CargoTalk

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By DDP Publications

SOUTH ASIA’S LEADING CARGO MONTHLY

MAY 2013

No.1 in Circulation & Readership

RNI No.: DELENG/2003/10642 Date of Publication: 22/4/2013

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Sohar Freezone in Oman woos Indian logistics companies

Warehousing Issues Ease in land acquisition urged

Hub Port on

East Coast Krishnapatnam Port all set with world standard container terminal

PLUS

ASSOCHAM INTERNATIONAL CONFERENCE ON DEDICATED FREIGHT CORRIDORS HIGHLIGHTS

Cargotalk

editorial Two steps

Editor SANJEET Sr. Assistant Editor RATAN KUMAR PAUL

Cargotalk

Asst. Vice President GUNJAN SABIKHI

Vol XIII No.6 Pages 60 Rupees 50 cargotalk.in

By DDP Publications

Deputy General Manager HARSHAL ASHAR

CARGO MONTHLY SOUTH ASIA’S LEADING No.1 in Circulation & Readership

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MAY 2013

RNI No.: DELENG/2003/10642 Date of Publication: 22/4/2013

Sohar Freezone in Oman woos Indian logistics companies

forward for warehousing

Warehousing Issues

Regional Head: North & West SHIV KUMAR

Ease in land acquisition urged

Assistant Manager: West ROLAND DIAS Assistant Manager Marketing YOGITA BHURANI

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he issue of availability of land and acquisition of the same is a serious concern in view of the fact there is tremendous demand for organised and quality warehouses in India. Indian manufacturers, shippers and logistics players often face huge challenges because of paucity of world standard warehouses. And, lack of suitable land and stringent rules and regulations to acquire it remain the major facts behind slow growth of warehousing industry in the country. Recently, two initiatives were undertaken pertaining to supply of land likely to boost the industry.

The initiatives include an apparent consensus to stop the impasse on the ‘Land Reform Bill’ and relaxation in the existing SEZ policy, announced in the Foreign Trade Policy Supplement for 2013-14.

The gravity of poor warehousing infrastructure can be perceived from some recent research. It is estimated that warehousing costs to be between 20-25 per cent of the total logistics cost in India.

Despite this the state of warehousing in India is largely dismal. About 80-85 per cent of warehouses are traditional with sizes of less than 10,000 sqft. Majority of the local operators of these warehouses are also small to mid-sized entrepreneurs with limited investment capacity. The only really large warehousing owners are government agencies including Central Warehousing Corporation and State Warehousing Corporations, but the focus of a significant majority of government warehouses is food grain storage. A research on supply chain systems in India unveiled that while regional distribution centers promise greater efficiency and

SanJeet Editor

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Sr. Marketing Co-ordinator GAGANPREET KAUR Design RUCHI SINHA

Hub Port on

East Coast

Photo Journalist SIMRAN KAUR

with world Krishnapatnam Port all setiner terminal standard conta

PLUS

ASSOCHAM INTERNATIONAL

HTS

ED FREIGHT CORRIDORS HIGHLIG

CONFERENCE ON DEDICAT

effectiveness, few facilities in India today could fit the demand side. Called ‘godowns’, most Indian warehouses owned by multinational companies are small in size—between 5,000 and 25,000 sqft—compared to the 250,000to 1-million sqft structures found in the United States or Western Europe. Existing Indian warehouses tend to be located close to a customer base and carry only enough inventories to serve those customers.

Keeping in mind the issues related to land acquisition, most companies entering India and adopting a regional network model consider a partnership with a thirdparty logistics company that already has a warehouse or land on which it can build a facility.

The manufacturing and logistics industry can only expect the required investment in warehousing once the ambiguity and disputes regarding land acquisition stop. In addition, the amended SEZ rules were a long pending demand from the warehousing sector.

The initiatives taken by various political parties and the Commerce & Industry Minister of India are commendable.

Now, fast and transparent implementation will be the factors the industry needs to watch out for.

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Contents May 2013

Events Calendar 32

Calendar of International logistics events

Logistics Services 40

Supreme Industries recognised for ‘INSUboard’ with ACREX Award

Freight Forwarding 42

Air Freight Consolidation: AMI opens office to strengthen operations in India

Shipping & Ports 43

18

z ICTT Cochin receives first transshipment marine service

COVER STORY

z Far East–India Express calls Port Pipavav

Hub Port on East Coast Krishnapatnam all set with world standard container terminal

The ambitious container terminal of Krishnapatnam Port Company Limited (KPCL) has recently been dedicated to the Nation by Nallari Kiran Kumar Reddy, Chief Minister of Andhra Pradesh at a ceremonial function, which was attended by the port officials and a large number of government and industry representatives. The terminal is expected to position the port as a transshipment hub for exim cargo on the east coast of India.

SECTORS

National News 8

z LCL Logistix launches CFS in Haldia Port

CRWC to promote Express freight trains across India

51

The Port of Dunkerque Zooms in on India as source market

In Focus

Product Display 16

Rolling Shutters: Quality Engineered

Industry Associations 22

54

z UPLIFT by ACAAI and Kale:

Destination Oman: Freezone Sohar woos Indian 3PL companies

registers one million EDI messages COLUMNS

z Abhijeet Logistics receives WCA

48

10

Foreign Trade Policy 2013: Exporters hail for growth oriented steps

International Events 12

14

Worldwide Marathon: Bollore Logistic’s innovative ways for a cause Chapman and Lufthansa sign strategic cooperation agreement

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Award Dedicated Freight Corridors: Railway Minister updates construction status

Lead Story 24

Warehousing Issues: Industry urges for ease in land acquisition and regulations

Guest Column 44

Intermodal Transport: Emergence of new horizons

In Conversation 47

CTOs seek friendly policy: to survive the testing times

Viewpoint 58

Role of Associations: Competition Compliance Programme WWW.CARGOTALK.IN

National News In Brief

CRWC to promote

Express freight trains across India Central Railside Warehouse Company (CRWC) has decided to promote express/parcel freight trains by using the existing railside warehouse complexes. The Company is working on providing integrated logistics solutions by developing adequate infrastructure.

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RWC has developed and operates Railside Warehouses across the country on Railway land with attached facilities and full train rail-siding.

At present the public sector company has total warehouse capacity of over 3 lakh metric tonne. According to its study, there is a huge scope of operating express cargo trains by the CRWC warehouses.

With an aim to enhance express cargo movement by Railway CRWC recently hosted an interactive meeting with the leading logistics companies and representatives from Railway Board.

Apart from Vinod Asthana, MD, CRWC and a number of logistics logistics

companies the Railway Board members included Manoj Akhouri, EDTT(F), Railway Board.; Rita Raj, Director (FM), Railway Board and Sanjeev Garg, CCM (FM), Northern Railway participated in the interactive session.

The logistics companies expressed their keenness in moving cargo/parcel through the rail and they appreciated the advantages available at the CRWC warehouses. The participants also discussed about specific routes for operations including the long tenure to be provided for marketing and development of these routes. Railways representatives assured the reliability of service in this segment.

‘DHL Express Easy’ accelerates mango movement

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HL has stareted its seasonal service offering – ‘DHL Express Easy’ for transporting mangoes across the world. With an objective to offer a hassle-free solution for customers gifting mangoes to family and friends the service will continue till end of May. The service includes selecting the best quality certified Devgadh Alphonso mangoes; dedicated packaging; relevant documentation for the destination countries; customs clearance; and finally a doorstep delivery to the receiver.

According to RS Subramanian, Country Head, DHL Express India, this year the offer is open to all small, medium and corporate customers across the country. Once an order is placed, mangoes are chosen on the basis of transit and clearance time required, so that the fruits are ‘ripe-in-time’ when they reach their respective destinations. The mango gift packs are connected via the first available flight and are cleared on arrival. “This unique service allows customers to send mangoes from India across the world to Belgium, Canada, Czech Republic, Greece, Hong Kong, Hungary, Italy, Luxembourg, Maldives, Netherlands, Norway, Oman, Qatar, Singapore and Sweden,” he said.

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National News Government Policy

Foreign Trade Policy 2013 Exporters hail for growth oriented steps A number of announcements have been made by Anand Sharma, Commerce, Industry and Textiles Minister, Government of India, in the Foreign Trade Policy Supplement for 2013-14. Out of them Extension of Zero Duty EPCG Scheme and relaxed land policy for SEZ encouraged the export industry for reaching the set target.

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ommending the Foreign Trade Policy 2013 initiatives M Rafeeque Ahmed, President, FIEO said that the extension of Zero Duty EPCG Scheme will help in expansion and modernisation of the units which is need of the hour. The Policy has also given a boost to domestic sourcing for spurring manufacturing growth by providing relaxation in export obligation on domestic procurement of capital goods.

He also maintained, “The pragmatic announcement on SEZ by reducing the land requirement by 50 per cent and linking it to built up area will renew the interest in SEZ scheme but some concession on tax front needs to be given to SEZ units to make it an engine of growth added.”

Second Task Force on Transaction Cost in International Trade The report on Transaction Cost was released in Feb 2011. Implementation of its recommendation resulted into estimated reduction of transaction cost of approximately Rs 2495 crore. Second Task Force on Transaction Costs has been constituted. The Committee would submit its report in six months.

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On the issues relating to Vacancy of Land, while the existing policy allows for parcels of land with pre-existing structures not in commercial use to be considered as vacant land for the purpose of notifying an SEZ, it has now been decided that additions to such preexisting structures and activities being undertaken after notification would be eligible for duty benefits similar to any other activity in the SEZ. In addition, the minimum built up area requirement has also been considerably relaxed with the requirement of one lakh square meters to be applicable for the 7 major cities viz: Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Kolkata. For the other Category B cities 50,000 square meters and for remaining cities only 25,000 square meters built up area norm will be applicable.

In view of the acute difficulties in aggregating large tracts of uncultivable land for setting up SEZs, while ensuring vacancy and contiguity, the government has decided to reduce Anand Sharma the Minimum Land Area Commerce, Industry and Textiles Requirement by half. For The present SEZ Minister, Government of India Multi-product SEZ from Framework does not include 1000 hectares to 500 hectares and for Sectoran Exit Policy for the units and feedback specific SEZ from existing 100 hectares to was that this was perceived as a great 50 hectares. disadvantage. It has now been decided to permit transfer of ownership of SEZ units, To provide greater flexibility in utilising including sale. land tracts falling between 50-450 hectares, it has been decided to introduce a Graded “Exports from SEZs during the last Scale for Minimum Land Criteria which financial year have registered a growth would permit a SEZ an additional sector for of over 31 per cent over the previous each contiguous 50 hectare parcel of land. year. Undoubtedly, these are significant This will also bring about more efficient use achievements, but the SEZ scheme has of the infrastructure facilities created in such not been able to realise its full potential so an SEZ. far. We have undertaken a comprehensive review of the SEZ Policy after intense Further flexibility to set up additional stakeholder consultation and after a units in a sector specific SEZ is being year- long process. Today I am happy provided by introducing Sectoral broadto announce a package of reforms for banding to encompass similar / related areas reviving investor interest in SEZs,” said under the same sector.

Sharma in his speech.

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International News Corporate Social Responsibilities

Worldwide Marathon Bolloré Logistic’s innovative ways for a cause

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and ended in Papeete, the capital of French Polynesia, in the Pacific Ocean. In India, the company employees participated in the programme in NCR Delhi.

objective of this event was to express solidarity to charitable organisations viz UNICEF. The marathon started in Auckland

The Bolloré Logistics corporate culture is based on essential principles, such as entrepreneurship, team spirit and integrity. As part of its ‘sustainable development’ strategy, the division is committed to expressing its solidarity with charitable associations. Thus, the company wanted to pay tribute to the unity, dynamism and solidarity of its teams by creating an unprecedented global and social event: Marathon Day. According to the company sources, Marathon Day means working together towards the same goal and showing the significance of Bolloré Logistics’ international network.

orld’s leading company Bolloré Logistics, which is a part of the Bolloré group’s transport and logistics division, on March 21 organised a world wide round the clock (in 19 different time zones) Marathon by creating a human chain of its nearly 2000 employees. The

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With a presence spanning five continents, Bolloré Logistics Brands (SDV, SAGA, BLP, Nord Sud) can perform all kinds of logistics-related service: the commissioning of air, maritime and overland transportation, customs services, storage and distribution, industrial logistics, port operations, safety and quality inspections and chartering brokerage through an international network.

