CargoTalk sept12

Cargotalk SEPTEMBER 2012

RNI No.: DELENG/2003/10642 Date of Publication: 22/8/2012

Vol XII No.10 Pages 68 Rupees 50 cargotalk.in

By DDP Publications

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

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ROLE OF SUPPLY CHAIN INDUSTRY to cope up with economic slowdown

CUSTOMS CLEARANCE ON 24X7 BASIS becomes a reality

GMR IGI AIRPORT AWARDS to outstanding performers

International trade from

Indian Ports

Capacity building needs to be complemented by industry-friendly policy

PRESENT SCENARIO OF PORT INDUSTRY IN INDIA: A DELOITTE STUDY

Publisher

SEPTEMBER 2012

SanJEEt Editorial Director

rUPali naraSiMhan Sr. assistant Editor

from the editor

ratan kUMar PaUl Desk Editor

nEElaM Singh Sub-Editor raMya J. S. D’roZario general Manager

gUnJan SaBikhi Deputy general Manager

harShal aShar

regional Manager: South

k n SUDhEEr

regional head: north & west

Shiv kUMar

asst. Manager: west

rolanD DiaS

assistant Manager advertising

MUkESh gaMrE

assistant Manager Marketing

yogita BhUrani

Sr. Marketing co-ordinator

gaganPrEEt kaUr Design

rUchi Sinha advertisement Designer

vikaS ManDotia Production Manager

anil kharBanDa circulation Manager

aShok rana

Stepping towards a sea change The shipping and port industry in India is sailing through hope and distress. Despite huge coast line (7,500 km), cost-effective inland waterways and positive industry initiatives, gateway ports in the country often become chock-a-block. Shippers recurrently encounter harrowing experience at majority of Indian ports owing to paucity of space, poor management and cargo handling mechanism. Add to these, ambiguity in the government policies is reducing potential of some Indian ports (of becoming hub port in this region) to non-starters.

A recent study by Comptroller and Auditor General of India (CAG) also unveiled that cargo handling services at Indian ports were inefficient. Foreign carriers are reluctant to call at Indian ports because berths at the ports did not have dedicated facilities necessary for the quick handling of cargo. Since the average pre-berthing time on port account goes up to 23 hours and the average turnaround time varies between two to five days, foreign vessels gets diverted to neighbouring countries like Singapore and Hong Kong, where turnaround time is between four and six hours! Moreover, Indian ports are also suffering from inadequate drafts and poor connectivity with other modes and hinterland. The present Cabotage rule is also hindering the foreign vessels in calling at Indian ports.

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On the other hand, high cost structures, different tariff setting frameworks for Major and Nonmajor ports, port security and land acquisition for capacity building, both at port and off-port areas are desisting private players to invest in port sector. The Ministry of Shipping is taking various steps to address these problems. However, there is a wide gap between the intent and action.

Also, there is a serious lack of integration between various ministries and departments, resulting in unnecessary delay and cost escalation.

The Government of India has set a target to reach 943.06 million tonne and 815.20 million tonne marks at Major and Non-major Ports, respectively, by the end of 12th Plan, as against the present level of 560.15 million tonne handled by Major Ports and about 370.00 million tonne handled by Nonmajor Ports. However, it seems unrealistic unless a strong bond is created between policy makers and industry stakeholders. The proposed investment of Rs1,80,626.63 crore during 12th Plan would see red, if foreign large vessels find Indian ports commercially unviable. Hence, apart from capacity building and investment, the need of the hour is to bring in a sea change in the policy framework and mind set of policy makers from different ministries. rupali narasimhan Editorial Director

DDP Publications Private limited new Delhi: 72 todarmal road, new Delhi – 110001, india. tel.: +91 11 23731971, 23710793, 23716318, Fax: +91 11 23351503, E-mail: cargotalk@ddppl.com, website: www.cargotalk.in Branch offices Mumbai: 504, Marine chambers, new Marine lines, opp SnDt college, Mumbai – 400020, india tel.: +91 22 22070129, 22070130 Fax: +91 11 22070131, E-mail: mumbai@ddppl.com Middle East: P.o. Box 9348, Saif Zone, Sharjah, UaE tel.: +971 6 5573508 Fax: +971 6 5573509 Email: uae@ddppl.com CARGOTALK is a publication of DDP Publications Private Limited. All information in CARGOTALK is derived from sources, which we consider reliable and a sincere effort is made to report accurate information. It is passed on to our readers without any responsibility on our part.The publisher regrets that he cannot accept liability for errors and omissions contained in this publication, however caused. Similarly, opinions/views expressed by third parties in abstract and/or in interviews are not necessarily shared by CARGOTALK. However, we wish to advice our readers that one or more recognized authorities may hold different views than those reported. Material used in this publication is intended for information purpose only. Readers are advised to seek specific advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the readers’ particular circumstances.

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No part of CARGOTALK or any part of the contents thereof may be reproduced, stored in retrieval system or transmitted in any form without the permission of the publication in writing.The same rule applies when there is a copyright or the article is taken from another publication. An exemption is hereby granted for the extracts used for the purpose of fair review, provided two copies of the same publication are sent to us for our records. Publications reproducing material either in part or in whole, without permission could face legal action.The publisher assumes no responsibility for returning any material solicited or unsolicited nor is he responsible for material lost or damaged.This publication is not meant to be an endorsement of any specific product or services offered.The publisher reserves the right to refuse, withdraw, amend or otherwise deal with all advertisements without explanation.All advertisements must comply with the Indian and International Advertisements Code.The publisher will not be liable for any damage or loss caused by delayed publication, error or failure of an advertisement to appear. CARGOTALK is printed & published by SanJeet on behalf of DDP Publications Private Limited. and is printed at Cirrus Graphics Pvt. Ltd., B-62/14, Phase-2, Naraina Industrial Area, New Delhi – 110028 and is published from 72Todarmal Road, New Delhi – 110001.

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SEPTEMBER 2012

Cover Story

contents DEPARTMENTS National News 8 Sindhu Cargo ties up with SG Holdings 10 Customs Clearance on 24x7 basis becomes a reality 12 DHL express launches new service centre facility in Kanpur 14 Mahindra Logistics to go global through alliance

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International Trade from Indian Ports Capacity-building needs to be complemented by industry-friendly policy Currently, 90 per cent by volume and 30 per cent by value of India’s international trade is performed through its ports. However, despite some significant initiatives by the Government of India and some private companies for creating capacity with a long-term goal, shippers often get stuck at Indian ports thanks to the lack of efficient port management, skilled man power and proper integration among allied organisations/ ministries. Cargotalk spoke to industry practitioners and port association to highlight remedial measures for the greater interest of the country’s economy…

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38 52

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12 News in Brief 15 Ahlers honoured at South East CEO Conclave & Awards 2012 International News 16 Worldwide Flight Services appoints Jay Shelat in Cargo Terminal Services 18 Schiphol and China to start E-freight shipments from October 20 DWC witness 153 per cent growth in Q2 of 2012

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Logistics Services

Family Album

29 Swisslog in India: Adding value to warehousing and distribution services

46 ACCD gets new managing committee for 2012-13

34 Airlines wise exim cargo performance from IGI Airport, Delhi for July 2012 35 Airlines wise exim cargo performance from CSI Airport, Mumbai for July 2012

48 DCCAA presents a spectacular evening for Annual Dinner 52 GMR IGI Airport presents awards to outstanding performers

Express Cargo

52 FFFAI meets with WCO Secretary in New Delhi

42 Indiaontime Express eyes domestic express market in a big way

Product Launch

44 Red Express launched to foray into express cargo business

54 CEVA Logistics launches ‘CEVA Mobile’ to track shipments’ location

COLUMNS View Point

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Role of Supply Chain Industry to cope up with economic slowdown Guest Column 38 Air Cargo Operation: Enhancement of capacity and process is the key behind success Study Report 56 Present Scenario of Port Industry in India CEO Talk 66 Hike in Airport Charges: Delhi Airport to face consequences: IATA www.cargotalk.in

National News Alliance and Acquisition

SiNDhU CARgO TiES UP

wITh SG hOLdINGS

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indhu Cargo Services, one of the leading logistics company in India, recently entered into a strategic alliance with SG Holdings by fresh issue of 26 per cent equity share in the company. SG Holdings is one of the major transportation companies in Japan and is the parent company of Sagawa Express.

G Balaraju (right) with Eiichi Kuriwada, chairman & CEO, SG Holdings

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Sindhu Cargo has been engaged into logistics business for over 25 years in the Indian market providing end-to-end customised logistics solutions. The company has a strong pan India presence through its network of 22 branches at all major airports, dry ports (ICDs) and seaports, like Bengaluru, Chennai, Mumbai, Delhi, Kolkata, Hyderabad, Kochi and Tuticorin. Its services include custom brokerage, freight forwarding, transport and warehousing services. Sindhu is now expanding and

strengthening its business by further penetrating into expanding Asian markets.

SG Holdings provides various logistics services in 10 countries mostly in Asia. It offers surface, air and ocean transportation services; warehousing services; logistics services, such as inventory management, product inspection, storage, processing, picking, door-to-door delivery and payment collection services.

According to G Balaraju, chairman and managing director, Sindhu Cargo, with this joint venture, Sindhu Cargo and SG Holdings will complement each other’s strength to develop and augment growth in both domestic and international logistics arena. Sindhu Cargo with its expertise in Customs broking and international freight forwarding would harness SG Holdings’ proficiency and presence across Asia for developing markets in India and across the globe.

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National News Government Policy

CUSTOMS CLEARANCE

ON 24x7 BASIS becomes a reality

in view of the fact that one of the major constraints for international trade has been the non-availability of customs clearance and other facilities at airports and seaports round the clock, the Prime Minister Office (PMO) has advised the Customs department to clear cargo on 24x7 basis, initially at four major seaports and airports in the country.

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his 24x7 facility is scheduled to be available from August 25 at Delhi, Bengaluru, Chennai and Mumbai airports. The four ports where this facility would be available are Chennai, Kolkata, Kandla and JNPT, Mumbai.

ExPORTERS hAIL ThE mOVE

Rafeeque Ahmed

ThE 24 x 7 OPERATiONS wiLL BEgiN ON A PiLOT BASiS wiTh CUSTOMS OPERATiONS wiTh ALL OThER COMPLEMENTARy SERviCES

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According to Rafeeque Ahmed, president, Federation of indian Export Organisations (FiEO), introduction of 24x7 Customs Clearance Operation will reduce transaction time and cost, and would help exporters to meet the stringent delivery schedule.while complimenting this decision of the government, Ahmed said that the exporting community had been requesting for this facility and implementation of the same will greatly help them in clearance of their import-export shipments. it will also lead to reduction of congestion at the ports and airports in india. According to him, india’s ranking will also improve as far as ease of doing business in india is concerned. Ahmed, however, urged that this facility shall be extended to all export consignments other than factory stuffed export containers and exports under Free Shipping Bills. “This trade facilitation measure will definitely encourage the exporters and india will be able to achieve the set export target,” said Ahmed.

The 24x7 operations will be available for certain categories of imports and exports.

For imports, the category “No Assessment No Examination” will be covered. This would account for 70 per cent of imports.

For exports, the facility could be extended to those exports that are not claiming benefits.

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ExPANdING OPERATION

According to the PMO source, the 24x7 operations will begin on a pilot basis with customs operations with all other complementary services. Along with customs clearances, other government agencies such as the concerned port/airport authority, drug controller, FSSAI (Food Safety and Standards Authority of India), quarantine, etc., and private players such as custodians, CHAs (Customs House Agents), banks, transporters, etc., shall also have to work 24x7 to synchronise with the extended work hours. This would be initially for four months after which efforts would be made to expand similar operations at other locations.

The PMO decided that for smooth implementation of the 24x7 operations, the Commissioner of Customs concerned at these locations shall hold meetings with all stakeholders and additional staff required to start these operations shall be redeployed from existing resources. Secretary, commerce and the director general, foreign trade shall also hold meetings with other support agencies to facilitate and ensure 24x7 operations. www.cargotalk.in

National News New Launches

DhL ExPRESS LAUNChES

NEw SERVICE CENTRE FACILITy

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Ishad Mirza along with Malcom Monterio and RS Subramanian inaugurating the new service centre at Kanpur

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ecently, DHL Express opened a new Service Centre facility at Kanpur (UP).

Inaugurated by Irshad Mirza, chairman, Mirza International and Malcolm Monteiro, CEO, South Asia, DHL Express, the new facility is spread over 2,000 sqft with a capacity to handle a volume of close to 1,500 shipments a week.

new facility at Kanpur, DHL Express is now closer to the market around Kanpur. “DHL has been servicing clients at Kanpur over the last 30 years. The new service centre is a direct DHL operation facility which will improve service offering for international shipments leading to faster processing and reduced transit time,” he added. The new Service Centre will offer same day delivery for Unnao, Banthar, Panki, Jajmau and Chaubepur.

