the content covered and the dignitaries invited as part of the panel discussions. I am sure all the expert comments would certainly help the Indian pharma logistics trade flourish.”

Vikas Rajput, CIPLA

It was one of a kind conference and hospitality was superb. Lot of learning and knowledge sharing happened during the panel discussions. Would be more than happy if there would be more professionals from the logistics department of pharma companies attending the event.”

Stanley Fernandes, Bharat Serums and Vaccines

I truly see that the event turned out very fruitful for all participants. Looking forward to a more grand PHARMACONNECT 2020 next year.”

Brijendra Kumar, Mankind Pharma

Indeed a splendid platform for pharma and supply chain professionals, who has unquestionably been benefited after attending this conference. The panel sessions gives an international exposure with respect to most recent trends in the industry and how these can be implemented in day-to-day activities.”

Vinod Mulay, Bilcare Limited

It was a wonderful event and our heartfelt congratulations to the entire team for putting together such a good show. All the best to the team for their future endeavours.”

Arvind Aggarwal, Celebi Delhi Cargo Terminal Management

Compliments for organising a wonderful gathering of various partners active in the Indian Pharma Supply Chain. The distinctive feature of this event was the practical discussions, augmented by the networking opportunities.”

Surendra Deodhar, Reliance Life Sciences

It was a pleasure meeting the top personnel from the field. For future, I would suggest we talk about compliances and regulatory policies/bodies within India catering to both domestic and international market, and also challenges to set compliance at each stage in line with the present scenario.”

Jayanthi Bandi, Exceed Logistics

PHARMACONNECT 2019 at start of the year, was of great importance bringing pan India pharma users under one roof through the day covering 5 sessions which were meticulously planned by CARGO CONNECT team, giving stakeholders rarest of opportunity to understand the services offered to pharma users, hear their experience, and what they further desire to plan their supply chain seamlessly.”

Bharat Thakkar, Zeus Air Services

An amazing and one of its kind event. Excellent arrangements. Good sequence of panel discussions. Superb hospitality. Overall a truly satisfactory PHARMACONNECT 2019.”

Rajesh J. Rao, Cadila Pharmaceuticals

ATTENDEES AT PHARMA CONNECT 2019


Interview

Each component of the Logistics sector is showing robust growth in double digits, which is impressive. The respective Ministries are adequately focusing on the policies. Essentially, all need to deliver in unison for optimising strength and growth. N Sivasailam, IAS, Special Secretary (Logistics), Department of Commerce, Government of India, in a candid interaction with Ajeet Kumar, elucidates the various initiatives such as NLP, and other steps taken to ensure efficient logistics in the country.

“The Logistics Division strategically wants to work with the industry organically for implementing the National Logistics Policy.� The initiatives of the draft National Logistics Policy appear promising for the logistics Industry. How would you rationalise its success?. The draft policy has been shared publicly to enable stakeholders to appreciate it and share their reactions. We want the stakeholders to benefit from the policy. The policy’s success rests on the stakeholders perceiving value in the policy initiatives such as setting up of a separate fund, single window, e-marketplace and changes in rules, regulations, processes and procedures envisaged in the policy. We want the Policy to be joint vision document. We want to develop it in collaboration with the Industry and work with the Industry organically in implementing the elements of the policy.

What are the plans for integrating and optimising the various elements of the logistics value chain for seamless growth?

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Logistics is a multi-sectoral subject. Apart from the important Sectoral Verticals such as Shipping, Air Transport, Road Transport and the many institutions such as Customs, that are directly associated with these sectors;there are 42 other Participating Government Agencies (PGAs) associated with and significantly affecting Trade Logistics. For Logistics efficiency, all PGAs need to deliver in unison for optimising strength and growth. As they say, the supply chain is as strong as the weakest link. It is important that actions of one PGA to promote improved logistic efficiency is not defeated by the restrictive actions of another PGA. The role of the Logistics Division shall be to ensure that we all fire together. Executives in allied verticals shall have their objectives, action plans and rules, but the Logistics Division will coordinate to ensure that the objectives, action plans and rules that the Verticals determine for themselves are also aligned with the goals and strategies for effective and

efficient logistics of the country.

Multimodal can create efficiencies as well as reduce cost. What are the initiatives of building a multimodal transportation infrastructure? We need to quickly act together in designing a multimodal logistics ecosystem. The matter is under consideration at the highest level in the GoI. The suggestions of the industry associations have been invaluable in the consideration of the Amendments to the Act. This is a path-breaking initiative. The action on the ground level is also there. The need is to get many projects on the ground together to make an impact. Take for example, the mode of Inland Waterways - there is no point in having just one or only a few terminals, for the system to be truly efficient. There is a requirement of a certain minimum number of terminals, what we call the critical mass, for the system to


We plan to make India a transshipment hub, and therefore consolidating Port and Airport infrastructure is in that direction along with warehousing, which is a valuable addition in this endeavour. Also driving this endeavour are the policies for Free Trade Warehousing Zones.

be considered efficient. With every new terminal, benefits increase exponentially. Hence, there is an imminent and urgent need to address many projects in short-medium term all for an economy-wide impact. Multimodal logistics too creates exponential benefits and therefore it has to be scaled up quickly for significant economy-wide impacts. I consider PPPs to be the ideal mechanism to push the significant scaling up of Multi-modal infrastructure. The Logistics division is working on it and is also encouraging the Verticals to take to this system for significant scaling up.

What are the initiatives for consolidating Port and Airport infrastructure? The Port and Airport infrastructure are crucial, as our exports and imports are through these gateways. The respective Ministries themselves are formulating policies to improve the infrastructure and operations. The Port Community System; is a case in point, it is for the benefit of Port’s ecosystem stakeholders. Making Air Cargo affordable is an objective and a challenge we have, for internal freight movement as well as for external freight. The affordability factor will be crucial for agriculture products, mainly if we need to develop the North East market. Air Cargo and Waterways are going to play a crucial role in certain areas, primarily in the North East, which has traditionally been producing both fresh and processed agricultural products. These products will be able to find new markets with a robust, reli-

able, efficient and affordable supply chain. Therefore improvement of Air Cargo and Inland Waterways Logistics is essential. Besides, India as a transshipment hub for both Sea Trade and Air Cargo makes tremendous sense strictly from the Logistics point of view since we spend significant amounts for the transhipment of our own goods in external ports. India, as a transhipment hub, opens up enormous trade, business and employment opportunities for the country. Enabling Policies such as that for Free Trade Warehousing Zones will ensure efficient utilisation of capacities. Of course, the initiatives of Customs with SWIFT and ICEGATE have facilitated improved efficiencies at Ports and Airports. Further, significant improvements are required to integrate into a common platform for improved efficiencies,as in better placed foreign jurisdictions.

What are the initiatives on the technology front? We are developing a portal for Trade, which will provide an opportunity for any stakeholder to enroll, connect with partners and even individuals/firms who need transportation. We are ensuring that the portal covers all sectors of Logistics - Ports, Airports, Road, Railway and Inland Waterways. We propose to create a platform to get all PGAs, Customs included, on to the portal, ensuring clearances that are fast, transparent and affordable. Also, the ‘Logistics Tool’ which is currently being developed, will help Logistics Industry, Logistics Industry Users, Logistics Industry Associations, Vendors, Associates, and Media for informed business decisions by educatiing and sharing information and updates on relevant field information such as road congestion, toll waiting times, etc. The success of the ‘logistics tool’ will depend to a great extent on the participation of the ecosystem stakeholders by providing data. The data will be used for the creation of heat maps which will be of collective use for the Logistics Industry.

How do you see the present and long term growth of Logistics in India? Logistics is an exciting sector. Each component of the sector is showing robust growth in double digits, which is impressive. The challenge lies in our ability to provide funds to the sector. Business is poised to expand with the Government’s support. Manufacturing activity is growing in the country and fall in the cost of logistics will give a fillip to the manufacturing sector, which in turn will drive the growth of the logistics sector. Fall in logistics cost has great potential for making our exports more competitive besides enhancing it. In respect of imports, it will facilitate greater value addition, thereby opening new avenues for re-export; the

The Logistics Tool will help Logistics Industry, Logistics Industry Users, Logistics Industry Associations, Vendors, Associates, and Media for informed business decisions.

resulting vibrancy in India’s international trade has favourable implications for creating increased number of new jobs in many sectors,several of which hitherto were not exposed to international trade at all.

