Cargotalk September 2013
RNI No.: DELENG/2003/10642 Date of Publication: 22/8/2013
Vol XIII No.10 Pages 60 Rupees 50 cargotalk.in By DDP Publications
South Asia’s Leading Cargo Monthly No.1 in Circulation & Readership
Postal Reg. No.: DL (ND)-11/6002/2013-14-15. WPP No.: U (C)-272/2013-15, for posting on 25th-26th of advance month at New Delhi P.S.O.
Air Cargo Village in Delhi
DIAL’s target is 2015 to start operation
Fashion Logistics
Of Evolving Demands in Logistics and SCM
editorial
Editor
4 i cargotalk i september 2013
Sr. Sub Editor HRitvick sen
Regional Head: North & West shiv kumar Assistant Manager: West Roland Dias
A
SanJeet
Sr. Assistant Editor Ratan Kumar Paul
Deputy General Manager Harshal Ashar
transport and logistics
Driven by the forces of technological innovations and progressive globalisation of its business profile, the Indian economy has undergone a paradigm shift during the period. Accordingly, relevant to the transport sector, these changes broadly include infrastructure and technological developments associated with growth in performance levels of different modes of transport. As a first step, a state-wise list of check-posts around major cities, industries, ports, etc. were identified using cordoning approach aimed at capturing
Editor SanJeet
Asst. Vice President Gunjan Sabikhi
Integration for
few years ago, it was identified by the Planning Commission that the main challenge is to have a coordinated and integrated approach to transport planning. The coordination will ensure that competition is not wasteful, and that network effects develop in an environment of complimentary compatibility. Such an integrated approach inherently entails the following aspects: Integrating the planning for different modes in synergy with each other, and allocating to each mode the traffic in accordance with its niche domain of cost advantage, rather than stand-alone system for mode-specific funding. These would necessarily involve an understanding of the transportation market, reason for system failures and the need and scope for government intervention. Initiatives in this direction may also interalia include fiscal measures like taxation, user charges, etc and nonfiscal measures like positive inducements of facilities, services and incentives.
Cargotalk
Sr. Marketing Co-ordinator Gaganpreet Kaur Design ruchi sinha Photo Journalist simran kaur
an optimal sample of interregional traffic. Their physical sites were firmed up in consultation with officers of the PWD and Departments of Economics and Statistics of the related State Governments, taking into consideration the operational convenience e.g. adequacy of space for parking of goods vehicles on either side of the road, so as to cause minimum disruption to traffic. In meeting the above requirements, efforts have been made to use suitable alternative sites like Octroi, Excise, Sales Tax and Toll Gate checkposts for trucks/other goods vehicles. Unfortunately, the industry still experiences tremendous hurdles on national highways, resulting in huge transit time and transaction costs. The same has put Indian logistics under serious pressure. In absence of a nodal agency (maybe a logistics board or a separate ministry for logistics), the industry is now a nobody’s baby. The sooner an integrated initiative is taken not only for transport, but also for logistics industry at large, the better the national economy will grow as per its potential. It is therefore of significance that both the Planning Commission and industry bodies are thinking seriously in this direction.
Advertisement Designer Vikas Mandotia, Nitin Kumar Aarushi Agrawal Production Manager Anil Kharbanda Circulation Manager Ashok Rana DDP Publications Private Limited New Delhi: 72 Todarmal Road, New Delhi – 110001, India. Tel.: +91 11 41669575, 41669576 Fax: +91 11 41669577 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: Z1-02, P.O. Box 9348, Saif Zone, Sharjah, UAE Tel.: +971 6 5528954, Fax: +971 6 5528956 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. Contents of this publication are copyright. 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.
www.cargotalk.in
Contents September 2013
38 I Airport-wise international cargo performance for May 2013 in India
International News
Industry Meet 45 I Retail and FMCG industry eyes eCommerce segment in a big way
12 I 10th Sino-International
Freight Forwarders Conference to attract over 12,000 participants
Trade Opportunities
International Airports 14 I Cargo Village at Delhi Airport will be operational by 2015
50 I EEPC focusses on
35 I Construction of Navi
52 I Agility India delivers
Mumbai Airport to be awarded by Jan, 2014 On the Move
16 I AirBridgeCargo
Airlines, TIACA, Railway Board
Industry Associations 18 I CASS will not benefit the air cargo agents: ACAAI
22 I DACAAI Convention: Domestic Air cargo agents find ways to arrest the decline 25 I NTDPC pushes for
formation of nodal agency for logistics Cargo Performance
African countries to offset slowdown Products & Services
temperature-sensitive shipment securing special permission Shipping & Ports
54 I Shreyas connects
East and West to enhance containerised cargo movement
COLUMNS Exclusive Interview 24 I Apparel export is bouncing back Logistics Services
40 I Safexpress plans
high for catering demands from fashion industry View Point
34 I Airlines-wise exim
44 I Gati-KWE eyes big
35 I Airlines-wise exim
56 I Om Logistics:
cargo performance from Delhi Airport for July 2013 cargo performance from Mumbai (MIAL) Airport for July 2013
36 I Airport-wise domestic
cargo performance for May 2013 in India 6 i cargotalk i september 2013
Photo source: pagesdigital.com
SECTORS National News 8 I Chhattisgarh to get second airport at Raigarh
share in eCommerce pie Green Initiatives
Compliance for ecological balance
Customer’s Perspective 58 I New age customer wants delivery with less cost and transit time
n Cover story
26 I Fashion Logistics
Of Evolving Demands in Logistics and SCM
The fashion logistics industry is likely to get a boost in the days to come, if forecasts and present market trends are taken into account. According to recent researches, the domestic apparel industry in India grew at a CAGR of 10 per cent from `1,260 billion in FY-07 to `2,026 billion in FY-12. There will also be policy reforms, an expected revival in economy and entry of new brands to support the recovery of apparel demand in FY-14. The export sector, on the other hand, is also witnessing a reasonable growth. Cargotalk presents an industry perspective‌ www.cargotalk.in
National News Infrastructure Update
Chhattisgarh to get its second airport at Raigarh Recently, the Airports Authority of India (AAI) has signed a Memorandum of Understanding (MoU) with the State Government of Chhattisgarh for development of Raigarh Airport at the estimated cost of `280 crore. The MoU was signed in presence of Raman Singh, Chief Minister of Chhattisgarh.
JBS Academy gets approval to eight logistics courses from Government of Gujarat Recently, JBS Academy (JBSA) has received the go-ahead for its eight courses that it had submitted for three verticals viz, Customs Clearance, Freight Forwarding and Custodians’ Functions for approval by Gujarat Council for Vocational Training (GCVT). According to the JBS Academy sources, the GCVT has fully approved the contents of the syllabus, thus strengthening the zeal of the JBSA to take the logistics education to larger audience and greater depth. These tri-level programmes are designed to be delivered within 120/ 180/240 hours including full exposure to hands on training. Thus, this will give them the capability of independent operation in these fields. While the corporates will be happy to get job-ready manpower, the government institutions can also come up with synergistic efforts to train more people within shorter periods. The JBS Academy is a partner to many renowned organisations like CII Institute of Logistics, National Skill Development Corporation, Chartered Institute of Logistics & Transport (UK), Narottam Morarjee Institute of Shipping and some others. 8 i cargotalk i september 2013
p VP Agrawal, Chairman, AAI and Subodh Kumar Singh, Secretary Aviation, Government of Chhattisgarh exchanged MOU, in the august presence of Raman Singh, Chief Minister, Chhattisgarh
T
he function was chaired the Chief Minister, Chhattisgarh. VP Agrawal, Chairman, AAI and Subodh Kumar Singh, Secretary Aviation, Government of Chhattisgarh signed the MoU. Also present at the function were Sunil Kumar Chief Secretary, DS Mishra, Addl Chief Secretary (Finance), N. Baijendra Kumar Principal Secretary and Chairman NRDA, and senior officials of the State Government and Airports Authority of India. Raigarh Airport will be the second airport for domestic flights in the state. State Government has provided 592 acres of land to AAI for Construction of the airport. Addressing the gathering, Agrawal commended the Chhattisgarh Government for reducing the tax on ATF from 25 to 5 per cent; as a result of which the number of domestic flight operations and passenger movement have increased significantly.
On this occasion, the Chief Minister declared that the tax on ATF will be further reduced from 5 per cent to 1 per cent on commencement of International flights from Swami Vivekananda Airport, Raipur. Agrawal declared that the Construction of Airport at Raigarh will begin immediately on receipt of the land. The Airport will be developed in two phases. In the 1st phase the airport will be developed as suitable for the operation of Q-4 type of aircraft having runway length of 1,870 meters with width of 45 metres. The 2nd phase of the airport will be developed for operation of A-321 type of aircraft. On this occasion, the Chief Minister handed over the possession of 350 acres of land to Chairman AAI for further development and up gradation of Swami Vivekananda Airport as an International Airport. www.cargotalk.in
Industry News News in Brief
DB Schenker displays supply chain solutions for solar industry The solar industry in India is a forward-looking industry characterised by permanent development of its technologies in recent years. To contribute to its development, DB Schenker in India was present at ‘Solarcon India 2013 Expo’ to showcase its global capabilities for solar industry supply-chain solutions. The 2013 edition of exhibition was held recently at KTPO Exhibition Centre in Bengaluru. This exhibition is one of the biggest for the solar industry in India serving stakeholders from every stage of supply chain on one platform. THe DB Schenker stall witnessed more than 200 visitor footfalls during the three-day exhibition.
Celebi unveils Pharma Logistics Centre at Cargo Terminal 1 Recently, Celebi Delhi Cargo Terminal Management has introduced a state-ofthe-art Pharma Logistics Centre at Cargo Terminal 1, which is an extension to the existing Centre for Perishable Cargo. Salient features of the new pharma facilities include exam area – fully air conditioned (15-25 deg. c), bonded area to store cargo (15-25 deg. c), different cold storage rooms catering to different temperature requirements and a huge chamber where large number of palletised ULDs can be stored. Celebi is now able to process pharma shipments more effectively with enhanced focus on maintaining the temperature sensitivity of the pharma shipments. In addition, another dream project called ‘Cool Dolly’ will also be in place very soon to maintain the cool chain from the terminal to the aircraft and vice-versa.
CII Logistics urges for separate ministry for logistics In view of the tremendous challenges and issues being faced by cargo and logistics industry in India, and the lack of integration among the government agencies and policy makers, the CII Logistics will push the idea of having a separate ministry for logistics. Currently, the leading industry body in the country is discussing the matter within the organisation to give a concrete shape to this popular demand. Speaking to Cargotalk at the recently held CII Institute of Logistics’s ‘Next Generation Supply Chain 2020’ Conference held in New delhi, Cyrus Guzder, Chairman, CII Institute of Logistics, Advisory Council and CMD, AFL said that the cargo and logistics industry must have industry status. And, it is very difficult to address this long-pending industry issue without a nodal and powerful ministry. Supplementing Guzder, R Dinesh, Co-Chairman, CII Institute of Logistics Advisory Council and JMD, TVS & Sons maintained that though it apparently looks like an early demand, it is true that until and unless the industry gets a separate ministry, the country cannot expect seamless logistics operation and growth of its economy.