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International News Airlines News

Chapman and Lufthansa

sign strategic cooperation agreement charter aircraft through Chapman Freeborn’s global network of 35 offices – from helicopters and light aircraft for time-critical freight, up to giant Antonov AN-225 aircraft for heavy and outsize cargo requirements.

Chapman Freeborn clients will benefit from the enhanced access to Lufthansa Cargo’s freighter fleet - but maintain its position of neutrality in the marketplace and continue to work in partnership with cargo airline suppliers worldwide.

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hapman Freeborn Airchartering recently announced a new strategic cooperation agreement with Lufthansa Cargo. Effective April 1, 2013, the global aircraft charter specialist will handle Lufthansa Cargo’s third party chartering requirements, allowing the

Lufthansa to focus on marketing charter capacity on its own fleet of 18 McDonnell Douglas MD-11F aircraft.

The agreement is expected to give Lufthansa Cargo’s international sales force and client base access to the full range of

“We will continue offering customers flexible and high-value charter solutions in the future. With the newly adapted structure, we are leaner and more focussed, and can offer our own aircraft even easier and faster ways,” said Dr. Andreas Otto, Lufthansa Board Member Product and Sales.

Russi Batliwala, CEO of Chapman Freeborn asserted that Lufthansa and Chapman’s joint customers would benefit from this cooperation and would find the right charter solution at any time.

Emirates SkyCargo

witnesses increased interest in e-AWB

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mirates SkyCargo has stated that since 2011, it has put in place over 120 bilateral e-AWB agreements with its customers to ensure a smooth transition from paper Air Waybills (AWB) to electronic record formats, known as Electronic Air Waybill (e-AWB).

Ram Menen Divisional Senior Vice President-Cargo, Emirates

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According to Ram Menen, Divisional Senior Vice President-Cargo, Emirates, the recent World Cargo Symposium held in Doha, where the e-AWB multilateral agreement was endorsed, the airline has received an increased interest in e-AWB adoption from its customers across the world. “We have observed heightened interest in e-freight implementation industry-wide. We are at an important junction for the cargo industry, with

the future looking bright for e-freight adoption,” he said.

In his opinion, with increased flexibility in the e-AWB process as a result of the multilateral e-AWB agreement, industry players are finding it easier to enter into the e-AWB environment and manage processes electronically with their customers. “As a result, we will see increased adoption of e-AWB processes for both the Montreal and Warsaw Convention Countries over the coming months and years. Emirates SkyCargo will continue to remain at the forefront of these developments and advise those interested in taking the steps to ‘go green’ and adopt a paperless cargo system,” he reiterated.

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Product Display Gandhi Automations

Rolling Shutters:

quality engineered G

andhi Automations is the manufacturer of Rolling Shutters, certified to ISO 9001- 2008 quality management system. According to the company sources, this has resulted in the implementation of continuous improvement in personnel training, production, inspection, equipment calibration, machinery maintenance, logistics and customer relations. The product engineering team uses the latest software combined with technologically advanced machinery to offer to the customer a well-engineered product.

The sources also informed that Gandhi Automations has developed technical expertise in manufacturing various kinds of automated Rolling Shutters.

The research and development team with its extensive know-how and experience are able to produce specific types of Rolling Shutters unique to certain sites and client requirements.

According to the Gandhi Automations sources, Gandhi Rolling Shutters are ideal for situations where side room is at a premium and security is required. “Our Rolling Shutters require very little headroom above the structural opening.

16 I CARGOTALK I MAY 2013

They combine strength with elegance along with durability and are designed for both external and internal applications,” said the sources. Gandhi Rolling Shutters are fabricated of interlocking Galvanized Insulated and Non Insulated, Stainless Steel, patented Aluminum or Polycarbonate slats and patented MS Rolling Grills.

“Gandhi Rolling Shutters fit openings to a maximum width of 30,000 mm and height of 40,000 mm with an endless array of options to satisfy both aesthetic consideration as well as working requirement,” stressed the sources.

Gandhi Automations felicitated with ISO 9001:2008 Certificate A Gandhi Automations source informed that the company recently honoured with ISO 9001:2008 Certificate and it became the only company in the Entrance Automations industry to receive the certificate in accordance with TUV NORD CERT procedures. The company chose the respective certification body keeping in mind the reliable auditing procedures that the body practices.

The certification is applicable to manufacturing, installing and servicing of Gates, Doors & Rolling Shutters, Dock Levelers, Dock Shelters, Boom Barriers, Rolling Shutters, Fire Shutters, Doors and Gates and Access Control Systems.

It was in the year 1996-97, when Samir Gandhi and Kartik Gandhi, Company Directors, established ‘Gandhi Automations’ in India. In the span of 16 years, the company rose from scratch to being No. 1 Entrance Automations and Loading Bay Equipment Company.

Today, the company has direct presence in 23 cities of the country. The Company has added one more feather on its cap by acquiring a 100,000 square feet of land at Bhiwandi where the work of factory building is in process.

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Cover Story Port Infrastructure

Hub Port on

East Coast Krishnapatnam all set with world standard container terminal

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The ambitious container terminal of Krishnapatnam Port Company Limited (KPCL) has recently been dedicated to the Nation by Nallari Kiran Kumar Reddy, Chief Minister of Andhra Pradesh at a ceremonial function, which was attended by the port officials and a large number of government and industry representatives. The terminal is expected to position the port as a transshipment hub for exim cargo on the east coast of India.

RATAN KR PAUL

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ith tremendous potential and recent developments pertaining to trade between India and East and South East Asian countries, Krishnapatnam Port has launched a world standard container terminal to facilitate export import trade, initially in its surrounding areas (the hinterland within 250 miles).

The port is located in Nellore district of Andhra Pradesh, 80 km north of Chennai.

It has a vast hinterland covering Southern Andhra Pradesh, North Tamil Nadu and Eastern Karnataka. The aim of the port is to position itself as a viable hub for shippers across the country, who are interested in strengthening their exim business from the east coast of the country.

“Our container terminal is one of the most technically advanced terminals in the world offering tremendous benefits not just to liner companies but also to the import and export trade community, because of its strategic locations and world standard container terminal facilities, available at low cost,” asserted Anil Yendluri, CEO, Krishnapatnam Port. According to him, Krishnapatnam Port will help accelerate the growth of this region as an industrial hub and also aims at bringing a paradigm shift in Indian shipping and container terminal operations.

Present Facilities

at KPCT

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Terminal Capacity: 1.2 Mn TEUs 2 Berths Total Berth length: 650 metres Wharf: 650 metres (straight line); another 1370 metres to be added later Draft: 13.5 metres; to be increased to 17.5 metres Capabilities of handling Mother container vessels of up to 8000 TEUs State-of-the-art handling infrastructure with RMQCs, RTGs, Reach stackers, etc Large container yard with reefer storage facilities Rail siding details: On dock rail adjacent to CY CFS facility within port limits MAY 2013 I CARGOTALK I 19

Cover Story Port Infrastructure

According to the industry terminal is equipped with also commenced moving cargo through insiders, space availability 5 state-of-the-art super Krishnapatnam Port to avail of the and technically superior post panamax quay cranes. advantages of lower transportation and facilities certainly make the The terminal is also well handling costs, efficient and congestion– container terminal (KPCT) connected by rail and four free operations at KPCT. the port of the future on lane roads to the national the east coast of India, grid, making for swift access Yendluri further maintained that this unlike other ports that are and evacuation of containers all-weather container terminal will be challenged by congestion and cargo. operational round the clock, 365 days and and poor connectivity. is all set to boost the container terminal Krishnapatnam Port offers According to Vinita capacity to six million TEUs per annum Anil Yendluri multimodal connectivity by Venkatesh, Advisor, KPCT, within the next few years, handling the CEO, Krishnapatnam Port road and rail to the national the excellent connections highest container volumes ever on the east grid. It has a dedicated 4-lane offered by container liners coast. “We will add numerous strengths road (25 km) connecting to National from this terminal to all parts of the world like maximum efficiency, minimum dwell Highway 5, and 26 km of dedicated railway is tremendously benefitting the importers time and maximum safety, thus making it line to the national grid. and exporters in the immediate hinterlands one of the finest and most modern ports in of Guntur, Ongole, Vijayawada, Gudur, the world,” he said.

Meanwhile, container shipping lines Kodur and Nellore. like Maersk Line and Mediterranean “The trade in these areas Krishnapatnam Port Shipping Company (MSC) have started is enjoying reduced Company was appointed calling their own vessels at KPCT. In cost on transportation by the Government of addition, the largest container feeder thereby increasing their Andhra Pradesh to develop companies in the Bay of Bengal area – competitiveness in the global the existing minor port Bengal Tiger Line (BTL), FAR Shipping markets,” she emphasised. into a modern, deep water and Xpress Feeders ( XCL) are also and high productivity port, offering services from KPCT. Agricultural commodities with a concession period – maize, rice, groundnut, of 50 years. The port is With a draft facility of 18m, KPCL / chillies, onions, raw cotton being built in three phases.

KPCT spans over an area of 6500 acres and tobacco can be stored Krishnapatnam Port is Vinita Venkatesh providing ample space for import and in the port’s warehouses promoted by the HyderabadAdvisor, KPCT export cargo and containers as well as for container stuffing while based CVR Group. Navayuga transhipment operations. The Container granite, both rough blocks as well as Engineering Company Ltd. (NECL) is the finished slabs can be flagship entity of CVR Group. CVR group handled in open yards is a highly diversified group dealing with with the state-of-the art power, steel, port establishment, spatial equipment available at technology and applications, information Container Berths 7 the Port. technology and exports. Krishnapatnam Port has so far witnessed a total investment Total Berth Length 2,000 mtrs Venkatesh also of nearly USD 1 billion. For the container Terminal Capacity 4.8 Mn TEUs informed that the terminal Rs 1400 crore has been invested Draft Alongside 21.0 mtrs seafood industry of in the Phase I, and Rs 500 crore and Rs Total Area 600 acres Nellore has benefitted 7300 crore will be invested in the Phase Yard Ground Slots 10,000 TEUs critically by shorter II and the rest of the container terminal Yard Capacity 40,000 TEUs road transportation project respectively. The port has a plan and faster transit via to be India’s largest port by 2016-17 with Quay Cranes 20 (Super Post-Panamax) KPCT. Further the exim an annual capacity of 200 MTPA and 42 Rubber Tyred Gantry 40 x 42 MT trade of Hyderabad berths. Container terminal’s final capacity Integrated logistics park within port and Bangalore have will be 6 Million TEUs per annum.

Container Terminal – Phase II

20 I CARGOTALK I MAY 2013

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Industry Associations Technology/Award

UPLIFT by ACAAI and Kale registers one million EDI messages UPLIFT (Universal Platform for Logistics and Integrated Freight Transport), which is India’s first multi-modal Cargo Community System has crossed one million EDI messages in record time two years, after its inception. UPLIFT is India’s first cargo community platform to connect the multi-modal logistics network in India. It is promoted and co-developed by Kale Logistics Solutions in association with the Air Cargo Agents Association of India (ACAAI).

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Abhijeet Logistics receives WCA Award

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bhijeet Logistics was felicitated with ‘WCA Inter Global Best Partner Award’ for Indian sub continent region , at the recently held WCA Conference in Bangkok. The conference was attended by more than 2400 freight forwarders from across the world.

Headquartered in New Delhi, Abhijeet Logistics is a member of the international network for logistics industry called ‘WCA Family’. The company was established in 2009, and covers a wide range of services including international freight forwarding by air, ocean and road, custom house broking, insurance services, providing packages for dangerous goods, small parcel delivery, and other logistical solutions.

Abhijeet Logistics also provides consultancy for complete logistic solutions for handling, clearance and transportation of all types of commodities, specialising in pharmaceuticals and dangerous goods.

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PLIFT is an initiative to create a cargo community platform which targets to enable the more than 15000 strong Indian freight forwarding and custom house agent (CHA) organisations to electronically communicate within themselves and with other stakeholders like shippers, consignees, airports, seaports, airlines, transporters, customs, and custodians.

business (B2B) portal and a business to consumer (B2C) portal for trade community members to conduct electronic transactions.