Is logistics cost a concern?

Issues with Logistics cost appears to be the reason for constituting the Division and it remains the primary concern of the Division. We are focussed on the issues concerning Reducing logistics cost. Logistics services and businesses should sustain as a viable business, make reasonable margins and it should provide a visible contribution to business by enhancing access to goods and services at an affordable cost as in a competitive setting, in such a manner that logistics enhances Endproduct manufacturing and services availability. march 2019 - CargoConnect

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Interview

Setting new benchmarks in cargo handling! The 40-year history of Hong Kong Air Cargo Terminals Limited (Hactl) is one of constant innovation, ground-breaking initiatives, major investment and world records. Wilson Kwong, Chief Executive, Hactl, in a candid conversation with Ajeet Kumar, reveals about the cargo terminal’s unique world-class facilities, efficient operations, and continuing dedication and enthusiasm of the management that have kept Hactl ahead in the industry.

What makes Hactl’s SuperTerminal1 facility at Hong Kong International Airport (HKIA) the single largest and most sophisticated multi-level air cargo terminal in the world? We believe our SuperTerminal1 facility at HKIA to be the single largest, and most sophisticated general air cargo handling facility in terms of scale and complexity. SuperTerminal1 has a floor area of 395,000 sqm over six levels. Its fully-automated Container Storage System (CSS) has 3,500 positions, served by no less than 40 fully-automated driverless ATVs. There is additional storage for 1,573 empty units. Our Box Storage System (BSS), which handles cargo which is delivered loose, for us to build onto pallets, has 10,000 storage positions, and provides automated storage and retrieval. We have over 466 pallet workstations; 313 truck docks; facilities for livestock/bloodstock; a perishables zone with refrigerated storage, 30 dedicated truck docks and a fast-track route from plane to storage; a valuables store that can handle 9 armoured vehicles simultaneously; and a dedicated hazardous/ radioactive cargo zone. We also have a whole floor of our office building devoted to staff training. Our entire facil-

60 CargoConnect - march 2019

ity is monitored by over 1000 CCTV cameras; and access to controlled zones is card-controlled, with large areas entirely personnel-free. We also have a sports centre on our roof.

Super Terminal 1 was designed and built to do one thing: manage cargo in the smartest possible way. Can you share its exclusives!? Since 1998, we have constantly updated Super Terminal 1 facility, its processes, equipments and systems to ensure that cargo is handled quickly, safely, consistently and efficiently, and in full compliance with every new regulation and evolving requirement of the industry. We have our own innovation team, called Performance Enhancement, which proactively seeks ways of doing

things better. Among recent innovations have been the adoption of mobile computing throughout our entire operation (which has utterly transformed our business), the management of truck flows and parking (which has reduced handling times and eliminated congestion) and our ‘Smart Cargo Locating’ system that accurately logs all loose cargo locations

SuperTerminal1 can accommodate up to 3.5 mn tonnes per annum. Its record for throughput in a single day is 10,184 tonnes. We frequently handle over 100 freighters per day, and up to 15 at the same time.


in our giant facility (speeding up retrieval for pallet building and improving flown-as-booked performance). The ‘brains’ behind our operations are our central cargo management system, COSAC-Plus, which processes all cargo and interfaces with our airline customers, air cargo community and Customs; and our Logistics Control System (LCS), which totally controls our fully-automated CSS and BSS. COSAC-Plus was designed and built inhouse by our own team of 100 developers; the same team has just completely replaced the LCS, using a totally new platform that is scalable and futureproof, while also improving the system logic to rationalise CSS movements.

Tell us about your Special Cargo Handling Facilities, such as the Refrigerated Cargo Centre. Our special cargo handling facilities include resources to handle outsized cargo (for example, we recently offloaded three items of 20m long heavy industrial machinery weighing 17 tonnes per piece); dangerous and radioactive goods; express shipments; livestock; on-board courier traffic; perishables; and temperature-controlled cargo. These capabilities are supported by dedicated facilities for live animals, as well as zones for hazardous cargo (red), temperaturecontrolled cargo (gold), perishables (blue), and express freight (green). Hactl was one of the first handlers in the world to achieve WHO GDP certification. This was achieved through a programme of process optimisation, the introduction of new standards in hygiene, the creation of a ‘Golden Route’ that minimises time taken from unloading to either temperature-controlled storage or hand-out, and investment in new equipment such as thermal dollies (we believe the first in the world) to preserve condition on the ramp in all weathers. We followed this by being the first Hong Kong handler to achieve IATA CEIV Pharma. Among the many innovations that helped us achieve these certifications is constant temperature logging and automated alerts that would be triggered in the

event of any excursions, and mapping (signing) of our refrigerated facilities to indicate the optimum areas for storage at the required temperatures.

As human resource is valued as one of our greatest assets, what are people friendly policies taken up by Hactl? Hactl has always said that people are its greatest asset, and we demonstrate this daily. We start by providing comfortable and safe working conditions, attractive salaries, and opportunities for overtime. We develop individuals by providing thorough and regular training using our our own in-house resources (recently upgraded), and we nurture staff progression through soft skills training and promotion from within. We provide subsidies for further education. We reward staffs who reach service milestones (10 years and upwards). And we have an active social calendar of sports, fundraising and

Hactl has transferable skills in cargo terminal design and operations management, air cargo IT, and many other aspects of handling, which could form the basis of future partnerships in China and elsewhere. other pursuits, to which we also invite staff families. We try to instill a feeling of family and belonging among our workers; to judge by our low churn rates and long-service statistics, we seem to be succeeding. The dividend for our customers is that we have highly-experienced people, and we are the only handler here that is not forced to rely on temporary agency labour.

How is the trade balance with India? What are the major exports and imports? Hactl’s current involvement with India is limited by the fact that we do not

handle an indigenous Indian carrier; but that could change anytime. Notwithstanding, we are handling the equivalent of around 8 full 747 freighters every week. Exports are mainly mobile phones and parts, while imports are primarily garments. On a more macro level, India was Hong Kong’s 7th largest trading partner in 2017, while Hong Kong was India’s 5th largest trading partner. So we are not blind to the huge potential for an increased share of existing business, or to the future prospects of the Indian market, which we believe has not yet realised anything like its full potential as an exporter and importer.

What will be your ideal strategies for growth in the coming years? Hactl’s future growth will come from various sources. Firstly, we will continue to support our carrier customers with the tools to develop new revenue sources (such as E-commerce and pharma), as well as helping them to exploit existing market opportunities through enhanced service standards. E-commerce is also of direct interest to our subsidiary, Hacis, which is developing products for this sector, for example working with postal authorities on efficient export services via Hong Kong; this is additionally generating traffic for Hactl’s customers. Perishables will also be an increasing focus. It is already significant for Hactl and its carriers, but we plan further enhancements that will help them to attract more such business. The opening of the third runway will be a major factor in future growth, removing the recent constraints on freighter operations. This is Hactl’s core activity, and we have been held back more than any other handler while capacity is restricted. We will continue to look at other opportunities associated with our core business. Hactl has transferable skills in cargo terminal design and operations management, air cargo IT, and many other aspects of handling, which could form the basis of future partnerships in China and elsewhere. march 2019 - CargoConnect

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Interview

HKIA offers an aggregate cargo handling capacity of 7.4 mn tonnes per annum Though bigger and swankier airports continue to open around the globe every year, the 20-year-old Hong Kong International Airport is still regarded as one of the best – and most profitable – aviation facilities in the world. According to IATA’s estimates, the airport will handle 102 million passengers, 8.9 mn tones of cargo and 607,000 aircraft movements annually by 2030. Alaina Shum, General Manager, Aviation Logistics at Airport Authority Hong Kong outlined to Upamanyu Borah, the significant growth rate in cargo traffic at the airport, and their future development plans to meet the growing demand.