Commenting on the new launch Monteiro said, “India is a key focus market for DHL Express and figures among the top five markets globally.

For our business in India, we are committed on enhancing our services and offerings by investing in infrastructure which means ground facilities, fleet and air capacity.” He also underlined that with the

DHL’s customers in this region are mainly from leather and leather products, apparel and textiles, banking, and farm and industrial equipment sectors. “We are witnessing a double-digit growth in the Kanpur market and are strongly positioned in UP and Uttarakhand. We have a strong foothold in key cities including Kanpur, Allahabad, Lucknow, Jhansi, Farrukhabad, Gwalior, Shahjahanpur, etc. and the company will continue to invest in infrastructure.”

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National News New Initiatives

MAhiNDRA LOgiSTiCS TO gO

GLOBAL ThROuGh ALLIANCES

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ahindra Logistics, a well established logistics company in the domestic market, has decided to expand its operation in the international market, through alliance with overseas companies. At present, the company is evaluating several international players to partner with and grow this part of the business.

(L-R): Zhooben Bhiwandiwala, EVP, Group Legal, Mg Partner, Mahindra Partners Division and Pirojshaw Sarkari, CEO, Mahindra Logistics

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To make a foray into the international market, Mahindra Logistics (MLL) wants to partner with such players who support the issue of key lanes being developed, most importantly USA, Europe, South East Asia, China and Africa. MLL is considering venture out for several Asian countries, including China, Indonesia and Thailand. This is part of its plan to gradually extend the 3PL solutions it provides beyond the borders of India and support new and existing customers with such solutions across the globe. This expansion will

focus on value added 3PL services to several large customers in these locations and will expand beyond that as well.

Mahindra Logistics Limited (MLL), a wholly-owned subsidiary of Mahindra & Mahindra, is a fully integrated third party logistics service provider and provides such solutions to companies across a diverse cross section of industries in India.

The foundation of Mahindra Logistics was laid in 2000 as a strategic initiative to enhance focus on logistics services to both internal and external customers. It was soon engaged in taking care of Mahindra’s complex supply chain needs including inbound and outbound logistics, inter-plant movement, warehousing, linefeed and value added services amongst other solutions. This supply chain expertise was then extended to other customers spanning various industry verticals.

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News in Brief Success & Achievements

AhLERS hONOURED AT SOuTh EAST CEO CONCLAVE & AwARdS 2012

Pradeep Joseph, country head (India) and Kiran Gopi, corporate head, HR & Admin receiving the Award

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hlers India, part of Belgium-based 103-year old international MNC Ahlers Group, was voted as the best in the category ‘Freight Forwarder of the Year - International’, at the recently held ‘South East CEO Conclave & Awards 2012’ in Chennai. Ahlers is involved in international logistics and maritime services. The Indian headquarters of Ahlers is based at Chennai, with 14 offices across India.

Eminent panelists, including the Who’s Who of the Indian shipping trade, finalised the winners for all award categories and the awards were presented at a glittering ceremony held at The Chennai Trade Centre. The event was attended by CEOs, senior professionals of all the leading shipping lines, freight forwarders, CFS operators, CHA associations, etc.

On behalf of Ahlers India, the award was received

by Pradeep Joseph, country head (India) and Kiran Gopi, corporate head – HR & Admin.

Although, Ahlers’ presence in the Indian market adds up to more than a few decades, Ahlers India became operational since 2004 with just three offices based in south. In a span of eight years, it has turned itself to a leading freight forwarding company in ocean and air, with a prominent place in project cargo movement in India. Globally, Ahlers has presence in 20 countries spread across Europe, Asia, CIS and Africa. Major global activities of Ahlers are agencies, international freight forwarding, contract logistics and maritime services. Ahlers’ major focus commodities are specialty chemicals, tobacco, machinery and Oil & Gas. www.cargotalk.in

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international News Movements

wORLDwiDE FLighT SERviCES

APPOINTS JAy ShELAT in Cargo Terminal Services

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ecently, Worldwide Flight Services (WFS) has appointed Jay B Shelat as senior vice president, Cargo Terminal Services, based at its North America headquarters in Dallas, Texas.

Jay B Shelat

Prior to joining WFS, Jay was with Jet Airways in India as vice president since 2007. Before this, he was with American Airlines Cargo, as director, Alliances & Interline in Dallas, for 12 years. He began his successful 25-year career in the air cargo industry with World Airways in 1984 and later worked for both Federal Express and Airborne Express in New Jersey until 1995.

During his tenure with Jet Airways, he helped the expansion of the airline’s network in India and internationally,

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significantly increasing its cargo revenues.

At American Airlines, he led the team that developed cargo alliances with most of the Oneworld members and negotiated contracts and managed the performance of 32 offline GSAs worldwide.

“With considerable experience of working for high quality airlines and a great track record for ensuring high quality performance, Jay brings to the position a very wide perspective, fully understanding an airline’s needs in terms of revenue management, sales and customer service, as well as its expectations of quality handling.

Shelat is a great addition to our team in North America,” said Olivier Bijaoui, executive chairman, president and CEO of WFS.

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international Airports E-freight

SChiPhOL AND ChiNA TO START E-FREighT

ShIPmENTS FROm OCTOBER Department. The group, accompanied by IATA representatives, led by Des Vertannes, Cargo Director met with senior executives of Dutch Customs, SkyTeam and member carriers Air France KLM, China Southern and China Cargo Airlines, Schiphol Cargo, Air Cargo Netherlands, Cargonaut, Damco and Rhenus.

The programme included tours of logistics facilities at Schiphol, the Customs Control Centre and the AFKLM Cargo handling base.

Delegates learned about Schiphol’s extensive airline links with China, the alignment of e-freight with the World Customs Organisation SAFE standards framework and RKC (Revised Kyoto Convention), and SkyTeam’s progress with e-freight.

Representatives of IATA, China Customs, Dutch Customs, AF-KLM Cargo and Schiphol Cargo

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chiphol Cargo, IATA and China’s Central Customs Department have set October 1 (the National Day of China) as the target date for the first e-freight shipments between China and Amsterdam. In a highlysymbolic celebration, they plan to exchange e-freight shipments of mooncakes, a delicacy eaten during China’s important Mid-Autumn Festival and Dutch flowers.

The decision was taken at the Schiphol Airport during a delegation of high-ranking officials from China’s Central Customs

Commenting on the decision, Saskia van Pelt, director, Schiphol Cargo, business development, said, “China is the world’s biggest exporter and the single largest market for Schiphol’s logistics community. It’s clear that China Customs fully understands the challenges it is facing and its enthusiasm for e-freight proves its determination to take positive action.” According to him, e-freight will bring much greater efficiency and processing capacity to China Customs’ vast operations benefiting Customs itself, Chinese and other carriers, and the global logistics industry.”

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ETihAD CARgO REgiSTERS

RECORd VOLumE OF 33,000 TONNE IN JuLy 18 i cargotalk i SEPtEMBEr 2012

tihad Cargo touched record monthly figures for July with network volumes approaching 33,000 tonne, an increase of 18 per cent on the same month last year.

The figures surpass a previous month record of 31,700 tonne which Etihad Cargo carried in March 2012. Total revenues for the month were up 4 per cent on June and 8 per cent on the corresponding period the previous year.

Etihad Cargo also reported strong H1 2012 results, with tonnage up by 21 per cent.

Commenting on the airline’s performance Kevin Knight, chief planning and strategy officer, Etihad Airways said, “We’ve seen a good recovery in business from Europe after the second quarter. Also, the capability of our fleet with the addition of the 747-400 Freighter has enhanced our overall schedule flexibility, and helped support significant project work in what was also a record month for our Charter team.

He also shared that new routes including Etihad’s recently launched 6-times a week passenger service to Lagos and new freighter service to Dammam have strengthened the payload capacity. “Looking ahead, we expect to maintain strong freight performance over the third and fourth quarters of 2012,” he added.

Etihad Cargo currently operates a fleet of six freighters, consisting of one Airbus A300600F, two Airbus A330-200F, one McDonnell Douglas MD-11F, one Boeing B777F and one Boeing B747-400F.

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international Airports Performance

DwC wiTNESSES 153 PER CENT

GROwTh IN Q2 OF 2012

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KEy FACTS n Dubai Airports owns and manages the operation and development of Dubai international Airport as well as Dubai world Central n DwC has a cargo capacity of 2,50,000 tonne per annum, which is expandable to 6,00,000 tonne per annum.

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pened for commercial operation in June 2010, Dubai World Central (DWC) is quickly establishing itself as an emerging cargo airport in the region.

According to the latest traffic statistics, cargo volume at this airport (Dubai’s second airport) surged 153 per cent to 56,271 tonne during the second quarter of 2012, compared to 22,252 tonne during the corresponding period last year.

According to DWC, the growth is mainly being driven by a number of large noncommercial contracts secured late last year as well as additional charter and scheduled services introduced during 2011. Significant developments during the first half of the year include the launch of thrice-weekly flights from Riyadh by Saudi Airlines Cargo. Additionally, in May, United States logistics provider National Air Cargo operated its 1,000th flight into the emerging airport.

DWC currently has some 36 carriers signed up and operating. Dubai International Airports’ total cargo volume is expected to top 4 million tonne by 2020 and an increasing portion of that growth is expected to spill over to DWC. Paul Griffiths, CEO, Dubai Airports maintained that the airport’s proximity to and bonded road connection with the free zone and port at Jebel Ali and the easy availability of take-off and landing slots are very attractive propositions for cargo carriers.

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Cover Story Indian Ports

iNTERNATiONAL TRADE FROM

iNDiAN

capacity building needs to be

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www.cargotalk.in

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ccording to the Working Group Report for 12th Plan for the Port Sector, Major Ports and Non-Major Ports in India are estimated to handle 943.06 million tonne and 815.20 million tonne respectively by the end of 12th Plan, as against the present level of 560.15 million tonne handled by Major Ports and about 370 million tonne handled by Non-Major Ports. To meet the above projected demand, both Major ports and Non-Major ports have conceptualised various capacity augmentation schemes with an estimated investment of `1,80,626.63 crore during 12th Plan. The estimated capacity by the end of 12th Plan will be 2,686.66 million tonne.

According to the data published by the Ministry of Shipping, by the end of March 2012 the existing capacity of Major Ports was 689.83 million tonne per annum. As per the 12th Five Year Plan, the capacity of Major Ports will be increased to 1,229.24 million tonnes per annum by the end of March 2017. In the year 2012-13, 25 projects have been identified for awards at various Major Ports in the country under the Public Private Partnership mode.

Meanwhile, the Government of India has advised all coastal states in the country to explore the possibility of setting up of a new Major Port or new ship-building yard or as

a composite port-cum-ship-building yard in their states and submit a comprehensive proposal.

Proposals have already been received from state governments of Andhra Pradesh, Karnataka, Kerala and Gujarat. Technical Committees have been constituted to identify a suitable location for the development of Major Ports proposed by state governments.

It is pertinent to mention that as per Indian Ports Act, 1908, the responsibility of the development of Minor/Non-Major Ports lie with the respective state governments.

As regards Major Ports, they are under the control of Government of India. In the 12 th Five Year Plan, the Government proposed to invest `73,793.95 crore for the development of various projects in the port sector.

Recently, after a review of the infrastructure sector by Prime Minister Dr Manmohan Singh, a target has been set for the Shipping Ministry for award of projects for creating 244 million tonne of capacity during 2012-13 spread, across 42 projects at an estimated cost of `14,500 crore.

The target also include obtaining approval of establishing two new Major Ports – one in Andhra Pradesh and another in West Bengal.

GK Vasan

ThE gOvERNMENT OF iNDiA hAS ADviSED ALL COASTAL STATES iN ThE COUNTRy TO ExPLORE ThE POSSiBiLiTy OF SETTiNg UP OF A NEw MAjOR PORT OR NEw ShiP-BUiLDiNg yARD OR AS A COMPOSiTE PORT-CUM-ShiPBUiLDiNg yARD iN ThEiR STATES AND SUBMiT A COMPREhENSivE PROPOSAL

Remarkably, in the Union Budget 2012-13, the tax-free bond scheme has been extended for

Currently 90 per cent by volume and 30 per cent by value of india’s international trade is performed through its ports. however, despite some significant initiatives by the government of india and some private companies for creating capacity with a long-term goal, shippers often get stuck at indian ports thanks to the lack of efficient port management, skilled man power and proper integration among allied organisations/ministries. Cargotalk spoke to industry practitioners and port association to highlight remedial measures for the greater interest of the country’s economy… Ratan Kr Paul

PORTS

complemented by industry-friendly policy www.cargotalk.in

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Cover Story Indian Ports

one more year to enable ports to raise funds to the tune of `5,000 crore for various projects. The rate of withholding tax on interest payments on external commercial borrowings has also been reduced from 20 per cent to five per cent for a period of three years for ports and shipyards.