Amar More Vice President, Kale Logistics Solutions

The aim of UPLIFT is to eliminate the manual operations, paperwork, and redundant data entry and bring in the shipment visibility across the value chain.

Presently it acts both as a business to

Key Highlights of UPLIFT

Fastest adoption of cargo community platform globally Transacting with 10 out of top 15 cargo carriers in India Recognised by International Air Transport Association (IATA) Providing connectivity to 114 carriers Top 30 per cent of India’s air cargo agents are currently connected to UPLIFT More than 2500 users across India Compliant with all industry regulations including e-cargo initiatives

According to a Kale Logistics statement, meanwhile leading freight forwarders, custom house agents, carriers, airports are utilising this platform to realise significant savings in terms of time, money and resources.

Today, UPLIFT is reportedly connecting 30 per cent of Indian freight forwarders/ CHAs electronically with 10 leading carriers (representing over 65 per cent of India’s air freight market) and Indian Customs. With more than 2500 users and shipment filing to more than 450 destinations globally, this pioniering platform is preparing the ground for Indian logistics players for paper free cargo initiative or e-freight.

Commenting on this achievement Amar More, Vice President, Kale Logistics Solutions said, “With UPLIFT, India is geared up to be one of the leading nations participating in the global e-cargo movement. This platform is revolutionising the way cargo information is exchanged by the Indian cargo community.” He also asserted that industry stakeholders are already realising the benefits of visibility across the supply chain, a more predictable shipment status and far more secure cargo movement. “We are confident that UPLIFT will contribute in lowering the logistics transaction costs in India and increasing India’s EXIM competitiveness,” More stressed.

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Lead Story Current Topics

24 I CARGOTALK I MAY 2013

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Warehousing

Issues

Industry urges for ease in land acquisition and regulations According to a recent report, an absence of laid-out rules or a framework for the warehousing segment is the first and foremost building block of the logistics value chain, and the result for mushrooming illegal warehouses on the outskirts of most cities.

Cargotalk spoke to a few industry stakeholders to get their views on issues related to warehousing development in India‌

„ RATAN KR PAUL

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he Study report unveiled that in India warehousing clusters have developed in close proximity to demand centres such as Mumbai, Kolkata, Chennai, Gurgaon and Indore. Today, almost all major cities, by virtue of being large consumption centres, have warehousing markets.

Since acquisition of land is one of the main challenges for warehouse developers, laws of the state play a very crucial role in the development of land-based facilities. States where land laws are extremely complicated and restrictive, the number of illegal structures is found to be more compared to other states, where easy regulations help developers get necessary approvals fast and without much fuss.

The warehousing segment, which makes up 20 per cent of the Indian logistics industry, still remains largely unorganised and lack of development rules has hampered it from taking advantage of the growth

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the country recently experienced in the logistics sector.

A PWC Study also underlined that warehousing has been gaining tremendous importance due to the growing need to reduce storage and lead times for inventory. In addition, the concentration of the auto manufacturing activity in some places has led manufacturers to construct warehouses in strategic locations, which then serves as the central point for distribution and collection of finished and intermediate products including auto parts. This primarily works on the theory of augmentation and assortment. The government has also contributed to the growth of the warehousing sector. It has established Special Economic Zones (SEZs) especially for auto manufacturers, usually close to ports, to cater to the growing demand in the automobile sector.

SEZs in Haryana, Jharkhand, Karnataka, Maharashtra, Tamil Nadu and West Bengal are established by state governments.

MAY 2013 I CARGOTALK I 25

Lead Story Current Topics

Most of the Logistics Parks are today primarily updated and renovated warehouses and have very little multi-modal facilities

Land acquisition is one of the main challenges for warehouse developers apart from laws of the states that play a very crucial role for such facilities”

Vinod Asthana MD, CRWC

There are pockets of landed-elite with strong political and bureaucratic networks that thwart land reforms”

Vineet Agarwal JMD, Transport Corporation of India

Vikram Mansukhani National Operations Head, Drive India Enterprise Solutions Limited (DIESL)

Land Acquisition “Warehousing is emerging as a major game changer in the field of Logistics. It adds value to the transportation and also provides opportunities for additional value added services, while at the same time reducing the overall logistics cost. This will help the agricultural warehousing segment as well as industrial warehousing,” said Vinod Asthana, MD, CRWC. According to him, modern formats for warehousing will replace the traditional godown and cold storages to give way to multi-chambers cold chain based warehouses.

He pointed out that warehousing is an asset based business and has high capital requirement. Most of the Logistics Parks are today primarily updated and renovated warehouses and have very little multi-modal facilities. “For setting up of Logistics Parks, whether industry specific or commodity specific warehouses besides ICDs/CFSs, the industry requires large parcel of land at key locations. Availability of land continues to be a major concern. The organised warehouse companies are finding it difficult to expand the business, in spite of the growing demand,” he added.

26 I CARGOTALK I MAY 2013

Endorsed Vineet Agarwal, JMD, Transport Corporation of India, “Land acquisition is one of the main challenges for warehouse developers apart from laws of the state that play a very crucial role in the development of such facilities.” In his opinion, in the development plans, particularly industrial area planning, warehousing needs to be incorporated as a rule rather than an exception. Land reform is therefore extremely critical for setting-up of warehouses.

Vikram Mansukhani, National Operations Head, Drive India Enterprise Solutions Limited (DIESL) maintained that India needs world-class facilities with automation and a good network of roads and infrastructure to support its growing logistics needs. Investment in large warehousing hubs will see a positive trend with liberal land reform policies and the government allocating land for special warehousing zones. “Unfortunately, while the government is moving towards liberalisation and privatisation, there are pockets of landed-elite with strong political and bureaucratic networks that thwart land reforms and their judicious

implementation,” he said.

According to him, complex land laws in several states, example Maharashtra, and stringent regulations also serve to push up the number of illegal warehousing. To curb this menace, government should demark land banks for dedicated warehousing zones, create awareness about warehouse structure regulations and encourage long term investments via PPPs According to Ram Tiwari, Director Marketing, Shine Logistics, land acquisition is one of the major hurdles before the warehousing industry. There is no direction from the Government as per land registry or change of land for warehousing. However, for other manufacturing industries, clear guidelines have been given. “As a result, there are many illegal warehouses operating, which are not able to meet client requirements, because they do not want to invest in a modern warehouse,” he highlighted.

“Warehousing will come out of the dark ages in the near future. Poor quality infrastructure on questionable land parcels WWW.CARGOTALK.IN

Lead Story Current Topics

will give way to quality warehousing solutions that comply with all laws.

This transformation will be spurred by tenants/customers, who will demand that landlords comply with all laws, the rapidly rising scale of inventory that will compel warehouses to get leaner and more efficient, and government cracking down on defaulters,” supplemented Bharat Joshi, Director, ACTL and CEO, J Curve.

“In place of sheds in ‘lal dora’ or agricultural land, we will witness customised warehouses that cater to specific products and commodities, employing the best of warehouse management systems,” he added.

Rules and Regulations Agarwal was of the view that the warehousing segment still remains largely unorganised and lack of uniform warehousing development rules has hampered it from taking advantage of the boom the country recently experienced in the logistics sector. Except for a few statecontrolled companies and a very few large private operators, the segment cannot claim much.

FTWZs in India are governed by the SEZ Act 2005 and SEZ Rules 2006. These zones mandate availability of power (conventional or solar), water, motor-able roads, and manpower. Resources can be shared, delivery time and cost can be reduced and benefits can be passed to the customer.

“However, shortage of land available for FTWZs compounded with a plethora of rules, regulations and licenses pertaining to setting up warehouses and operations, creates bottlenecks in fulfilling the demand for state-of-the-art warehousing hubs in India,” Mansukhani pointed out. The multitude of regulatory and enforcement authorities at local, state and national levels require several approvals and licensing before starting operations. These are in addition to the elementary registrations like TAN, PAN, VAT, etc. There are also regulations relating to environmental clearances, handling of chemicals and hazardous products, safety, etc.

and companies are unable to consolidate their supply chains, thus posing difficulty in maintaining a seamless supply across the country. Pending GST has also resulted in lower investments in IT leading to delay and detention of trucks, which in turn causes delay in delivery of goods and inefficiency in fleet utilisation.

“Imbalance between the Centre and States continues to exist in the absence of GST. This is hindering development of logistics parks and free trade warehousing zones by formation of regional hubbased infrastructure and an environment conducive of rationalisation for the logistics network. This is also discouraging logistics companies from investing in assets and technology to align their service offering to complement the supply chains of their customers,” observed Agarwal.

Delay in GST implementation is hampering growth of the logistics sector in India. Trade boundaries between states continue to exist

Delay in implementation of GST is also affecting productivity and encouraging corruption by way of complex documentation which leads to slow movement of cargo and thus hindering cost optimisation. “The rollout of GST is long overdue but at the same time the concept is

There are many illegal warehouses operating, which are not able to meet client requirements, because they do not want to invest in a modern warehouse”

Warehousing will come out of the dark ages in the near future. Poor quality infrastructure on questionable land parcels will give way to quality warehousing solutions”

Ram Tiwari Director Marketing, Shine Logistics

Imbalance between the Centre and States continues to exist in the absence of GST. This is hindering development of logistics parks and free trade warehousing zones”

Bharat Joshi Director, ACTL and CEO, J Curve

T N Seetharaman ChieI Operations OI¿cer Damco South Asia

28 I CARGOTALK I MAY 2013

Delay in GST implementation

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Lead Story Current Topics

plagued by uncertainties of design and rate bands. While GST is getting delayed, the back door entry of new local taxes such as Local Body Tax (LBT) are creating a shroud of mystery on whether one uniform and easy to use tax structure will ever be the way ahead,” added Mansukhani.

“It is imperative that GST be enforced at the earliest. Delay in implementing this uniform tax code causes a wasteful supply chain resulting in inflation of costs,” felt Joshi.

T N Seetharaman, Chief Operations Officer, Damco South Asia, also maintained that GST implementation is expected to change the scenario of warehousing and distribution, which will shift focus from being “Tax Planning” to “Logistics Planning” for most of the corporates.

However the delay in implementation of GST is a major worry for all in the corporate world.

“To avoid further confusion among the international clients and losses to the national economy because of diversion of exim to other countries, the Government must introduce GST as soon as possible.

It will help the logistics industry and ultimately benefits will be passed on to end users,” stressed Tiwari.

Industry Status “Warehousing should be recognised as infrastructure. It will help in getting cheaper finance from banks and financial institutions and at the same time will help the agri and the industrial sector. In SEZ and industrial towns, warehousing should be treated as part of common facilities like road and power, for which

Consensus on Land Acquisition Bill At a meeting held on April 18 in New Delhi, major political parties have reached to a consensus on the ‘Land Acquisition, Rehabilitation and Resettlement Bill 2011.’ The Bill proposes the payment of compensation that is up to four times the market value in rural areas and two times the market value in urban areas. The Government of India has reportedly accepted key demands of the major opposition parties regarding leasing of land and compensation reaching the original farmer-owners, and rights of tenants. The government also agreed to amend the bill to provide for an enabling provision for states to enact laws in this regard as leasing of land is a state subject.

The objective of the Bill was to address problems of industry regarding acquisition of land for setting up projects. It provides for land acquisition, rehabilitation and resettlement of the displaced people and proposes to replace the Land Acquisition Act, 1894.

According to the Bill, consent of 80 per cent of the people is required for acquiring land for private industry. However, there was a debate among various political parties regarding the contents of the Bill. It was referred to a GoM in the wake of differences in the Cabinet over certain provisions in the Bill.

land should be earmarked,” suggested Asthana.

In his opinion, development of modern warehouses, especially for highend commodities and certification is becoming necessary to integrate the growth of logistics with policies. “An integrated logistics policy will ensure that development is moving in the desired direction,” he said.

Agarwal pointed out that the rules for approval of warehousing projects vary from state to state. To have systematic growth of the warehousing sector, it should be put under a regulatory authority, which could make policies for implementation across the country and co-ordinate with the relevant ministries/states.