How do you manage record breaking figures of cargo throughput at Hong Kong International Airport? With extensive connectivity, continuous enhancement of cargo infrastructure and high efficiency, Hong Kong International Airport (HKIA) has been the world’s busiest cargo airport for 8 consecutive years since 2010. As of 2018, the cargo volume continued to grow 1.5 per cent to 5.1 mn tones, driven by strong performance in transshipment, along with a total of 13 new airlines starting their opera-

62 CargoConnect - march 2019


tions at HKIA, including freighter airlines such as Hong Kong Air Cargo Carrier, Air Cargo Global and CargoLogicAir. Backed by several state-of-the-art cargo infrastructures, including three cargo terminals, namely Hong Kong Air Cargo Terminals, Asia Airfreight Terminal and Cathay Pacific Cargo Terminal, together with the DHL Central Asia Hub (CAH) and other logistics facilities, HKIA is able to offer an aggregate cargo handling capacity of 7.4 mn tonnes per annum to process the record high volume of cargo throughput. Furthermore, benefiting from the efficient round-the-clock customs and commitment from the ground operators, HKIA is able to sustain its efficiency with high service standard, such as very late export cut-off time of 3 hours before flight departure.

HKIA and Brussels Airport recently unveiled an airportto-airport (A2A) pharma corridor to fulfil the specific requirements of pharma shipments. To what extent will it foster handling of pharma shipments? Most pharmaceutical products are temperature sensitive and require stringent and special handling procedures. As the strategic members of Pharma.Aero and Partner Airports of IATA’s Centre of Excellence for Independent Validators in Pharmaceuticals (CEIV Pharma) Certification, HKIA and Brussels Airport have launched an airport-to-airport pharma corridor, aiming to pioneer service offerings and CEIV Pharma standards that provide assurance in

As one of the fastest growing economies, India is definitely a market we have focused on. Currently, there are over 170 flights operating weekly between HKIA and various destinations in India.

handling quality of such high value pharma products. After this pioneering launch, the model will be propagated to other Pharma.Aero member airports to form a network of pharma corridors. Pharma shippers will then have a network to cover their trade lanes which meet their shipping needs.

How important is the Indian cargo market for HKIA? As one of the fastest growing economies, India is definitely a market we have focused on. Currently, there are over 170 flights operating weekly between HKIA and various destinations in India.

What are HKIA’s significant initiatives and strategies for 2019 and the future? To capture the growing E-commerce business and ensure sufficient capacity at HKIA for handling express cargo, Airport Authority Hong Kong (AAHK) has entered into agreement with DHL to expand its Central Asia Hub (CAH) for targeted completion for operation by 2022. By then, the annual throughput of the expanded CAH is expected to go up by 50 per cent to 1.06 mn tonnes. An agreement has been signed with the joint venture led by Cainiao Network, the logistics arm of Alibaba Group, to develop a Premium Logistics

Centre at Kwo Lo Wan in South Cargo Precinct of HKIA. Spreading across 5.3 hectares with an estimated gross floor area of 380,000 sq mts, the Centre will be the third-largest warehousing space in Hong Kong. The Centre is targeted to be future-proof with high specifications, such as ramp access to all floors with allowing the use of large-scale robotics and automation, temperature control provisions. It is scheduled to commence operation in 2023. Further, with the commencement of Hong Kong-Zhuhai-Macao Bridge, the travelling time between HKIA and the city of Zhuhai by road transport is significantly reduced from about 4 hours to 45 minutes, enhancing the capabilities of HKIA and the Hong Kong logistics industry in serving the Pearl River Delta, especially its western parts. In the longer run, to support the growing air-to-air transshipment and enhance the overall operation efficiency, AAHK is planning for the provision of a Transshipment Handling Facility in the future Three-runway System. Lastly, HKIA will continue to enhance its capacity and capability in handling high-value added, temperaturecontrolled cargo as a key business development strategy. In order to provide end-to-end temperature-controlled transportation process on airside, AAHK will acquire 21 additional cool dollies by mid2019. Also, the development of a sheltered apron for temperate-controlled cargo short-term staging is underway. march 2019 - CargoConnect

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guestcolumn

Sush a n t Sar i n argo insurance reduces shippers’ exposure to financial loss. Still many shippers choose to risk importing and exporting goods without getting cargo insurance. Unfortunately, many shippers have suffered significant loss for taking this risk. Below are prime reasons, why shippers should get cargo insurance.

CARGO THEFT RISING

Cargo theft, especially through identity theft and fictitious pickups, is on the rise. We’re not even counting piracy, which is a significant risk of cargo theft and loss in modern international shipping.

MORE CONTAINERS LOST AT SEA EVERY YEAR

Every year, containers are lost to the sea. With the trend to mega ships, carrying huge stacks of shipping containers across the oceans, cargo containers overboard have increased. Considering the dramatic rise in shipping containers lost at sea is one more reason shippers should get cargo insurance. As per World Shipping Council, approximately 10,000 containers were lost at sea in 201718. This number does not even include containers lost during land transits.

CATASTROPHIC EVENTS

Storms, shipwrecks, explosions. Every yea r, c at a st r oph ic eve nt s c au s e tremendous amounts of cargo losses.

CARGO DAMAGE BY COMMON OCCURRENCES 2017-2018

25 percent of the damage is physical, 14 percent temperature related, 11 percent of containers lost overboard, 9 percent theft and 8 percent shortage. Other claim areas are sinking, contamination,

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Why you need cargo insurance and infestation. All these claim types account for smaller percentages than 8 percent. Damage to cargo happens all too often, probably because there are so many different opport unities for damage to occur. Bad stowage and shore error are the primary contributors to damaged cargo, but they list many other reasons for damage: • Lack of export packaging • Increased use of weak retail packaging • Inadequate ventilation • Wrong choice of container • The poor condition of the container • Lack of effect ive contai ner interchange inspection • Ineffective sealing arrangements • Lack of clear carriage instructions • Ineffective internal cleaning • Contaminated oors (taint) • Wrong temperature settings • Condensation • Overloading • Poor distribution of cargo weight • Wrong air flow settings • Wrongly declared cargo • B/ L t e mp e rat u r e not at io n s misleading/ unachievable • Lack of reefer points • Organized crime • Heavy containers stowed on the light • Stack weights exceeded • Heat sensitive cargoes stowed on/ adjacent to heated bunker tanks or in direct sunlight • Fragile loads stowed in areas of high motion • Damaged, worn, mixed securing equipment • Poor monitoring of temperatures • Wrong use of temperature controls

GENERAL AVERAGE

General Average is an internationally accepted principle where if certain types of accidents occur to the vessel, all parties share in the loss equally. You do not want to find yourself in a General Average situation without

insurance. A Claim’s specialist website has recorded almost 185 GA incidents in the year 2018. These do not include sunk or machinery & engine failure incidents.

CONTRACTUAL REQUIREMENT

Shippers’ sales contracts may obligate them to provide ocean cargo insurance to protect a buyer’s interest or their bank’s interest. This is especially true when selling goods CIP or CIF. Shippers should always pay attention to the sma l l det a i l s of t hei r cont rac t s. Unfortunately, insurance sometimes gets overlooked, and the shipper can be held responsible. Failure to get cargo insurance when a shipper is contractually obligated to do so can not only subject the shipper to financial loss if there is loss or d a m age to t h e go o d s, b ut no n compliance with the terms of the contract with the buyer can lead to loss of sales and legal problems.

COVERAGE FOR LIMITED CARRIER LIABILITY

Carriers, by law, are not responsible for many common causes of loss that occur in transit (for example, acts of God, General Average). Even when carriers are liable, carriers’ liability in the event of a loss is limited – either by contract in the bill of lading or by law. In most cases, shippers will only recover cents on the dollar from the carrier. Shippers should never count on the carrier that is shipping their goods to cover losses or damage that may occur over the course of a container ship voyage. Sh ippers who purchase cargo insurance themselves are usually much better protected than shippers who allow other parties in their importing or exporting transactions to handle the cargo insurance. (The author is Executive Vice President - Commercial Lines, Tata AIG)


Technology

Bionic

Superhumans are on the horizon

B

ionic enhancement technologies such as advanced wearables and exoskeletons have the potential to expand the boundaries of current physical barriers. Smart clothing, bionic arms, and even futuristic brain-computer interfaces can support the logistics workforce, especially older workers, in areas such as training, communication, process execution, and optimisation. Most importantly, they can also minimise health and safety risks in the supply chain.