According to a recent statement by G K Vasan, Minister of Shipping, India’s external trade, as a proportion of GDP has more than doubled in last 10 years and is close to 40 per cent. Bulk of this international trade is carried through shipping. The Minister expressed hope that in future, high demand for energy will result in increased import of coal and oil. Similarly, the container volumes in India are expected to witness high growth in the years to come.

Vasan informed that the Ministry of Shipping has also taken up with the Ministry of Finance the need for exemption of Minimum Alternate Tax (MAT) on the book profit on sale of qualifying ships, and its inclusion within tonnage tax regime. The inclusion of interest income on funds, deployed out of tonnage tax reserve within tonnage tax regime, is also among various other issues that are being taken up with the Ministry of Finance.

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INduSTRy PERSPECTIVE

According to R Radhakrishnan, past president, Federation of Freight Forwarders’ Associations in India (FFFAI) and chairman, Clearship Group, the current scenario in the global shipping industry is characterised with weak markets, slow traffic, low margins, commoditisation and industry level consolidation. With the world focussing on the BRIC nations for growth opportunities, the altering landscape in the global shipping industry has had major implications on India.

R Radhakrishnan

ONE OF ThE MOST SigNiFiCANT DEvELOPMENTS iN ThE ShiPPiNg AND PORT iNDUSTRy iS ThE iNvESTMENT iN iNFRASTRUCTURE AND DEvELOPMENT OF NEw LOgiSTiCS hUBS, LOgiSTiCS CENTRES, CONTAiNER TERMiNALS, CONTAiNER FREighT STATiONS AND wAREhOUSiNg FACiLiTiES

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PPP mOdE IN INLANd wATERwAyS SECTOR Recently, the government of india has constituted a committee under the Secretary, Planning Commission to scale up private investment in inlandwaterways Sector.The secretary, Ministry of Shipping, Dg of inland waterways Authority of india (iwAi) and a representative of Department of Economic Affairs will be the members of this committee. This Committee would undertake a systematic effort to identify new areas for private investment, both in infrastructure and in transportation. it will also identify multiple business models which could then be bid out through concessions.

This will be supplemented by designing Model Concession Agreements (MCA) and other standardised documents for facilitating a rapid scaling up of investment.

stations and warehousing facilities. This is going to help the sector in India with an introduction of sophisticated technological advancements and stable infrastructure facilities.

Radhakrishnan also maintained that a new competitive landscape is fast emerging.

It has provided many avenues for growth, but poses several risks and challenges. The increased capital from private equity firms and acquisition by major global giants has not only altered the competitive landscape in the Indian transport and logistics industry, but has also

“The global industry-wide consolidation is a coping mechanism for companies to sustain growth in this ever slowing and maturing industry. The shipping/port related industry in India is highly fragmented and the current trend of structured investments has to continue if we need to sustain growth in the future.

This, along with the positive growth figures in emerging markets means that India will witness an increased influx of capital and market entry by global giants, each trying to bite off a piece of the cake,” he underlined.

In his opinion, one of the most significant developments in the shipping and port industry is the investment in infrastructure and development of new logistics hubs, logistics centres, container terminals, container freight www.cargotalk.in

PhASE-wiSE RAiL-ROAD PROjECTS PLANNED By ThE MiNiSTRy OF ShiPPiNg

made it one of the sectors to look out for in the next few years. “Only time will tell whether this is for the better or worse for the Indian shipping and logistics industry,” he observed.

According to Prakash Iyer, vice president, Cochin Steamer Agents Association and branch manager, Cochin, NYK Line India, presently shipping in India is really booming and of course the imports are on the higher side. This will prompt the carriers to take strong action in promoting exports, while the shipping lines can enjoy the benefit of reducing loss on equipment evacuation. However, an improvement on investment in agricultural and

finished products will only help to reach the growth rate of 20-25 per cent on both imports and export together in the coming years.

hINdRANCES ANd BOTTLENECKS

Radhakrishnan was of the opinion that the primary concern is the reliability of current infrastructure and procedures in India. “The ports, instead of extending reliability to our operations, are lending uncertainty, delays and anxiety. The increased frequency in unexpected events like port agitations and unrest has hindered efficient operations in the recent past. Our ports are not equipped to handle exceptions and unexpected risks. Anything out of the ordinary affects our operations which escalates and snowballs into new problems for all parties involved in the supply chain,” he stressed.

According to Radhakrishnan, although India operates some of the busiest ports in the world, the efficiency in Indian ports is way below the global standards. “Even with weak and slow markets, our ports are suffering from congestion which talks about our inefficiency.

How will we manage if the market operates at full capacity is unthinkable?” he raised the vital question.

Prakash Iyer

GS Chawla

Radhakrishnan highlighted that extended delays in upgradation processes in ports are not helping us at all. The lack of proper infrastructure at major ports is also a matter of concern as it causes unhealthy competition in www.cargotalk.in

SEPtEMBEr 2012 i cargotalk i 25

Cover Story Indian Ports

spite of increase in port capacity. “This cannot be seen as growth as we are only redistributing our traffic and not facilitating growth,” he said.

Taking cue from Radhakrishnan, Iyer viewed that shipping and ports are on the growing path, but increased number of ports with minimum capacity will not help in the future. In his opinion, the steep increase in all essential commodities makes the shipping industry shell out more money on administration cost. Considering the investment and recurring expenses, revenue earned is minimal.

Ashish Mahajan

COST OF RUNNiNg ShiPS ARE A MAjOR ChALLENgE FOR ShiPPiNg LiNES DUE TO ESCALATiON ON BUNkER AND OThER COSTS, iNCLUDiNg DAiLy ExPENSES OF ThE ShiP. whEREAS, AgENTS FACE hUgE CRUNCh iN ThE REvENUE EARNED By ThEM. ThE DiFFERENCE BETwEEN REvENUE EARNED AND COST iNCURRED iS vERy NARROw, AND ThUS, ThE ShiPPiNg iNDUSTRy AND AgENTS ARE FiNDiNg iT DiFFiCULT TO RUN ThE ShOw

26 i cargotalk i SEPtEMBEr 2012

On the other hand, cost of running ships are a major challenge for shipping lines due to escalation on bunker and other costs, including daily expenses of the ship. Whereas, agents face huge crunch in the revenue earned by them. The difference between revenue earned and cost incurred is very narrow, and thus, the shipping industry and agents are finding it difficult to run the show. Increased handling costs at the terminal make shipping lines unviable to operate on containerised liner services.

Radhakrishnan also expressed serious concern about frequently changing rules and regulations. “The increased frequency (every 2-3 months) of revisions and amendments to trade practices and procedures is not acceptable. We have to rethink and amend our supply chain schedules more often than necessary which is hurting our efficiencies and service commitments,” he pointed out. He further observed that the main expectations from regulatory agencies are to facilitate efficient operations and not promote anxiety.

GS Chawla, MD, Ocean King Shipping Services, maintained that ports in India have

to be provided with excellent infrastructure facilities, especially those ports which handle majority of the bulk goods. “By developing large number of efficient ports, our country can become the largest international hub to deliver goods from West to the East and viceversa,” he said. However, he added, Indian ports are not having adequate infrastructure facilities. This non-availability of adequate infrastructure facilities is creating hindrances to attract investments from both domestic as well as foreign sources.

Ashish Mahajan, director, Perfect Cargo Movers, also felt that freight movement is facing challenges because of congestion and poor performance at Indian ports. “Its impact on the industry is quite serious. As a result, many exporters have to convert the ocean freight into air freight at their cost.

ì

wAy OuT

“We need to simulate more risks and develop effective troubleshooting mechanisms which reduce possible impact on Exim trade,” said Radhakrishnan. Controlling of tariff at major ports by TAMP is also a matter of concern. This needs to be reviewed to avoid trade blockage.

Iyer observed that ports (facilitators) should have a better understanding on their services as they are meant to serve the trade and industry through better and timely services provided to shipping lines and agents. The growth in the number of ports may not fetch good results unless the government takes serious action on the improvement in infrastructural facilities. “As a shipping person, I do not expect substantial increase in the number of ports with minimum facilities, but a horizontal growth based on draft, back up yards, connectivity and costs. Minimisation of paper work will help in cost reduction www.cargotalk.in

Cover Story Indian Ports

have a long way to cover to reach international standards,” he said.

and corruption-free segment will make the business attractive,” he argued.

He further maintained that at present regulating authorities are looking into the cost side only, whereas it is their duty to ensure that overall performance of the ports/terminals are met with international standards and helps the export-import fraternity.

Chawla felt that the best way to overcome infrastructure problem is to optimise the available strength/space of the ports to handle cargo and to create required strength/space for the same. There is also a requirement to build deep sea ports to reduce the cost of transport.

The Indian Ports Act, 1908 and the Major Port Trusts Act, 1963, govern some major ports.

“Recently, greater administrative and financial powers have been delegated to ports. We still

Mumbai Container Terminal The construction of Offshore Container Terminal in Mumbai Por t will be completed by December 2012.

R Srinivasagopalan

major focus and improvement on infrastructural facilities should be on cargo operation from hinterland (dry) ports. The need of the hour is to change the way export entries are being made in customs

28 i cargotalk i SEPTEMBER 2012

Presently, both the Ministry of Shipping and Mumbai Port Trust are monitoring the progress of the work. Meanwhile, Mumbai Port Trust has appointed an Independent Engineer for approval of designs, quality control and monitoring progress of the BOT operator.

A Project Management Consultant has also been appointed for preparation of estimates, tenders and supervision of works for Mumbai Port component.

In Chawla’s opinion, major focus and improvement on infrastructural facilities should be on cargo operation from hinterland (dry) ports. The need of the hour is to change the way export entries are being made in customs. “We need to be at par with European and US systems where the shipper must make an electronic export declaration with customs directly through his own allocated user ID. This will ensure that no abuse and misuse of export licenses is taking place right under the nose of customs” he suggested. According to him, the role of CHA must be confined to further processing of documents, handling of material, having it examined and handover to the airline or shipping line. Each shipper should be allocated with their set of username so as to enable more control and a fool-proof operation.

“I am sure our Government, CHA associations and other trade bodies are taking up issues for improvement of the facilities and regulations for better and smoother operation at Indian ports. If our country can build and airport terminal like T3 at IGI Airport in Delhi, we are confident that the country can create port facilities like Shanghai, Hong Kong or Singapore,” Mahajan went on.

ì

Indian Port Association

R Srinivasagopalan, ED, Indian Port Association (IPA) was quite bullish about attaining the target set by the Ministry of Shipping for the 12th Plan pertaining to capacity building and handling of cargo volume at Indian ports. He maintained that though presently there are some bottlenecks hindering the growth process, the same would be removed in the near future thanks to the joint initiatives (PPP model). “The ongoing capacity-building initiatives and fast cargo clearance mechanism will definitely position some of the Indian ports as hub ports in the Asia Pacific region,” he said. He, however, emphasised on development of off-port facilities like ICDs and CFSs, and hinterland connectivity through railways, roadways and inland waterways. In addition, adequate measures for dredging and drafting on regular basis are a must to attract more mother vessels to Major Ports in India.

Srinivasagopalan shared that IPA has placed several recommendations to the Ministry of Shipping for smooth functioning at Indian ports and attract foreign vessels to India. IPA also suggested for relaxation in the existing Cabotage Regulations, which restrict foreign shipping lines. www.cargotalk.in

Logistics Services Warehousing & Distribution

SwiSSLOg

IN INdIA

adding value to warehousing and distribution services Swisslog, a 100+ years’ company headquartered in Switzerland, made a foray in the warehousing and distribution logistics market in india last year. The company is now present in over 25 countries. Asim Behera, general manager india, Swisslog, spoke to Cargotalk about the potential of this market for the company’s special services that are well established in other parts of the world. Ratan Kr Paul

T

hough Swisslog had entered India market in 2011, the company did not start its operation. According to Behera, Swisslog has finished the India discovery phase and it is now in expansion mode. “We are unique in India as we are a global leader when it comes to automated material handling solutions,” he asserted. He underlined the fact that there is a dearth of experienced System Integrators in India and this is where Swisslog adds value.

“We are a one stop shop from consulting to system design to implementation and operational support. We will offer our complete portfolio of solutions and expertise.

We are very excited to be here and are looking for long-term growth,” he added.

PRESENT SCENARIO

Commenting on the present scenario of warehousing system in India, Behera was of the opinion that India is 20-30 years behind when it comes to the overall warehousing scenario.

“I am not comparing India to the sophisticated west, but with regions in Asia Pacific such as Malaysia, Korea, China, etc. Warehousing in India is not looked as a value-addition, but rather as an unnecessary cost centre,” he explained.

According to him, when value-added activities such as picking, order processing, cross-docking and much more are performed at a warehouse, the true value of a warehouse is enhanced. In the Indian context, majority of the warehousing activity is an outsourced function.