AITWA introduces ‘Carriage by Road Cost Index’ at ‘Trade Manthan’ The All India Transport Welfare Association (AITWA) recently hosted a workshop called ‘Trade Manthan’ in New Delhi. The event was attended by leading transport companies from across the country along with the representatives from the Ministry of Road Transport and Highways. At this workshop AITWA unveiled ‘Carriage by Road Cost Index (CRI)’ which was prepared and presented by Mahendra Arya, President, IRTDA. CRI has been designed to reflect the effects of changes in the input prices of transportation on the overall costing. It also defines the share of cost of different components like diesel, tyre, toll, capital investment, maintenance and road taxes—for the first time in India. 10 i cargotalk i september 2013
www.cargotalk.in
International News Events Update
10th Sino-International Freight Forwarders Conference to attract over 12,000 freight forwarders
The event this year will see confirmed participation from top-level executives representing China’s largest logistics companies – all of which are actively seeking new international partners and business relationships.” Zhao Huxiang
CIFA President and Vice-President of FIATA Extended Board
O
ver 1,200 of the world’s leading independent freight forwarders will gather in Xiamen, China from 16-19 September for logistics networking. Co-organised by China International Freight Forwarders Association (CIFA) – the country’s leading logistics organisation, and WCA – the world’s largest freight forwarder’s network, the annual Sino-International Freight Forwarders Conference is celebrating its 10th anniversary.
According to Zhao Huxiang, CIFA President and Vice-President of FIATA Extended Board, the event is a vital tool in the creation of new partnerships between freight forwarders all over the world. In 2012, it attracted 1,105 delegates from over 115 countries. “The event this year will see confirmed participation from top-level executives representing China’s largest logistics companies – all of which are actively seeking new international partners and business relationships,” he said.
Open to all independent freight forwarding companies from around the globe, as well as logistics vendors and suppliers, the Sino-International Conference attracts key decision-makers.
Huxiang also informed that all delegates will be able to pre-arrange their meetings using the one-on-one scheduler. Over 70,000 individual meetings will be scheduled and conducted during the event.
News in Brief
ICAO, IMO and WCO strengthen ties for global supply chain security
R
ecently, the Secretaries General of the Internationals Civil Aviation Organisation (ICAO), International Maritime Organisation (IMO) and the World Customs Organisation (WCO) met at IMO headquarters in London yesterday to enhance collaboration between their organisations on aviation, border and maritime security and facilitation. Raymond Benjamin (ICAO), Koji Sekimizu (IMO) and the WCO’s Kunio 12 i cargotalk i september 2013
Mikuriya welcomed the opportunity for a strategic dialogue on supply chain risk management issues that cut across the mandates of international organisations. ICAO and the IMO perform their roles as specialised agencies of the United Nations, while the WCO is an independent intergovernmental body. Commenting on the importance of the joint efforts, Benjamin said, “The aviation
community has long recognised that the constantly evolving threats posed by global terrorism must be met with highly coordinated transportation security and border control measures. Coordination and cooperation, with partners such as the IMO and WCO, helps us to better anticipate and mitigate these threats while minimising adverse impacts on international passenger and trade flows.” www.cargotalk.in
International Airport Infrastructure Update
Cargo Village at Delhi Airport
will be operational by 2015 The much awaited Cargo Village at Delhi International Airport will start functioning by 2015, confirmed Pradeep Panicker, CCO, Delhi International Airport Limited (DIAL), while interacting with Cargotalk.
C
urrently the process of RFP (request for proposal) is on and several bidders have already submitted their proposals. The RFP will be closed by September 30 this year and the Cargo Village project will be awarded to successful bidders by January 2014. The construction works is likely to start by April 2014 and commercial operation is expected to start by 2015. DIAL has identified approximately 40 acres of land in close proximity to the Cargo Terminals for the ambitious Cargo Village project. It will have approximately 60,000 sqm for warehousing and 19,000 sqm of office space. In addition, the Village will have parking facilities, public services, banking and canteen. There will be a Central access gate to Cargo Village and Cargo Terminal area.
The Cargo Village will drastically reduce cargo processing and clearing time at the airport, resulting is enhancement of volume of cargo� Pradeep Panicker
CCO, Delhi International Airport Limited
According to the DIAL official, the Cargo Village will drastically reduce cargo processing and clearing time at the airport, resulting is enhancement of volume of cargo (both export and import). Though there is a lull in demand, DIAL is
Hyderabad Menzies launches new cold storage facility for import cargo
H
yderabad Menzies Air Cargo has launched new Import Cold Storage facility at Import Terminal for handling Import Pharmaceutical, Perishables & Biotech commodities. The New Facility consists of two chambers which are +15 to +25 degrees C & +2 to +8 degree C 14 i cargotalk i september 2013
inside the bonded Area. The new Import Cold Storage facility is built over 141 Sq. MT. , 14.73 metres length by 9.54 metres width with one-time holding capacity of 21 MT in +2 to + 8 Degrees Celsius and 25 tonnes in +15 to + 25 degrees C.
optimistic the growth will be remarkable by the time the Cargo Village is ready for operational.
Recent Developments at the IGI Airport in Cargo
n Cargo Terminal Infrastructure Enhancement n Current Area: Approximately 1,20,000 sqm n After final phase of Cargo Terminal-2 capacity to reach 1,40,000 sqm n Cargo Terminal 1 completely renovated with state of the art infrastructure n Cargo Terminal 2 under development. Phase – 1 completed and operational. Area approximately 48,500 sqm n Phase -1 of Cargo Community Systema, a common IT platform for air cargo stakeholders is operational. Phase-2 under development n Transshipment Facility at airside n Air Freight Service (AFS) at Kapur and Ludhiana, more to come n Road Feeder Service from Ahmedabad n 24 x 7 customs clearance
Services offered
n Acceptance of Import Perishables, Pharmaceutical and Biotech cargo n Quality cold chain management n Temperature recording round the clock n Facilitation of temperature data to the customers up on request n Temperature tracking and monitoring n Security surveillance round the clock www.cargotalk.in
On the Move Appointments
AirBridgeCargo Airlines D
enis Ilin has been appointed as Executive President of AirBridgeCargo Airlines (ABC), Russia’s largest international scheduled cargo airline. He took over charges on August 1, 2013. He worked for several years as Head of Aviation for Basic Element, the Russian financial and industrial Group, where his main responsibilities included aviation business development. Ilin previously held several leadership roles in Volga Dnepr Group, including Manager of Volga Dnepr UK (United Kingdom), General Director of AirBridgeCargo, Strategic Management Advisor to ABC’s General Director, and Senior Vice President, Strategic Marketing and Sales, and has made a significant contribution to the establishment of Volga Dnepr Group’s scheduled cargo business.
Railway Board D
evi Prasad Pande recently took over as new Member Traffic, Railway Board and ex-officio Secretary to Government of India. Prior to this new posting, he served as General Manager, South Central Railway (SCR), Secunderabad. Born on 15th January, 1955 at Kanpur, Pande did his MA in Modern History from Allahabad University. An officer of Indian Railways Traffic Service (IRTS) of 1976 batch, he has rich and varied experience in Operations and Commercial branches and has held several important executive and managerial posts on Indian Railways.
16 i cargotalk i september 2013
The International Air Cargo Association T
he International Air Cargo Association (TIACA) has appointed Doug Brittin as its new Secretary General, effective August 15th 2013. Doug brings over 33 years of experience to the post, which has included senior roles in the transport and logistics industry as well as in government. During a long career in the transportation industry, Doug held executive level sales, marketing and operational positions with leading companies such as BAX Global, Panalpina, Emery and Menlo Worldwide. He also has experience of the rail and trucking sectors. In 2007, he joined the U.S. Transportation Security Administration (TSA) as Air Cargo Manager, where he was responsible for the development of the Certified Cargo Screening Programme, as well as policy, forwarder programs and screening technology development. In May 2010, he was promoted to Division Director, Air Cargo at TSA headquarters in Arlington.
www.cargotalk.in
Industry Associations Current Issues/Logistics
CASS will not benefit the air cargo agents: ACAAI In the July issue of Cargotalk, we had published an interview with SL Sharma, Vice President, Air Cargo Agents Association of India (ACAAI) on the current issues pertaining to international air cargo industry in India. According to him, in that interview an impression appeared to have been created as if ACAAI is not against Cargo Account Settlement System (CASS) as long as it is under the umbrella of Indian Air Cargo Programme (IACP). Sharma, presents more clarifications on this point, in view of the huge importance of the issue.
A
ccording to Sharma, since 2006, the year when IATA first mooted the introduction of CASS in India, ACAAI consistently maintained its view and many a times asserted through various documents that the forwarders industry has a serious objection to the introduction of CASS in India since it is a unilateral decision of IATA, which was
The association is of the concerted view that the terms and conditions of IATA are inequitable and unfair to the forwarders” SL Sharma
Vice President, Air Cargo Agents Association of India (ACAAI)
mooted and undertaken by it without any appropriate consultation with ACAAI. The association is of the concerted view that the terms and conditions of IATA are inequitable and unfair to the forwarders. In ACAAI’s view, CASS does not provide any benefit or advantage to the operations of agents. ACAAI also pointed out that while CASS claims to improve their cash flows “as the CASS rate of success in collecting funds is virtually 100 per cent” in other jurisdictions, it is imperative to mention that in India, the success rate in agent payments to airlines has remained at virtually 100 per cent over the last 40 years without CASS. Much of this is accorded to the responsible behaviour of the cargo agents, who have invested their own funds to pay the airlines on time and in full, regardless of the delays and defaults in payments from the shippers, who in fact are the airlines’ customers. Sharma also denounced any perception that “air cargo agents seek adequate time to get the industry streamlined for a successful implementation of CASS”. “In fact, most air cargo agents already have automated operations, with capability for EDI exchanges with the carriers, terminals and regulators. Hence, the matter of CASS is not a technology issue at all,” he said. Moreover, ACAAI is also very concerned with the introduction of CASS without adequate data protection arrangements at IATA. Sharma also emphasised that ACAAI has also promoted, in cooperation with Kale Logistics Solutions, the establishment of UPLIFT (Universal Platform for Logistics and Integrated Freight Transport), an EDI platform or CCS through which all players in the air cargo industry can be connected. “Thus, ACAAI members are fully enabled to commence EDI operations.”
CRWC celebrates Foundation Day
C Sudhir Kumar 18 i cargotalk i september 2013
entral Railside Warehouse Company (CRWC), recently celebrated its Foundation Day on Monday, at Singhania Auditorium, PHD Chambers of Commerce. CRWC, a Public Sector Undertaking under the Ministry of Consumer Affairs, Deptt. Food and Public Distribution, was incorporated on
July 10, 2007. The Company provides multi-modal Logistics to the trade and supports Indian Economy in reducing logistics cost. Hosted by Vinod Asthana, MD, CRWC the event was addressed by Sudhir Kumar, Secretary (Food & Public Distribution), Government of India. www.cargotalk.in
Industry Associations Conference
NTDPC pushes for formation of nodal agency for logistics In view of the lack of coordination between various ministries at the Central Government as well as state government levels, the National Transport Development Policy Committee (NTDPC), Government of India will recommend to set up a nodal agency for logistics. u Poul V. Jensen, Vinod Asthana, Saurabh Sanyal, R.S. Bedi, B.N. Puri, B.B. Pattanaik and Ranjeet Mehta releasing a Knowledge Paper “ Multimodal Logistics in India : An Assessment” prepared by PHD Chamber and European Business and Technology Centre (EBTC)
S
peaking at the Conference on Multimodal Logistics, which was recently organised by PHD Chamber; BN Puri, Consultant Planning Commission (Transport) and Member-Secretary, NTDPC maintained that there is an urgent requirement of a nodal agency for logistics. “We are seriously considering the matter at the Planning Commission and will recommend the forming of a nodal agency for logistics industry by the Government of India,” said Puri. The Conference was attended by more than 120 delegates that included senior government officials from Ministry of Railways, senior officials from embassies; senior officials from private companies working in the logistics sector, consultants specialising in logistic sector;
Share of various modes in mix across the globe Countries Modes of Traffic Road Rail Water Air Europe India China US
46% 60% 30% 37%
10% 31% 23% 48%
20 i cargotalk i september 2013
43% 8% 46% 14%
1% 1% 1% 1%
representatives from the industry; media and more. The PHD Chamber appealed for the creating of adequate infrastructure for multimodal transport and logistics industry, to keep pace with the projected growth of manufacturing, domestic economy and export market. According to Saurabh Sanyal, Executive Director, PHD Chamber, India has experienced fast-paced growth over the last decade. Though the growth has primarily come from the services sector, manufacturing and exports have also risen substantially. Logistics, as a function, is being increasingly outsourced by manufacturers. However, the Indian logistics sector in many ways still lags behind the global standards of performance. He emphasised that with more and more players from the manufacturing sector relying on multimodal transportation, the potential for this segment of logistics is enormous. A coordinated approach is required from an empowered government body to oversee all infrastructure projects spanning road, rail, air, coastal shipping and inland waterways. RS Bedi, Chairman, Task Force on Logistics Management, PHD Chamber emphasised that for developing an efficient intermodal/multimodal transport system, there is a need to look into the three principal issues which are infrastructure development, regulatory/policy reforms and investment in technology. Poul V.