Key Developments & Implications

Aging workforces and labour shortages in mature markets are driving the need for exoskeletons with the market projected to exceed a billion dollars within the next decade, up from around $200 million in 2017. Initial logistics use cases will focus on improving health and safety, particularly in reducing the stress and strain caused by repetitive movements in manual handling activities. This is a key issue in transportation and warehousing which has one of the highest rates of occupational injury and illness in the US private sector. Beyond exoskeletons, breakthroughs in sensors and nanotech-

  Key Opportunities

  Key Challenges

■ Increased effciency through real-time operational analytics from wearables, enabling proactive correction

■ As this trend is in its early stages of industrial adoption, no cost/benefit indicators are available so far

■ Revolutionary potential for handsfree task execution through gesture and thought-control technologies

■ Most bionics are currently immature for enterprise usage but are developing quickly

■ Signifcant reduction and even elimination of work-related injuries, raising health and safety standards

nologies have allowed for previously unimaginable bionic solutions. Initial industrial trials of advanced solutions in human augmentation have become prevalent in the market, such as using implants for security and access control and innovative interfaces that allow for steering computers through brain waves (e.g. Neuralink). Forward-thinking companies will utilise bionic enhancements to support the workforce in coming decades. Exoskeletons are robotic suits that boost the wearer’s strength and endurance, greatly reducing the physical strain of manual handling activities. They are becoming increasingly applicable and demanded in logistics to replace bulky tools to lift

■ Other ethical challenges with human enhancements

heavy objects. Various solutions focusing on parts (or all of) the body are being developed for mass adoption (e.g. Panasonic Power Loader Suit). Human augmentation is the use of technology to boost the physical and cognitive abilities of humans and enable new forms of human machine interaction. Smart contact lenses and smart chip implants can be used for security procedures as well as access control. Advanced chips are also being used to “connect” humans for exchanging concepts without the necessity of speech. Brain-computer interfaces that focus on using brain waves for controlling machines could potentially enable new ways of immersive interaction between humans and machines. march 2019 - CargoConnect

65


Shipper Speaks

Prompt Delivery can give a big advantage to the Company With the growth in the Indian pharmaceutical industry (ranked 3rd in terms of volume and 14th in value globally), the logistics of pharmaceuticals is becoming all the more important. Around 30 to 40 per cent of the Pharmaceutical Industry expenses is invested in logistics. Subhash Talukdar, Senior General Manager - Supply Chain & Demand Planning, Lupin Limited, discusses how logistics is vital to Lupin’s overall growth and progress and profitability by maintaining the right product mix at the right location with the required quantity, delivered cost-effectively.

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he underlining philosophy of Lupin’s Founder Chairman Desh Bandhu Gupta was to alleviate the suffering of the people by providing affordable medicines produced in India with the highest quality. The journey started with preparing medicines for TB which was the need of the hour in India, at very affordable prices, which got instantly accepted by the customers and till today, we continue to manufacture anti TB medicines and sell at the no-profit basis. This, till today, has been the biggest contribution Lupin has given to the nation. Subsequently, the company expanded into Cardio Vascular, Neurology, Diabetology, Anti-Asthma, AntiInfective, Gastrointestinal and Oncology segments. These are all major lifestyle health issues as well as chronic diseases being faced by India and the world at large, hence high acceptance levels. The company has stuck to its path of the founder’s ideology i.e. alleviation of diseases being faced by mankind through cost-effective drug delivery system.

Supply Chain Design

Virtually, every major pharma company must view their supply chain in a new, strategic light, as a potential competitive advantage rather than an unavoidable cost center embedded in day-to-day

66 CargoConnect - march 2019

operations. In the process, they must discard age-old attitudes that once drove nearly uninterrupted success. As they tackle the issues that threaten their future, multinational pharmaceutical firms must strategically transform their supply chain to facilitate revenue and profit growth. This means streamlining the supply chain and making it more flexible, as well as being as close to the customer as possible, so it can produce and deliver drugs efficiently to meet the needs of a variety of product and market segments at competitive cost levels. Lupin’s supply chain has evolved over the years to meet the challenges

Formerly, pharmaceutical companies needed to focus their skills on research and development and on sales and marketing. For the most part, managing costs and operational excellence didn’t matter as much. But as the competitive landscape has shifted, so have the required operational capabilities.

with the ever-changing environment. The biggest environment change in the recent past is the implementation of GST. For domestic business, we have two inhouse manufacturing facilities, around 80 plus Third-Party manufacturers as well as Loan License facilities with strong quality control from where we procure finished goods. These goods are strategically dispatched to 4 central warehouses situated closer to the cluster of manufacturing locations. These products are then distributed to all the 28 depots situated in different states of India strategically placed nearest to the customer. We also have very good product tie-ups with many MNCs for comarketing their innovative products. One of the most successful ventures is co-marketing of range of insulin and anti-diabetic products. Since these are temperature sensitive products, Lupin has invested heavily into infrastructure both at the CWH premises as well as at the depot level. For cold chain products, we have created 4 modern cold chains CWHs across India. Further to distribute the cold chain products, dedicated temperature controlled refrigerated vehicles are used.

Innovations

As per the practice in the Pharma Industry, around 60 per cent of orders


come around the last week of the month, increasing the delivery costs of delivering as air freight to ensure availability at the desired location. In order to reduce the additional expenses incurred of air freight delivery and still cater to the requirement, we introduced a startup - smart transporter with advanced technological support. The smart transporter has been delivering at 50 per cent reduced timeframe compared to traditional transporters; as they operate 20 hours a day, by using drivers in shifts as against 8-10 hours operating time of traditional transporters. With an incremental increase in freight cost, we have created great overall delivery speed as well as savings of air delivery costs.

Strategies and Tactics

For CWH operations, we have a clear strategy to dispatch all the STOs raised in the system from time to time within a maximum of 3 days i.e. 70 per cent on the 1st day, 20 per cent on the 2nd and the balance on the 3rd day. Most of the time the dispatches get completed w it h i n 24 hou r s. For t h e de p ot operations, we have placed dedicated exec ut ives to ha ndle a g roup of divisions and the storage space for the

specific group of division products is defined. Hence goods once received, are stocked in the same allocated location, which helps the selected group to easily identify and do the picking promptly. Technology is leveraged for improving the effectiveness of distribution. In this connection, we have adopted the Depot Rolling Plan and Demand Planning t o o l ( I M S C o g n o s) p r o g r a m t o effectively distribute goods across our

High level of forecast inaccuracy, leads to either sales loss due to stock out or high inventory built up. Input from marketing, sales and finance departments is combined with the latest marketplace intelligence and historical demand data to create a consensus forecast for individual drugs and families of drugs. This process allows senior management to evaluate various financial scenarios and business trade-offs.

depots. The DRP run is done regularly to catch any spurt in sales so that no opportunity for sales is lost.

Megatrends

Technology is rewriting the rules. In today’s competitive environment, prompt service can give a big advantage to a compa ny a nd hence we a re investing heavily on technology to quickly convert orders received from trade into uploadable format and then quickly process the same. We have converted manual upload into digital upload system which has reduced order entry from 3 hours to 5-10 minutes with the use of technology. The accuracy has also increased manifold. Similarly, after dispatching the goods to the stockist, they used to take 2-3 days to update the goods in their system, resulting in Lupin products not being available for 2-3 days, till GRN has been prepared. We now g ive t hem i nvoice dat a electronically which enables them to upload t he i ncomi ng stocks i n 5 minutes and make Lupin goods availa ble at t h e i r c o u nt e r i n s t a nt ly. There are certain changing trends in Pharma space due to the advent of Ecommerce business model being intro-

march 2019 - CargoConnect

67


Shipper Speaks duced in the Pharma Industry. The end consumer gets delivery at their residence with a 10-20 per cent discount and as per their schedule. This e-commerce currently is at 2 per cent of the domestic sale and is rapidly growing at 15 per cent year-on-year. Apart from E-Pharmacy, there are corporate retail chains which are also growing by leaps and bounds. Both corporate retail chains and online business model will take over the conventional dispensing of medicines through chemists/retailers.

Managing Partnerships

Every month end as well as in the mid of the month, we have pre-SNOP and SNOP meet i ng where a l l t he stakeholders meet to evaluate the situation with respect to the availability of products for the month and the coming month, and corrective actions are taken by senior management if there is an issue with any product availability. The transporters service is being reviewed periodically and corrective action is taken.