“Whilst I am not against the 3PL approach, it is pertinent to mention that accountability for improvement becomes nobody’s business in outsourcing,” he said. He observed that the 3PL agent is always squeezed down for the price he can charge for storage and the client has his interest to do so. India is a very competitive www.cargotalk.in

market place with many players and one would lose heavily if it were to pass all the cost increases to the customer. In addition, the existing tax structure prohibits consolidation, resulting in fragmented warehouses.

PROduCTIVE wAREhOuSE

“We bring in an in-depth experience when it comes to designing the most efficient and productive warehouse or distribution centre,” stressed Behera. He maintained that Swisslog makes its own Warehouse Management System and Programmable Logic Controller (PLC) which seamlessly blend in with the company’s Automated Storage and Retrieval Systems (ASRS), conveyors, etc. Apart from providing tailor-made solutions, Swisslog has Subject Matter Experts (SMEs) who study trends in the company’s focus segments of Food & Beverage, Pharmaceuticals and Retail. “As a result of the research done by the SMEs, we offer preemptive solutions to our client so they can act rather than react. Our website has a blog

hE OBSERvED ThAT ThE 3PL AgENT iS ALwAyS SqUEEzED DOwN FOR ThE PRiCE hE CAN ChARgE FOR STORAgE AND ThE CLiENT hAS hiS iNTEREST TO DO SO. iNDiA iS A vERy COMPETiTivE MARkET PLACE wiTh MANy PLAyERS AND ONE wOULD LOSE hEAviLy iF iT wERE TO PASS ALL ThE COST iNCREASES TO ThE CUSTOMER

SEPtEMBEr 2012 i cargotalk i 29

Logistics Services Warehousing & Distribution

post wherein the SMEs continuously write on how environmental trends affect business,” he shared.

In Behera’s opinion, the India growth story will force companies to look at their back end.

Warehouses are the very foundation of one’s back end operations. In today’s competitive world, two comparable companies will most likely buy their raw material from the same source and they will use the same 3PL providers.

The only place where they can save money and be competitive is their back end operations.

Asim Behera

ì A POiNT TO kEEP iN MiND iS ThAT iN MOST CASES ThE TOTAL vOLUME ThAT ThE COMPANy MANUFACTURES FOR iNDiA MAy BE SigNiFiCANTLy LOwER ThAN whAT iT DOES OvERSEAS

30 i cargotalk i SEPtEMBEr 2012

ChALLENGES

Behera, however, maintained that there are huge challenges before the warehouse and distribution sector in India. The biggest challenge is the tax structure. According to him, the current tax structure is a deterrent to consolidation, thereby eliminating the economies of scales that typically most companies harness overseas. It is not uncommon for a company overseas to have one mega-factory which is then supported by a handful of company-owned distribution

centres which can serve all customers. By doing so, companies can control their logistics cost because everything is in-house, so they can reduce the middlemen and reduce the touches per Stock-Keeping Unit (SKU). However, for its Indian operations it is not uncommon for the same company to have 10 factories, followed up by 25-30 distribution centres or warehouses most likely outsourced to 3PLs. A point to keep in mind is that in most cases the total volume that the company manufactures for India may be significantly lower than what it does overseas. As a consequence, one has to establish ten times more basic infrastructure, have multiple touches, have more middlemen each carving out his share and as a result the profit margin is reduced, damage to product increases and a lot of uncertainty and dependencies creep in, because the processes are not in-house. “I sincerely hope that the current government approves and executes the GST alongside the multi-brand FDI. These two policies when implemented well will be the catalyst for modernisation to the Indian warehousing and distribution scene,” he viewed.

www.cargotalk.in

view Point Trends in Technology

ROLE OF

SuPPLy ChAIN INduSTRy to cope up with economic slowdown

in the mid-2000s, global sourcing was the mantra and, with a booming global economy and cost reductions fuelled by emerging nations, an unstructured procurement scramble took hold. The financial crisis in 2007-08 saw a sudden end to all of that and created the moment for some businesses to pause for breath, take stock of their supply chains and look for opportunities that may be enabled by technology. mV BalaKrishna Reddy, head- Asia, Four Soft, highlights some key points…..

A

ccording to Reddy, seizing the opportunity (from the financial crisis in 2007-08) has driven some interesting repositioning of the leaders and laggards across different industries. The evolution from batch transfer of data using EDI through adaptive supply chains has been a rocky road. The focus on data standardisation was lost but more flexible mapping tools became available, so data transformation became the norm. Other technologies usurped EDI, with the extension of internet-based ‘track & trace’ into supply chain portals. These became the new starting point for supply chain connectivity; bringing new terminology, with ‘collaboration’, ‘agility’ or ‘synchronisation’ in every description.

MV BalaKrishna Reddy

TODAy, CONNECTiviTy AND COLLABORATiON ARE DELivERED By A SUPPLy ChAiN PORTAL. ThESE PORTALS ENABLE DEMAND, SUPPLy AND LOgiSTiCS ExECUTiON TO BE SyNChRONiSED. BUT ThE MOST DiFFiCULT COMPONENT TO ADDRESS iS ExECUTiON – ThE ACTUAL FULFiLLMENT

32 i cargotalk i SEPtEMBEr 2012

In Reddy’s opinion, today, connectivity and collaboration are delivered by a supply chain portal. These portals enable demand, supply and logistics execution to be synchronised.

But the most difficult component to address is execution – the actual fulfillment. This is because managing demand and supply is essentially ‘a closed loop’ involving formal relationships and defined information exchanges. Execution involves many parties with complex and changing interactions – from carriers, forwarders and agents, to government agencies and intermediaries, such as Chambers of Commerce. Each party requires a different view of the information to play their part.

Reddy underlined that many shippers use their 3PLs and forwarders to provide visibility but the leaders have now in-sourced this. They have realised the value of managing their own data while still outsourcing the actual activities.

ì

ThE KEy CONSTITuENTS

n Scope: He viewed that initially all supply chain partners – vendors; manufacturing plants;

customers; logistics; carriers; service providers, internal and external – must accept webbased sharing of information and facilitating collaboration. Each party will have their own ‘dashboard’ to quickly understand their actions and responsibilities, with personalised metrics and graphical reporting. n Visibility: Each party must be able to ‘see’ that part which is relevant to their needs consolidated to one place. Visibility includes classic ‘track and trace’ but also information must be gathered, validated and presented so that each party has visibility of sufficient information for them to play their role without delays. n document distribution: Even in today‘s electronic age, there are documents that are absolutely necessary at various stages of logistics. These documents must be uploaded as images to be shared at the appropriate time with the appropriate party. n Event management: The system must be configurable to react automatically to events and non-events. This means that actual data must be compared to a plan and rules and tolerances set to proactively alert the relevant parties. n Key Performance Indicators: While visibility and event management can enable management by exception, this only applies to individual transactions. The data gathered from individual logistics life-cycles must also be retained for analysis. Key Performance Indicators should be used to monitor and control supply chains. Responsible parties can be alerted when a trend moves towards a tolerance boundary, rather than once it has passed, and a dashboard can provide the decision support for corrective action. www.cargotalk.in

Cargo Performance Export/Import

dELhI INTERNATIONAL AIRPORT CARGO dEPARTmENT, IGI AIRPORT, NEw dELhI (AIRLINE-wISE ImPORT/ExPORT CARGO PERFORmANCE FOR ThE mONTh OF JuLy 2012) S. No. Airlines

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 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 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

Export(mTs)

Export Perishable Cargo (mTs)

Export (with Peri.) (uPL)(mTs)

Import

Total Cargo

All wt. in mt. % of Total

Jet Airways 1437 263 1700 1896 3596 12% Cathay Pacific 902 5 907 1962 2869 9% Emirates 981 1179 2160 471 2632 9% British Airways 945 102 1046 925 1971 7% Singapore Airlines ................... 522 ...............84 .............. 606 ..............913 ..............1519 ............. 5% Thai Airways 330 43 373 1082 1455 5% Lufthansa Cargo Airline 468 75 543 744 1287 4% Fedex Express Corpation 842 21 862 392 1255 4% Air India 324 558 883 272 1155 4% malaysian Airline System ......... 349 ...............34 .............. 383 ..............419 ............... 802 ............. 3% qatar Airways 379 116 495 232 727 2% kLM 429 70 499 200 699 2% Martin Airline 266 20 286 389 675 2% Uzbekistan 394 43 436 220 657 2% kalitta Air .......................................407 .................... 0 .................. 408 .................246 ...................653 ................ 2% Etihad Airways 292 69 361 291 652 2% Swiss world Cargo(india) 322 64 386 216 602 2% virgin Atlantic 371 3 374 205 579 2% Finnair 327 21 348 189 537 2% Turkish Airlines ..............................380 .................. 27 .................. 407 .................124 ...................531 ................ 2% Air France 323 14 337 160 497 2% Aeroflot Cargo Airlines 169 97 267 83 349 1% Saudia 200 132 332 8 340 1% Austrian Airlines 152 26 179 132 311 1% japan Airlines ...................................78 .................... 0 .................... 78 .................200 ...................278 ................ 1% China Eastern Airlines 117 0 117 158 275 1% Air China 136 6 142 120 262 1% Unitop Airlines 0 0 0 234 234 1% gulf Air 172 42 214 9 223 1% United Airlines ...............................139 .................... 2 .................. 142 .................. 67 ...................208 ................ 1% Philippine Airlines 63 20 83 114 197 1% Aerologic 8 0 8 172 180 1% Eva Air 54 0 54 126 180 1% Blue Dart 165 0 165 4 169 1% indigo Cargo ....................................97 .................... 4 .................. 101 .................. 47 ...................147 ................ 0% Ariana Afghan Airlines 67 0 67 52 119 0% Mahan Air 97 8 105 14 119 0% Asiana Airlines 25 1 26 90 117 0% Dhl Express 0 0 0 100 100 0% Ethopean Airlines .............................20 .................... 0 .................... 20 .................. 77 .....................97 ................ 0% Sri Lankan Airlines Ltd 56 2 57 35 93 0% Air Mauritius 55 31 85 3 88 0% China Air 46 0 46 33 80 0% Safi Airways 68 0 68 8 76 0% Oman Air ..........................................56 .................. 16 .................... 73 .................... 2 .....................75 ................ 0% China Southern Airlines 34 0 34 37 71 0% Aerosvit 56 9 66 2 68 0% Air Arabia 63 0 63 0 63 0% Air Shagoon 0 0 0 57 57 0% Biman Bangladesh ............................33 .................... 5 .................... 38 .................. 18 .....................56 ................ 0% Elal israel Air 0 0 0 54 54 0% kam Air 49 2 51 0 51 0% kuwait Airlines 2 30 32 8 40 0% Air Astana 33 4 36 1 37 0% Pakistan international .......................11 .................... 0 .................... 11 .................. 14 .....................26 ................ 0% Turkmenisthan Airlines 13 7 20 1 21 0% Royal jordanian Airlines 16 0 16 0 17 0% Ups 0 0 0 16 16 0% jetlite 4 1 5 10 14 0% Air Shagoon ......................................10 .................... 2 .................... 11 .................... 0 .....................11 ................ 0% Aero Space One 7 0 7 0 7 0% Mera Travels 4 0 4 0 4 0% Tajik Air 3 0 3 0 3 0% iraqi Airways 0 0 0 0 0 0% kingfisher Airlines Ltd. ...................... 0 .................... 0 ...................... 0 .................... 0 ...................... 0 ................ 0% Druk Air 0 0 0 0 0 0% Air Shagoon 0 0 0 0 0 0% Axios Aviation Services 0 0 0 0 0 0% Flywell Aviation Pvt.Ltd 0 0 0 0 0 0% hercules Aviation Pvt Ltd ................... 0 .................... 0 ...................... 0 .................... 0 ...................... 0 ................ 0% Fzc Air People i. (P) Ltd 0 0 0 0 0 0% Flywell Aviation Pvt.Ltd 0 0 0 0 0 0%

Total Cargo handled in july’11 % vARiATiON

13369 14083 -5.07%

3256 2626 24.01%

16626 16709 -0.50%

13654 15323 -10.90%

30280 32033 -5.47%

100.00%

## Cargo handled at Centre for Perishable Cargo

34 i cargotalk i SEPtEMBEr 2012

www.cargotalk.in

mumBAI CSI AIRPORT

ExPORT/ImPORT CARGO TONNAGE hANdLEd IN JuLy 2012

(including TP Cargo)

wEIGhT IN TONNES S. No. Airlines 1 2 3 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Export General