Jensen, Director, European Business and Technology Centre (EBTC) also emphasised that technology is one of biggest drivers for the logistics industry. Vinod Asthana, Managing Director, Central Railside Warehouse Company (CRWC), in his presentation, stated that logistics has become a fast-expanding business that includes transportation, warehousing, preservation, packaging, and other value-added services. He also stated that Containerisation, Development of Highways, Development of Ports, Dedicated Freight Corridor, Railside Warehousing, Free Trade Warehousing Zones, Warehousing Development and Regulatory Authority (WDRA) and National Centre for Cold Chain Development (NCCD) are some of the key initiatives taken by the government for the development of the logistic sector. He highlighted various issues that the logistic industry of the country is facing. Asthana advocated for a Regulatory Body for the development of the logistic sector. BB Pattanaik, Managing Director, Central Warehousing Corporation (CWC) stated that due to poor quality of infrastructure, the multimodal logistic industry of the county is facing a huge problem. For example, rail infrastructure in the last 10 years has grown slowly, and the use of inland water bodies has not been utilised optimally. www.cargotalk.in
Trade Associations DACAAI Convention
Domestic Air Cargo Agents
Find ways to arrest the decline The Domestic Air Cargo Agents Association of India (DACAAI), which held its 4th Trade Convention on August 9 in Delhi, discussed many ways how to counter the successive decline of domestic air cargo movement in the country. Industry veteran and Chairman, CSC India, Tushar Jani set the tune of the event as the chief guest. The convention experienced a scintillating presentation from eminent research scholar Dr Pawan G Agrawal on Supply Chain Management by Mumbai Dabbawala and Paperwala.
D
uring last couple of years, the domestic air cargo agents have been under tremendous pressure because of reduced volume of cargo and drop in yields. There has been a sharp shift of customer profiles, changes in mode of operation and emergence of new segments and areas (ie T-II and T-III cities). In addition, lack of infrastructure for domestic air cargo operations, security hassles and overall apathy from facilitators, compelled trade practitioners to have another look at their products, services and their capability to satisfy emerging customers. “Yes, the domestic air cargo industry is running through rough weather. It should also be remembered that the prevailing scenario is the reflection of the present world and Indian economy, as well as the changing requirements of customers. The situation is demanding as well as challenging,” said Jani. He however, underline the fact that this cycle will see an end very soon, and there will be substantial consumption (and hence cargo movement) in due course of time. And, 22 i cargotalk i september 2013
this time there will be huge growth from Tier-II and Tier-III cities. “Air cargo will be the major beneficiary. It is seen in the world’s developed countries like USA, that despite a very strong surface network in this country, air cargo plays a very important role with almost 100 per cent load factor, as compared to little more than 60 per cent load factor in India,” he pointed out. According to him, the problem lies in the lack of basic, suitable infrastructure, and services offered by industry stakeholders. In addition, there is a dire need of exploring new revenue-generating ideas. “The domestic cargo agents have to change their way of business, and add new products and services to grow in the years to come. The entire distribution network will see a sea-change because of new developments taking place (viz multimodal transport system, GST and DFC). Go from airportto-airport to end-to-end solutions,” Jani suggested. Also, he emphasised on skilled manpower development to cater to the future logistics demand. At present, the logistics industry needs half a million skilled manpower units across the country.
Later speaking to Cargotalk, Gaurav Ghuwalewala, President, DACAAI informed that the Convention was focussed on searching for new avenues and skill development. “We had a very fruitful interaction at this convention, combining all stake-holders of the domestic air cargo industry from across the country. We will continue the process through the year by organising seminars, workshops and training sessions to benefit our members and the industry as a whole,” he said. The Convention was also addressed by Deepak Brara, Director Commercial, Air India; Amit Gulati, DACAAI; Vijay Kumar, COO, EICI; Tamil Rajan, Logistics Consultant, Firstcry.com; Hemanth DP, COO, Airport Sector, GMR HIAL; Amit Bajaj, GS, DACAAI; Hareendranathan, ED Cargo, AAI; Radharamanan Panicker, CEO, CSC India; K Rammohan, Senior GM, Jet Airways; K Ravindran, Head Safety and Security, HMACPL; Govindarajan Bashyam, Suraj Agarwal, VP, DACAAI and several other industry practitioners. www.cargotalk.in
Exclusive Interview Manufacturers & Exporters
Apparel export is bouncing back After witnessing a lull for quite some time, apparel exports touched US$1,240 million in June 2013-14. This was an increase of 12.13 per cent against the corresponding month of last financial year. Factory compliant manufacturing in India has surged with new and unprecedented export orders in the current season. World renowned chain stores and international brands have preferred expanding their sourcing of merchandise from India. n Ratan Kr Paul
I
ndian apparel exports in the last fiscal were down by six per cent amounting to US$12.9 billion. During the current fiscal year, exports have shown a robust growth of 10 per cent. “In the next 10 months of the current fiscal, exports would touch around US$16 billion, provided we keep growing at the same pace. An increase in the April-June month of FY 2013-14 is attributed India’s good performance in US & EU market. India’s exports to these markets increased by an average of 16 per cent. At the end of the current financial year, we are expecting a growth
Over 24 export promotion events are planned for FY 2013-14, including participating in seven international fairs, organising six overseas buyer seller meets, and 11 domestic export promotion events.” A Sakthivel
Chairman, Apparel Export Promotion Council (AEPC)
24 i cargotalk i september 2013
of around 15-16 per cent, if other factors keep supporting the current rate of export growth. Accordingly, by the end of FY 2013-14, apparel export would be around of 95 per cent of the target. The Ministry of Commerce has given US$17 billion as apparel export target for 2013-14,” said A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC).
New Markets
To achieve targets, Indian apparel exporters have targeted non-traditional markets like Chile, Uruguay, Columbia, Panama, Israel, Brazil, Australia, South Africa, Denmark, Croatia, Estonia and Japan. “We are channeling all our energy in making garment collection, fabric shows and BSM in India. Over 24 export promotion events are planned for FY 2013-14, including participating in seven international fairs, organising six overseas buyer seller meets, and 11 domestic export promotion events,” informed Sakthivel. Apart from organising the 51st India International Garment Fair in New Delhi, AEPC participated in several overseas events in July this year to strengthen its marketing initiatives. The major international events include Fatex Fair in Paris, France; Hong Kong Fashion Week and International Fashion Fair (IFF), Tokyo, Japan. In August, AEPC participated in the ‘Sourcing at Magic’, at Las Vegas, USA, and to be followed by other events in New York and Spain. According to him, the flow of expansion of orders in www.cargotalk.in
p An apparel production unit in Tirupur.
India is expected to fetch additional US$3 billion in business. “India has been chosen as the best place, due to the persistent improvement in factory capacity building through ambitious programme—AEPC Common Code of Conduct – ‘DISHA’, an initiative of Ministry of Textiles,” he observed. Recently, the Ministry of Textiles, Government of India has approved AEPC as an independent agency for assessment and certification modules for non-MES courses under Component-II of Integrated Skill Development Scheme (ISDS). AEPC has set a target of 4.84 lakh assessments. AEPC is now setting up office, manpower and infrastructure to assess 4.84 lakh workers within 12th Five Year Plan. The Government of India has already approved a proposal to set up about 100 SMART Centres to train over 40,000 youth and women in the next two years and 1.7 lakh over the next five years.
Product Trends
According to the AEPC Chairman, in view of the consumption pattern, it has been observed that until 2012-13, cotton-made products dominated the international market. Products like women’s suits, blouses, and men’s shirts, and cottonmade trousers were fairly good in demand in the Southern Africa, Latin American countries, Russia and some parts of Eastern Europe. www.cargotalk.in
It has also been found that pullovers, cardigans, women’s suits of synthetic and other textiles material, knit men’s shirts have gained higher share in the RMG export basket of India. This may be attributed to the changing demand pattern as synthetic and other textiles materials are more in demand in the western countries and other parts of the world. In Sakthivel’s opinion, global garment sourcing has undergone tremendous change during the last few years. Gradually, all buyers are getting extra cautious about meeting compliance standards. “We are fortunate that our factories are getting stronger in terms of compliance due to adoption of DISHA. We have successfully completed 200 factory level trainings and visits in 2013. In 2013-14 we are planning
The rule of 24x7 custom clearances must be strictly followed, and there should not be unnecessary stopping of garment consignments at the ports. Our products are perishable and needs timely delivery to meet the buyers’ demand
to cover 150 more units as to strengthen facilitators and experts for expanding our regional reach,” he added.