Outsourcing Partnerships: Logistics Service Providers LSPs have a huge role to play in providing WH space, maintaining the quality of the company’s products during storage and transportation, and the timely delivery of the same to the customers. We have set up SOPs and norms by which the LSPs need to function. The LSPs need to ensure that the norms and SOPs are followed to the T. Expectation from LSPs is to provide required space as per the organisation’s specification, skilled labor and leverage technology to improve the service levels to the end customer. The LSP partner should also engage and provide an efficient transport system. As mentioned above, we have 4 central warehouses where the operations are managed by the company with the workforce being outsourced. The Depots (C&FAs) at various locations are completely outsourced right from the space to the operations and work-force. The transportation is completely out-

68 CargoConnect - march 2019

sourced for transport from factories/ manufacturers to a central warehouse and further to C&F agents and the distributors, but for cold chain supply chain, there are dedicated reefer vans available with us.

Challenges

One of the major problems being faced by t he compa n ies is forecast i ng inaccuracy. These shortages in market arising due to the difference in the forecast and actual sale, are met by following inventory norms and looking at 6 months sales saliency. High level of forecast inaccuracy, leads to either sales loss due to stock out or high inventory built up. Input from marketing, sales and finance departments is combined with the latest marketplace intelligence and historical demand data to create a consensus forecast for individual drugs and families of drugs. This process allows senior management to evaluate va r iou s f i n a nc ia l sc e n a r io s a nd business trade-offs. Companies with well-r u n pla n n i ng processes, experience substantial reductions in

inventory levels, supply chain volatility and manufacturing costs, and also see improved supply chain resilience.

Way Forward

Formerly, pharmaceutical companies needed to focus their skills on research and development and on sales and marketing. For most part, managing costs and operational excellence didn’t matter as much. But as the competitive landscape has shifted, so have the required operational capabilities. Trad it ion a l s upply c h a i n s wer e structured to avoid stockouts and to meet regulatory requirements, even if that meant maintaining high inventory levels and carrying costs, and eventually taking substantial write-offs. With increasing competition, pharmaceutical firms must strategically transform their supply chain to facilitate revenue and profit growth. This means streamlining the supply chain and making it more flexible, so that it can produce and deliver drugs efficiently, to meet the needs of a variety of product and market segments at competitive cost levels.


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march 2019 - CargoConnect

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n ews The Prime Minister, Shri Narendra Modi inaugurating the several development projects, in Itanagar, Arunachal Pradesh on February 09, 2019. The Governor of Arunachal Pradesh, Brigadier (Retd.) (Dr.) B.D. Mishra, the Chief Minister of Arunachal Pradesh, Shri Pema Khandu and the Minister of State for Home Affairs, Shri Kiren Rijiju are also seen.

PM lays foundation stone for extension of terminal building at Surat Airport

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he Foundation Stone of the extension of Terminal Building of Surat Airport in Gujarat was recently laid by Prime Minister Narendra Modi. The ceremony took place in the presence of Gujarat Chief Minister Vijay Rupani and other dignitaries.

PM lays foundation of greenfield airport, inaugurates another airport in Arunachal

P

rime Minister Narendra Modi laid the foundation stone for const r uct ion of greenfield Airport at Hollongi and inaugurated an upgraded and retrofitted Airport at Tezu in Arunachal Pradesh. Inaugurating the Tezu airport in the Lohit district, the PM said the airport will

connect Guwahati, Jorhat and Hollongi. He said fruit and flowers of the region can reach any market of the country in a few hours w it h t he Tezu airport becoming functional at a cost of `125 crore. The greenfield airport at Hollongi will be a great help to the people Itanagar as at

present the nearest airport to Ita nagar is at Lilabar i i n Assam at a distance of 80 km. The airport will reduce the d i st a nc e by a fou r t h. I n addition to providing better connectivity to the region, the airport will also unravel the tourism potential of the state.

Suresh Prabhu launches three aviation projects in Andhra Pradesh

M

inister for Civil Aviation S u r e s h P r a bhu h a d opened extended runways at Vijayawada and Rajahmundry airports and laid foundation stone for linear expansion of Visakhapatnam airport terminal building.

The runaway at Vijayawada airport was extended from 2,286 meters to 3,360 meters, which will allow wide-bodied aircraft to land. Airports Authority of India (AAI) Chairman Guruprasad Mahapatra said the project cost `145

crore. The runway at Rajahmundry airport was extended from 1,750 meters to 3,165 meters at a cost of `182 crore, he said. The terminal area at Visakhapatnam airport will be increased from 19,800 square

The terminal building of Surat Airport is being extended by the Airports Authority of India, at the cost of `354 Crores. After the extension, the terminal building will be capable to handle (1200 Domestic + 600 International) i.e. 1800 passenger during the peak hours. Surat Airport then, will be able to handle 2.6 million passengers annually. The extended terminal building will be equipped with all essential amenities like check-incounters, baggage conveyors and parking space to accommodate more than 500 cars. meters to 29,050 square meters. With this, the terminal’s peak-hour handling capacity will go up from 700 to 1,050 passengers. On completion of the project, the airport will be able to handle four million passengers per annum.

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n ews Focus is on building additional airports in metro cities: Sinha

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he government is working to ensure that the metro cities have two or three airports, Jayant Sinha, Minister of State for Civil Aviation said. “The Delhi airport is adding a fourth runway, a fourth passenger terminal and another passenger terminal. In addition, the Hindon airport (on the outskirts of Delhi) will be ready to receive flights by March. Besides that,

the under construction Jewar airport will have two runways. Similarly, we are working hard to have a Navi Mumbai airport, which will also have two runways and should be ready sometime by 2021-2022,” the Minister said at the India Aviation Summit. Sinha added that in Bengaluru, the airport is expanding rapidly, with the addition of a second runway and terminal, while a new terminal has been commissioned in Chennai. The minister added that airport infrastructure is to see committed investments of around $14$ 15 billion over the next few years, with the State-owned Airports Authority of India (AAI) looking at a capex of around `25,000 crore. The Minister also indicated that while the private sector will be involved in airports in the metros, AAI will look at creating heliports and seaports among others.

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SC RZD Logistics, the largest multimodal logistics operator in the CIS and Baltic countries, and Container Corporation of India Ltd (Concor), India’s largest operator of railway container shipments, signed the Memorandum of Understanding (MoU) for exploring logistics opportunities in Russia, India and International Transport Corridors (ITC), including to the North-South ITC. The MoU was signed by

M

ajor ports of the country together handled 578.86 Million Tonnes (MT) of cargo during AprilJanuary 2019, representing a growth of 3.11 per cent. The major ports had handled 561.39 MT cargo in the corresponding period of previous fiscal, the Ministry of Shipping said. “The major ports in India have recorded a growth of 3.11 per cent and together handled 578.86 MT of cargo during the period April to January, 2019 as against 561.39 MT handled during the corresponding period of previous year,” it said.

‘Revenues of auto parts cos to grow 12 per cent over four years’

CONCOR signs MoU with Russia’s JSC RZD Logistics

J

Cargo traffic handled by major ports up 3.11 per cent in April-January

the chairman & managing director, CONCOR, V Kalyana Rama and CEO, RZD Logistics Viacheslav B Valentik. With signing of MoU, both the parties agreed to join efforts in the improvement of logistics cooperation between Russia and India and to develop high-potential projects in the area of container shipments between the countries. Partnership with Concor opens strategic perspectives

I

for the RZD Holding, making it possible for the company to strengthen its positions on Eurasian market of multimodal logistics by developing new joint logistics products for international trade.

ndian auto parts industry’s revenues are expected to grow by 10-12 per cent between FY18 and FY22, on the back of strong demand for vehicles, higher realisations and increased content per vehicle during the period, said senior analysts of rating agency ICRA. “Despite all capex requirements and pressures because of the new technological changes in the market, the industry has a stable outlook. We have projected 8-10 per cent growth of the automotive industry during this five-year period,” said Pavethra Ponniah, VP & Sector Head, Corporate Ratings, ICRA.

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n ews Stone laid for Renigunta airport runway expansion

V

ice-President M Venkaiah Naidu has laid the foundation stone for the extension of the Renigunta Airport runway. Once the runway expansion work gets completed, interna-

tional flights could land here, Naidu said. Besides the one in Renigunta, runways in Rajamundry, Vijayawada and Visa k hapat na m a i r por t s i n Andhra Pradesh were also being expanded to enable landing of large aircraft, he said. Highlighting that the PPP mode has ensured development trickling in to new areas, Naidu expressed happiness that the 177 crore-project undertaken at the Tirupati airport, estimated to be completed by June 2020, would make it an alternative to the major airports in Chennai, Bengaluru and Hyderabad during operational exigencies.