“The government should also identify strategic logistics points and develop facilities on a public-private participation mode, apart from encouraging longterm investment from public and private players alike for developing facilities like warehousing. The requirement of industry status/tax incentives is to encourage prospective investors,” he emphasised.

Agarwal added that setting-up of a nodal cross-ministerial logistics body, infrastructure status to the wider warehousing industry and higher financial outlay for skill improvement should be initiated.

“Logistics must be first granted the status of an ‘industry’. It is no longer about transportation between two cites or warehousing alone; it is in fact a complex value chain continuously evolving by adopting international best practices.

The need for industry status will be felt more and more as the country’s economy spreads to tier III and IV cities,” observed Mansukhani.

Seetharaman, however emphasised on the industry’s inherent weaknesses.

“The main challenge can be cited as the industry following a traditional mindset of “low cost outsourcing” as the only way to become competitive in the market. This needs to change to improving operational efficiencies through introduction of technology and systems, where cost productivity will be a logical by-product,” he concluded.

30 I CARGOTALK I MAY 2013

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International Events Logistics Events

Calendar of International Logistics Events 26th IGHC Ground Handling Conference

coldchainiq.com

May 5 to 8 Vancouver, B.C., Canada Venue: Westin Bayshore, Vancouver Contact: www.iata.org

Air Cargo Europe

Cold Chain and Temperature Management Logistics

May 13-15, 2013 Intercontinental Miramar Panama City, Panama Contact: newsletter@ coldchainiq.com

2nd Cold Chain India

May 16-17, 2013 Mumbai, India Contact: newsletter@

32 I CARGOTALK I MAY 2013

Trans Middle East

May 29- 30, 2013 Intercontinental Phoenicia Hotel, Beirut, Lebanon Contact: Transport Events Management 2nd Floor, 53-3, Jalan USJ 9/5R, 47620 Subang Jaya Selangor Darul Ehsan,Malaysia +(60)-(3)-80235352

June 4-7, 2013-04-17 New Munich Trade Fair Centre, Germany Phone +49 89 949-11368 Contact: info@ aircargoeurope.com

E-Cargo Conference

Black Sea Ports and Shipping

June 18 - 20, 2013 Geneva, Switzerland IATA Conference Centre Route de L’Aeroport 33 1215 Geneva, Switzerland Contact : www.iata.org

11th ASEAN Ports and Shipping

September 11-12, 2013 The Marmara Hotel, Istanbul, Turkey Contact: Transport Events Management 2nd Floor, 53-3, Jalan USJ 9/5R, 47620 Subang Jaya Selangor Darul Ehsan,Malaysia +(60)-(3)-80235352

July 11 – 12, 2013 Windsor Plaza Hotel

BioLogistics

June 3-5, 2013 Golden Gateway Hotel, San Francisco, CA Contact: newsletter@ coldchainiq.com

Ho Chi Minh City, Vietnam Contact: Transport Events Management 2nd Floor, 53-3, Jalan USJ 9/5R, 47620 Subang Jaya Selangor Darul Ehsan,Malaysia +(60)-(3)-80235352

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Cargo Performance Export/Import

DELHI INTERNATIONAL AIRPORT CARGO DEPARTMENT, IGI AIRPORT, NEW DELHI (AIRLINE-WISE IMPORT/EXPORT CARGO PERFORMANCE FOR THE MONTH OF MARCH 2013) All wt. in mt.

S. No.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

52 53 54 55 56 57 58 59 60 61 62 63

Airlines

Jet Airways Air India Cathay PaciÂżc Emirates British Airways Singapore Thai Airways Lufthansa Cargo Airline Fedex Express Corpation Kalitta Air Qatar Airways Etihad Airways Air France Swiss Intl Airline Ltd Malaysian Airline System Turkish Airlines Virgin Atlantic Uzbekistan Klm Finnair China Eastern Airlines Japan Airlines M/S All Nippon Airways Martin Airline $HURĂ€RW &DUJR $LUOLQHV Saudia United Airlines Lufthansa Cargo Ag Air China Eva Air Indigo Cargo Uni-Top Airlines China Air Blue Dart Mahan Air Oman Air Air Shagoon Pvt. Ltd. Gulf Air Dhl Express China Southern Airlines Ariana Afghan Airlines Air Arabia Air Mauritius Spice Jet Ethopean Airlines Hercules Aviation Sri Lankan Airlines Ltd Asiana Airlines Philippine Airlines Air Astana 6DÂż $LUZD\V Kenya Mihin Lanka Airlines Kuwait Airlines Pakistan International Ups Kam Air Turkmenisthan Airlines Finnair Royal Jordanian Airlines Iraqi Airways Jetlite Druk Air Total Cargo handled in March ‘12’ % VARIATION

34 I CARGOTALK I MAY 2013

Export (MTs)

Export Perishable Cargo (MTs)

1275 1358 1008 1105 1006 864 532 671 633 439 422 402 476 506 356 566 422 417 334 348 243 175 320 220

310 245 165 158 98 193 0 113 138 152 128 83 113 0 55 82 108 72 81 57 83 51 56 34 34

32 24 1 7 0 17 9 12 8 1 0 1 17183 14520 18.34%

224 442 27 1044 35 11 32 64 13 1 106 28 54 24 32 17 5 48 26 8 1 11 7 14

59 15 9 1 17 0 0 15 0 3 27 0 28 0 3 1 0 28 0 13 0 1 0 3 10

0 0 18 1 0 0 3 0 0 2 0 0 2543 2643 -3.79%

Export (with Peri.)

(UPL) (MTs) 1499 1801 1035 2149 1041 875 564 735 646 440 528 430 530 530 388 583 426 465 360 356 245 186 327 234

369 260 174 159 115 193 0 128 138 155 155 83 141 0 58 83 108 100 81 70 83 52 56 37 45

32 24 18 7 0 17 12 12 8 3 0 1 19726 17162 14.94%

Import

1546 1193 1777 600 951 810 1073 693 603 443 349 442 315 294 385 180 281 201 216 172 283 302 160 232

14 107 128 114 142 20 207 73 38 9 1 63 2 125 65 39 7 16 27 17 0 28 16 15 1

4 5 2 14 19 0 2 0 0 0 3 0 14879 15558 -4.37%

Total Cargo

3046 2994 2812 2749 1992 1685 1637 1429 1249 883 878 872 845 825 772 763 707 666 576 528 527 488 488 465

383 367 302 273 257 213 207 202 176 164 156 145 143 125 123 122 116 116 107 87 83 80 72 51 45

36 30 21 21 19 17 15 12 8 3 3 2 34605 32721 5.76%

% of Total 8.80% 8.65% 8.13% 7.94% 5.76% 4.87% 4.73% 4.13% 3.61% 2.55% 2.54% 2.52% 2.44% 2.38% 2.23% 2.21% 2.04% 1.92% 1.66% 1.53% 1.52% 1.41% 1.41% 1.34%

1.11% 1.06% 0.87% 0.79% 0.74% 0.61% 0.60% 0.58% 0.51% 0.48% 0.45% 0.42% 0.41% 0.36% 0.35% 0.35% 0.33% 0.33% 0.31% 0.25% 0.24% 0.23% 0.21% 0.15% 0.13%

0.10% 0.09% 0.06% 0.06% 0.05% 0.05% 0.04% 0.04% 0.02% 0.01% 0.01% 0.00% 100.00%

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MUMBAI CSI AIRPORT

EXPORT/IMPORT CARGO TONNAGE HANDLED IN MARCH 2013 S.No.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

49 50

Airlines

Jet Airways Emirates Lufthansa Air India Cathay PaciÂżc Singapore Airlines British Airways Etihad Airways Qatar Airways Turkish Airlines Saudi Arabian Airlines Swiss Intl. Airlines Malaysian Airlines Federal Express Air France Ethopian Airlines UPS Thai Airways Virgin Atlantic Martin Air Delta/KLM Airlines South African Airlines Fin Air Gulf Air Kuwait Airways Kenya Airways Korean Air Air Arabia Air Cargo Arologic C/O Lufthansa Air Mauritius Oman Air EL-AL Airlines United/Continental Airlines Indigo Air Srilankan Air Blue Dart 113.69 Yemenia Airways Pakistan intl Airlines Egypt Air Iran Air NorthWest Airlines Royal Jordanian Air China Charters Royal Joradian Island Aviation (Maladvian) Baharin Airlines .LQJÂżVKHU $LUOLQHV Qantas Others

TOTAL %Variation over February 2013 %Variation over March 2012

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Export General

Export Perishable

Total Export

Import

Total Exp+Imp

1230.92 1715.86 558.08 871.41 1334.16 888.62 524.23 754.29 545.77 533.60 704.38 325.21 406.42 403.73 379.56 694.61 163.37 174.68 186.69 0.00 185.94 298.99 267.51 62.52 105.83 210.52 98.55 53.23 0.00 166.87 78.86 71.92 25.56 65.31 61.14 54.24 61.54 19.54 21.72 24.11 23.67 0.00 15.92 7.97 0.00 0.00 1.05 0.00

0.00 43.01

1185.67 1575.90 625.20 1248.89 117.18 264.17 589.03 57.23 333.30 51.10 143.53 126.66 68.50 115.07 113.69 6.97 0.00 103.10 29.21 0.00 83.98 1.73 8.91 197.37 123.94 1.87 12.80 128.73 0.00 6.14 65.16 3.19 7.20 51.01 8.52 0.00 8.54 8.04 2.64 0.15 2.59 19.67 0.00 0.00 0.00 1.72 0.00 0.00

0.00 142.24

2416.59 3291.76 1183.28 2120.30 1451.34 1152.79 1113.26 811.52 879.07 584.70 847.91 451.87 474.92 518.80 493.25 701.58 163.37 277.78 215.90 0.00 269.92 300.72 276.41 259.89 229.77 212.38 111.36 181.96 0.00 173.01 144.02 75.11 32.77 116.32 69.66 54.24 70.07 27.58 24.35 24.26 26.26 19.67 15.92 7.97 0.00 1.72 1.05 0.00

0.00 185.25

2554.93 1413.50 2130.48 1040.81 1355.11 1407.09 705.39 789.26 646.49 374.19 63.16 445.86 313.09 247.36 230.54 6.35 543.61 408.98 333.03 545.95 230.31 30.59 0.00 1.78 4.18 4.91 96.57 3.48 182.37 3.65 2.03 67.83 89.73 0.47 27.60 19.38 3.44 0.12 3.30 2.47 0.32 0.00 0.28 0.00 7.82 0.00 0.00 0.00

0.00 374.69

4971.52 4705.26 3313.76 3161.11 2806.45 2559.88 1818.65 1600.78 1525.56 958.88 911.07 897.73 788.02 766.16 723.80 707.93 706.97 686.76 548.92 545.95 500.23 331.31 276.41 261.66 233.95 217.30 207.93 185.44 182.37 176.66 146.05 142.94 122.49 116.79 97.25 73.62 73.52 27.71 27.65 26.73 26.59 19.67 16.20 7.97 7.82 1.72 1.05 0.00

0.00 559.94

14421.09 8.77 1.57

7640.52 13.26 8.89

22061.61 10.29 3.99

16712.48 34.67 (-) 0.41

38774.10 19.62 2.04

MAY 2013 I CARGOTALK I 35

Cargo Performance Airports in India

TRAFFIC STATISTICS DOMESTIC FREIGHT

Freight (in Tonnes) For the Month S. No. Airport

January 2013

January 2012

For the period April to January % Change

2012-13

2011-12

% Change

(A) 11 International Airports 1 2 3 4 5 6 7 8 9 10 11

Chennai Kolkata* Ahmedabad Goa Trivandrum Guwahati Calicut Jaipur Srinagar Amritsar Portblair Total