Need Support from the Government
The garment export industry was expecting a lowering of the interest rate, which has not been announced. The pre- and postshipment credit rates are hovering around 10 per cent, which is very high when compared to interest rates available to its competitors. It was the present Finance Minister’s initiative, through which he had given a separate chapter for interest rates in the export sector. The industry appeals to him for reintroduction of the separate rates of fixed 7.5 per cent for the labour-intensive sectors of clothing and textiles. “The rule of 24x7 custom clearances must be strictly followed, and there should not be unnecessary stopping of garment consignments at the ports. Our products are perishable and needs timely delivery to meet the buyers’ demand,” Sakthivel emphasised. However, Sakthivel maintained that measures like expansion of zero-duty EPCG scheme, extension of TUFs benefits to EPCG, announcements on promotion of incremental exports and winding the ambit of market and product focus scheme, and extension of interest subvention till March 2014, will help in promotion of garment exports from India. september 2013 i cargotalk i 25
Cover Story Fashion Logistics
The fashion logistics industry is likely to get a boost in the days to come, if forecasts and present market trends are taken into account. According to recent researches, the domestic apparel industry in India grew at a CAGR of 10 per cent from `1,260 billion in FY-07 to `2,026 billion in FY-12. There will also be policy reforms, an expected revival in economy and entry of new brands to support the recovery of apparel demand in FY-14. The export sector, on the other hand, is also witnessing a reasonable growth. Cargotalk presents an industry perspective‌
Fashion n Ratan Kr Paul
26 i cargotalk i september 2013
Logi s www.cargotalk.in
A
ccording to Revati Kasture, Chief General Manager & Head-CARE Research, the Indian apparel industry will witness a revival in FY-14. The factors like changing fashion trends, a growing consumer class and rising urbanisation together, have contributed to the growth in the apparel industry. Additionally, growing differentiation in the party-wear, office-wear and semi-formals, increasing retail penetration, increasing share of designer-wear and a growing service class have also been the drivers for growth. However, on the account of an overall slowdown in the economy, the apparel industry also witnessed lower growth in the past couple of years. The industry is estimated to grow at a lower rate of about 4-5 per cent on a YoY basis in FY-13. CARE Research expects the impact of recent slowdown to persist in the industry, and that the demand would recover gradually. The domestic Indian apparel market can be divided into five broad segments – men’s, women’s, kids,and unisex apparels, and uniforms. CARE Research estimates the domestic apparel industry to grow at a CAGR of about 8 per cent from `2,026 billion in FY12 to `2,746 billion in FY16. Within the men’s apparels segment, the subsegment of shirts will remain the biggest. CARE Research expects the men’s shirts segment to grow at a CAGR of 7.5 per cent up to FY16. Kasture argued that measures, which are expected to aid the recovery in apparel demand in FY-14 include resumption of zero-excise duty on readymade garments and made ups announced in the Union Budget 2013-14, an expected improvement in the economy and faster clearance of
The apparel industry in India is plagued with a high degree of fragmentation with only a handful of fullyintegrated players” Revati Kasture Chief General Manager & Head-CARE Research investment proposal of foreign retail brands. It also estimates the Indian apparel exports to grow at a CAGR of 9 per cent to about `928 billion in FY16. The growth would primarily be driven by increasing shift of the apparel industry from developed Western nations (traditional exporting destinations) to the other non-traditional markets. Currently, India’s exports are mainly directed to the traditional markets – US and EU. And now, with these regions turning into matured markets, the growth in apparel imports is expected to slow down. “India needs to look at other potential markets for apparel exports. Remarkably, Indian exporters are promoting their apparel by participating in trade shows and also by holding road-shows in new markets like Latin America, Russia, Japan, Israel and South Africa,” Kasture pointed out. She also underlined that, with the growing concern over rising production costs in China; India stands a good opportunity to increase its share in the global apparel market. Abundant raw material availability, a well-integrated textile industry and good
stics www.cargotalk.in
designing skills are key attributes, which if utilised efficiently, can help India to consolidate and grow its position in the global apparel market.
Critical factors that need to be addressed by India to remain competitive in the global markets Kasture maintained that though India is one of the largest producers of cotton yarn and fabric, the productivity of cotton in India in terms of yield per hectare is found to be too low in comparison with other countries. The productivity of cotton in countries like China, Brazil and Turkey is above 1 tonne per hectare per annum whereas in India it stands at around 0.5 tonne per hectare per annum. According to CARE Research, India needs to bring down high labor costs. Apparel, being a labour intensive industry, labour-costs play a key role in determining the profitability of an industry. India, with a labor cost of about US $ 0.6 per hour, ranks fourth compared to other Asian countries (higher by 100 percent, 28 per cent and 20 per cent compared to Bangladesh, Cambodia and Pakistan, respectively). Bangladesh, which enjoys duty benefit in EU, has an edge over other Asian countries. Considering various costs involved in the exports of garments, the landed cost at EU markets works out to be the cheapest for Bangladesh, followed by Pakistan. Kasture also observed that, apparel manufacturers should aim at shorter delivery lead times. The apparel industry in India is plagued with a high degree of fragmentation with only a handful of fully-integrated players. This, coupled with infrastructure bottlenecks, leads to longer lead times. An order in India takes approximately 45-60 days to execute
Of Evolving Demands in Logistics and SCM september 2013 i cargotalk i 27
Cover Story Fashion Logistics
from procurement-fabrication-delivery, as against a global average of 30-35 days.
New Sales and Supply Chain Model: Madura Fashion and Lifestyle Speaking to Cargotalk on the present trends and initiatives from apparel manufacturers Satish Karunakaran, Head Supply Chain & Sourcing , Madura Fashion & Lifestyle, said that most companies in the Indian Fashion & Lifestyle industry used to follow make & sell model a few years back. This model had disadvantages in terms of higher inventory of slow and non-moving stocks, and stock-outs in case of best-sellers on the other hand. But now, almost all big players have moved to the trade show model, which is conducted twice a year. “The Madura Fashion & Lifestyle was a pioneer of such trade shows in India and has followed this model religiously over the last 7-8 years,” he maintained. However, the trade show model has put enormous pressure on the supply chain of apparel companies. The OTIF (on time in full) performance, indicator for the customer-order fulfillment as per the original month of offering in trade show, has gone down. The uncertainties and inefficiencies in the long supply chain, which is almost 8-9 months long, has a direct bearing on the customer-service level. In earlier sell & make model, since the brand used to accept orders only to the extent of stocks produced, the customer service level was obviously higher. “Madura Fashion & Lifestyle has tackled this issue very well and perfected the trade show execution model to a large extent. It has invested heavily in order management, demand planning and supply planning tools and processes to improve OTIF dramatically over the last two years compared to its competition,”Karunakaran added. Another major growing trend is to optimise the inventory at the front end (seen across all channels) to control cash flow and to improve retail experience by optimising the stock density. Due to this, managing efficient and fast replenishment of right stocks at right time at right store has become an area of paramount importance. “As far as new markets are concerned, clearly two trends have evolved dramatically over the last two years the first being e-commerce, and the second being expansion of exclusive brand outlets 28 i cargotalk i september 2013
Revati Kasture Chief General Manager & Head-CARE Research
Satish Karunakaran Head Supply Chain & Sourcing , Madura Fashion & Lifestyle
(EBOs) in Tier -II towns. Supply-chain functions play a vital role in both these new markets and will be a key differentiator. E-commerce business, though a small channel for large apparel companies like ours, is of significant strategic importance. For e-commerce companies, apparel is one of the fastest-growing categories,” Karunakaran pointed out. In his opinion, the fashion industry is going through lot of swift changes. Most brands are venturing into multiple new categories (no more only shirts or trousers brands) and increasing the number of style codes offered to cater to different regional needs, wearing occasions and price points. This has resulted in high number of SKUs in the supply chain compared to any other industry. In addition to these products offering related complexities, particularly in case of MFL; almost all brands have launched sub-brands and expanded their distribution rapidly. At the same time in the competitive environment, almost all customers demands on service level and cost efficiency has gone up. To handle these challenges, MFL has been investing in developing supply chain
E-commerce business, though a small channel for large apparel companies like ours, is of significant strategic importance” Satish Karunakaran Head Supply Chain & Sourcing Madura Fashion & Lifestyle
Abhik Saha Director-Supply Chain, Benetton India
processes, systems and people over the years. “Today, supply chain is the heart of our company. Once the orders are booked in the trade show for a season, the baton is handled over to the sourcing and supply chain team. The supply chain has to deliver the targeted OTIF service-level at the targeted closing inventory every month. It’s an ongoing challenge to improve service level and improve inventory turns at lower costs,” added Karunakaran. Madura is a multichannel company; and each channel has different requirements on stocking and deployment process. The company has designed order management processes, demand planning systems and warehouses to suit specific needs of every channel. MFL’s logistics and order management team is quite agile, and is able to consistently make improvements in the service level, while adapting to the new requirements of the customers. As far as distribution strategy is concerned, Madura Fashion has a mix of self-managed distribution centres (DCs) and outsourced to 3rd party logistics service providers. Its two large DCs (2.7 lakh sq ft & 1.8 lakh sq ft) in Bengaluru are selfmanaged. The company has recently set up a North DC to cater to seasonal products, which are primarily produced in North region. The North DC is outsourced to a 3rd Party LSP. In addition to the above three DCs, Madura Fashion also has 10 small-format warehouses to cater to the demand of bigger markets and to service customers in permit states. These are again outsourced to 3rd Party LSPs.
Benetton India
Abhik Saha, Director-Supply Chain, Benetton India, felt that customers are www.cargotalk.in
Cover Story Fashion Logistics
increasingly becoming more discerning based on the purchase occasions.This often leads to the same consumer behaving differently, based on different purchase usage. And, logistics and supply chain plays the critical role of meeting customers’ aspirations. Accordingly, logistics and supply chain is increasingly shifting from focussing just on cost to adding value to the company’s success. Benetton manages the same through co-sourcing, wherein the company staffs managerial positions and manages the balance through 3PL service partners. “The logistics industry in India today is highly fragmented and skilled manpower at every level is at a premium. We are working along with our 3PL service partners to incorporate the latest trends in this space into our business,” he said.
Logistics Needs: Warehousing Outshines Transportation
“We see lot of action happening on the warehousing side. There is spurt in good quality warehousing infrastructure & LSPs in the last few years. But on the transportation side, particularly on the national routes, there is very little improvement to be seen. For companies like us, who service most of their customers directly from their centralised DC and not through the state-level CFAs and warehouses, this becomes a bug hurdle,” Karunakaran said. “As an example, MFL services close to 4,000 customers directly from Bangalore, as well as its North DC. The average dispatch frequency per customer is twice a week. So we ride on the infrastructure of the express distribution service providers to service these small shipments to our customers. There are not enough options in this segment, and very few new players have entered this segment in the last decade. Plus, the success rate of new entrants has not been encouraging,” he further added. When it comes to smaller towns (which are the growth markets), the hub-andspoke model of these national carriers or express distribution service providers has its limitations due to low volume, rigid systems, infrastructure issues and costs. There is an impact on the product quality and customer experience, as well due to multiple handling and handshakes. He however maintained that the performance of 3PL companies, when it comes to small-format warehouses (less 30 i cargotalk i september 2013
than 20,000 sq ft) has been very good, and they consistently achieve and exceed the KPIs of the customers. “However, on the medium (20,000100,000 sq ft) and large DC (more than 100,000 sq ft) management side, there is a need for significant improvement from 3PL to partner. Right now, most 3PL companies are able to match the service requirements of the customers, after an initial teething period of anywhere between 8-10 months (in some cases going up to a year). The customer cannot afford such high stabilisation periods. Moreover, he expects continuous improvement in KPI and aligning the DC operations to changing needs of his customers,” he added. He also argued that the logistics of fashion industry is complex, due to large number of SKUs, shrinking duration of full-price window, shelf-life of products and direct shipping to retailers in most cases. To handle this complexity, the 3PL company has to invest in disproportionately higher management attention in such customers not only in the beginning, but also on a continuous basis. So, the 3PL companies entering to service this industry should be prepared for this eventuality. Also it is extremely important to study customer
Keep pace with the changing demands of customers, especially where MNC service providers are entering the country” Abhik Saha Director-Supply Chain, Benetton India
processes, technology and software used, capital investments required, KPI targets particularly on cost, inventory accuracy and service delivery. According to Saha, the quality of services offered by logistics companies is still at a nascent stage, and it is trying to keep up with increased customer requirements of consistency of deliverables and regulatory compliance. “Keep pace with the changing demands of customers, especially in a scenario where MNC service providers are entering the country with significant experience in operational efficiencies and value addition to the organisation,” he suggested.