AISATS launches recognition of Prior Learning certification

A

ir India SATS Airport Services Pvt Ltd (AISATS), India’s premier airport services company in partnership with National Skill Development Corporation (NSDC) and Aerospace and Aviation Sector Skill Council (AASSC) launched Recognition of Prior Learning (RPL) certification program for its employees. Under the RPL program, employees will be assessed for their knowledge, skills & aptitude acquired while on the job as AISATS’ employ-

ees. On successful completion of the assessment, applicants will receive a certificate from NSDC and AASSC. The RPL platform will facilitate AISATS to provide additional recognition to its employees. Recognition of Prior Learning (RPL) is a flagship program under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme of the Ministry of Skill Development and Entrepreneurship (MSDE).

Logistics Sector Skill Council signs MoUs with institutions for apprenticeship programmes

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he Logistics Sector Skill Council (LSC) has signed the memorandum of understandings (MoUs) with 17 Institutions across India for a

three-year apprenticeshipbased UG degree programme for developing adequate skills

74 CargoConnect - march 2019

for gainful employment at supervisory or managerial levels in the logistics industry. The agreements were inked at the Logistics Summit 2019, organised by the Confederation of Indian Industry (CII) at New Delhi. Captain TS Ramanujam, CEO, Logistics Sector Skill Council, said, “LSC has been taking a lot of initiatives with the logistics industry to skill the human resources. The programme will drive the unsat-

urated demand for skilled young graduates for deployment at the supervisory level.” Commenting on professionalising humanities education through skilling becoming a priority day-by-day, VLVSS Subba Rao, senior economic advisor & additional secretary, ministry of human resources development opined that apprenticeship embedded degree programme is a logical step towards ensuring employability of graduates.

Singapore Airlines to deploy bigger aircraft

A

bigger A350-900 aircraft to be deployed between Singapore and Bengaluru from May will allow Singapore Airlines to enhance its

capacity by 14 per cent, said David Lim, the airline’s India MD. The airline is likely to replicate this move in Chennai next year when it marks 50 years of its operation at its first-ever station in India. The airline has announced that it would be replacing its Boeing B777 aircraft with Airbus A350 for medium haul between Singapore and Bengaluru from May 18. This plane would be used for three flights in a week. Subsequently, when the airline inducts more aircraft of this variant, these would be used to serve 10 flights per week to Bengaluru.

GMR, TERNA signs concession agreement for new airport in Greece

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MR Airports Limited and its Greek partner Terna Group have signed a concession agreement for construction of the new international airport in Greece’s island Crete. The consortium intends to invest over EUR 500 million (approx `4,034.28 crore) for development of the new airport, GMR Infrastructure said in a regulatory filing. The concession agreement is for design, construction, financing, operation and maintenance of new international airport of Heraklion at Crete, Greece. The concession period for the project is 35 years including phase 1 construction of five years, the company added.


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n ews CKB Logistics selects Ramco Systems’s logistics suite

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nterprise software provider Ramco Systems has said that Indonesia’s logistic service provider PT. Cipta Krida Bahari Logistics has rolled out the first wave of Ramco ERP (enterprise resource planning) to digitise supply chain, financials and warehouse operations business. The signing of deal with CKB Logistics is a milestone for Ramco Systems which forayed into the Indonesian market in 2017. Targeted at third-party logistics providers, freight forwarders and courier service providers, Ramco’s Logistic Suite would be covering modules to manage finance, rating and billing, assets and transport at CKB Logistics.

Crane Worldwide Logistics moves to new Chennai facility

Kale Logistics Solutions opens new office in New Delhi

K

ale Logistics Solutions recently relocated its regional office in Delhi, India, with plans to expand their work in digital Trade Facilitation and enabling Ease of Doing Business. The company said that the new office on Kasturba Gandhi Marg, is strategically located closer to government offices and consulates to help add impetus to Kale’s work in digital trade facilitation solutions. The relocation is in tandem with the company’s vision to empower and integrate all stakeholders of the logistics value chain to enable, accelerate and facilitate global trade. In the last two years the company has opened offices in Dubai and Mauritius.

Maersk Line enters India’s inland waterways

C

rane Worldwide Logistics, a leading supply chain solutions company has announced that they have moved into a new expanded facility in Chennai, to accommodate rapid growth in the marketplace. With more than 7 per cent GDP growth annually, India has one of the fastestgrowing economies in the world and that is reflective in the shipping and logistics marketplace.

Crane Worldwide Logistics has seven offices in India with more than 100 employees and the new Chennai office will accommodate 25 people in both operations and IT. The new facility will provide better communications, interactions and seamless business operations, the company says. The new office will fall under the scope of Nimish Shah, managing director for India.

M

aersk recently began its first i n la nd contai nerised cargo pilot movement in India through the country’s first multimodal terminal on river Ganga (National Waterway-1) from Varanasi to Kolkata. The company flagged off the vessel ‘M.V. Rabindranath Tagore’ loaded with 16 TEU of empty containers that will be plying from Multi-Modal Varanasi Terminal to RR Jetty in Kolkata, a distance of 1,390 kilometre. The event marked another milestone for the company and is expected to further boost their business activity in and around the region.

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International Joint Saudi-Jordan project to build $705mln railway

S

From L to R: Omar Hariri, CEO, Saudia Cargo with Rayan Qutub, CEO, King Abdullah Economic Port

Saudia Cargo signs deal with King Abdullah Port and Air Charter Service

S

audi Airlines Cargo Company has signed a joint agreement with King Abdullah Port to establish a logistical operations centre and an air-sea-air cargo corridor. The agreement, signed at King Abdullah Economic City, 90 kilometres north of Jeddah, will establish the cargo corridor to surrounding airports, ensuring the smooth flow of cargo to the port and re-export it by air.

Saudia Cargo’s CEO, Omar Hariri signed the agreement with King Abdullah Economic Port CEO, Rayan Qutab covering numerous aspects including transportation, logistics operations, supply and information exchange. Saudia Cargo has also signed a new deal with Air Charter Service on the sidelines of the three-day Air Cargo Africa in Johannesburg, South Africa.

The contract signing took place at the Flower themed Saudia Cargo booth in the presence of Omar Hariri, Saudia Cargo CEO, Amer Abu Obaid, Executive Director – Commercial, and Semih Kutlug - Director of Charters. The new business deal involves transporting rubber fenders for ship-docks by charter flights from the DWC Al Maktoum International Airport in Dubai to Dhaka, Bangladesh.

British Airways announce historic BOAC Livery for 100th anniversary

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n observance of its 100th anniversary, British Airways will paint one of its 747s in historic British Overseas Airways Corporation (BOAC) livery. In getting to the modern British Airways, the company went through a long history of mergers and acquisitions that began with Aircraft Transport and Travel Limited, which opened for business on August 25, 1919. British Airways itself came into being in 1974 with the government-mandated

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merger of BOAC and British European Airways (BEA). Today, BA is the largest airline in the UK based on fleet size, and second largest in passengers carried behind discount carrier

easyJet. The retro-liveried 747 has entered service after it returned from the paint shop on February 18, and will remain in service with the historic paint job until at least 2023.

audi Arabia is to help build a rail project in Jordan as part of a 500 million-dinar ($705 million) joint investment. The Saudi-Jordan Investment Fund Company and the Aqaba Special Economic Zone Authority (ASEZA) signed a MoU to connect the ports of Aqaba on the Red Sea with Ma’an. Upon completion, the railway will operate along a 195-kilometer (121-mile) track, transporting cargo containers to and from Aqaba, Jordan’s only outlet to the sea, as well as phosphate from the mines in Shidiya for export.

WFS to build new pharma facility at Copenhagen Airport

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ne of the leading cargo handlers, Worldwide Flight Services (WFS) will begin construction of new pharma facility at Copenhagen Airport in April. The new facility, with an area of 1,500 square metres, will provide end-to-end handling in a temperature-controlled environment for 2-8C pharma products incorporating acceptance, offload, pre-storage, build-up and storage. WFS expect the construction process to be completed in time for the new building to undergo IATA CEIV Pharma pre-assessment in July. Accessible through four dedicated cargo doors, the facility will accept loose shipments and pre-built units, offering a storage area large enough for 300 EUR pallets and 30 PMC pallets.