5669 6260 2987 1 130 431 31 652 199 5 191 16556

6913 6454 2794 285 132 593 12 477 157 9 195 18021

-18.0 -3.0 6.9 -99.6 -1.5 -27.3 158.3 36.7 26.8 -44.4 -2.1 -8.1

65141 67215 29641 3499 1242 5088 272 5778 2658 77 1697 182308

70317 68438 13967 3275 1147 6827 155 5448 1993 72 1946 173585

-7.4 -1.8 112.2 6.8 8.3 -25.5 75.5 6.1 33.4 6.9 -12.8 5.0

15345 15143 6618 2880 715 366 41067

17407 15304 6643 2725 741 352 43172

-11.8 -1.1 -0.4 5.7 -3.5 4.0 -4.9

158638 153250 69085 28053 7394 4018 420438

167175 159098 69504 28812 7110 3961 435660

-5.1 -3.7 -0.6 -2.6 4.0 1.4 -3.5

1568 246 474 192 145 0 30 95 22 100 123 0 2995

2036 327 540 238 30 0 16 222 33 148 75 0 3665

-23.0 -24.8 -12.2 -19.3 383.3 87.5 -57.2 -33.3 -32.4 64.0 -18.3

16643 1889 5193 1762 1161 0 244 2145 276 1103 856 0 31272

19273 3261 6153 2966 728 0 220 2487 307 1378 670 0 37443

-13.6 -42.1 -15.6 -40.6 59.5 10.9 -13.8 -10.1 -20.0 27.8 -16.5

281 471 146 378 177 295 137 54 82 45 120 0 45 0 23 2 28 2284 9797 62999

189 326 152 540 256 293 198 134 102 55 106 0 72 1 28 1 24 2477 128 67463

48.7 44.5 -3.9 -30.0 -30.9 0.7 -30.8 -59.7 -19.6 -18.2 13.2 -37.5 -100.0 -17.9 100.0 16.7 -7.8 -24.2 -6.6

2687 3966 1247 4847 1989 3395 1670 1180 821 639 1050 0 260 16 262 18 291 24338 1072 659428

1868 4057 1025 5841 2358 4188 1818 1415 720 1040 1206 0 621 25 274 38 443 26937 1253 674878

43.8 -2.2 21.7 -17.0 -15.6 -18.9 -8.1 -16.6 14.0 -38.6 -12.9 -58.1 -36.0 -4.4 -52.6 -34.3 -9.6 -14.4 -2.3

(B) 6 JV International Airports 12 13 14 15 16 17

Delhi (DIAL) Mumbai (MIAL) Bangalore (BIAL) Hyderabad (GHIAL) Cochin (CIAL) Nagpur (MIPL) Total

(C) 12 Custom Airports 18 19 20 21 22 23 24 25 26 27 28 29

Pune Lucknow Coimbatore Patna Visakhapatnam Trichy Mangalore Chandigarh Varanasi Bagdogra Madurai Gaya Total

(D) 17 Domestic Airports 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Bhubaneswar Indore Jammu Agartala Raipur Imphal Vadodara Ranchi Bhopal Aurangabad Leh Udaipur Rajkot Tirupati Dibrugarh Jodhpur Silchar Total (E) Other Airports Grand Total (A+B+C+D+E)

* Estimated 36 I CARGOTALK I MAY 2013

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Cargo Performance Airports in India

TRAFFIC STATISTICS

I N T E R N AT I O N A L F R E I G H T Freight (in Tonnes) For the Month S. No. Airport

January 2013

January 2012

For the period April to January % Change

2012-13

2011-12

% Change

(A) 11 International Airports 1 2 3 4 5 6 7 8 9 10 11

Chennai Kolkata* Ahmedabad Goa Trivandrum Guwahati Calicut Jaipur Srinagar Amritsar Portblair Total

15855 2754 1155 291 2103 3 2237 10 0 54 0 24462

18320 2899 969 221 4215 0 2168 25 0 723 0 29540

-13.5 -5.0 19.2 31.7 -50.1 3.2 -60.0 -92.5 -17.2

199192 35104 10599 1934 33837 15 22573 141 0 1220 0 304615

229732 37115 10015 1638 38069 0 20403 186 0 5893 0 343051

-13.3 -5.4 5.8 18.1 -11.1 10.6 -24.2 -79.3 -11.2

29026 34380 11211 3843 2855 29 81344

27241 34534 11170 3415 2463 26 78849

6.6 -0.4 0.4 12.5 15.9 11.5 3.2

295651 377548 118116 38175 31151 323 860964

306441 390422 116863 36571 29465 314 880076

-3.5 -3.3 1.1 4.4 5.7 2.9 -2.2

0 66 46 0 0 311 0 0 0 0 0 0 423

0 71 35 0 0 93 0 0 0 0 0 0 199

-7.0 31.4 234.4 112.6

0 1012 463 0 0 2202 0 0 7 0 0 0 3684

0 646 382 0 0 1726 0 0 1 0 0 0 2755

56.7 21.2 27.6 600.0 33.7

0 0 106229

0 0 108588

-2.2

202 0 1169465

0 0 1225882

-4.6

(B) 6 JV International Airports 12 13 14 15 16 17

Delhi (DIAL) Mumbai (MIAL) Bangalore (BIAL) Hyderabad (GHIAL) Cochin (CIAL) Nagpur (MIPL) Total

(C) 12 Custom Airports 18 19 20 21 22 23 24 25 26 27 28 29

Pune Lucknow Coimbatore Patna Visakhapatnam Trichy Mangalore Chandigarh Varanasi Bagdogra Madurai Gaya Total

(D) (E)

17 Domestic Airports Other Airports Grand Total (A+B+C+D+E)

* Estimated

ICAO and TIACA sign pact for cooperation on technical matters

T

he declaration agreement between the two organisations was officially signed in Dallas at TIACA’s 2013 Executive Summit by Michael Steen, Chairman TIACA and Raymond Benjamin, Secretary General, ICAO. Under the terms of the new agreement, ICAO and TIACA will work more closely on air cargo and mail security and facilitation, accelerating the evolution from paper-based to electronic processes, environmental stewardship, the liberalisation of market access for air cargo services, and air cargo safety.

38 I CARGOTALK I MAY 2013

According to this is another highly significant breakthrough in the new era of collaboration between air cargo industry and leading regulatory bodies. ICAO is taking a lead in critical areas of aviation, such as security and the environment. “ICAO has made a clear point of meeting with us, listening to our views and participating in our events to learn more about the requirements and concerns of the air cargo industry. We welcome the opportunity to help this important global standards setter realise its objectives, based on a stronger understanding of the views of our sector,” he said.

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Logistics Services Success & Achievements

Supreme Industries

recognised for ‘INSUboard’ with ACREX Award

The recognition strengthens our pledge to offer high performance thermal insulation products that are energy HI¿FLHQW DQG HQYLURQPHQW friendly” As recognition to their green product initiatives, the Supreme Industries INSUboard (Extruded Polystyrene Board for Thermal Insulation) was honoured with ‘ACREX Award of Excellence 2013’ at ‘ACREX 2013’, an international exhibition on air-conditioning, refrigeration and building services held recently in Mumbai.

Other ‘INSU’ Products ‘INSUshield’: Closed-cell, nonfibrous, fire retardant (Class ‘O’ in fire propagation and Class ‘1’ in surface spread of flame) chemically cross-linked polyethylene foam ‘INSUflex’: Nitrile Butadiene Rubber (NBR) tubing ‘INSUreflector’: Reflective Insulation 40 I CARGOTALK I MAY 2013

A

CREX 2013 was hosted by Indian Society of Heating, Refrigeration and Air Conditioning Engineers (ISHRAE). More than 350 global exhibitors from 20 countries attended the event.

Commenting on the achievement, Umesh Sengaonkar, General Manager (West) – Protective Packaging Division, Supreme Industries said, “The recognition strengthens our pledge to offer high performance thermal insulation products that are energy efficient and environment friendly.” Elaborating on the green product Sengaonkar maintained that ‘INSUboard’ is a closed-cell, rigid extruded polystyrene board having a continuous skin surface, derived from its process of manufacture.

The light weight of the product combined

Umesh Sengaonkar

General Manager (West) – Protective Packaging Division, Supreme Industries

with the closed-cell structure and uniform surface, supports the imposed loading during Overdeck and Floor applications. Low thermal conductivity of the product offers energy savings in critical air-conditioning areas. Even in non-conditioned buildings, it reduces the temperature by 7-8 degrees.

“INSUboard retains the low thermal conductivity over its entire life spanning several decades,” he emphasised.

According to Sengaonkar, ‘INSUboard’ is moisture resistant. “As a ‘Green Product’, its application for Overdeck / Underdeck / within Cavity Walls reduces solar energy gain by air conditioned buildings, thus providing valuable recurring energy savings and costs in terms of reduction in size of A/C plant requirement,” he added.

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Freight Forwarding New Launch

Air Freight Consolidation

$0, RSHQV RI¿FH WR VWUHQJWKHQ RSHUDWLRQV LQ ,QGLD Recently, Air Menzies International (AMI) opened its office in Mumbai by appointing Trevor Saldanha as Vice President – India. AMI is part of the UK headquartered global multinational Menzies Aviation Group.

Speaking to Cargotalk Saldanha unveiled the company’s strategies for this market.

RATAN KR PAUL

A

MI is the world’s leading trade-only airfreight and express wholesaler.

With its new office in Mumbai the company has created a new regional division to spearhead its development in India, to launch its own operations in this country. Once its Mumbai office is fully established, AMI India plans to follow this with more branches in Delhi, Chennai, Bangalore and Hyderabad.

AMI’s Mumbai operation is initially focusing on airport-to-airport traffic to the company’s existing stations in the UK, USA and Africa. AMI India will progressively introduce more destinations, and additional products such as airport to door, over the ensuing months.

The company will also work to stimulate import traffic to all key points in India, from its 21 locations in the USA, UK, Europe, South Africa, Far East and Australasia.

Breakbulk of imports to cities other than Mumbai will continue to be handled by its existing network of service partners across the country.

“India is a growing air cargo market with vast potential. With the liberalisation of government policies, the market is maturing well and all the leading international airlines are now operating to India. Some of them are also operating scheduled flights to smaller cities in India and this has created adequate capacity. There is however no true ‘neutral wholesale consolidator’ within India so far,” said Saldanha. Neutrality for AMI means dealing only with forwarders and agents.

Saldanha shared that AMI studied the market in detail and felt that the time was ripe to introduce AMI’s globally practised ‘neutral wholesale air consolidation’ service in India. Prior to this, AMI was offering only import consolidation services to India through a network of its local Indian agents.

42 I CARGOTALK I MAY 2013

With over three decades of experience in the logistics market, Saldanha is highly optimistic about the company’s success

Our Customers can expect a high level of personalised service, coupled with competitive rates and guaranteed neutrality, which will empower them to compete more effectively in the market” Trevor Saldanha Vice President – India

in the Indian market. “Most forwarders that we have spoken to are excited about working with a truly neutral wholesaler.

Our business model of ‘guaranteed neutrality’ provides our customers the power to compete, feeling safe in the knowledge that AMI has no direct dealings with shippers, thereby safeguarding their customer relationships and business interests,” he asserted. He also maintained that AMI India would work with freight forwarders— both big and small to add value to their individual businesses.

“Our Customers can expect a high level of personalised service, coupled with competitive rates and guaranteed neutrality, which will empower them to compete more effectively in the market, without any threat to their customers (the shippers) being poached by us,” he stressed.

For the moment, AMI India will be working with scheduled airlines and freighter operators. “Integrators could be an option that we would look at in due course. We would not however be looking at Charters at this point in time, unless the market so demands,” Saldanha said.

He also underlined that AMI’s job is to offer airlines access to agents, as they might otherwise not service the clients cost effectively, particularly in hard times.

“Our business model has also proven resilient when the market is soft. We have been doing this successfully since 1976,” added Saldanha.

For AMI the traditional trade lanes in India have been the UK, Europe, USA and Africa, and that will initially be focus areas. “As we stabilise our operations, we will look at establishing other routes as well, based on market demands. We are a customer focussed organisation and will always strive to do what our customers expect from us,” Saldanha concluded.

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Shipping & Ports News Update

ICTT Cochin receives first transshipment marine service

A

s a result of Cabotage relaxation, the International Container Transshipment Terminal (ICTT) in Cochin recently received its first transhipment mainline service with the berthing M.V Zim China of the AsiaIndia Sub Continent-East Med (AME) service operated by global shipping line ZIM. This is an important milestone for ICTT which has recently received cabotage waiver becoming India’s first and only transhipment gateway. ICTT has also increased its draft to 14 meters which will further increase its capacity to handle large mainline vessels.