Major challenges & bottlenecks in logistics
n Optimising the warehousing space, considering the seasonality of businesses. n Higher safety stock impact due to fluctuations in sales and uncertainties in supply network. n Slower speed of trucks on Indian roads compared to international standards, increasing the cost of transportation. n Faster reach to smaller towns, particularly in big states like Maharashtra, UP & MP and the entire North-East region. n Limited air-cargo capacity available and high cost of air-freight (Air-freight cost in domestic sector is too high compared to international routes). n Shipments getting offloaded. n Growing state-level regulatory requirements in terms of permits and documentation. n Poor infrastructure and stringent government policies. n Delays in customs examinations and formalities (certifications, testing, etc). n High power and transaction costs, increased costs of raw material, labour and other input costs. www.cargotalk.in
Cover Story Fashion Logistics
‘clicks’ on online portals are increasing. The end customers are exploring options to feel/touch/wear even through on-line stores, such initiatives being driven by the fashion industry. With the production centres shifting mainly to APAC countries, the options of multi-country consolidation is increasing. Thus, FTWZ facilities will be important for future growth and consolidation of business,” they observed. Sanjay Goel COO, SDV India
Ajay Sharma Sr. Manager —Vertical Markets, Retail & Fashion Schenker India
Recommendations
n Increase the capacity of cargo handling at ports to remove congestion. n Increase rail network and capacity. n Introduce VPH service on more trains and increase capacity. n Remove / relax state level permits requirement for goods movement. n Improve road infrastructure to reduce national routes lead time by minimum 25 per cent and increase connectivity to smaller towns. n Debottlenecking the check-posts in the road network and make travel across India seamless. n Implementation of GST at the earliest. n Attract investments and speed up infrastructure projects in warehousing / roads / railways / ports / inland waterways. n Fast and effective approval process can improve the time duration for overall implementation of project in retail and fashion industry.
Third Party LSPs: Services in Place
Commenting on the growth potential of fashion logistics business from freight forwarders and 3PLSPs point of view, Sanjay Goel, COO, SDV India said, “The Indian Fashion industry is at its infancy at the moment, though it has great potential to make its mark on the world stage. Fashion in India has thousands of years of tradition behind it, and it’s growing at a rapid pace with international developments. As a freight forwarder, our business depends on country’s exports and imports, and garments are one of the biggest export commodities out of India.” Goel maintained that being a French multinational, SDV has an excellent understanding for handling fashion and luxury brands worldwide. The company offers a wide range of made-to-measure services, especially for the fashion industry 32 i cargotalk i september 2013
Rammi Anand Dy. General Manager – Vertical Markets India Schenker India
which includes PO management, QC platform, warehousing, distribution and multimodal transport across the globe with JIT approach. SDV recently launched a new concept called iD solution for its customers, based on RFID tagging. Once the RFID tag is fitted, each item of clothing has its own identity, and the information on the tag can be read remotely across the entire supply chain all the way to the shop. It will help to collect maximum amount of data, read remotely off the tag. So, making an inventory in the minimum amount of time, whenever necessary, will preventing handling errors. “We have also created a vertical dedicated to the fashion industry. The emergence of local Indian consumer base for fashion and luxury is a good opportunity for us, as we have been established ourselves as a key player in the recent years on this vertical,” he stressed. Ajay Sharma, Sr. Manager —Vertical Markets, Retail & Fashion and Rammi Anand, Dy. General Manager – Vertical Markets India, Schenker India noted that the fashion industry presently is passing through an interesting phase. “While footfalls in the stores are going down, the
As a freight forwarder, our business depends on country’s exports and imports, and garments are one of the biggest export commodities” Sanjay Goel COO, SDV India
They also maintained that with the Indian Government’s approval to allow foreign direct investments in Retail, foreign brands are expected to enter into Indian market more easily. This will result in growth of the organised retail, can compensate for the negative effects of the devaluation of the Indian Rupee and thus, the opportunities in end-to-end logistics services within the countries. Referring to the new markets, Sharma and Anand were of the view that, while traditional fashion markets from USA and EU are seeing a downward trend, there has been an upsurge in emerging markets from Asia-Pacific e.g. India and China. The emerging markets are becoming fashion conscious and with the increase in earnings, these emerging markets are now seen as fashion consumption markets as well. People in India have become more sensitive towards the brands they wear. This is also reflected with an upsurge in luxury brands spreading in the country. However, the trend is presently limited to Tier-I Cities. Therefore, there is untapped potential in Tier -II and Tier-III Cities within the country, which gives confidence in long-term sustainable growth in India. “DB Schenker understands the changing dynamics of fashion industry in India and its evolving requirements. This is reflected in the wide range of services that DB Schenker renders, which can be customised as per its customers’requirements,” they said. The company’s services include PO Management, ICM Tool to give complete visibility to supply chain as well as production, Quality Check, Labeling and Tagging, Pick and Pack, Palletisation, In-house Customs Clearance, Assistance from a strong global network, Customised IT Solutions, Warehousing and Distribution, Multi-Modal Solution and Dedicated Key Account Management Structure. 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 2013) 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
Jet Airways Cathay Pacific Emirates Air India British Airways Singapore Lufthansa Cargo Airline Thai Airways Qatar Airways Fedex Express Corpation Swiss Intl Airline Ltd Etihad Airways Kalitta Air Klm Malaysian Airline System Uzbekistan Virgin Atlantic Air France Turkish Airlines M/S All Nippon Airways Finnair Aeroflot Cargo Airlines Saudia Japan Airlines China Southern Airlines Hercules Aviation China Eastern Airlines Lufthansa Cargo Ag Martin Airline United Airlines Indigo Cargo China Air Air China Spice Jet Air Shagoon Pvt. Ltd. Blue Dart Air Arabia Dhl Express Mahan Air Gulf Air Asiana Airlines Air Mauritius Oman Air Ethopean Airlines Sri Lankan Airlines Ltd Flywell Aviation Kuwait Airlines Biman Bangladesh Air Astana Spice Jet Ariana Afghan Airlines Flywell Aviation Pvt. Ltd Royal Jordanian Airlines Eva Air Kenya Abakan Avia Ups Kam Air Pakistan International Turkmenisthan Airlines Tajik Air Jetlite Iraqi Airways Druk Air Air Moldova Safi Airways Mihin Lanka Airlines Total Cargo handled in July ‘12’ % VARIATION
34 i cargotalk i september 2013
Export With- Out Peri- shable (MTs) 1312 1005 790 928 1101 802 622 236 434 481 511 389 394 449 302 434 428 360 434 309 329 362 282 113 98 390 168 175 113 220 221 125 87 151 128 106 121 0 105 69 33 62 46 50 49 34 5 22 25 34 32 30 28 2 20 16 0 15 5 9 3 1 2 1 0 0 0 15609 13369 16.75%
Export Export with Perishable Perishable Cargo (MTs) (UPL) (MTs) 198 31 1638 466 74 18 75 43 265 11 22 36 0 72 42 35 5 36 7 0 104 101 183 5 9 1 0 13 3 5 0 0 5 0 0 3 3 0 1 33 0 5 23 4 0 0 44 1 10 1 0 0 0 7 0 0 0 0 0 3 0 0 0 0 1 0 0 3642 3256 11.83%
1510 1036 2428 1395 1175 820 697 279 698 492 533 425 394 522 344 469 433 396 441 309 432 462 465 119 106 391 168 188 115 225 222 126 92 151 128 109 124 0 106 102 33 67 69 55 49 34 49 23 35 35 32 30 28 9 20 16 0 15 5 12 4 1 2 1 1 0 0 19250 16626 15.79%
Import (MTs)
Total Cargo (MTs)
% of Total
1648 2083 558 1320 629 684 778 1027 370 500 341 391 335 199 356 199 228 197 127 258 124 47 4 298 299 0 192 134 181 43 37 112 134 67 11 24 5 128 5 2 64 8 5 14 17 27 7 16 1 0 0 0 0 17 1 0 16 0 8 0 0 2 0 0 0 0 0 14274 13654 4.55%
3157 3119 2985 2714 1804 1504 1475 1305 1068 992 874 816 729 720 700 667 660 594 569 568 556 509 469 416 406 391 360 322 296 267 258 238 226 218 139 133 129 128 111 103 97 75 74 68 66 60 55 39 36 35 32 30 28 26 21 16 16 15 13 12 4 2 2 1 1 0 0 33525 30280 10.72%
9.42% 9.30% 8.91% 8.10% 5.38% 4.48% 4.40% 3.89% 3.19% 2.96% 2.61% 2.44% 2.18% 2.15% 2.09% 1.99% 1.97% 1.77% 1.70% 1.69% 1.66% 1.52% 1.40% 1.24% 1.21% 1.17% 1.07% 0.96% 0.88% 0.80% 0.77% 0.71% 0.67% 0.65% 0.41% 0.40% 0.39% 0.38% 0.33% 0.31% 0.29% 0.22% 0.22% 0.20% 0.20% 0.18% 0.16% 0.12% 0.11% 0.10% 0.10% 0.09% 0.08% 0.08% 0.06% 0.05% 0.05% 0.05% 0.04% 0.04% 0.01% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 100.00%
www.cargotalk.in
mUMBAI csi aIRPORT
eXPORT/iMPORT cARGO tONNAGE hANDLED IN July 2013 S.No. Airlines
Export General
Export Perishable
Total Import Export
Total Exp+Imp
AIRLINES HANDLED BY MIAL 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
Jet Airways Emirates Lufthansa Cathay Pacific Singapore Airlines British Airways Etihad Airways Saudi Arabian Airlines Qatar Airways Turkish Airlines Swiss Intl. Airlines Ethopian Airlines Air France Federal Express Virgin Atlantic Malaysian Airlines UPS Delta/KLM Airlines Kenya Airways Air Cargo Arologic C/O Lufthansa Martin Air Fin Air Indigo Air EL-AL Airlines Air India + Air India Carriers Gulf Air Srilankan Air Blue Dart Bangkok Airways United/Continental Airlines Air Arabia Oman Air Iran Air Royal Jordanian Air China Baharin Airlines Kingfisher Airlines Qantas Others TOTAL
1401.20 1420.91 739.99 1185.70 689.51 599.56 805.14 1246.66 564.03 614.73 379.56 740.88 422.50 376.63 279.88 365.20 118.18 146.47 387.79 0.00 0.00 211.84 92.57 71.16 0.08 95.78 67.28 39.04 74.26 53.17 68.19 52.51 42.00 13.79 3.40 0.00 0.00 0.00 124.24 13493.81
96.14 766.68 587.85 26.14 68.42 455.33 13.99 1.25 13.58 53.21 168.91 2.56 68.44 82.02 146.68 17.80 0.00 176.10 4.21 0.00 0.00 16.36 38.27 4.54 103.88 0.00 4.27 0.00 1.83 2.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 36.20 2957.64
1497.34 2187.59 1327.84 1211.84 757.93 1054.88 819.13 1247.91 577.61 667.93 548.47 743.44 490.94 458.65 426.56 382.99 118.18 322.56 392.01 0.00 0.00 228.20 130.84 75.71 103.96 95.78 71.56 39.04 76.09 56.14 68.19 52.51 42.00 13.79 3.40 0.00 0.00 0.00 160.43 16451.45
2170.45 1056.00 1589.99 1077.20 1033.24 658.05 656.50 50.17 492.69 349.05 382.09 8.68 231.78 210.62 197.69 237.21 369.38 143.13 7.85 377.21 359.22 0.00 0.00 52.59 5.53 0.34 15.94 46.48 0.29 19.05 0.36 3.72 4.29 0.46 0.25 0.00 0.00 0.00 318.15 12125.66