International

Lufthansa Cargo welcomes new B777 freighter to Frankfurt

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ufthansa Cargo has welcomed the latest arrival to its freighter fleet: its sixth Boeing 777F. The new aircraft, registered as D-ALFF, arrived from Everett, Washington, USA, and was received with a welcome ceremony after its official ferry flight with flight number LH8145. Lufthansa Cargo’s sixth Boeing 777F will soon start scheduled operations. Harald Gloy, Chief Operations Officer and

Member of the Board of Lufthansa Cargo – who was on hand to greet the crew atLufthansa’s home hub of Frankfurt – pronounced: “We are delighted to welcome the sixth Boeing 777F freighter to our fleet today. This aircraft is the quietest and most efficient in its class – and therefore the freighter of our choice for our ongoing fleet modernisation process which is scheduled to be completed by 2025.”

Panalpina flies 1.6 million roses from Nairobi to Sydney

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nboard a Boeing 777 cargo aircraft, Swiss freight forwarder Panalpina has carried 1.6 million roses from Nairobi to Sydney, right in time for the Valentine’s Day. Panalpina describes it as ‘Love Plane’ and according to the company; this was the full freighter flight from Nairobi to

Sydney. And Panalpina is the first and only freight forwarder with this service offering in the market. The special shipment delivery follows the expansion of Panalpina’s cold storage facility in Nairobi’s Jomo Kenyatta International Airport in November 2018, which will enable the company to move a projected 80,000 tonnes of flowers, fruit and vegetables in and out of Kenya by 2020.

Hong Kong’s Kerry Logistics forms JV with E-Services Group

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erry Logistics has announced a new joint venture with E-Services Group (ESG), an international e-commerce company in Asia, to strengthen global e-commerce fulfillment capabilities, especially in the Greater China region. The joint venture, Kerry ESG (HK) Company Limited (‘Kerry ESG’), will combine

Kerry Logistics’ global supply chain capabilities with ESG’s technology platform, global marketplace networks, and ecommerce expertise to offer etailers cost-efficient solutions internationally. Kerry ESG, set to debut in March 2019, aims to become one of the leaders in global ecommerce fulfillment solutions, enabling etailers to de-

liver products to customers anywhere in the world quickl y a n d c o s t- e f f e c t i v e l y. Through direct integration with leading shopping carts and global marketplaces, etailers using Kerry ESG’s services will be able to seamlessly manage their order fulfillment, inventory, and returns to and from multiple logistics centres through one platform.

Air France KLM Martinair Cargo gains CEIV Pharma recertification

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ir France KLM Martinair Cargo has become the first major airline group to successfully pass the IATA CEIV Pharma re-certification process for its hub operations in Amsterdam and Paris, as well as the Air France and KLM airline processes. After having set the industry standards in February 2016, the airline reconfirmed its focus on the pharmaceutical business as a top priority, not only investing in its digital transformation but also increasing its quality standards and its cool chain solutions. Marcel de Nooijer, executive vice president of Air France KLM Martinair Cargo said, “Pharma is a top priority for our airline group. In an increasingly demanding environment, this certification reconfirms our commitment to offering the highest possible quality standards in support of our customers’ business activities.”

Swissport acquires 100 percent stake in Heathrow Cargo Handling

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wissport has announced its decision to increase its shareholding in Heathrow Cargo Handling Ltd (HCH) to 100 per cent from the current 50 per cent stake. The cargo handler will acquire remaining 50 per cent stake in HCH, from its joint venture partner Air France. “We are very satisfied that we can strategically round off our global cargo business with this selective acquisition,” said Luzius Wirth, Swissport executive vice president Europe, Middle East & Africa. march 2019 - CargoConnect

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APPOINTMENTS

Ashwani Lohani appointed for second tenure as Air India CMD Ashwani Lohani has been appointed chairman and managing director (CMD) of Air India for the second term. Lohani was appointed Railway Board chairman in August 2017 and retired in December 2018. He was also ITDC chairman as well as director of the Rail Museum in the capital.

Balfour Manuel named CEO of Blue Dart

AISATS appoints Ramanathan Rajamani as CEO

Blue Dart Express Limited, the logistics services provider, has named Balfour Manuel as CEO to chart the company’s next chapter of growth. Manuel, a Blue Dart veteran of over 35 years, has been instrumental in the success of the company from the very beginning of its inception.

Air India SATS Airport Services (AISATS) has appointed Ramanathan Rajamani as its new chief executive officer. Rajamani has over 15 years of experience in the military and civil aviation sectors. He first joined SATS in 2011 as head of the engineering team.

Vakrangee appoints Anil Khanna as MD & Group CEO Vakrangee Limited (VL) has appointed Blue Dart veteran Anil Khanna as its new Managing Director and Group CEO effective January 25, 2019. Khanna has 40 years of experience in various industries and has been with Blue Dart since 1992 and moved to the position of MD since 2007.

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InstaFreight appoints Dirk Reich as Chairman of the Board Digital freight forwarding start up InstaFreight has appointed former president and CEO of Cargolux Airlines International Dirk Reich as the chairman of the Board. Reich has more than 35 years of experience in the industry, including 20 years at the globally operating logistics company Kuehne Nagel. He is also on the Board of Directors of Panalpina, Skycell AG, IPT AG and Log-hub AG.

Wilhelm to lead automotive growth for Imperial Logistics Imperial Logistics has appointed Holger Wilhelm to the newly-created post of executive vice president - Automotive. Prior to this, Wilhelm has held various senior posts in logistics companies, working on automotive business in Germany, Poland, India and the USA.

CEVA Logistics names Claus Svane Schmidt head of LCL Product CEVA Logistics has named Claus Svane Schmidt as the head of Less than Container Load (LCL) product. He joins this newly created role on March 1, 2019. Prior to this, he was managing director of the company’s North Asia cluster. For the last year, he was based in the Philippines.

Chris Allen new BDM for Asia at B&H Worldwide B&H Worldwide has promoted Chris Allen to the newly created role of business development manager for its Asia operations.

At B&H, Allen has worked in operational, business development and customer solutions roles for a number of years including time as station manager, Dubai.


UpComingevents Event: India Warehousing Show Organised by: Reed Manch

Air Cargo

Event: World Cargo Symposium Organised by: IATA Date: March 12 - 14, 2019 Where: Marina Bay Sands, Singapore

The event will bring together key stakeholders from the entire air cargo supply chain, with featuring plenary sessions, specialised tracks, workshops, and executive summits, tackling aspects related to Technology & Innovation, Security & Customs, Cargo Operations, and Sustainability. To know more visit www.iata.org

Logistics & Warehousing

Event: FMCG CONNECT: FMCG Logistics Conference Organised by: CARGOCONNECT Magazine Date: April 11, 2019 Where: Shangri-La, New Delhi Look forward to rubbing shoulders with 200 plus leaders and key stakeholders from the FMCG supply chain. To know more visit www. fmcgconnect.com

Exhibitions

Date: June 20 - 22, 2019 Where: Pragati Maidan Exhibition

Complex, New Delhi A platform where one can see the latest technologies available, make new business contacts and catch up with industry colleagues at the exhibition while getting first-hand exposure to latest market trends & insights. To know more visit www.indiawarehousingshow.com

Event: COLDCHAINCONNECT 2019:

Cold Chain Logistics Conference

Organised by: CARGOCONNECT

Event: Air Cargo Europe Organised by: MesseMünchen Date: June 4 - 7, 2019 Where: Munich

This year at the world’s largest exhibition and conference for the air cargo industry, four days of exhibition and a half-day conference will provide air cargo professionals the perfect platform to expand knowledge, network and initiate business. To know more visit www. aircargoeurope.com

Magazine Date: July 25, 2019 Where: Shangri-La The event will offer a great opportunity to meet and network with over 200 cold chain professionals. To know more visit www.coldchainconnect.in Event: APPARELCONNECT: Apparel

Logistics Conference

Organised by: CARGOCONNECT

Magazine

Date: May 16, 2019 Where: Shangri-La, New Delhi

Asia’s biggest conference for apparel logistics professionals APPARELCONNECT 2019, organised by Surecom Media is scheduled on May 16, 2019. To know more visit www. apparelconnect.com

Warehousing Event: International Conference on Industrial Flooring Organised by: Confederation of Indian Industry (CII), in partnership with Indian Flooring Association (IFA) Date: February 14-15, 2019 Where: The Grand Hotel, VasantKunj, New Delhi To know more visit www.cii.in

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 CORRIGENDUM With reference to Page 22 and 24 of the cover story titled ‘The State of Logistics Outsourcing’ published in our February 2019 edition, the designation and company name of Vishal Sharma, CEO, Damco (India, Bangladesh and Sri Lanka) may be read as Vishal Sharma, CEO, Schenker India Pvt Ltd (India and Indian Subcontinent).