Export Perishable

Jet Airways 1490.90 1367.59 Emirates 1682.32 1563.28 Lufthansa 683.01 571.12 Cathay Pacific 1175.49 54.97 Singapore Airlines 960.46 114.34 British Airways ..................... 706.22 ...........525.00 Air India 513.36 778.71 Etihad Airways 800.54 72.28 Qatar Airways 383.18 421.84 Air France 477.43 174.55 Saudi Arabian Airlines ........... 836.56 ...........182.22 Swiss intl. Airlines 351.69 113.98 Turkish Airlines 331.92 92.91 Federal Express 401.08 96.00 Thai Airways 281.94 76.25 Malaysian Airlines....................... 379.06 ...............45.62 Ethopian Airlines 559.68 7.84 UPS 117.96 0.00 korean Air 309.69 0.04 kenya Airways 372.32 3.25 Delta/kLM Airlines ........................ 93.75 ...............93.29 South African Airlines 266.04 2.73 Fin Air 249.98 32.71 gulf Air 137.17 112.63 Charters 0.00 0.00 kuwait Airways 108.19 88.37 Air Mauritius ............................... 176.30 .................2.30 Blue Dart 110.49 0.00 indigo Air 144.66 3.43 Air Arabia 41.71 111.60 Oman Air 85.73 66.29 EL-AL Airlines ............................... 38.08 .................0.28 Srilankan Air 55.34 0.51 kingfisher Airlines 87.49 0.00 United/Continental Airlines 33.97 0.80 Bangkok Airways 55.31 0.23 yemenia Airways........................... 30.23 ...............14.29 Baharin Airlines 38.87 0.00 Pakistan intl Airlines 29.45 0.00 iran Air 31.87 2.40 Air China 7.21 0.00 Egypt Air....................................... 16.66 .................0.05 Royal jordanian 15.10 0.00 qantas 0.00 0.07 Austrian Air 0.00 0.00 Northwest Airlines .......................... 0.00 .................0.00 Royal jordanian Airways 0.00 0.00 Others 2.63 6.12 TOTAL

14671.00

6799.87

Total Export

Import

Total Exp+Imp

2858.49 2718.02 5576.51 3245.60 1144.78 4390.38 1254.12 1858.62 3112.75 1230.46 1636.43 2866.89 1074.80 1256.09 2330.89 ......... 1231.22 ........... 682.09 ........ 1913.31 1292.07 96.69 1388.76 872.82 505.01 1377.83 805.02 434.71 1239.72 651.98 547.97 1199.95 ......... 1018.78 ............ 69.79 ........ 1088.57 465.67 456.47 922.14 424.83 388.08 812.92 497.07 268.73 765.81 358.19 341.66 699.84 ............. 424.68 .............. 255.10 .............679.78 567.52 4.07 571.59 117.96 307.25 425.21 309.73 80.41 390.14 375.57 6.58 382.15 ............. 187.04 .............. 166.80 .............353.84 268.77 37.08 305.85 282.68 0.00 282.68 249.80 2.00 251.80 0.00 244.32 244.32 196.55 19.68 216.23 ............. 178.60 .................. 5.54 .............184.14 110.49 61.91 172.40 171.06 148.09 22.97 153.31 1.21 154.52 152.02 2.41 154.42 ............... 38.36 ................ 67.91 .............106.26 55.85 35.78 91.63 87.49 0.00 87.49 34.77 51.47 86.24 55.54 1.17 56.71 ............... 44.52 .................. 0.10 ...............44.62 38.87 0.00 38.87 29.45 8.29 37.74 34.27 1.70 35.97 7.21 15.08 22.29 ............... 16.71 .................. 0.85 ...............17.55 15.10 0.06 15.16 0.07 0.00 0.07 0.00 0.00 0.00 ................. 0.00 .................. 0.00 ................ 0.00 0.00 0.00 0.00 8.75 817.20 825.95 21470.87

14622.09

36092.96

14315.95

37519.86

ExPORT/iMPORT CARgO TONNAgE hANDLED iN jUNE 2012 Cargo handled in june’12

www.cargotalk.in

15188.33

8015.58

23203.91

SEPtEMBEr 2012 i cargotalk i 35

Cargo Performance Airports in India

TRAFFIC STATISTICS

dOmESTIC FREIGhT Freight (in Tonnes) For the month S. No. Airport

(A) 11 International Airports 1 Chennai 2 kolkata 3 Ahmedabad 4 goa 5 Trivandrum 6 guwahati 7 Calicut 8 jaipur 9 Srinagar 10 Amritsar 11 Portblair Total (B) 6 JV International Airports 12 Delhi (Dial) 13 Mumbai (Mial) 14 Bangalore (Bial) 15 hyderabad (ghial) 16 Cochin (Cial) 17 Nagpur (Mipl) Total (C) 9 Custom Airports 18 Pune 19 Lucknow 20 Coimbatore 21 Patna 22 visakhapatnam 23 Trichy 24 Mangalore 25 Chandigarh 26 varanasi 27 Bagdogra 28 Madurai 29 gaya Total (d) 20 domestic Airports 30 Bhubaneswar 31 indore 32 jammu 33 Agartala 34 Raipur 35 imphal 36 vadodara 37 Ranchi 38 Bhopal 39 Aurangabad 40 Leh 41 Udaipur 42 Rajkot 43 Tirupati 44 Dibrugarh 45 jodhpur 46 Silchar Total (E) Other Airports grand Total (A+B+C+D+E)

36 i cargotalk i SEPtEMBEr 2012

For the period April to may

may 2012

may 2011

% Change

2012-13

6969 7265 3079 250 127 478 8 545 325 5 99 19150

6878 7325 1186 299 129 870 21 593 216 11 159 17687

1.3 -0.8 159.6 -16.4 -1.6 -45.1 -61.9 -8.1 50.5 -54.5 -37.7 8.3

13717 13712 5890 489 257 1003 26 1062 500 11 327 36994

13965 13722 2245 561 267 1526 48 1219 366 18 344 34281

-1.8 -0.1 162.4 -12.8 -3.7 -34.3 -45.8 -12.9 36.6 -38.9 -4.9 7.9

17796 16461 7520 2856 741 386 45760

14006 16671 7000 2996 754 432 41859

27.1 -1.3 7.4 -4.7 -1.7 -10.6 9.3

34249 31448 14099 5596 1469 779 87640

29765 32565 13497 5650 1513 850 83840

15.1 -3.4 4.5 -1.0 -2.9 -8.4 4.5

2107 174 590 195 120 0 25 266 21 135 57 0 3690

2061 301 577 282 84 0 26 218 31 101 70 0 3751

2.2 -42.2 2.3 -30.9 42.9 -3.8 22.0 -32.3 33.7 -18.6 -1.6

4231 339 1064 362 231 0 62 499 60 287 124 0 7259

4135 604 1087 512 190 0 47 303 63 192 119 0 7252

2.3 -43.9 -2.1 -29.3 21.6 31.9 64.7 -4.8 49.5 4.2 0.1

249 376 101 565 253 341 220 139 75 85 134 0 16 1 27 1 42 2625

176 441 82 486 216 442 160 140 68 124 150 0 49 5 35 3 32 2609

41.5 -14.7 23.2 16.3 17.1 -22.9 37.5 -0.7 10.3 -31.5 -10.7 -67.3 -80.0 -22.9 -66.7 31.3 0.6

518 715 210 1045 467 751 440 273 161 160 281 0 54 2 63 2 67 5209

425 682 180 985 410 886 340 260 136 243 370 0 106 5 63 10 61 5162

21.9 4.8 16.7 6.1 13.9 -15.2 29.4 5.0 18.4 -34.2 -24.1 -49.1 -60.0 0.0 -80.0 9.8 0.9

131 71356

121 66027

8.3 8.1

260 137362

231 130766

12.6 5.0

2011-12

% Change

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TRAFFIC STATISTICS

INTERNATIONAL FREIGhT Freight (in Tonnes) For the month S. No. Airport

(A) 11 International Airports 1 Chennai 2 kolkata 3 Ahmedabad 4 goa 5 Trivandrum 6 guwahati 7 Calicut 8 jaipur 9 Srinagar 10 Amritsar 11 Portblair Total (B) 6 JV International Airports 12 Delhi (Dial) 13 Mumbai (Mial) 14 Bangalore (Bial) 15 hyderabad (ghial) 16 Cochin (Cial) 17 Nagpur (Mipl) Total (C) 11 Custom Airports 18 Pune 19 Lucknow 20 Coimbatore 21 Patna 22 visakhapatnam 23 Trichy 24 Mangalore 25 Chandigarh 26 varanasi 27 Bagdogra 28 Madurai 29 gaya Total (D) 17 Domestic Airports (E) Other Airports grand Total (A+B+C+D+E)

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For the period April to may

may 2012

may 2011

% Change

21368 3300 1017 157 4546 0 2442 33 0 144 0 33007

23311 3439 1260 143 3701 0 2068 45 0 600 0 34567

-8.3 -4.0 -19.3 9.8 22.8 18.1 -26.7 -76.0 -4.5

40778 6697 1864 338 9128 0 5158 53 0 212 0 64228

46291 6746 2255 356 7334 0 4071 74 0 1005 0 68132

-11.9 -0.7 -17.3 -5.1 24.5 26.7 -28.4 -78.9 -5.7

30960 40312 11950 3728 3337 36 90323

35591 42620 12008 4018 3669 22 97928

-13.0 -5.4 -0.5 -7.2 -9.0 63.6 -7.8

62370 78670 23941 7473 6053 70 178577

69690 82972 23882 7786 7230 37 191597

-10.5 -5.2 0.2 -4.0 -16.3 89.2 -6.8

0 68 48 0 0 284 0 0 0 0 0 0 400 0 0 123730

0 33 34 0 0 220 0 0 0 0 0 0 287 0 0 132782

106.1 41.2 29.1 39.4 -6.8

0 141 87 0 0 509 0 0 0 0 0 0 737 0 0 243542

0 64 68 0 0 386 0 0 0 0 0 0 518 0 0 260247

120.3 27.9 31.9 42.3 -6.4

2012-13

2011-12

% Change

SEPtEMBEr 2012 i cargotalk i 37

guest Column Air Cargo

AiR CARgO

OPERATION KS Kunwar

Enhancement of capacity and process is the key behind success Though the air cargo industry in india is witnessing lull at these challenging times, industry experts are quite confident about the upturn soon. however, challenges like capacity building in a balanced way and modernisation of cargo handling processes will have to be taken seriously for a sustainable growth of the industry as well as the country’s economy. Cargotalk presents the views, shared

by KS Kunwar, ED, Air Cargo Forum india…

T

he scenario of Indian air cargo at present is at 8-10 per cent declining stage throughout the country. The past continuous growth registered till 2010-11 has shown steep decline during 2011-12 and 2012-13. It has been mainly witnessed in the export cargo due to which the percentage of difference between the two (export and import) has come down very close to 55:45 ratio, respectively, which was once 70:30. Mainly observed in the northern region, this decline has affected Delhi airport grossly.

Though the cargo upliftment capacity of the airlines has increased significantly due to increase in the operation of passenger flights, there has been inadequate demand because of

slow down in the US and EU markets. About 70 per cent of the total cargo carried by airlines is uplifted by the passenger flights.

ì CARGO hANdLING CAPACITy AT dELhI AIRPORT

The capacity on the ground, particularly in Delhi, has increased almost 100 per cent after the commissioning of the 2nd cargo terminal. Delhi Airport has been lucky because of plenty of space available across the airport. It has two cargo terminals having almost equal terminal space and capacity. The built-up area has increased from 71,000 sqm to1,20,000 sqm. Hence, the cargo handling capacity of Delhi Airport has also increased drastically.

Now it’s up to the airlines to choose the best cargo terminal. This increased cargo capacity will be sufficient to handle cargo for more than the next five years even if the growth picks up at more than 10 per cent annually.

As far as the cargo handling/storage capacity is concerned, Delhi Airport need not worry because of decline in volume at present and for immediate future. However, there is a need to introduce vertical automatic storage & retrieval system (AS/RS) to take care of long-term future demand and to improve quality and efficiency in the handling services.

The automation in the cargo handling would certainly help in reducing the prevailing high dwell time of import (over four days) and

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guest Column Air Cargo

export cargo (two days) and to bring it at par with standards prevailing at any world-class international airports.

Not only the cargo terminal operators (CTOs) but also all the trade partners will have to transact business electronically to promote environment-friendly paperless transactions.

CTOs need to have enough qualified and trained staff to handle all types of cargo. They must be geared up for clearance of cargo on 24x7 basis which is going to be introduced by Customs w.e.f September 2012. In a nutshell, the cargo terminal operator should be capable enough to handle the business coming to its door up to the satisfaction of the customer.

ì

ON AIR FREIGhT STATION

The concept of Air Freight Station (AFS) has been developed for promoting faster processing of air cargo away from airports similar to the concept of Container Freight Station (ICD) away from Sea Ports.

The AFS and ICD are there to decongest the main Airports and Sea Ports. This has many other advantages, i.e., the import/ export shipments meant for places far away from the Customs Airports can finally get Custom clearance at the nearby AFSs/ICDs and then transported to the main airports/ seaports. All the Customs formalities can be completed at the AFS/ICD itself. So, exporters/ importers need not go too far away from main airports/seaports for Customs clearance of their shipments. He can get his drawbacks from AFS/ICD and pay the import duty.

This concept should be encouraged keeping in mind the future growth of the Indian economy. It will definitely increase the speed of air cargo operation and ease out the hassles faced by exporters/importers.