3667.80 3243.59 2917.83 2289.04 1791.18 1712.94 1475.63 1298.08 1070.30 1016.99 930.56 752.13 722.73 669.27 624.24 620.20 487.56 465.69 399.86 377.21 359.22 228.20 130.84 128.29 109.50 96.12 87.50 85.52 76.37 75.19 68.56 56.22 46.29 14.25 3.65 0.00 0.00 0.00 478.58 28577.11
Construction of Navi Mumbai Airport to be awarded by Jan, 2014
I
n the first meeting of the Steering Group (appointed by the Prime Minister to accelerate Infrastructure Investment) held on July 25, deadlines have been set for key infrastructure project investments, including the Navi Mumbai Airport. The deadlines have been finalised with specific with timelines. The progress on the intermediate steps will be monitored on a regular www.cargotalk.in
basis. The deadlines will ensure that Ministries / Departments are clear about not just the overall deadline, but also all the intermediate steps that need to be completed so that there are no slippages. The Principal Secretary to PM has directed all Ministries/ Departments to nominate a Nodal Officer each, of the rank of a Joint Secretary or above, who will report on a weekly basis on the progress of their
department’s project(s). The Steering Group has decided that the construction work of Navi Mumbai Airport will be awarded by January 31, 2014. The Group also finalised some other key infrastructure projects related to transport are: Mumbai rail Corridor-by January 31, 2014; Eastern Peripheral Expressway-by December 31, 2013 and Mumbai Vadodra ExpresswayMarch 1, 2013. september 2013 i cargotalk i 35
Cargo Performance Airports in India
Traffic statistics D omestic F reight
S. No. Airport
May 2013
Freight (in Tonnes)
For the Month May 2012
% Change 2013-14
For the period May 2012-13
% Change
(A) 16 International Airports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Chennai Kolkata* Ahmedabad Goa Trivandrum Calicut Guwahati Lucknow Srinagar Jaipur Coimbatore Mangalore Amritsar Trichy Varanasi Portblair Total
5284 6145 2699 174 115 12 508 228 324 610 503 21 19 0 30 186 16858
6969 7265 3079 260 127 8 478 174 325 545 590 27 5 0 21 99 19972
-24.2 -15.4 -12.3 -33.1 -9.4 50.0 6.3 31.0 -0.3 11.9 -14.7 -22.2 280.0 - 42.9 87 .9 -15.6
11339 12092 5461 354 208 32 1030 451 572 1054 947 44 27 0 49 387 34047
13717 13712 5890 508 257 26 1003 339 500 1062 1064 64 11 0 60 327 38540
-17.3 -11.8 -7.3 -30.3 -19.1 23.1 2.7 33.0 14.4 -0.8 -11.0 -31.3 145.5 -18.3 18.3 -11.7
15083 14659 7159 2940 764 338 40943
17796 16461 7520 2856 741 386 45760
-15.2 -10.9 -4.8 2.9 3.1 -12.4 -10 5
29917 28584 13746 5593 1505 708 7 80053
34249 31448 14099 5596 1469 80 87641
-12.6 -9.1 -2.5 -0.1 2.5 -9.2 -8 7
(B) 6 JV International Airports 17 18 19 20 21 22
Delhi (DIAL) Mumbai (MIAL) Bangalore (BIAL) Hyderabad (GHIAL) Cochin(CIAL) Nagpur (MIPL) Total
(C) 7 Custom Airports 23 24 25 26 27 28 29
Pune Visakhapatnam Patna Chandigarh Bagdogra Madurai Gaya Total
1633 130 339 378 120 111 0 2711
2107 120 195 266 135 57 0 2880
-22.5 8.3 73.8 42.1 -11.1 94.7 - 5.9
3053 276 657 610 240 209 0 5045
4231 264 362 499 287 124 0 5767
-27.8 4.5 81.5 22.2 -16.4 68.5 12.5
30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
Bhubaneswar Indore Jammu Raipur Agartala Vadodara Imphal Bhopal Ranchi Aurangabad Udaipur Leh Tirupati Rajkot Jodhpur Dehradun Dibrugarh Total
280 417 134 277 536 142 275 70 163 64 0 101 0 13 1 0 35 2508
249 376 101 253 565 220 347 75 139 85 0 134 1 16 1 0 27 2589
12.4 10.9 32.7 9.5 -5.1 -35.5 -20.7 -6.7 17.3 -24.7 - -24.6 -100.0 -18.8 0.0 - 29.6 -3.1
559 840 255 505 1072 306 607 139 346 119 0 117 0 28 3 0 59 4955
518 715 210 467 1045 440 757 161 273 160 0 281 2 54 2 0 63 5148
7.9 17.5 21.4 8.1 2.6 -30.5 -19.8 -13.7 26.7 -25.6 -58.4 -100.0 -48.1 50.0 -6.3 -3.7
77 63097
174 71375
-55.7 -11.6
197 124297
328 137424
-39.9 -9.6
(D) 17 Domestic Airports
(E) Other Airports Grand Total (A+B+C+D+E) * Estimated
36 i cargotalk i september 2013
www.cargotalk.in
Cargo Performance Airports in India
Traffic statistics
I N T E R N AT I O N A L F R E I G H T Freight (in Tonnes)
S. No. Airport
For the Month
May 2013
May 2012
For the period May
% Change 2013-14
2012-13
% Change
(A) 16 International Airports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Chennai Kolkata* Ahmedabad Goa Trivandrum Calicut Guwahati Lucknow Srinagar Jaipur Coimbatore Mangalore Amritsar Trichy Varanasi Portblair Total
18304 3514 1575 152 2236 2493 4 87 0 29 77 0 227 408 0 0 29106
21368 3300 1017 157 4546 2442 0 67 0 33 48 0 144 284 0 0 33406
-14.3 6.5 54.9 -3.2 -50.8 2.1 - 29.9 - -12.1 60.4 0 57.6 43.7 - - -12.9
36653 6915 2922 307 4465 4755 7 134 0 46 137 0 273 782 0 0 57396
40778 6697 1864 338 9128 5158 0 140 0 53 87 - 212 509 0 0 64964
-10.1 3.3 56.8 -9.2 -51.1 -7.8 -4.3 -13.2 57.5 28.8 53.6 -11.6
31605 39679 12401 4181 3405 39 91310
30960 40312 11950 3728 3337 36 90323
2.1 -1.6 3.8 12.2 2.0 8.3 1.1
63846 77953 25375 8536 6921 76 182707
62370 78670 23941 7473 6053 70 178577
2.4 -0.9 6.0 14.2 14.3 8.6 2.3
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
- - - - - - 0 -
0 0 0 0 0 0 0 0
0 0 0 0 0 0 - 0
-
0 0 120416
0 0 123729
- - -2.7
0 0 240103
0 0 243541
-1.4
(B) 6 JV International Airports 17 18 19 20 21 22
Delhi (DIAL) Mumbai (MIAL) Bangalore (BIAL) Hyderabad (GHIAL) Cochin(CIAL) Nagpur (MIPL) Total
(C) 7 CUSTOM AIRPORTS 23 24 25 26 27 28 29
Pune Visakhapatnam Patna Chandigarh Bagdogra Madurai Gaya Total
(D) (E)
17 Domestic Airports Other Airports Grand Total (A+B+C+D+E)
Malaysia Airlines starts daily Kuala Lumpur-Kochi services from September 1
M
alaysia Airlines has announced new services between Kuala Lumpur and Kochi effective September 1. The daily Kuala Lumpur - Kochi flight with the B737-800 aircraft with cargo capacity of 3-3.5 tonne per flight will be departing from Kuala Lumpur at 10.30 pm and arriving in Kochi at 12.01 am while the Kochi - Kuala Lumpur return route will be departing from Kochi at 12.50 am and arriving in Kuala
38 i cargotalk i september 2013
Lumpur at 7.40 am. The airline is currently well connected between the five Indian metro cities of New Delhi, Bengaluru, Chennai, Mumbai and Hyderabad with its home base Kuala Lumpur. It currently operates 54 weekly flights from India to Malaysia and comprises New-Delhi (12 flights), Mumbai (11 Flights), Chennai (14 flights), Hyderabad (07 Flights) and Bangalore (10 Flights). www.cargotalk.in
One-on-One Logistics Services
Safexpress plans high
for catering demands from fashion industry Vineet Kanaujia
According to Vineet Kanaujia, Vice President - Marketing, Safexpress, the fashion logistics industry is ever transcending. Many international brands have entered the Indian fashion industry. These brands with strong financial backing have led to increased competition in fashion market. This has in turn led to increased pressure on cost reduction, for which optimising supply chain and logistics costs is vital.
I
n Kanaujia’s opinion, the product demand is very uncertain in the fashion logistics industry and flexible supply chain systems are needed to respond to the ever-changing markets. The product demand depends on seasonal variations, high inflationary market and availability of cheaper substitutes. Also, E-commerce in India is growing at a very fast pace. The logistics challenges of such online business models are numerous. To counter them, supply chains have to be efficient, flexible and accurate. “The Indian fashion industry is extremely volatile with products having short life-
cycles. The consumer demands are everchanging and in order to make profits, fashion apparel retailers need to adopt ‘speed-tomarket’ approach to harness trends not embraced by their competitors. Such speed can only be provided by logistics providers having market expertise and huge national presence,” Kanaujia pointed out. According to him, new policy initiatives have been taken by Indian government which will have significant impact on the textile and apparel industry. On the retail front the decision to allow 100 per cent FDI in single brand retail and 51 per cent in multi brand retail will have a strong impact on foreign
Supply chains have to be efficient, flexible and accurate to counter logistics challenges of various online business models 40 i cargotalk i september 2013
www.cargotalk.in
One-on-One Logistics Services
investment in fashion retail and hence on its supply chain and logistics requirements.
Domestic market scenario
Kanaujia highlighted that domestic business for apparel brands have on average grown by 9 per cent in value during the first half of 2013. The reasons for this growth are : increase in disposable income, increased product demand in the women’s clothing segment, fashion is increasingly becoming a form of self-expression, rapid urbanisation/ Westernisation of the Indian youth and the continued rise of organised retail across the country. “Speed, flexibility and efficiency are the key factors that the apparel and lifestyle industry expects from logistics providers. Safexpress works with retailers & manufacturers to develop supply chain systems that are always ready to respond to ever-changing market requirements. The company makes sure that the products don’t just remain idle in the warehouses, but ensures their delivery to the market faster so that retailers can take advantage of the latest trends,” observed Kanaujia. He underlined that Safexpress provides innovative logistics services to the apparel and lifestyle industry that help speed up inventories to market. The firm provides supply chain services that efficiently manage material flow, from stock to shelf, and enables manufacturers and retailers, to focus on their core activities. Safexpress has state-of-the-art infrastructure and a huge network across India. The company offers services that include everything from supply chain strategy and network designing to in-store logistics.
Other supply chain services that Safexpress provides include:
Piece, inner box and box picking Bundling, kitting & tagging services Efficient reverse logistics services Monitoring & quality control procedures n Product inspection, estimation & reassembling n Bar coding, labeling & scanning services n In-Store Delivery & Just-In-Time services n n n n
Future plans for handling fashion logistics
Safexpress is developing world-class warehousing facilities at key industrial hubs across India. Out of the planned 32 Logistics Parks, the company has already launched 18 Logistics Parks in Mumbai, Jamshedpur, Bengaluru, Puducherry, Pune, Rudrapur, Chennai, Salem, Nagpur, Kolkata, Ahmedabad, Gurgaon, Bilaspur, Bhubaneshwar, Agra, Indore, Haridwar and Ambala. These warehouses have a combined area of over 8 million square feet across the country. “We intend to create 2 million sq. ft. of additional warehousing space across the country in the next couple of years. These Logistics Parks will support our fashion logistics endeavors in a big way,” Kanaujia asserted.