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EVENTS

FIEO organised the first edition of LOGIX INDIA

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o create an effective International Trade Logistics, LOGIX INDIA 2019 an International Buyer Seller Meet was organised from January 31 - February 2, 2019, in New Delhi with the support from Ministry of Commerce & Industry, Government of India. Inaugurated by Commerce & Industry and Civil Aviation Minister, Suresh Prabhu, the 1st Edition of Logix India 2019 witnessed unprecedented turnout setting the pace for global logistics trade. Over 130 International Delegates from more than 27 countries attended the first LOGIX INDIA 2019 to develop superior trade linkages with India in the form of partnerships, joint ventures, and 100 per cent foreign entities.

Agility India Hosts Second Annual Cold Chain Conference

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gility, a leading global logistics provider, hosted Pharmerging Expo 2019 and Unbroken Cold Chain – Series II, a

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conference bringing together over 300 professionals from the supply chain industry, on February 25, 2019 at Hyderabad.

The gathering, now in its second year, featured five panel discussions on key issues for the life science industry, including perishable and pharmaceutical supply chains,challenges in ocean freight andair freight transhipment hubs. At the conference, Agility launched and showcased a co-branded passive packaging solution, Agile+, developed in collaboration with PLUSS Advanced Technologies and Tagbox.Agile+ is a shipment box for the pharmaceutical industry that can be used to move highly critical international shipments.


EVENTS

FFFAI discusses current issues and India-Iran trade opportunities

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osted by Noida Custom Brokers Association, Federation of Freight Forwarders’ Associations in India (FFFAI) had its 9th Executive Committee Meeting on February 8 and 9, 2019 at Pride Plaza Hotel in New Delhi. A number of issues were discussed at this meeting, including the recently announced National Cargo Policy, Draft Logistics Policy, recent changes in GST and trade

opportunities between India and Iran. Also, two individual sessions pertaining to Trade Opportunities in Iran and GST related issues & compliances were addressed by Asghar Omidi, Counsellor, Economic Section, Embassy of the Islamic Republic of Iran; Kapil Kumar Sharma, Partner, Lakshmikumaran & Sridharan; and Joshua Ebenezer, Director, Lakshmikumaran & Sridharan, respectively.

Speaking on this occasion, Omidi emphasised on the strategic location and important role of Chabahar Port in Iran to script the success of Indo-Iran trade relationship. He pointed out that presently India is Iran’s 6th trade partner with $ 13.10 bn trade, and with support from Indian logistics stakeholders the bilateral trade can be increased manifold. Omidi also invited Indian Freight Forwarders and Logistics companies to visit Iran to witness infrastructure facilities including Chabahar Port and explore business opportunities.

Fourth conference on SAFE ROAD – SAFE LIFE by ASSOCHAM India ASSOCHAM India organised its 4th Conference on Safe Road- Safe Life at New-Delhi and unveiled a knowledge report on Best Practices in Road Safety. Anil Srivastava, IAS, Principal Advisor & DG DMEO, Niti Aayog and Abhay Damle, IRS, Joint Secretary, Ministry of Road Transport & Highways were present as Chief Guest on the occassion.

From L2R: DS Rajora, Asst. Secretary General, ASSOCHAM; Sudeep Narayan, Director, PR & Corporate Communications, Volvo Auto India; Abhay Damle, IRS, Joint Secretary, Ministry of Road Transport & Highways, Govt of India; Vinod Pandey, Chairperson, Manufacturing Council, ASSOCHAM, and Director, Goverment and External Affairs - CSR, BMW India Pvt Ltd; Ravishankar Rajaraman, Technical Director, JP Research India Private Limited; and Rahul Sharma, Senior Managing Committee Member.

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EVENTS CCA celebrates Sadak Surakha Jeevan Raksha Divas 2019

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he Car Carrier Association (CCA) jointly along with the Regional Transport Authority celebrated Sadak Suraksha Jeevan Raksha Divas 2019 on February 9 at the Tau Devilal Sports Complex, Gurugram with a full day colourful event. Priyank Bharti, Joint Secretary in the Ministry of Road Transport & Highways; R K Singh, ADC, Gurugram; and Rajesh Kumar, DCP of Manesar

presided over the event. CCA President Vipul Nanda also graced the occasion along with Rohit Singh Tomar (R Sai Logistics); Mukesh Haritash (Chetak Logistics); G S Saluja (Skyline), Nishant Saini (Swift); Shivkant Khajuria (Shivam Logistics); Hargovind Pruthi (Sushila Transport); K Singhal (IVC Logistics); Anil Nanda (Ahmedabad Roadways); Varun Kaushik (TR Finishied Vehicle); Vikrant Gupta (Supreme); Nitesh Baweja (ARL); and Sandeep Choudhary (Mercurio Pallia Logistics). The celebrations held as part of the 30th National Road Safety Week was attended by 600 long haul truck drivers ferrying mint fresh passenger vehicles.

Saudia Cargo picks up two awards at Air Cargo Africa 2019

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audi Airlines Cargo Company won two distinguished awards at Air Cargo Africa 2019, which took place from 19-21 February in Johannesburg. The two awards were the International Cargo Airline of the Year 2018 in Africa & the International Air Cargo Marketer of the Year 2018 both coming as result to Saudia Cargo’s efforts in intensifying its cargo capacity, fostering its operations & promoting innovative freight solutions, offering its wide-body freighter capacity in addition to an ample belly-hold capacity on board Saudi Arabian Airline.

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PEOPLECONNECT Kruti Jobanputra

Director, JWC Logistics Park Pvt Ltd What motivated you to be a part of the logistics industry? How has been your journey so far? As a child, I was always fascinated by the kind of work my father did. He used to tell me of the different experiences that he had tackled to handle a certain cargo. This also motivated me to work with my father in this industry. The journey so far has been remarkable. In the last 13 years, I have learned many important work lessons from my father, and I am still learning. How has the industry changed from the time you stepped in? What major transformations have you observed in terms of technology, workforce, practices, government regulation, etc? The Logistics Industry has experienced a revolutionary change, with the kind of larger investment done by private players, by the introduction of advanced and emerging technolo-

What was the biggest challenge you have faced in your career? The biggest challenge that I have faced is dealing with people, especially the local people, the manpower and the Unions. However, the kind of mindset they have is now changing slowly; either Out of choice or Out of force. What is your success mantra? And, whom you consider as your guru in business? My Guru is my father, Lalit Jobanputra. He has always taught me 2 things which I sincerely keep in my mind and thoughts: • Our Values and Strengths- Our Family, Our Team and Our Dedication. • Keep Working- Keep Improving, Keep Hoping and victory is on the other side. Apart from work what are your other interests? Apart from work, I spend a lot of time with my

gies, and other significant developments. The Government has also taken a lot of initiations towards ease of doing business in this industry. Today, the manpower joining this industry is more skilled and professional and is working towards making Logistics Industry the best industry to work in.

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family and friends. I love to take delight in my music playlist and my movie collection.

Any management lesson you would like to give to those who aspire to work in this industry? Logistics Industry has a great future, all we need is to change and evolve with time. CC

Interviewed by Upamanyu Borah

Keep working, Keep improving and Victory is on the other side


80,000+

Sq.Mtr total warehouse area across six airports

100+

Customers trust us to deliver their goods on time

6,00,000+

Tons general cargo handled per year

150,000+

Tons perishable cargo handled per year

12,000+

Sq. mtr cold storage area across three airports

2000+

employees across our network of airport warehouses


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Cargo Connect March 2019  

Cargo Connect March 2019  

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