NOT ONLy ThE CARgO TERMiNAL OPERATORS (CTOS) BUT ALSO ALL ThE TRADE PARTNERS wiLL hAvE TO TRANSACT BUSiNESS ELECTRONiCALLy TO PROMOTE ENviRONMENTFRiENDLy PAPERLESS TRANSACTiONS. CTOS NEED TO hAvE ENOUgh qUALiFiED AND TRAiNED STAFF TO hANDLE ALL TyPES OF CARgO

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There are no disadvantages to CTOs as they are going to charge their usual handling charges on its arrival at their terminal. They will be benefited by a faster movement of import and export cargo by handling more cargo from the same facility. The terminal operators may also extend their services beyond their terminal by providing bonded trucking services up to and from the AFSs/ ICDs which will generate more revenue to them. They should develop their terminals for handling SLUs (shipper-loaded units) of import and export cargo so that the SLUs are handled smoothly. This concept is prevailing worldwide and that is the reason they have bare minimum dwell time of not more than 12 hrs for both import and export.

ì mAJOR ISSuES ANd ChALLENGES

At present, there are five main challenges before the air cargo industry encountered in its day–to-day clearance of international cargo: n

High Dwell Time of import and export cargo at the ports and airports

n

Rigid/outdated regulatory procedures which delay the clearance of cargo

n

Customs single shift operation for the clearance of import/export cargo

n

Traffic restrictions for transportation of cargo vehicles before 11am and 5-9 pm and harassments

n

Customs EDI system is yet to come up with user-friendly and reliable operations

ì APPEAL BEFORE STAKEhOLdERS ANd GOVERNmENT n

First, the industry should improve upon the activities in their respective segments wherever possible to become a world-class player.

n

Second, to form a bigger platform of all the segments of air cargo logistics trade for taking up issues of common interests for improvement with a single and strong voice. I am confident that together we can make the regulatory authorities listen to our requests for improvements.

n

The Government should give air cargo logistics industry an Industry status.

n

To promote the air cargo logistics industry, which contributes 0.5 per cent of the national GDP and is responsible for transportation of 30 per cent of the country’s international trade & commerce in value terms by air, the Government should establish a National Air Logistic Trade Facilitation Committee.

n

Simplify Transshipment procedures for hassle-free transfer of cargo from one airline/aircraft to another.

n

Bring all air cargo terminal functions under Free Zone regime/policy as has been done

by Malaysia at KLIA, making it an air cargo hub in that region competing with Singapore. www.cargotalk.in

Express Cargo New Kid on the Block

iNDiAONTiME

ExPRESS

Eyes domestic express market in a big way The express cargo industry in india is apparently being strengthened with formation of new companies, primarily for catering to the domestic market in india. indiaontime Express is one of those new kids on the block. ES Sudharsan, chief executive officer, indiaontime Express, spoke to Cargotalk about the genesis of the company and strategy to establish its pan-india presence. Ratan Kr Paul

w

ith an objective to become contemporary express service providers, Indiaontime will be focussed and specialised in eCommerce deliveries to position it as an eCommerce logistics expert. The company will offer services for express door-to-door logistics space.

According to Sudharsan, Indiaontime Express will be handling shipments of commercial as well as non-commercial value in cargo and non document in nature. It will carry any package weighing 1 kg and above. “These packages will be shipped through the company’s own dedicated surface network and confirmed belly space on Air Network arrangement from one of the existing airlines. We will also be conducting charter business as a revenue stream through strategic agreements with charter operators,” he said.

ES Sudharsan

iNDUSTRy SEgMENTS LikE FiNANCiAL SERviCES, ELECTRONiCS AND ELECTRiCAL EqUiPMENT, PhARMA, AUTOMOTivES AND TExTiLES wiLL BE iNDiAONTiME’S FOCUS AREA. iNDiAONTiME wiLL BUiLD PRODUCTS AS PER CUSTOMER REqUiREMENT

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In his opinion, today, there is a huge gap between express cargo leaders and rest of the service providers in this industry. “IOT would like to position itself in this space and cater to both retail and regular big customers. eCommerce, air express, ground express and charters will be our major products and our USP will be flexibility,” he added.

Industry segments like financial services, electronics and electrical equipment, pharma, automotives and textiles will be Indiaontime’s focus area. Indiaontime will build products as per customer requirement. The company will also focus on reverse pick-ups which has big potential in the coming years.

“Our immediate goal is to be in the space of the last mile for eCommerce companies – to be a specialist. Going forward, we plan to acquire company specialised in document product and migrate and set up last mile

delivery for eCommerce companies,” shared Sudharsan. Though, currently in domestic market, Indiaontime will expand its services to the international market within next three years’ time.

Headquartered in Bengaluru, Indiaontime already has opened 41 offices across India.

The company has regional sales head and regional operation head models in every location.

The board members of Indiaontime include Mohan Kumar, former CFO of Air Deccan as the chairman, The co-founders of the company will be the chief operating officers. EV Shunmugam, director, who is based out of Abu Dhabi has been raising funds for Indiaontime from the UAE region. The total fund required to launch the company is about six million USD. Meanwhile, the company has invested four million USD primarily in IT development, hardware and real estate. It has investment plans in warehousing and later in cargo aircraft. The company has set a revenue target of Rs 27 crore in nine months of its operation. www.cargotalk.in

Express Cargo New Kid on the Block

RED

ExPRESS

launched to foray into express cargo business Recently, some well known air cargo professionals have introduced a new company called RED Express, which will be operative by the end of 2012. Armed with complete express logistics solutions, the company will target both B2B and B2C customers. ì

‘huB ANd SPOKE’ mOdEL

The company will follow the ‘hub and spoke’ model. The first phase will have 10 Operation Hubs or Master Distribution Centres (MDCs)) and 48 Sub Distribution Centres (SDCs) in over 23 major cities in India. This will be strengthened by the franchisee network in Tier II and III cities.

The distribution network will be backed by fleets of RED Liners, operating on the principle of scheduled departure and arrivals with multiple frequencies.

Team RED Express at a press meet in Delhi

S

peaking at a pre-launch meet, recently held in Gurgaon (Haryana), Shivi Suri, project head, RED Express, said that before launch, the officials of RE D Express studied the express cargo market for quite some time before taking the decision of this launch.

“We are offering innovative services with a good balance of human touch, process and technology,” asserted Suri.

ì RED ExPRESS wiLL OFFER ExTENDED PiCk UP AND DELivERy SERviCES FOR BUSiNESS hOUSES OF ANy SizE. ThE SERviCE wiLL iNCLUDE SAME DAy DELivERy SERviCE AND ALSO COLLECTiON OF ThE vALUE OF CONSigNMENT, wiTh AN AiM TO TAP E-RETAiLiNg BUSiNESS

44 i cargotalk i SEPtEMBEr 2012

INNOVATIVE SERVICES

According to him, presenting web-based booking is one of those innovations in this regard, which helps customers to avail of multiple frequencies, pricing, track ‘n’ trace, etc.

RED Express will offer extended pick up and delivery services for business houses of any size. The service will include same day delivery service and also collection of the value of consignment, with an aim to tap e-retailing business.

Commenting on maintaining quality of services, Suri said that the company will control service providers and franchisees through its own technology, which is completely transparent.

He also informed that initially the company will invest substantially in technology, infrastructure and human resources. Also, RED Express will invest more than `2 crore to acquire vehicles for distribution. He, however, made it clear that the company would not invest in warehousing and this requirement would be fulfilled by outsourcing to 3PL service providers. RED Express will concentrate on small packages and general distribution services.

According to Suri, RED Express would be able to witness a turnover of `120 crore in the first year of its operation. He appeared to be bullish about achieving the target, thanks to the emergence of eCommerce. “We have a well experienced team in the cargo and logistics market. The company (RED Express) will be benefited by the existing cargo network of o u r t e a m . We are also confident that the company will create a special niche in the express logistics market because of its innovative ideas,” stressed Suri.

RED Express has already received financial investments from a Singapore-based freight organisation with business operations in Malaysia, Philippines and other parts of the Asia Pacific region. Discussions are on with Asia Pacific and international Express operators for tie-ups. www.cargotalk.in

Family Album Club Events

ACCD gETS NEw

mANAGING COmmITTEE FOR 2012-13

The Air Cargo Club of Delhi (ACCD) has recently elected its new managing committee for 2012-2013 at its Annual general Meeting held on july 27. j P Singh has been elected as its president. Other office bearers are yashpal Sharma, vice president; Ravinder katyal, hon. secretary and Sajan kallra, hon. treasurer. The immediate past president, Sunil kohli will continue to be with the managing committee as ex-officio for one year.

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Family Album DCCAA Annual Dinner

DCCAA PRESENTS

A SPECTACuLAR EVENING

The Delhi Customs Clearing Agents Association (DCCAA) recently hosted their Annual Dinner at Taj Palace hotel in New Delhi. Najib Shah, Chief Commissioner of Customs (Dz) and vineet Ohri, Chief Commissioner Customs (Preventive-Dz) were present at this event with their entire team of senior officers from all the ports of the city to interact with industry stalwarts. The spectacular event was organised under the leadership of Raman Raj Sud, president, DCCAA.

(FROM CEnTRE, CLOCK wISE): najib Shah, Chief Commissioner Customs (DZ) with Raman Raj Sud, President, DCCAA Vineet Ohri, Chief Commissioner Customs (Preventive-DZ) Anil Gupta, MD, Concor along with his spouse MS Arora, Commissioner Customs, ICD TKD and PPG and neeta Lall Butalia, Commissioner Customs

(Import & General), IGIA Satya Vir Singh, Commissioner (Central Excise III), Delhi with Shailendra Jain, VP, DCCAA Raman Raj Sud; MD Kala, GM, DIAL Cargo and Pradeep Panicker, CCO, DIAL Atul Dikshit, ADG (Systems)-Customs VK Goel, Commissioner Customs (Publicity & Public Relations) Continued on page 50 and 52 u

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Family Album DCCAA Annual Dinner

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Family Album Award Function/Meet

gMR igi AiRPORT PRESENTS AwARDS

TO OuTSTANdING PERFORmERS Recently, gMR-led consortium Delhi international Airport (DiAL) presented the first edition of the ‘gMR-igi Airport Awards’ to top performers from various sections of aviation industry in india, for their outstanding contributions towards the success of the airport. Several air cargo trade practitioners were also honoured at a glittering function.

FFFAi MEETS wiTh wCO

SECRETARy IN NEw dELhI

Recently, at the invitation of Sk goel, chairman, Central Board of Excise & Customs (CBEC), delegation of Federation of Freight Forwarders’ Associations in india led by Shantanu Bhadkamkar, chairman, FFFAi, attended a joint conference at the india habitat Centre, New Delhi with kunio Mikuriya, secretary general, world Customs Organisation, and senior members of the CBEC and Customs department, New Delhi.

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Product Launch Tracking and Handling

CEVA Logistics launches

‘CEVA Mobile’ to track shipments’ location

CEVA Logistics, one of the world’s leading supply chain management companies, has recently launched its first mobile application, CEVA Mobile, which enables customers to track the exact location of every shipment using their iPhone or iPad. According to Peter Dew, chief information officer, CEVA, the application is CEVA’s latest move in using technology to provide customer value and is a simple and flexible way to search and retrieve the status of air freight, ocean freight and customs brokerage shipments worldwide.

CEVA Mobile provides on-the go access to shipment tracking using only customers’ shipment reference or house number.

“This new app is a clear example of how we are using technology and innovation to improve the overall service our customers receive. Visibility is an integral part of any supply chain and this app, in combination with our online CEVA Trak tool, makes it quick and convenient to see exactly where a customer’s goods are at any given point in the supply chain,” informed Dew. In line with CEVA’s focus on continuous improvement, further development to the app includes: additional functionality; integration of more systems and offering the app to Android and Blackberry users. CEVA Mobile and CEVA Trak are supported

by CEVA Matrix, CEVA’s technology solutions landscape that integrates best in class IT components and CEVA’s knowhow and expertise to support leading supply chain solutions.

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Gandhi Automations offers

Bolzoni Auramo lift tables

The wide range of Bolzoni Auramo lift tables provides an effective solution to most lifting problems.

According to Gandhi Automations sources, the safety of the operator during the use of lift tables is paramount.

Bolzoni Auramo lift tables comply with the European safety of machinery standards EN 292, Machinery Directive 98/37/EC and safety requirements for lift tables EN 1570.

TyPE 1-E ERGO-LIFT SINGLE SCISSOR FOR EVENLy dISTRIBuTEd LOAd ì

It is designed as a ‘work station’ to provide improved ergonomic conditions to ensure the health, safety and comfort of the operator together with improved productivity. Its load application is evenly distributed; top platform has smooth surface; having maximum 20 cycles-per-hour (one shift a day); single acting hydraulic cylinders with drainage; upper and lower travel limited by mechanical stops; self-lubricating bearings on pivot points; hydraulic power pack inside the table provided with relief valve against overloading and compensated flow valve for controlled lowering speed and electrical equipment controlled by electronic system.