According to Anil Singh, Sr. VP & Managing Director, Subcontinent DP World (the operator of ICTT) the event marked a significant change to the dynamics of transhipment within the subcontinent region going forward, as this will be the first time Sri Lanka’s import/export containers to/from Colombo will be transhipped at Cochin for loading on to a mainline vessel.

This will be the first service to bring transhipment volumes from Tuticorin to Kochi, and subsequently efforts are being made to connect other major hinterland markets like Bangalore on this new AME service.

ICTT will be part of the new port rotation of ZIM’s AME service, a flagship service of ZIM Integrated Shipping Services, connecting China to Mediterranean via Indian subcontinent with Cochin being the first port of call in India from China.

This will be the fastest service out of China to Kochi, connecting Shanghai to Cochin in 12 days.

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Far East–India Express calls Port Pipavav E

ffective April 2013, the Far East India Express Service (FIX) has started calling APM Terminals Pipavav. The FIX service is a consortium operated by Hanjin Shipping, STX Pan Ocean and KMTC. A total of six vessels of 4300 TEU’s are deployed on this service. C K Rajan, Head – Container Business, APM Terminals Pipavav, and other officials were present on the occasion to receive the vessel, STX Patraikos.

The FIX service provides the EXIM trade in North West India with an added choice to access the Asian markets and a direct sailing to Karachi. The port rotation for the FIX Service is: Kwangyang – Busan – Shanghai – Ningbo – Kaohsiung – Singapore –Nhava Sheva – Pipavav – Karachi – Port Klang – Singapore - Kwangyang.

LCL Logistix launches CFS in Haldia Port

I

n a bid to strengthen its integrated supply chain logistics initiatives, LCL Logistix – the Indian member of the FPS network of independent forwarders and NVOCCs – has opened its third container freight station (CFS) in Haldia, near Kolkata Port. The new base has an annual capacity of 25,000 TEU, and its facilities are designed to comply with the requirements of industrial shippers.

Partha Bhadury, Deputy General Manager, who reports to the head of the group’s logistics division, is responsible for management of this CFS. Prior to the Haldia CFS, LCL launched its CFS bases in Pipavav (Gujarat) and Nhava Sheva (Maharashtra).

According to Jaison George, Director – Logistics, LCL the new Haldia CFS is the next milestone in LCL Logistix’s journey into total logistics and supply chain management solutions. It is pertinent to mention that Haldia is a fastemerging industrial location for West Bengal and the entire eastern region of India. It is also a new gateway to south-east Asia. Government initiatives are helping to make Haldia one of the country’s fastest-growing urban industrial centres. It is expected that with further development Haldia Port will take its current capacity of from 38 million tonne to 50 million tonne per annum within the next two years.

MAY 2013 I CARGOTALK I 43

Guest Column Logistics Issues

Intermodal Transport

Emergence of new horizons Raghu Dayal Former MD, Container Corporation of India

With the shift of global trade centres from West to East, the role of multimodal transport in India will be tremendous.

However, the country has a long way to go, albeit the presence of a strong railway network. An integrated approach and pragmatic policy framework can only utilise the ensuing opportunities for the logistics industry.

44 I CARGOTALK I MAY 2013

T

he expansion of the Panama Canal, now postponed until April 2015, will make room for vessels with a capacity of up to 13,000 TEU (only fiddlers below 4,400 TEU are now allowed).

Over time it would mean a shift of business away from Long Beach to the east coast and Gulf of Mexico ports. Then there is the growth of non traditional trade routes – another milestone in the long shift of economic power from rich, industrial economies to middle-income and developing ones.

According to the World Bank, the value of South-South trade now exceeds South-North trade. In 2002, developing countries bought only 40 per cent of total developing country exports; the rest went to rich nations. In 2010, the share was divided evenly. Now the developing country’s share is larger; their share of the world trade doubled, from 16 per cent in 1991 to 32 per cent in 2011.

China will overtake the US and be the number one in global trade by 2030.

An OECD (Organisation for Economic Co-operation and Development) Forecast

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of the top 25 bilateral trade pairs also shows some ‘newcomers’, such as India, Nigeria, Indonesia and Malaysia. These developments will lead to the creation of new transport corridors, especially between Asia and Africa, Asia and South America as well as between Asian countries.

Product profile changes The value of trade is growing much faster than its weight. This compositional shift is happening both across products (the shift away from bulk and towards manufacturing) and within manufacturing products.

Current demographic shifts highlight the reality of ageing population, mostly in OECD countries, and a rising middle class in leading emerging economies. There is supremacy in the demand for precision, speed and coordination in anticipating customer needs down to the store level.

Higher income countries import higher quality goods. Speed in delivery today is itself an important characteristic of product quality. As a result, air transport is picking up. At present about 30 per cent of world trade (by value) moves by air. Over the next twenty years, world air cargo will treble and the freighter fleet will double and Asia will account for highest growth rates. The region will move towards open sky policies, larger and faster planes, dedicated freight services and development of cargo hubs.

China and India will lead the way With global GDP doubling by 2030, airline traffic worldwide could grow by around 4.7 per cent per annum over 2010-30. Air freight could increase by around 5.9 per cent pa over the same period. On the other hand, maritime container traffic could increase by more than 6 per cent pa. Air freight could triple in 20 years and port handing of maritime containers worldwide could quadruple.

The highest economic growth is expected in the Asia-Pacific region. China and India would lead the way, with many other economies also growing strongly.

GDP per capita levels in China and India could increase three to four times by 2030.

Among the developed country regions, North America’s GDP could be 50 per cent higher and Europe’s 40 per cent higher by 2030.

expected, particularly along major trade and transport corridors between the largest regions, i.e. Asia (China, India), Europe and North America.

Transport: A strategic Sector Transportation is considered a transaction cost factor and a critical variable in the corporate decision process. Transport and logistics costs most often pose a larger barrier than tariffs.

According to a WTO Report (Trade in a Globalising World), spending on shipping for world imports in 2004 was three times higher than spending on tariffs. Logistics (like a country’s bloodstream) has become an integral part of the production process and there is a paradigm change in transport itself. It is today an integrated logistics service, involving the convergence of traditional transport infrastructure with the world of bits and bytes.

Importance of Railways About 65 per cent of cargo movement in India is bulk and 75 per cent of traffic moves over 400 km or more. Over 60 per cent containers are carried by road over distances up to 150 km. Another 11 per cent moves over distances of 151-300 km. Rest of the container movement is more than 300 km.

Indian Railways (IR) has been losing market share, mainly to road transport. Rail freight is overwhelmingly patronised by captive customers for whom railways is the only option. According to a McKinsey

report, rail share can increase up to 46 per cent by 2020 and 50 per cent by 2030.

Indian Railways should extract more from existing assets. India’s infrastructure development programmes have typically focussed more on building new infrastructure as opposed to maintaining and extracting better services from existing assets. Over 10 per cent of the existing rail and road network capacity can be unlocked by upgrading existing assets.

More investment to be allocated to rail and reallocating within roads and rail. The allocation to railways needs to increase by more than 50 per cent with large sums spent on building high-density traffic corridors, connectors and last mile links.

Recent history’s most important changeagent railways failed to adapt and grow.

Although still recognised as the nation’s life-line, IR has steadily ceded its dominance in India’s transport market. Its capacity is required to grow exponentially.

It is imperative that railways should be a leader in the rapidly evolving world of logistics – with a customer-centric marketing strategy. Besides handling its traditional core business of high volume dense cargo streams over long distances, it must devise innovative operational strategies to woo and win LTL freight.

Big is beautiful, small is no less Railways can ill afford to ignore retail

Container port throughput for top ten developing countries: (TEU) Country

2009

2010

2011

2010 -2009

2011 -2010

107 963 180

128 929 895

138 391 031

19.42

7.34

Singapore

26 592 800

29 178 500

30 722 470

9.72

5.29

Hong Kong

21 040 096

23 699 242

24 404 000

12.64

2.97

Republic of Korea

15 699 161

18 537 801

20 809 210

18.08

12.25

Malaysia

15 859 938

18 244 650

19 808 658

15.04

8.57

United Arab Emirates

14 425 039

15 174 023

16 752 724

5.19

10.40

Taiwan

11 352 097

12 501 107

13 463 919

10.12

7.70

India

8 011 810

9 752 908

9 951 310

21.73

2.03

Indonesia

7 243 557

8 371 058

8 884 888

15.57

6.14

472 273 661

540 693 119

572 834 421

14.49

5.94

China

World Total

Rapidly increasing volumes can be WWW.CARGOTALK.IN

MAY 2013 I CARGOTALK I 45

Guest Column Logistics Issues

put India’s growth at risk. However, IR’s ambitious Dedicated Freight Corridor (DFC) project may well be the gamechanger.

An integrated world Improving connectivity for users hinges on seamless co-operation between the players. Seamlessness is a state of mind as much as it is a technical concept.

The focus is on exploiting comparative advantages and creating synergies with other modes. The individual modes must not compete with each other; they should rather complement each other. The focus should be on exploiting comparative advantages and creating synergies with other modes – such as code-sharing agreements between airlines and railway companies, or auto manufacturers moving into the car-sharing business.

freight market, notwithstanding its core strength lying in wholesale business of dense volumes in full train loads. Currently, more than 1000 mt of originating freight in India is non-bulk, most of which is transported by road.

Railways carry a miniscule volume of piecemeal general goods traffic.

Rail freight business needs to be redimensioned. To cater to retail market railways need to develop wagons with weight and volume capacity 3-4 times that of a truck. Also it needs to use standardised pallets like airline ULDs, besides road-railers/trailers and productspecific vehicles for value-added logistics.

Rail freight calls for integrated multimodal transport service. It necessitates selected nodes, yards, terminals and sidings for consolidation.

Assistance by way of common user infrastructure of terminals will help in this regard.

IR has to radically change its approach and incentivise Container Train Operators (CTOs), for example, in FAK (freight of all kinds) pricing and guaranteed transits for substantial rail retail business to be won over. They may well be valuable partners for IR. It may yield good results with nominated day direction-wise loadings and clearances.

India’s growth at risk India’s logistics infrastructure is 46 I CARGOTALK I MAY 2013

Rail freight calls for integrated multimodal transport service. It necessitates selected nodes, yards, terminals and sidings for consolidation

Intermodal transport industry is continuing to evolve and, in so doing, it is becoming increasingly integrated with supply chain management. It is pertinent to mention that containerisation could spread inland with the deregulation and privatisation trends that began in the 1980s in the US,. The shipping lines were among the first to exploit the intermodal opportunities that the US deregulation permitted. They could offer door-todoor rates to customers by integrating rail services and local truck pick-up and delivery in a seamless network. Many seaports as well as shipping lines integrate vertically to control hinterland transport.

Potential of the Box inadequate to support the annual growth rates of 7- 9 per cent. Around $45b is lost every year to logistics inefficiencies.

Indian Railways arterial network remains saturated. Demand far outstrips supply of rail transport. While operating 12,000 passenger trains, transporting 23 million passengers daily, it carries just about, 10 per cent of country’s total passenger traffic. Similarly, running another 7,000 freight trains daily, it carries almost 3mt of goods, mostly bulk commodities.

A Mckinsey study unveiled that India’s logistics infrastructure delivery is characterised by high costs and low service levels. Rail infrastructure is not properly aligned with the production and distribution centres. The continuing shortfall in logistics infrastructure will

Container traffic growth needs to be anticipated at twice the rate of the country’s GDP growth. It will call for expeditiously modernising and expanding port infrastructure as well as intermodal connectivity. Containerisation in the country has a scope to expand to an optimal 70-80 per cent level of non-bulk general cargo in international trade.

The huge potential of containerisation of domestic cargo offers opportunities for an exponential growth in the sector.

For India to be a major destination for outsourcing its logistics infrastructure and practices will need to rise to the best among world standards. More than low labour cost arbitrage it is proper logistics support that will enable the country to remain ahead of the pack.

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In Conversation Container Train Operators

CTOs seek friendly policy to survive the testing times The Ministry of Railways, Government of India a few years ago liberalised container train operations by inviting private operators. Some 14 private operators registered themselves with Indian Railways against the prescribed registration fees. However, it appears, the private companies are now struggling for their survival owing to irrational policies.