Some challenges
n Infrastructural problems like bad road conditions, poor connectivity, and inadequate air/sea port capacities are major deterrents n Lack of skilled labor and manpower to handle supply chain operations
STOCK2SHELF
Stock2Shelf enables multi-brand retail stores and shopping malls to function seamlessly throughout the year. This service ensures ‘time-definite’ delivery with the help of professionally trained crew that manages stocks along with the necessary documentation required to enter the malls. Stock2Shelf offers comprehensive mall supply chain services, inclusive of movement of retail & lifestyle goods, inspection, estimation, professional packaging, security clearance, storage, destination delivery, unpacking, reassembling of the goods and reverse logistics. 42 i cargotalk i september 2013
We intend to create 2 million square feet of additional warehousing space across the country in the next couple of years. These Logistics Parks will support our fashion logistics endeavors in a big way
n Delayed documentation processes and other regulatory hurdles n Vast Indian geography – numerous remote locations to be covered
Expected Solutions
“The solutions lie to a large extent in the hands of our Government, which could do its bit in terms of developing a world class infrastructure to enhance pan-India connectivity. Also, the regulatory hurdles need to be minimised by the Government, if in case swift economic growth has to be brought about to our country. Regarding skill development, both the sector as well as the Government can join hands and work together for developing a large number of programmes, which can help create skilled manpower for the industry,” said Kanaujia. He also maintained that the most important expectation is the providing of industry status to the Supply Chain and Logistics Sector in India. Formation of a single Regulatory Body to look into the concerns of logistics sector will immensely benefit the economy and streamline procedures and processes. “Also, we expect an increase in the budget on infrastructure development. The government should prioritise the creation of special tax provisions to improve the level of private sector investment in infrastructure,” he added. According to him, a Uniform Toll Policy is another vital need of today. Multiple toll points on highways reduce efficiency and adversely affect the turnaround time of trucks. Moreover, the lack of uniformity in toll charges creates irregularities in the cost structure. A centralised toll mechanism is needed to ensure uniformity in toll charges paid by trucker drivers at various check points. This would lead to reduction in stoppage time and will create greater efficiency. “Finally, we expect higher level of automation to be brought in while handling documentation, alongside implementation of GST. Documentation needs to be computerised and minimised, so that less number of forms are needed to be filled at checkposts. This would greatly enhance the efficiency of logistics operations,” Kanaujia concluded. www.cargotalk.in
Viewpoint New Initiatives
Gati-KWE eyes
big share in eCommerce pie Bablu Tewari
According to Bablu Tewari, COO, Gati-KWE, eCommerce is fundamentally a combination of traditional front end retail management and logistics. The store front becomes virtual, but the retailer’s core business is still ranging from merchandise planning, procurement and pricing. Their added complexity needs to be in developing the virtual storefront and customer acquisition. Anything beyond that is fundamentally logistics, and should be an opportunity for experienced logistics companies.
Over the past year, we have enhanced our traditional distribution capabilities to support demands of accurate, ontime last-mile delivery.” Bablu Tewari COO, Gati KWE
44 i cargotalk i september 2013
T
he main focus on logistics for ecommerce is currently last-mile delivery. Looking at the entire ecommerce logistics space, there is significant opportunity around e-Fulfillment warehousing on the both retailer and vendor sides, consolidated returns handling, installations, inventory planning, and even online presence as another retail channel. “As ecommerce companies in India mature, it is expected that they will look to equally mature logistics companies that can provide integrated logistics solutions covering more than just simple delivery or warehousing,” said Tewari. In his opinion, winning the race of profitability will need support from more than just cheap deliveries; it will depend upon ensuring excellent customer service after the buy button is clicked, less inventory to reduce working capital costs, the ability to stress fixed assets, and good collaboration between the retailer and logistics service provider. “There are many new players entering the ecommerce logistics space, but mainly in the last-mile delivery area. These new players focus on limited geographic zones or specific cities. Over time, the ecommerce market is rapidly expanding in non-metros,” Tewari observed. He also pointed out that as online retailers start to engage with their logistics partners as a strategic way of lowering the cost of sale, more mature partners are required who can provide a pan-India presence and proven capability to support more complex end-to-end solutions.
GATI-KWE Experience
“GATI-KWE is a recognised leader in distribution with a pan-India network spanning 653 of 657 districts in India. Over the past year, we have enhanced our traditional distribution capabilities to support demands of accurate, on-time last mile delivery,” he stressed. Gati-KWE has also started the rollout of a dedicated
parallel network focussed entirely on ecommerce delivery, including value-added services like packing. To support this, the company has also improved its CoD (cash on delivery) infrastructure and remit cash to retailers within seven days and provide the breakdown by delivery docket for faster reconciliation. “We have three pillars to our ecommerce services portfolio— pan-India last mile delivery, specialised eFulfilment warehouses and an online marketplace. Our value to the industry comes not only from the provision of individual services, but also from the ability to support end-toend solutions, including offshore sourcing, importation, ownership of inventory, trading and inventory planning. Our online marketplace provides an alternative channel to market for our customers and an opportunity to significantly reduce the cost of sale through disintermediation,” Tewari informed. Tewari asserted that one of the core competencies developed by Gati-KWE is in delivering large-size parcels. The industry has evolved from online selling of services to selling of small packages, which is now moving towards online sales of large parcels like white goods, furniture etc. A lot of companies jumped in delivery of small packages, which are not capable to deliver such big shipments. “Gati-KWE will aggressively roll out additional ecommerce delivery capacity across India to expand our online marketplace and open additional eFulfillment warehouses in key locations. We are also tapping market for small shipment delivery across India,” Tewari added. He highlighted that new model of e-commerce industry is becoming zero/ least inventory, in which delivery model is just vendor–customer (IT based). The company is focussing aggressively for this model and service will include pick, pack and deliver. www.cargotalk.in
Industry Meet FICCI Event
Retail and FMCG industry eyes eCommerce segment in a big way Addressing the recently held conference called ‘Massmerize 2013’, organised by FICCI with the support of Ministry of Consumer Affairs, Food & Public Distribution, Government of India, K V Thomas, Minister of Consumer Affairs, Food & Public Distribution, urged the retail and FMCG industry to take the lead in inventing new technologies to meet the rising aspirations of the Indian consumer.
M
assmerize 2013 brought together the leading players from the retail and FMCG industry and the government. The conference discussed emerging trends and business imperatives. The theme of the conference this year was ‘Consumerism in digital era’, which highlighted the transitions observed in the industry with advent of technology and new innovations.
“I would expect Indian industry to live up to the expectations of the people who look up to them for goods and services at a price that they can afford. The consumer behavior is experiencing consumer technologies,” Thomas maintained. Earlier, Naina Lal Kidwai, President of FICCI, said, “Increasing incomes, growing urbanisation, digitalisation and exposure to global trends are giving rise to an evolved consumer base and meeting consumer aspirations is now the key focus of the Industry. India is slowly picking up in the trend of becoming digitally active in the ways of communications to consumers, on account of increasingly growing internet penetration in both urban and rural areas.” www.cargotalk.in
According to Kidwai, digitally active consumers have embraced the Internet, telecom, media, and social space, changing the way they communicate, transact, and make purchase decisions, thus giving rise to digital consumerism. Retail & FMCG companies are capitalising on these changing trends. “Across the world, the retail industry is at the center of a major shift in the way consumers shop and interact with their retailers. Against the traditional way of customers ‘going to the store’, the store is now coming to the customer. Embedded systems are changing every point in a retailer’s business, from sourcing of goods to distribution to display,” she added.
FICCI-TCS Paper on Multichannel Retailing
“Indian market is enormous and to cater to different consumers it needs a variety of retail models. With the opening up of retail market both in single brand and multi brand, greater interests has been generated among international players to enter the Indian retail market,” added Bijou Kurien, Chairman, FICCI Retail Committee. Sundeep Malhotra, Co-Chair, FICCI Retail Committee & Founder & CEO, HomeShop18 and Dr. Arbind Prasad, Director General, FICCI, also addressed the session.
Evaluating a leading retailer’s online and store initiatives in India (representing the APAC region), the research indicated that number of visitors to their online channel had grown 1.57 times, whereas there was only a 9 per cent increase in store footfalls.
At this conference FICCI in association with TCS released a white paper on ‘Adapting to the Multichannel Customer - A Roadmap for Integrated Multichannel Retailing’. The FICCI-TCS paper outlined the roadmap for IMCR, it covered the current state of multi-channel retail - globally as well as in India. Global consumer indicators reveal that multi-channel consumers (consumers who shop across multiple channels, including web, mobile, offline store), spend more on brands than single channel shoppers.
The paper estimates that by 2018, the number of visitors to the retail brands’ online channel will far exceed the number of its store visitors. It is therefore important that retailers focus on becoming a truly integrated multi-channel retail entity. september 2013 i cargotalk i 45
Family Album Annual Convention
ention v n o C e d a r T I A 4 DACA eet with th
ns o A serious m i t a t n e s e r p stimulating on, which was held on
enti e 150 Trade Conv I A A C A ded by som mestic D n e tt a s a The 4 w ding do New Delhi, untr y, inclu rs, o c August 9 in e th s s inal operato acro rm m te o d fr n s a t te r a deleg olders , airpo nts, airlines , other industr y stakeh n e g a o rg a c s air e Conventio resentative p th f re o t n s e n m io s rn gove d ess ses ractions an . The busin te ts r in e p ly x e e v li d n a s to cked, thank was jam-pa rammes/activities. rog innovative p th
46 i cargotalk i september 2013
www.cargotalk.in
www.cargotalk.in
september 2013 i cargotalk i 47
Family Album Conference
rings b r e b m a h C D PH odal m i t l u m r e h t e g o t e roof n o r e d n u s r o t a oper
ics ultimodal Logist “M ld he ly nt ce ly hosted The re hich was recent w �, 13 20 enc elhi, Confere merce in New D om C of r be m by PHD Cha r the logistics clear direction fo a e of on ed at er lib de om different mod fr s er ay pl ey K for mounting industry in India. with each other ed ct ra te in ts a nodal transpor akers demanding m y lic po e th pressure on stics industry. authority for logi
48 i cargotalk i september 2013
www.cargotalk.in
Family Album Club News
ACCD AGM re-elects the executive committee for 2013-14 The 36th Annual General Meeting(AGM) of the Air Cargo Club of Delhi (ACCD) was held recently in New Delhi.The members unanimously re-elected JP Singh as President, unopposed in keeping with the club’s past tradition. Other office bearers are Yashpal Sharma, Vice President, Ravinder Katyal, Secretary, Sajjan Kalra, Treasurer. The managing committee members include Ashwini Sharma, Prem Sawhney, Rajan Nijhawan, Shakti Yadav and Sumit Mathur.
www.cargotalk.in
september 2013 i cargotalk i 49
Trade Opportunities Engineering Goods Export
EEPC focusses on African countries to offset slowdown session on ways to increase India’s trade with Africa, particularly in engineering products. Speaking at the meet, Dhesi stressed on greater importance to the share of India’s engineering exports to African continent to arrest decline in India’s overall trade.
C
oncerned over a sharp year-on-year fall of 9.25 per cent in engineering exports in June, despite rupee depreciation around the same ratio in the last two months, the EEPC India with support of the Commerce & External Affairs Ministries has decided to explore new markets in the African continent.