SALIENT FEATuRES OF ThE LIFT mOdELS n Aluminum safety bar, stopping descent of the platform on contact with obstruction n Safety clearance between scissors to prevent trapping during operation n Safety check valve to stop the lift table lowering in the unlikely event of the hose break n Protection against overloading n Low voltage control box with up-down buttons and emergency stop n Maintenance props (for safe maintenance operation) n Removable lifting eyes to facilitate handling and lift table installation

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Logistics Events National & International Events

jBS ACADEMy CONDUCTS

AwARENESS PROGRAmmE

w

ith an objective of providing overview of Customs, WCO, WTO, Self Assessment, Valuation Rules, Interpretation of Customs Tariff, etc., recently JBS Academy organised an interactive one-day programme at Gandhidham in Ahmedabad.

The programme witnessed a good participation from the staff of custom house agents, exporters and importers and custodians. The event was conducted by Samir J Shah, chief mentor and director, JBS Academy.

The Academy also decided to run a weekend programme in Customs Clearance and freight forwarding through different programmes – Basic and Advanced – at Gandhidham.

In the recent past, the Academy also conducted a programme on handling of Dangerous Goods by Sea. Two new certificate

Samir J Shah

programmes in Customs Clearance and International Freight Forwarding had been announced to start at Ahmedabad.

Additionally, a new batch of Post Graduation Diploma in Shipping Management has also been scheduled at the Narottam Morarji Institute of Shipping, Ahmedabad. JBS Academy is also in the process of announcing programme for Custodians, Port and related agencies.

international Shipping and Logistics Events 10th Intermodal Africa 2012

SCm Logistics world 2012

1st Black Sea Ports and Shipping 2012

2nd Logistics west Africa Conference & Exhibition

September 6-7, 2012 international Convention Centre Durban, South Africa Contact: enquiries@transportevents.com

October 24-25, 2012 Bristol hotel Odessa, Ukraine Contact: enquiries@transportevents.com

8th Trans middle East Bahrain 2012

November 20-21, 2012 gulf international Convention and Exhibition Centre, kingdom of Bahrain Contact: Tel: +60 87 426 022 Fax: +60 87 426 223 Email: enquiries@transportevents.com

October 16-19, 2012 Marina Bay Sands – Singapore Candy Tan Contact: candy.tan@terrapinn.com

November 5-7, 2012 Lagos. Nigeria Details: www.cwc-logistics.com

Intermodal Europe 2012 November 27-29, 2012 Amsterdam RAi Contact: Sophie Ahmed Event Director Tel: +44 (0)20 7017 5112 Fax: +44 (0)20 7017 7818

India maritime 2012

October 17 -20, 2012 Panaji, goa, india Contact: Federation of indian Chambers of Commerce and industry (FiCCi), Federation house 1, Tansen Marg, New Delhi-110001 Ph: 011-23359734 E-mail: s.sundli@ficci.com

Automotive Asia Congress November 6-7, 2012 Thailand, Bangkok Candy Tan Contact: candy.tan@terrapinn.com

7th Philippine Ports and Shipping 2013

january 30-31, 2013 The Peninsula Manila, The Philippines Contact: enquiries@transportevents.com

Study and Survey Shipping & Ports

w

ith this knowledge paper, Deloitte aimed to provide an overview of the policies and issues affecting the maritime sector. This Paper includes various sections to provide a very high level overview of recent developments and identify several issues requiring deliberation and debate.

INdIAN SCENARIO IN ShIPPING

Shipping is a global industry and its prospects are closely tied with the global economy.

Any fluctuation in the global economy has a direct and indirect impact on the shipping industry. The industry is cyclical in nature

and is today struggling to navigate through the changing economic context. Supply pressure is making matters worse. Indian shipping industry is also not unaffected by the changing macro-economic factors. India has one of the largest fleet and is ranked 16th in the world. The total fleet size of the Indian shipping industry is 10 million gross tonne (GT). Still it forms a marginal share of only one per cent of the global fleet. On the other hand, India’s seaborne trade has been growing at a rate of over 12 per cent in the last 10 years.

Consequently, the share of India’s vessels in carrying country’s cargo has been declining and is currently only around 8 per cent.

PRESENT SCENARiO OF

PORT iNDUSTRy

A deloitte study

iN iNDiA

Deloitte, world’s leading platform for audit, consulting, financial advisory, risk management, and tax services was the knowledge Partner for the recently held National Conclave on Shipping 2012, which was organised by the Federation of indian Export Organisations (FiEO) in Chennai, in association with the Ministry of Shipping, government of india. we are presenting the highlights of the Study unveiled by Deloitte as the Background Paper of the Conclave.

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ì

PORT SECTOR IN INdIA

CoNTAINEr TrAFFIC AT MAjor PorTS (IN MILLIoN ToNNE)

Ports provide an interface between the ocean transport and land-based transport. They represent a promising sector for India, given the country’s 7,500 km long coastline, robust economic growth, abundant raw material, costcompetitive workforce and a strategic location on the trade map. The port infrastructure in India constitutes 13 Major Ports and 187 Nonmajor ports. Out of the total Non-major ports, only about 48 are operational; while the rest are only fishing harbours. The 13 Major Ports are administered by the Central Government through the Ministry of Shipping, and Nonmajor Ports are administered under respective state governments. The state-wise numbers of ports are given hereunder: Gujarat has emerged as the leading state in cargo handling. While Kandla port in Gujarat accounted for the highest share (14 per cent) in Major Port traffic, Non-major Ports under the Gujarat Maritime Board collectively boasted the maximum Minor Port traffic (71 per cent).

This can be attributed to its proximity to the northern hinterland, pro-business government and a dynamic business community.

www.cargotalk.in

ì

KEy ISSuES IN mAJOR PORTS

Source: IPA and Deloittee

Although the sector witnessed significant growth in cargo traffic, it has still not been able to optimise operations owing to technical and institutional constraints (capacity constraint).

As per the latest statistics (2009-10), 8 of the 12 Major Ports are operating at more than optimum range of 70-75 per cent utilisation.

The ports of Vizag, Tuticorin, Mormugao and

SEPtEMBEr 2012 i cargotalk i 57

Study and Survey Shipping & Ports

MAjor AND NoN-MAjor PorTS ACroSS THE 11 INDIAN CoASTAL STATES AND INDIAN ISLANDS WEST CoAST oF INDIA

EAST CoAST oF INDIA

Maharashtra – 55 ports

Andaman & Nicobar Islands – 24 ports

Gujarat – 41 ports

Tamil Nadu – 18 ports

Kerala – 14 ports

Andhra Pradesh – 13 ports

Karnataka – 11 ports

Orissa – 3 ports

Lakshadweep Islands – 10 ports

West Bengal – 2 ports

Goa – 6 ports

Pondicherry – 1 port

Daman & Diu – 2 ports Total – 139 ports

Total – 61 ports

Source: Deloitte Analysis, Indian Ports Association

Mumbai are experiencing more than 100 per cent utilisation. Correspondingly, the average capacity utilisation at Non-major ports was at 77 per cent in 2009-10. This sets the background for faster development of port projects to ensure smooth flow of traded goods and growth of EXIM trade.

ì INEFFICIENT CARGO hANdLING ANd LOw PROduCTIVITy

A study placed in the Parliament in Feb 2010 by the Comptroller and Auditor General of India highlighted that cargo handling services at ports were inefficient. A predominant number of berths did not have the dedicated facilities necessary for the quick handling of cargo.

Around 55 per cent of the equipment available at all ports, except at the Jawaharlal Nehru Port Trust, were running beyond their rated economic lives, resulting in low utilisation.

ì CAPACITy uTILISATION AT mAJOR PORTS gUjARAT hAS EMERgED AS ThE LEADiNg STATE iN CARgO hANDLiNg. whiLE kANDLA PORT iN gUjARAT ACCOUNTED FOR ThE highEST ShARE (14 PER CENT) iN MAjOR PORT TRAFFiC, NON-MAjOR PORTS UNDER ThE gUjARAT MARiTiME BOARD COLLECTivELy BOASTED ThE MAxiMUM MiNOR PORT TRAFFiC (71 PER CENT)

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Wide variations were observed in efficiency among the 12 Major Ports. The average preberthing time on port account varies between 0.4 hours -23 hours. The average turnaround time also varies between two to five days.

In contrast, the turnaroundtime at globally competing ports like Singapore or Hong Kong is between four and six hours.

ì INAdEQuATE dRAFTS ANd POOR CONNECTIVITy

Future shipping trends point towards larger vessels with a minimum of 6,000-8,000 TEUs and a few vessels with 12000-14000 TEUs. These future generation vessels would require drafts between 13 to 15.5 m. Due to current draft restrictions, several Indian ports are unable

to handle larger vessels typically with more than 9.5 m and 12.5 m draft. This could lead to shipping lines/large shippers moving to other ports. Therefore, there is a need to firm up dredging plans and also improve productivity through removal of constraints like inadequate infrastructure, absence of seamless connectivity with other modes, etc.

ì dEmANd-SuPPLy SCENARIO OF PORTS

Indian ports have formulated ambitious plans for development of new ports, augmentation of existing facilities, mechanisation of ports, purchasing of modern cargo handling equipment and improvement in logistics to meet the challenges emerging from the anticipated growth in trade. The capacity at 13 Major Ports is likely to increase to 1459.53 million tonne by 2020. The capacity at Nonmajor Ports is expected to increase by 2020 to 1660.02 million Tonne. Thus, a surplus capacity of above 25 per cent over the projected demand is targeted by the Indian ports. This will enable the ports to provide berthing facilities on arrival of the ships, thus achieving zero pre-berthing detention for the vessels.

The proposed investment during the next ten years is expected to be Rs. 2.77 lakh crore – Rs. 1.09 lakh crore for Major Ports and Rs.1.68 lakh crore for Non-major Ports.

ì

CONTAINERISATION

The development of container trade and infrastructure depends upon ports, railways, roads, warehouses, shipping and logistics companies because they are the primary players dealing with containers. The advancement in overall trade and benefits due to adoption of containers for transport has brought forward the term “Trading in the Box”.

While the Non-major ports contribute significantly to the overall traffic, the containerisation traffic mostly belongs to the Major Ports. Only select Non-major / intermediate ports like Pipavav Port, Mundra Port etc. cater to the containerised traffic. The container infrastructure and trade is largely untapped by the non-major ports in India. The key reasons for it may be the greater drafts required for the large container ships or due to the large investments needed for containerrelated infrastructure.

Dedicated container terminals have been constructed across almost all the major ports to cater to the demand of container traffic. Private players have set up the CFSs/ICDs in proximity of the major ports. www.cargotalk.in

Study and Survey Shipping & Ports

CAPACITy UTILIzATIoN AT MAjor PorTS

Source: Indian Ports Association (IPA), Deloitte Analysis

ì POLICIES ANd TRENdS IN CONTAINERISATION More companies are considering transportation and logistics as an important factor for cost reductions and more developers are becoming interested in establishing the requisite infrastructure. The transport sector in India as a whole is currently undergoing a regulatory and policy level change. The following section provides an assessment of the salient features of various policy and regulations affecting the development of container infrastructure and in turn growth of container movement in India.

Infrastructure development is of great importance to the containerisation drive. The salient points for FDI in transport infrastructure sector are given as follows: n 100 per cent FDI in maritime infrastructure like ports, terminals, jetties, harbors, merchant shipbuilding n 100 per cent FDI in support infrastructure like warehousing, roads, inland.

whiLE ThE NONMAjOR PORTS CONTRiBUTE SigNiFiCANTLy TO ThE OvERALL TRAFFiC, ThE CONTAiNERiSATiON TRAFFiC MOSTLy BELONgS TO ThE MAjOR PORTS. ONLy SELECT NON-MAjOR /iNTERMEDiATE PORTS LikE PiPAvAv PORT, MUNDRA PORT ETC. CATER TO ThE CONTAiNERiSED TRAFFiC

60 i cargotalk i SEPtEMBEr 2012

ì hINTERLANd CONNECTIVITy FOR PORTS

Over the last two decades, India has seen multifold growth in its maritime sector, both in terms of number of operational ports and cargo volume. Adequate connectivity to the port acts as a catalyst to the growth of a port aiding better performance. Lack of proper connectivity has affected the growth and prospects of many ports. Despite having proper depth and adequate facilities, these ports are stranded for the want of containerised cargo, while the other ports are burdened with an excess they can’t handle. Keeping this in mind, the Government has already passed some regulations regarding the minimum required connectivity to the major ports. For

example, the Committee of Secretaries (CoS), Government of India has recommended that a minimum 4-lane road and double line rail connectivity be provided at major ports. Minor ports, which are now showing high growth, also consider connectivity as an important parameter to further growth in business.