LR Thapar MD, Rail Operations Hind Terminals

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he container train privatisation aim was to accelerate seamless transportation of EXIM goods from port to hinterland and back.

Accordingly, the responsibility and accountability of private container train operators (CTOs) was huge. However, from the very beginning the CTOs expressed serious concern over various policy issues.

Speaking to Cargotalk, LR Thapar, MD, Rail Operations, Hind Terminals, said, factors that are affecting the role of CTOs are multiple. “Movement of trains is controlled by IR. On the other hand, there is severe infrastructure constraint. Lack of loco availability, restrictions on handling of essential commodities, closed circuit movement of rakes and maintenance issues, increased turn around time of container trains in eastern sector, pricing of rail transport, frequent increase in rail tariff, competition with road transport and non-

availability of rail terminals are other crucial issues hampering our growth,” he argued.

In addition, construction of terminal buildings is a huge challenge before the CTOs. Identification of land, proximity to catchment areas, away from population, land acquisition and consolidation related to railway siding requirement and land cost are also the critical issues that need to be addressed at the earliest.

“The Public Private Partnership (PPP) is not that successful. The need is to give

ICDs in NCR and Punjab REGION

Punjab

Container Train Operators Name

No. of Rakes

Arshiya Rail International 20 Innovative B2B Logistics 12 Boxtrans Logistics 12 Concor 204 Container Rail Road Service 7 CWC 0 ETA Freight Star 11 Gateway Rail 22 Hind Terminals 14 India Infrastructure & Logistics 9 KRIBHCO Infrastructure 2 SMART 5 Trans Rail Logistics 2 WWW.CARGOTALK.IN

more freedom and flexibility to CTOs. The PPP should be very prompt and hassle-free. Otherwise, CTOs will have to shut their shops,” Thapar maintained.

However, on a positive note, Thapar informed that Hind Terminals was planning to strengthen its operations by launching one more container terminal by 2013. Currently, the company operates 14 container trains—9 from NCR Delhi and 5from Ludhiana to different ports in India. He was quite optimistic that the containerised cargo market will grow from five to ten per cent in 2013-14.

Delhi NCR

LOCATION

OPERATOR

Dhandari Kalan Sahnwewal Dhappar Kila Raipur Suranaussi Chawapail

CONCOR Gateway Distriparks Ltd. CONCOR Adani (Planned) CONCOR (Planned) Pristine (Planned)

Tughlakabad Dadri Garhi Noli Asauti Patli Balabhgarh Rewari Faridabad Bawal Palwal Asauti

CONCOR CONCOR Gateway Distriparks Ltd. WWIL Gateway Distriparks Ltd. Inland Conware Pvt. Ltd. (Adani) CONCOR CONCOR Associated Container Terminal Ltd. Sanjvik (Planned) HTPL (Planned) Inland Conware Pvt. Ltd. (Adani)

Khurja Bhodwal Dewana Palwal

Ashriya International. (Planned) JM Baxi (Planned) IILPL (Planned) ETA Freight Star (Planned)

(Planned)

MAY 2013 I CARGOTALK I 47

Industry Associations ASSOCHAM Conference

Dedicated Freight Corridors: Railway Minister updates construction status In view of the fact that Indian Railways is the third largest Rail network in the world under a single integrated management and Railway modernisation can contribute almost two per cent increse in India’s GDP, capacity enhancement will be a serious task. A recently held ASSOCHAM Conference underlined the importance of the Dedicated Freight Corridors (DFCs), which are expected to be the game changers in this context. accelerate private investment for speedy implementation of the DFC projects. It is worth mentioning that for the development of the DFCs the government is inviting large scale private participation with funding from World Bank, Japan Industrial Corporation Agency (JICA, and even on PPP mode in association with DFCCIL.

S Pawan Kumar Bansal releasing the ASSOCHAM-Yes Bank study paper titled ‘Corridors For India’s Economic Development’ along with (from L to R) Rajkumar Dhoot, D.S. Rawat, and Dr AK Agarwal

48 I CARGOTALK I MAY 2013

ealising the need to upgrade rail infrastructure, under its long-term strategic plan, the Ministry of Railways through the DFCCIL (Dedicated Freight Corridor Corporation Limited of India) has proposed to construct six high capacity corridors with speed potential of 100 kmph along the Golden Quadrilateral and its diagonals. In the first phase, two corridors, the Western and the Eastern Dedicated Freight Corridors have been approved and taken up.

The ASSOCHAM conference pointed out that large infrastructure projects like DFCs are critical drivers of the national economy and are being seen as an opportunity to adopt international best practices through latest technology, system, design, and business processes. The government has also announced development of the DelhiMumbai Industrial Corridor (DMIC) alongside the Western DFC for the development of market-oriented industrial areas, investment regions, industrial parks, ports and airports and six mega multimodal logistic parks at different locations along the corridor. In order to optimise productive use, longer and heavier trains have been proposed to ply on these DFCs such as double deck container with capacity of 32.5 tonne axle load rolling stock.

These corridors would be constructed and maintained by a corporate entity on commercial principles by DFCCIL while relying on modern technological solutions, and operated by the Ministry of Railways.

The objective of the ASSOCHAM Conference was to discuss various issues and opportunities in DFCs. It focussed on removing procedural bottlenecks and finding strategy options to

Inaugurated by Pawan Kumar Bansal, Minister of Railways, the international conference was attended by a large number of national and international stakeholders.

The industry stakeholders included

R

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Industry Associations ASSOCHAM Conference

way for transporting 10,000 to12,000 tonne freight per rake which is about three times more than the existing tracks.

Bansal said that Ministry of Railways has formulated a policy framework for private participation in rail connectivity and capacity augmentation projects which contains five models. He said that first-mile, and last-mile and inter-connecting lines for the entire freight commodity basket would be covered under the policy. The policy would provide the much-needed impetus to building of critical missing links in the railway network and evacuation from ports, mines and big industrial units and plants.

RK Gupta, MD, DFCCIL; Abhishek Chaudhary, Vice President, Delhi Mumbai Industrial Corridor (DMIC); Tushar Pandey, Senior President and Country Head, Yes Bank; Rajkumar Dhoot, President, ASSOCHAM; AK Agarwal, Chairman, ASSOCHAM National Committee on Rail Transport and CEO Autometers Alliance, and DS Rawat, Secretary General, ASSOCHAM. “To meet the needs of DFCs as far as huge investment is concerned, we have to encourage and invite private sector participation to the maximum extent possible. We are addressing the specific concerns of the industry through participative models and we are getting a good response to it,” said Bansal.

Bansal also maintained that there has been a huge demand for increasing movement of goods but the railway’s’ share of goods traffic has been falling vis-à-vis that of roads due to the construction of roads being achieved at a priority basis because the project cost is much less than laying down railway tracks.

The minister highlighted that the share of railways in goods traffic was more than 80 per cent a few years ago, which has now come down to 36 per cent. “There is a need to have heavier, longer and faster traffic carrying rail heads considering the cost benefits, impact on environment and capacity of railways to carry goods at a faster speed and in a much larger quantity,” he said.

He underlined the fact that Railways is 6-10 50 I CARGOTALK I MAY 2013

times more efficient in carrying goods as compared to goods carried by road. “We need dedicated freight corridors for further growth of the country as presently 60 per cent of goods traffic by freight is confined to 16 per cent of rail network making it saturated, leading to delay of traffic on railway lines for both passenger and freight trains,” Bansal added.

The minister also informed that prefeasibility of all six dedicated freight corridors identified across the country has been done and of these the Eastern Corridor on Ludhiana-Dankuni and the Delhi-Mumbai Industrial Corridor have been put on a priority basis with total cost of Rs 95,000 crore including land acquisition costs. “These two projects for the first time are seeing good tangible progress as more than 87 per cent land has been acquired and bridges have been built,” he informed.

The 1499 km long Western DFC starts from Jawahar Lal Nehru Port (JNPT) in Mumbai and ends at Dadri/Tughlakabad (Near Delhi), while the 1839 km long Eastern DFC starts from Ludhiana (Punjab) and ends at Dankuni (Near Kolkata). Initial funding agreements for Western DFC through JICA and part of Eastern DFC (Ludhiana-KhurjaKanpur-Mughalsarai) through the World Bank have already been formalised while Mughalsarai-Sonnagar section of Eastern DFC is being implemented through own resources of the Ministry of Railways.

Remaining 534 km Sonnagar-Dankuni section of Eastern DFC is proposed to be implemented through PPP. The DFCs will be able to carry the heavier axle paving the

Providing an update about the progress of private freight terminals, Bansal said that the role of the private sector in this regard has not been satisfactory. “We have found lesser efforts on the part of private players to build more private freight terminals, to generate more traffic and attract more customers to it. The efforts have to be directed towards further growth,” he pointed out.

Commenting on the containerised traffic, Bansal asserted that the Ministry of Railways has recently addressed the concerns of the container train operators and have reduced haulage charges for them.

The minister also emphasised on promoting containerisation. “We have responded to the industry’s concerns on tariff policy and we are open on this issue and take steps in this direction while engaging with the industry in this regard.”

Supplementing Bansal, Gupta said that a very unique contracting strategy called ‘Design build and lump sum’ has been adopted in DFC for the first time for developing rail infrastructure in the country.

Commenting on the progress in DFC he said that the first major civil contract covering a length of about 343 kms has recently been awarded and the company was in an advanced stage of awarding another contract for abut 650 kms length. “The procurement action on all the segments of the project is in various stages of progress and we hope to award the contract to cover over 1500 kms of route by the end of the current financial year,” Gupta informed.

The Minister also released the ASSOCHAM-YES BANK Knowledge Report ‘Corridors for India’s Economic Development’ at the conference.

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Shipping & Port International Port

The Port of Dunkerque

Zooms in on India as source market The Port of Dunkerque is well known as a port handling heavy bulk cargoes for its numerous industrial installations. The port is now emphasising more on the Indian market with an array of other services including cross-channel Ro-Ro traffic, containerised general cargo and perishable cargo. In an interview with Cargotalk, Daniel Deschodt, Commercial Director, Dunkerque Port, highlights the advantages of the port.

T

he state owned Port Dunkerque is the 3rd French port in terms of volume. In 2012 the port handled 46.7 million tonne cargo. Classified as the 7th port of North Europe extending from the Port of Le Havre to Hamburg, Port Dunkerque is also France’s leading port for ore and coal imports, containerised fruit imports, copper imports and France’s second-ranking port for trade with Great Britain. Located on the North Sea, the port offers excellent accessibility to shipping and large land reserves. The port extends along a frontage of 17 km and has two entries for shipping: the older, to the east, which is restricted to ships with draughts of 14.2 metres (Eastern Port), and the other to the west, which is more recent and can accommodate ships with draughts of up to 22 metres (Western Port).

The port’s territory covers 7,000 hectares and includes ten towns: Dunkerque, Saint-Pol-sur-Mer, FortMardyck, Grande-Synthe, Mardyck, Loon-Plage, Gravelines, Craywick, SaintGeorges-sur-l’Aa and Bourbourg.

“Situated 40 km from the English port of Dover, 10 km from the Belgian frontier, close to the city of Lille and at the heart of the Brussels-LondonParis triangle with a market of more than hundred million consumers,

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Daniel Deschodt Commercial Director, Dunkerque Port

Dunkerque is the ideal platform for goods consolidation and redistribution in Europe. All the terminals of the port have excellent road, barges and railway connections,” said Deschodt.

“Apart from our core strength on ore and coal handling we can handle all kinds of cargoes and the largest ships. We are expecting very good volume of cargo from India,” he added. One year ago, the French shipping line CMA CGM started a weekly direct service between Dunkerque, Nhava Sheva (JNPT) and Mundra ports. In addition, MSC also started a weekly transshipment service on this route. “Our main aim is to make Indian shippers aware of the advantages

at Port Dunkerque, which offers hassle free services with less transit time and less expenses. “It is expected there will be huge demand especially from this market and as a result shipping lines will be keen to increase their frequency or capacity,” Deschodt observed. He is confident that in the near future Port Dunkerque will be able to surpass the volume handled by its competitor ports, viz Antwerp (Belgium) and Rotterdam (Holland) because of its geographical position. According to him, there is huge possibility of export of temperature controlled and perishable cargo from India, apart from traditional cargo like textiles. “We have excellent draft, terminal and logistics facilities to cater to all kinds of ships and cargo,” asserted Deschodt.