50 i cargotalk i september 2013
In the second Interactive Round Table with over 30 diplomats of key African countries, senior Commerce Ministry officials including DS Dhesi, Additional Secretary and Ravi Capoor, Joint Secretary–Ministry of Commerce; Ravi Bangar, Joint Secretary, MEA and EEPC office bearers recently held a business
According to Aman Chadha, Chairman, EEPC, several segments of the sector are facing huge challenges. “Heavy weight engineering segments seem to be facing considerable decline in demand in external markets and there is, so far, no visible impact of the currency depreciation on our exports,” he said. Important engineering export segments like iron and steel, products of iron and steel, copper and copper products, motor vehicles and aircraft, spacecraft and parts have witnessed sharp decline in exports. “While the overall trade with Africa is much below potential, India and Africa can help each other tide over the impact of global slowdown,” he maintained.
www.cargotalk.in
Products and Services Logistics Services
Agility India delivers temperature sensitive shipment securing special permission In India, Customs do not allow movement of build-up pallets in and out of Air Cargo Complex due to multiple reasons including security aspects, infrastructural constrains and multiple handling issues. However, informs Vishal Kashyap, National Manager – Air Freight, Agility India; the company cleared one temperature sensitive shipment of Roche overnight despite all odds thanks to their innovative services. “So, when Roche approached Agility for delivering a Cyro vessel (Pharma ingredients, contained in an Envirotainer, set at -20 Degree Centigrade) to the consignee door 300 km from the air cargo complex, there were serious concerns. The AG team promised to revert on the best possible solution in due course of time,” said Kashyap. The company was fully aware of series of hurdles ahead - right from approaching Indian customs for their consent on taking stuffed delivery out of cargo complex, to the ground handling agencies, the airlines, concerns from the Envirotainers (vendors of the unit) and the strict security concerns on approvals for taking a unit out of the premises and bringing it back.
F
or exports, agents have to deliver cargo to the air cargo premises for building up the airline units post clearance, examinations and security checks. Likewise for imports, de-stuffed deliveries of shipments are to be taken and built-up units are not allowed out of the cargo premises.
When Roche approached Agility for delivering a Cyro vessel to the consignee door 300 km from the air cargo complex, there were serious concerns.” Vishal Kashyap
National Manager – Air Freight, Agility India
52 i cargotalk i september 2013
“In less than two months, Agility created history by securing all statutory approvals, relentless efforts from Mumbai AI team in terms of convincing Indian Customs officials and other concerned agencies along with Lufthansa Air Cargo team by making presentations and explanatory notes on why the permission for taking the delivery of an Envirotainer to the consignees door be granted and how the security concerns on the empty vessel will be addressed,” Kashyap pointed out. Customs issued a circular endorsing Agility India’s request and the company’s Mumbai team took the delivery of Envirotainer from Lufthansa Air Cargo team stacked it up neatly in a Reefer truck and delivered the shipment right at the consignees door within 5 hours 30 minutes. “It is laudable that Agility team took the extra care in handling this highly temperature sensitive shipment and by ensuring safe delivery. We greatly appreciate highest level of team involvement from Agility,” said Arun Manjeshwar, Director, Supply Chain and Quality Assurance, Roche India. www.cargotalk.in
Shipping & Ports New Initiatives
Shreyas keen to boost
containerised cargo movement in India
It has launched two new services connecting India’s Eastern and Western corridors, aiming to increase the domestic coastal containerised cargo market to a healthy 10-15 per cent in next few years in India n Anita Jain
u (L to R)- Capt. Vivek Kumar Singh, Chief Executive Officer; S. Ramakrishnan, Chairman & Managing Director; V. Ramnarayan, Executive Director of Shreyas Shipping and Logistics respectively and Varadarajan, CEO, Shreyas Relay Systems
W
ith international shipping companies getting a share of India’s containerised cargo traffic, Shreyas Shipping & Logistics (part of Transworld Group) is utilising its full potential to build, grow and tap this traffic in India. The company recently launched two new services in coastal shipping connecting KochiChennai-Visakapatnam-Kolkata and Mundra-JNPT-Hazira sectors. The first, from Kochi to Kolkata, linking Chennai and Vizag will be a fortnightly service initially. On the west coast, Shreyas already has a service from Kochi to Mundra via Mangalore. The second, a weekly service, will link Hazira with Mundra and Jawaharlal Nehru ports. Local cargo, for example, from Gujarat can be moved
by sea to the east coast ports of Vizag or Kolkata using the transhipment facility being developed at Vallarpadam in Kochi. This will not only help ease the pressure on road and rail but also save a lot fuel, infomed Ramesh S Ramakrishnan, Chairman, Transworld Group. Two ships with a capacity to carry 1,700 standard containers (TEUs) each will be deployed for the east coast service and a smaller 700 TEU vessel for the new west coast service. With the new services, Shreyas claims to be the first company to link all key ports of India for containerised trade offering seamless link connecting eastern and western coasts. Linking of India’s port for movement of cargo domestically will also help Vallarpadam terminal, Mundra, etc to be promoted as a transshipment hub.
The diversion of five per cent of cargo transportation to a waterborne mode can result in an annual saving of around `20 billion and a six per cent reduction of harmful chemicals and pollutants.”
The company’s priority is not just to capture a larger market share with these new services, but to become a market leader and act as a catalyst for the growth of containerised shipping movement in India.”
Capt. V K Singh
Ramesh S Ramakrishnan
CEO, Shreyas
54 i cargotalk i september 2013
Chairman, Transworld Group
According to Ramakrishnan, the company’s priority is not just to capture a larger market share with these new services, but to become a market leader and act as a catalyst for the growth of containerised shipping movement in India. He said, “Generally, the containerised shipping average movement in other countries is approximately 30-35 per cent. However, in India the penetration level of coastal containerised shipping has not exceeded more than five to six per cent. Through our work and strategies, we intend to grow this market and gradually take this growth to a 10-12 per cent. The potential is huge in coming years.” Through the two new weekly services, the company aims to achieve 75 per cent of the total volume in domestic movements from east to west corridor. Elaborating on the impact of a robust east-west corridor, Capt. V K Singh, CEO, Shreyas said, “Efficient transportation infrastructure by sea has tremendous social and economical benefits for the nation. According to the Ministry of Shipping and Transport, the diversion of 5 per cent of cargo transportation to a waterborne mode can result in an annual saving of around `20 billion and a six per cent reduction of harmful chemicals and pollutants. The sea mode effectively reduces emission of CO2 by 29 gm/tonne/km as compared to road transportation. The current north-south corridor handles around three per cent containerised cargo by sea mode. With the proposed east-west corridor, Shreyas targets to achieve five per cent containerized cargo shift to the sea mode. www.cargotalk.in
Green Initiatives CSR
Om Logistics
Compliance for ecological balance The recent natural disaster has once again revealed that users of natural resources are responsible to a great extent, because they have created an ecological imbalance, feels Akash Bansal, Head Logistics, Om Logistics. He highlights major initiatives for the larger interest of the environment and ecological balance.
“I
feel that, until all human beings understand and realise the collective responsibility to safeguard and conserve nature, it would be very difficult to control disasters like Uttarakhand. Everyone has to take at least one step towards conservation of our natural resources,” appealed Bansal. He also maintained that as a responsible logistics company in India, Om Logistics is sensitive towards nature and thinks about all possible CSR (Corporate Social Responsibilities) activities for its contribution to the same. “We are going around with regular green initiatives of planting tress all around our warehouse and also using green warehouse structures with sufficient natural lighting to conserve electricity. We have also taken a step towards certification on green initiatives and have lately being certified as ISO-14001 compliant organisation. We would also be aiming at all possible ways to contribute a green logistics environment for our customers,” informed Bansal.
Bansal feels that voluntary initiatives need some validation and control mechanism to further strengthen compliances. And, Om Logistics have a very strict preventive maintenance schedule for its vehicles to ensure that the pollution is controlled to the best possible limits. “This helps us sustain our internal compliances,” he stressed.
Green Initiatives from Sindhu Cargo Services n Implementation of solar street lighting systems at most of Sindhu Cargo Services locations. n All the light fittings are energy efficient with LEDs wherever possible and other places with CFLs n All the air-conditioners are energy efficient with 4 star and above rating n The lift for 1st floor and 2nd floor would be operational only for the critical requirements and not for general use
We are going around with regular green initiatives of planting tress all around our warehouse and also using green warehouse structures with sufficient natural lighting to conserve electricity” Akash Bansal
Head Logistics, Om Logistics
56 i cargotalk i september 2013
n Centralised air conditioners will be in off position during lunch hour and non-peak hours n For printouts for the inter office usage, the company encourages use of one-sided papers n For water recycling the company has installed Sewage Treatment Plant (STP) at its Logistic Park in Bengaluru n Rainwater harvesting has implemented at this Logistics Park n The Logistics Park has also retained greenery and landscaping
www.cargotalk.in
Customer’s Perspective E-commerce
New
age customer wants
Delivery with less cost and transit time
In view of the tremendous growth of online purchase and door-to-door goods movements in the country, Tamil Rajan, Logistics Consultant, Firstcry.com, suggested seamless logistics services. He unveils the success story of his company as an instance of fast-changing consumer behavior and the important role that needs to be played by the third-party logistics players.
B
rainBees Solutions, Partners, the first institutional owner of the brands investor in BrainBees, also Firstcry.com and participated equally in the GoodLife.com, was round. founded in late 2010. The company was started from Presently, Firstcry.com is a small bungalow, when the Asia’s largest baby and kids four co-founders discovered eCommerce portal. It exhibits the potential for kids and over 50,000 items from 400+ baby products in India, Thus, top international and Indian they conceptualised FirstCry. brands like Mattel, Ben10, Tamil Rajan com. on September 9, 2010. Pigeon, Funskool, Hotwheels, Logistics Consultant Now, the company has a Nuby, Farlin, Medela, Firstcry.com three-floor corporate office Pampers, Disney, Barbie, in Pune and main warehouses Gerber, Zapak and Mee Mee. with a capacity of 1,50,000 sq ft & 25,000 sq ft. It has regional warehouses at Delhi, Rajan asserted that FirstCry.com now Bengaluru and Kolkata with combined has the highest repeat customer base in the capacity of 40,000 sq ft. Indian e-commerce industry, standing at over more than 60 per cent market share. Later, IDG Ventures India led a US$14 “We offer very interactive websites that million Series-B round of investment into give a real shopping experience and offers BrainBees Solutions. In addition; SAIF lowest price on a huge range of products.”
Logistics Challenge Rajan highlighted the challenges before the eCommerce portals with respect to goods movement at lowest cost. Where cost and transit time play the key role behind the success of eCommerce, un-predictive off-loading, transit damage, ‘restricted items for air’ problems (though most personal care range are liquid /semi-liquid forms and safe), toys and electronic product restrictions and last-mile delivery hassles remain to be major bottlenecks. He appealed to the third-party logistics companies, carriers and policy-makers to address these issues for the greater interest of the country’s economy.
BrainBees solutions launched its second portal (GoodLife.com) at the end of 2011 to cater to beauty/personal care, health and food segment. Its aim was to be a one-stop destination for personal care and lifestyle essentials. “The portal exhibits over 20,000 items from 500+ top international and Indian brands like Adidas, Calvin Klein ,Davidoff, EVA, Gillette, Gucci, Prada, Guess, Elle 18, L’Oreal Paris and Lakme; providing products/brands at the lowest prices,” Rajan claimed. According to him, collaborating with 150 vendors nationally and internationally, Goodlife has a robust logistics and customer support system aimed at delivering the best brands to the customer’s doorstep at the shortest possible time. 58 i cargotalk i september 2013
www.cargotalk.in