The capacity and quality of the existing road/rail connectivity to Major Ports in India requires improvement to enable smooth inflow and outflow of cargo. The projects on rail and road connectivity are implemented by the Railways and National Highways Authority of India (NHAI) respectively, but in several cases, a significant financial contribution is also made by the ports. To understand the requirements of connectivity, we have to analyse the movement of cargo.

The requirement of ideal transport varies for different commodities. For example, coal is preferred to be carried through railway via rakes while petro-products are preferred to be carried through the pipelines or by lorries carrying huge containers so that it is easy for distribution to various users. The choice of development of the preferred/required mode of transport depends entirely upon the share of different types of cargo handled by a port.

For example, if JNPT specialises in containers and its maximum connectivity projects should be focused on the road and rail connectivity. In addition to cargo-type, the place of delivery of cargo and the feedback from the current and probable customers should also be accounted for while assessing the connectivity requirement.

Alternative modes of transport like coastal shipping which is more efficient, eco-friendly and cheaper must also be considered.

ì

POLICIES ANd REGuLATIONS

One of the functions of the Ministry of Shipping is to address the issues arising in the port sector and to facilitate the maritime development. The Ministry of Shipping and Directorate General of Shipping should also revise various rules / regulations meant for the promotion of the industry on a regular basis, in accordance with the international standards.

The prominent acts that guide the Indian Maritime Industry are Merchant Shipping Act, 1958, Major Ports Trust Act, 1963, The Draft Ports Bill, 2011, Cabotage Law, The Land Policy for Major Ports, 2010 etc. These policies and regulations should ensure that the Indian mercantile marine is efficiently maintained, safety in shipping and conservation of ports remain a priority, and stability is provided to the Indian bottoms. www.cargotalk.in

Port Performance Indian Ports

TRAFFIC hANdLEd AT mAJOR PORTS ( d u R I N G A P R I L T O N OV E m B E R ’ 2 0 1 1 V I S - A - V I S T O A P R I L T O N OV E m B E R ’ 2 0 1 0 )

(in ‘000 Tonnes)

Fertilizer Port

Traffic period

P.O.L

Raw

Coal

Container

Iron ore

Fin.

Ther- Cookmal ing

Tonnage

TEus Other Cargo

Total

232 232

64 219

7

4 -

-

3 4

2265 2168

151 131

1217 1604

3785 4234

-10.60

2332 2808

700 2173

54 36

84 76

733 884

1637 1981

923 760

51 49

3293 2837

9756 11555

-15.57

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

2564 3040

764 2392

54 43

88 76

733 884

1640 1985

3188 2928

202 180

4510 4441

13541 15789

-14.24

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

5344 5374

683 3471

30 24

904 1459

5679 5514

1693 2249

68 22

5 2

1793 1762

16194 19875

-18.52

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

5531 7181

4853 5998

467 734

168 289

1043 1075

2310 2794

1642 1175

90 65

4605 4974

20619 24220

-14.87

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

217 172

-

-

-

4460 3558

211 73

-

-

534 433

5422 4236

28.00

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

4495 4387

29

71 -

122 71

411

173

10358 10672

537 553

3336 4409

18382 20152

-8.78

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

293 305

-

107 254

228 319

2242 2086

41

2975 2847

157 155

3691 3610

9536 9462

0.78

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

4873 4274

-

22 33

79 51

-

16

1652 1720

109 120

295 285

6921 6379

8.50

6942 7903

1317 1100

193 77

9 21

-

1986 1452

243 250

13 17

537 690

11227 11493

-2.31

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

307 317

7365 10509

27 -

-

436 70

1932 2124

58 65

5 6

512 554

10637 13639

-22.01

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

11294 11360

-

30 27

135 37

1541 1341

-

217 171

19 19

6513 5102

19730 18038

9.38

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

1497 1692

-

-

-

-

-

20065 19077

1444 1431

659 826

22221 21595

2.90

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

17347 16789

279 305

824 1351

323 233

1159 1619

185 59

610 875

38 53

8504 7000

29231 28231

3.54

TRF APRiL-jULy’2012 TRF APRiL-jULy’2011

60704 62794

15261 23804

1825 2543

2056 2556

17293 16558

9957 10966

41076 39802

2619 2601

35489 34086

183661 193109

-4.89

-3.33

-35.89

-28.23

-19.56

4.44

-9.20

3.20

0.69

4.12

-4.89

%Var. against 2010-11

kOLkATA kOLkATA DOCk SySTEM TRF APRiL-jULy’2012 TRF APRiL-jULy’2011 hALDiA DOCk COMPLEx TRF APRiL-jULy’2012 TRF APRiL-jULy’2011 TOTAL: kOLkATA

PARADiP

viSAkhAPATNAM

ENNORE

ChENNAi

v.O.ChiDAMBARANAR

COChiN

NEw MANgALORE TRF APRiL-jULy’2012 TRF APRiL-jULy’2011 MORMUgAO

MUMBAi

j.N.P.T.

kANDLA

ALL PORTS

% variation from previous year

Source: Indian Ports Association

62 i cargotalk i SEPtEMBEr 2012

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Port Performance Indian Ports

PERFORmANCE INdICATORS:

(APRIL TO mARCh ’2012 VIS-A-VIS mARCh ’2011) 1. Vessels handled Port kOLkATA

Period

dry Bulk mech.

Conv.

239 269 853 998 317 352 715 778 92 87 507 502 226 214 359 373 693 700 153 160 957 916

328 358 57 55 75 22 219 166 52 22 524 558 476 411 35 38 157 89 36 27 560 709

APR-MAR. 2012 0 56 442 APR-MAR. 2011 0 64 475 kANDLA APR-MAR. 2012 0 715 1318 APR-MAR. 2011 0 684 1351 TOTAL APR-MAR. 2012 1461 3658 6871 APR-MAR. 2011 1614 3914 7175 (**) Refers To Dry Bulk Cargo for Mohp (Mech) and Berth No. 10 & 11 (Conv.)

163 93 456 431 3138 2979

hALDiA PARADiP vizAg ENNORE ChENNAi TUTiCORiN COChiN N.M.P.T. MORMUgAO ** MUMBAi

APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011

0 0 222 291 376 440 189 233 241 175 1 28 130 123 34 29 53 60 215 235 0 0

60 105 555 532 532 659 958 1015 0 9 222 281 295 275 16 19 153 168 48 55 48 48

Liquid Break Bulk Bulk

j.N.P.T

Container 577 570 291 355 28 14 351 277 0 0 789 812 365 379 387 360 80 80 48 27 14 14 JNPCT 708 713 225 226 3863 3827

Total

NSICT GTIPL 590 933 633 1148 590 633

933 1148

1204 1301 1962 2189 1328 1487 2432 2469 385 293 2043 2181 1492 1402 831 819 1136 1097 500 504 1579 1687 2892 3126 2714 2692 20498 21247

(in NOS.)

% Variation -7.46 -10.37 -10.69 -1.50 31.40 -6.33 6.42 1.47 3.56 -0.79 -6.40 -7.49 0.82 -3.53

Source: Indian Ports Association

II. Average Pre-Berthing Time(under Port A/C) Port kOLkATA hALDiA PARADiP vizAg ENNORE ChENNAi TUTiCORiN COChiN N.M.P.T. MORMUgAO ** MUMBAi

j.N.P.T. kANDLA OvERALL:

Period

dry Bulk mech.

Conv.

Liquid Break Bulk Bulk

APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011

0 0 4.96 15.09 0.85 1.58 1.87 2.77 0.02 0.01 0.75 1.23 0.96 3.12 1.71 2.81 1.20 0 24.13 19.93 0 0

0 6.14 14.42 32.59 1.93 4.00 2.87 2.96 0 0 1.50 1.56 32.88 21.12 8.82 0 0 0 7.53 29.38 2.65 2.06

1.97 9.72 17.24 23.47 0.09 0.81 1.70 1.44 0.01 0.02 1.07 1.03 14.64 8.40 2.06 2.83 1.44 0.96 12.19 13.41 11.42 12.55

0.83 3.99 11.48 28.45 2.03 4.74 3.30 4.69 0.02 0 0.85 0.89 31.92 11.76 0 1.58 0 0 5.07 20.11 1.85 3.09

APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011 APR-MAR. 2012 APR-MAR. 2011

0 0 0 0

17.76 25.68 92.64 88.32

26.40 37.92 6.00 4.80

10.08 29.74 91.20 69.84

Container 0.05 0.11 3.85 16.27 1.15 0.68 1.04 0.35 0 0 0.75 0.78 0 0 5.50 7.08 0 0 0.39 1.51 6.07 0.71 jNPCT 11.28 22.80 4.80 2.88

Total 0.67 3.45 13.05 25.65 1.17 2.51 2.22 2.28 0.02 0.01 0.94 0.97 18.96 9.36 3.69 4.57 0.96 0.72 15.23 17.91 7.71 8.18

NSiCT 3.12 5.76

gTiPL 0.48 1.20

8.40 13.68 42.96 36.24 11.01 11.76

% Variation -80.58 -49.12 -53.39 -2.63 100.00 -3.09 102.56 -19.26 33.33 (*) -14.96 -5.75

-38.60 18.54 -6.38

(*) Tentative Calculations (**) Refers To Dry Bulk Cargo For Mohp (Mech) And Berth No. 10 & 11 (Conv.)

Note : % variation in Negative Denotes improvement.

64 i cargotalk i SEPtEMBEr 2012

Source: Indian Ports Association

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view Point CEo Talk

hikE iN

AIRPORT ChARGES

delhi Airport to face consequences, says IATA There are huge possibilities of downturn of traffic at igi Airport owing to the hike of airport charges at this airport by 346 per cent. According to Tony Tyler, Dg & CEO, iATA, air traffic will be reduced from this airport if the same is not rationalised. Delhi international Airport Limited (DiAL), however, maintained that the hike was obvious and it would not harm consumers.

i

n view of the turbulence that the aviation industry is facing in India, the recent hike of airport charges at the IGI Airport in New Delhi will put the entire sector in serious crisis. There is a strong possibility that consumers will bypass this airport by choosing alternative airports or mode of transport to avoid the extra burden on them.

The ultimate loser will be the airlines and allied service providers, and of course the gateway airport itself. Experts believe that this would be a serious shock for the entire civil aviation industry in India.

ThE CRISIS

Tony Tyler

FAULTy STEPS AND POLiCiES viz. ThE hUgE hikE OF AiRPORT ChARgES AT igi AiRPORT, ExORBiTANT TAxES ON AviATiON TURBiNE FUEL (ATF) AND ExiSTiNg FDi POLiCy FOR iNvESTiNg iN iNDiAN CARRiERS ARE ThE MAjOR FACTORS ThAT ARE jEOPARDiSiNg ThE FUTURE OF AviATiON iNDUSTRy iN iNDiA

66 i cargotalk i SEPtEMBEr 2012

Expressing his concern while speaking at a CII-IATA Aviation Meet on ‘Building the Future of Indian Aviation’ in New Delhi, Tyler maintained that despite huge potential of becoming an aviation hub, India is in deep crisis as far as the growth of this sector is concerned. Faulty steps and policies viz. the huge hike of airport charges at IGI Airport, exorbitant taxes on Aviation Turbine Fuel (ATF) and existing FDI policy for investing in Indian carriers are the major factors that are jeopardising the future of aviation industry in India.

“It’s time for a grand plan to build India’s aviation future and thereby strengthen the Indian economy. Therefore, this crisis must be resolved with coordinated public policies. To do that, we need an ‘India Inc.’ approach that addresses the crippling issues of high costs, exorbitant taxes and insufficient infrastructure,” stressed Tyler.

According to him, expense is the prime concern for airlines at this moment.

“Accordingly, low cost with sufficient and world standard facility would help an airport to become a successful hub,” Tyler maintained. He also observed that at present structural issues

and policies are spoiling the future of aviation industry in India. At the same time, foreign carriers are losing interest in this country.

Tyler underlined the fact that to operate IGI Airport, Delhi, DIAL pays 46 per cent of top line revenue to the Airports Authority of India (AAI) as a concession fee, much of which is used to subsidise other public sector airports. “This is in contravention of international standards. It distorts competition and compromises Delhi’s cost competitiveness,” Tyler argued.

Tyler urged the government to initiate deliberations on utilising the 46 per cent concession fee to offset the increase in aeronautical charges.

“This could be the basis for a way forward that protects the interests of DIAL, its airline customers, users and the economy. And it is important that we find a workable solution soon to avoid Mumbai, with a similar concession structure, falling into the same dire situation,” Tyler shared.

H e also urged for quick decision and announcement of the much desired National Civil Aviation Policy, to end ambiguity in policy and clear strategy on the development of the aviation industry. “There will be no success if policies are not coordinated, or if they work at cross purposes. Aviation is the responsibility of the Ministry of Civil Aviation, though, its success rests on the coordinated efforts of other Ministries,” Tyler viewed. He strongly advocated that India needs to adopt an ‘India Inc’ approach for the greater interest of the civil aviation industry as well as the entire economy of the country. www.cargotalk.in