Logistics Facilities The 470 acre ‘Dunkerque Logistique International’ park, with rail transshipment facilities can accommodate large warehouse, which complete the Dunkerque offer— Dunfrost (sub-zero temperature warehouse), Dunfresh (fruits and vegetables warehouse), MGF (equipment and mineral water), Banalliance (fruit warehouse), Daily Fresh (fruit and vegetable platform), TOG (tinned food), DHL and TLN. “Ideally situated near the city of Lille, in the heart of the London-Paris-Brussels triangle, Dunkirk has made the most of its geographic location and its excellent road and rail links to develop logistics and distribution activities in the port. Its geographic location is ideal for serving London and south-east England, Benelux and north-eastern France,” Deschodt stressed. Dunkirk is a major centre for the distribution of fruit and other goods imported by sea and for distribution to Great Britain. Accordingly, Port Dunkerque is eyeing huge transshipment cargo from India.

MAY 2013 I CARGOTALK I 51

Family Album Get Together

The Port of Dunkerque Meets freight forwarders to showcase facilities Recently, a delegation from the Port of Dunkerque (France), which was headed by Daniel Deschod, Commercial Director of the port, met leading freight forwarders in Delhi in an evening function. The objective of the event was to highlight the facilities available for the shippers at this strategically located transshipment port.

52 I CARGOTALK I MAY 2013

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In Focus Logistics Hub

Destination Freezone Sohar woos Indian 3PL companies Freezone Sohar in Oman is one of the country’s biggest economic undertakings with around 4,500 hectares of land set aside for trade and logistics, manufacturing and distribution. In an interview with Cargotalk Neelima Vyas, Chief Operating Officer, Freezone Sohar, elaborates on the advantages and facilities for Indian shippers and logistics service providers.

RATAN KR PAUL

F

reezone Sohar is managed by Sohar Industrial Port Company of which Port of Rotterdam and the Sultanate of Oman are shareholders in a 50-50 joint venture. Freezone Sohar Company, LLC, is a joint venture between Sohar International Development Company and leading infrastructure development company, SKIL Infrastructure India. There are more than 20 large scale international companies that have already set up operations at the Sohar Free Zone.

The region is now aggressively looking at India as a major investor. Already Sohar witnessed successful investments by diversified Indian businesses such as Jindal Steel & Power, KLJ Group (the leading manufacturer and the market leader in plasticisers and polymer compounds in South Asia) and INDSIL (leader in alloy manufacturing amongst others).

A number of Indian companies are also showing interest in setting up transport and manufacturing hubs in Sohar.

A Strategic Location Oman borders the Republic of Yemen to the Southwest, the Kingdom of Saudi Arabia to the West and the United Arab Emirates to the North. With an area of over 300,000 sqkm, geographically Oman is one of the most diverse countries of the Peninsula.

Oman’s coastline borders the Sea of Oman and the Arabian Sea. The strategically important Strait of Hormuz is the only stretch of water between the Gulf and the Indian Ocean and is therefore, a vital route for the transportation of crude oil, gas and cargo.

Sohar lies at the centre of the Al Batinah region, in the North of Oman. This is a prime area for investment. With its geographical location, economic resources and high population density, the Batinah region has played an important part in Oman’s history.

It has always been the country’s maritime and commercial outlet to the Gulf and the Indian Ocean and its mineral resources have provided the basis for several important heavy industries. Today the Port of Sohar and Freezone are one of the Sultanate’s economic mega-projects.

‘Gateway Sohar’ comprises upcoming Sohar Aiport and the railway network, Port of Sohar and Freezone Sohar.

Sohar Airport Sohar Airport, which is likely to be operational by 2014 is about 10km northwest of Sohar. It will help avoid the two hour long drive from either Muscat or Dubai. Sohar and the wider Batinah region have in recent years attracted industrial and commercial infrastructure investments.

Moreover, cargo to Sohar is expected to increase in volume due to expected congestion at Sultan Qaboos Port in Muscat. The airport will also serve as a new 54 I CARGOTALK I MAY 2013

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In Focus Logistics Hub

gateway for passenger, cargo and courier traffic in northern Oman and a domestic and emergency alternative to Muscat International Airport.

The airport will add to a modern multimodal transport network that will fuel further economic growth in the Batinah region. It is being built within the proximity of the major commercial, industrial and economic centres of Sohar including the Port of Sohar Special Economic Zone and will compliment the future plans for a major expressway and rail network which will underpin the port city’s eventual transformation into a major industrial and economic hub on the Batinah coast.

Sohar Port Port of Sohar is a deep sea port in the Middle East situated in the Sultanate of Oman, 220km northwest of its capital Muscat.

The management of this industrial port lies with Sohar Industrial Port Company SAOC (SIPC), a 50/50 joint venture between the Government of Oman and the Port of Rotterdam.

The original agreement between the two parties was signed in 2002. Today, the port is fully operational with state-ofthe-art facilities. With current investments exceeding $14billion it is one of the world’s largest port development projects.

Located just outside the Strait of Hormuz, Port of Sohar is within easy reach of the booming economies of the Gulf and the Indian subcontinent and has good connectivity to Abu Dhabi, Dubai, Al Ain and Muscat. The biggest consumer market in the region, Saudi Arabia, can be reached directly from Sohar.

Port of Sohar houses three clusters: logistics, petrochemicals and metals. Worldleading companies Vale, Air Liquide, Larsen & Toubro, Methanol Holding International, Jindal Power & Steel are to be found in Port of Sohar. Terminals are operated by world class leading companies: Steinweg for general cargo, Odfjell/ Oiltanking for liquid cargo and Hutchinson Wampoa OICT for containers.

India and Oman Bilateral Relations Since the 1970s, the Sultanate of Oman has rapidly entered the modern world.

Today, it is an economically, politically, and socially progressive country. The country is a strategic partner in the Gulf and 56 I CARGOTALK I MAY 2013

an important interlocutor in addition to traditional the bilateral, Association of items like tea, coffee, Gulf Cooperation Council spices, rice and meat (AGCC) and Organisation products and seafood. of the Islamic Conference (OIC) contexts. Oman also Major Omani export accords a high priority to commodities are urea, its ties with India. Pointed LNG (through spot out Vyas, “India and Oman purchase), polypropylene, are linked by geography, lubricating oil, dates and history and culture. Both chromite ore. countries enjoy warm and cordial relations, which can be There are 581,832 Neelima Vyas ascribed to historical maritime legally registered Indian Chief Operating Officer trade linkages, intimacy of workers in Oman. The total Freezone Sohar the royal family with India number of Indian in Oman is and the crucial role of the Indian expatriate over 700,000. It is estimated that some 2,000 community in the building of Oman.”

Indian doctors work in Oman in Government hospitals and in clinics in the private sector.

Bilateral Trade Currently, Air India, Jet Airways and IndiGo In 2010 India ranked fifth largest source are operating regular flights from Muscat to of imports into Oman after the UAE, Mumbai. Oman Air also operates regular Japan,United States and China. In the flights to various destinations in India. Once same year India ranked second as the Sohar Airport is completed it is expected that destination of Omani non-oil exports a number of flights will be operated between after UAE and third as the top destination this Free Zone and India. of Omani crude oil exports after China.

There are around 140 Indian companies At present there is prominent Indian in Oman. As for the Foreign Direct presence in various sectors like oil and Investment in Oman from India, there are gas, mining, manufacturing, IT & telecom, around 1527 Indian-Omani joint ventures, power & water, construction, real estate & covering almost 13 socio-economic consultancy, healthcare, warehousing & sectors with a total investment of US$ logistics, railway sector and steel etc.

7.53 billion in which Indian participation is estimated at around US$ 4.52 billion.

“Freezone Sohar is all set to attract Indian investors including the logistics In the financial year 2010- 2011, bilateral companies. The Phase-I is completely trade jumped to US$ 5.1 billion from US$ ready to cater to the industry’s multi4.5 billion in 2009-10. Balance of trade is in product requirements. As soon as the Oman’s favour due to the export of fertilisers demand increases, the work for Phase-II and spot purchase of oil & gas by India. will commence,” said Vyas. She also informed that in the meanwhile the Freezone Major items of Indian exports are is receiving tremendous feedback from textiles and garments, machinery and different verticals in India. A regular equipment, electrical and electronic items, shipping service between Mundra and chemicals, iron and steel products in Sohar ports is in place. According to her, Sohar Port has excellent facilities for container movement and is very lucrative for transshipment cargo traffic, both for hinterland and beyond Oman. The port is targetting automobile and pharmaceutical 100% foreign ownership exports from India in a big way, to position Sohar as a cost-effective transit hub among 10 year corporate tax holiday UAE and Gulf region.

No customs duties on goods

Incentives Available at Sohar

brought into the Freezone No restrictions on sales to the local market One stop shop for all relevant clearance

“To promote the Freezone we will intensify our marketing and promotional activities in the days to come by organising road shows, participating in trade fairs and interacting with industry people across India,” shared Vyas.

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Viewpoint Role of Associations

Competition Compliance Programme CCI interacts with associations Trade/business associations have historically played an important role. And an even larger role in the open market economy. Trade associations may serve as a platform for activities that restrict competition, says PK Singh, Advisor and Head, Anti-Trust Division, Competition Commission of India.

A

ccording to Singh, a fair number of central cases brought by completion agencies around the world directly or indirectly involve a trade association for some cases like Price Fixing, Terms and Conditions of sale and Sharing of Customers and/or markets.

There are many ways in which an association may fix prices such as: Fixing the actual price charged by association members; setting a target price or minimum price. Formulation of standard/common terms and conditions to be applied by members in their trading relationships.

Trade and professional associations are sometimes directly involved in an exclusive territory for marketing arrangements on behalf of their members.

They may also be involved in conclusive trading and bid rigging.

Some other activities they may practise are: Unduly restrictive membership rules, the exchange of detail commercial information, the setting of exclusive/ closed industry standards, the imposition of marketing restrictions and the adoption of codes on pricing practices or on other trading practices which limit members’ ability to compete freely.

The Competition Act The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. The Act prohibits anticompetitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or is likely to cause an appreciable adverse effect on competition within India.

58 I CARGOTALK I MAY 2013

Shipping Industry Shipping industry is one of the most globalised industries in the world. Over 90 per cent of world trade is carried out by the international shipping industry.

Approximately 95 per cent of India’s international trade by volume and 70 per cent by value are seaborne. Competition Concerns are related to Liner Conferences, Alliances and Consortia and Discussion Agreement.

Singh maintains that there should be a widespread international practice that cargo liners meet at regular conferences to fix prices and quotas for individual routes.

The actions at such conferences that raise concerns can be broadly divided into three categories: 1. Steps to control competition between member shipping companies (price discrimination and price and output rules), 2. Steps to prevent shippers from using non-member shipping companies (loyalty contracts), 3. Steps to directly eliminate non-member shipping companies (predatory pricing behaviour).

Unlike shipping conferences, consortiums and alliances coordinate space charter for container vessels, the shared use of terminals and shipping schedules rather than determining shipping rates or surcharges. “This means that although they do not necessarily fall under the category of cartels, consortium and alliance agreements may be looked at

by CCI by the rule of reason,� said Singh.

In his opinion, a discussion agreement is a sort of framework agreement by virtue of which carriers, which are members of conferences and outsiders are able to coordinate flexibly their competitive conduct on the market in relation to freight rates and other service conditions.

Discussion agreements normally involve the exchange of sensitive business information between competitors thereby raising competition concerns.

As put of its advocacy function, CCI has been interacting with associations on a continuous basis right from the inception.

The associations are welcome to visit &RPPLVVLRQV RI¿FH interact with the RI¿FLDOV´ PK Singh Advisor and Head, Anti-Trust Division, Competition Commission of India

“As per its advocacy function, CCI has been interacting with associations on a continuous basis right from inception.

The associations are welcome to visit the Commission’s office, interact with the officials and invite them to speak to their members on ways to comply with the law,� he informed.

He further shared that the Commission would encourage all associations and their members to put in place a Competition Compliance Programme.

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