Cargotalk December 13

Cargotalk

SOUTH ASIA’S LEADING CARGO MONTHLY

DECEMBER 2013

RNI No.: DELENG/2003/10642 Date of Publication: 22/11/2013

Vol XIV No.1 Pages 60 Rupees 50 cargotalk.in

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Service providers gearing up with cautious optimism

Freight Forwarders & Customs Brokers urge for clarity

The need for better infrastructure and connectivity

PLUS

ACAAI CALLS FOR STRONG COORDINATION FROM DIFFERENT MINISTRIES

editorial

SanJeet Editor

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Sr. Assistant Editor Ratan Kumar Paul Sr. Sub Editor HRitvick sen

Deputy General Manager Harshal Ashar Regional Head: North & West shiv kumar Assistant Manager: West Roland Dias Sr. Marketing Co-ordinator Gaganpreet Kaur

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A Ministry of Heavy Industries & Public Enterprises study unveils that India is emerging as one of the fastest markets for passenger cars and second-largest for twowheeler manufacturers. It is a home for the largest motorcycle manufacturers and fifthlargest commercial vehicle manufacturers.

According to recent statistics, the industry is producing more than 13 lakh passenger vehicles, 4 lakh commercial vehicles and 76 lakh two-wheelers and 3 lakh tractors per annum. The automobile industry has achieved a turnover of US$ 28 billion and the auto component industry has reached a turnover of US$ 10 billion. To maintain this growth rate, the government had set up the Development Council for Automobile and Allied Industry and constituted a taskforce for the same.

Editor SanJeet

Asst. Vice President Gunjan Sabikhi

Give a motion to ‘Automotive Mission Plan’ hrough its ‘Automotive Mission Plan 2006-16’, the Government of India has a vision to emerge as the destination of choice in the world to design and manufacture of automobiles and automotive components. It also envisions an output reaching a level of US$ 145 billion, accounting for more than 10 per cent of GDP and providing additional employment to 25 million people by 2016. Meanwhile, the Indian automotive industry has emerged as a sunrise sector within a few years of the liberalisation of the country’s economy.

It is expected that the next few years will be very crucial for the growth of the automotive industry in India.

Cargotalk

Design ruchi sinha Photo Journalist simran kaur Advertisement Designer Vikas Mandotia, Nitin Kumar Aarushi Agrawal

The challenge before the taskforce was to give shape and motion to the industry, which has been facing various obstacles.

The basic problem in this regard is to put in place a suitable infrastructure and a policy conducive to grow the industry. The infrastructure for logistics operations and recognition to it as an industry, for instance, remains major areas of concern.

It is an undeniable fact that investors from automotive sector would only be attracted to make India their manufacturing hub, if logistics and transaction costs are competitive as compared to other parts of the world.

Moreover, the decision (as announced in the vision document) of having regular dialogue with the industry stakeholders has to be in practice.

Proper integration among the ministries involved for automotive logistics for fast clearance of projects as well as shipments will also be urgent tasks before the government.

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Contents December 2013

SECTORS

National News

8 I CII Service Sector Conclave recommends for a Nodal Body under Cabinet Secretary Kale Logistics Solutions partners with World Bank for Logistics Performance Index CBEC calls for more trade participations in Customs functioning and resolving issues

10 I Seminar on warehousing

opportunities in Lithuania

India is the 3rd largest garment exporter to Australia Million Minds’ 3 Logistics Talent Hunt-2014, Season 3 holds its first event in Delhi rd

International Airport 12 I Amsterdam Airport Schiphol positioning itself as a gateway for pharmaceuticals

39 I GSEC facilitates entry of new airlines to Ahmedabad Airport International News

14 I Emirates SkyCargo adds

capacity by acquiring a new Boeing 777 freighter to its fleet IAG Cargo launches new services to Hong Kong connecting Delhi ELITE introduces new facilities for freight forwarders 6 i cargotalk i december 2013

Movements 18 I Emirates appoints new Regional Manager Subodh Sachan joins Seagull Maritime Agencies Industry Associations 20 I ‘Simplify the Process’ says new FFFAI Chairman

22 I ACAAI calls for strong coordination between industry and different ministries viewpoint

24 I Making a cargo hub: Through strong connectivity by Indian carriers emerging segments

32 I Better infrastructure and connectivity urged for thriving exhibition sector cargo performance

34 I Airline-wise exim cargo performance at IGI Airport Delhi for October 2013 35 I Airline-wise exim cargo performance from Mumbai International Airport for October 2013 36 I Airport-wise domestic

cargo performance at Indian Airports for August 2013

n Cover story

26 I Automotive Logistics:

Service providers gearing up with cautious optimism Though presently sluggish, India is an emerging market for the automobile industry. However, are the 3rd party logistics service-providers in this country ready to cater to the demand from this sector? Cargotalk presents the perspective of leading logistics service-providers in the automotive sector

56 I Diwali Celebration in

ACCD style

38 I Airport-wise international cargo performance at Indian Airports for August 2013

COLUMNS User’s Perspective 30 I A perfect future for automotive logistics

Family Album

48 I AEO for fast

50 I ACAAI 2013: Delegates discuss changing roles to grow

clearance: Compliance & mutual understanding is the key

Agents’ Views 40 I AEO and SelfAssessment Programmes: Are they industry-friendly?

Expert Comments 46 I Self-Assessment of Cargo: Genesis and Significance Face of the Month 58 I New FIATA VP from India to focus on collaboration and recognition www.cargotalk.in

National News News in Brief

Kale Logistics Solutions partners with World Bank for Logistics Performance Index

CII Service Sector Conclave recommends for a Nodal Body under Cabinet Secretary he recently-held CII Service Sector Conclave in New Delhi witnessed logistics Tservice industry getting recognised by

agreement between Kale TBankheLogistics and the World was to conduct Logistics Performance Index (LPI) Survey 2013-14 in India. The LPI is the benchmark study that the World Bank publishes every two years. By partnering Kale Logistics, the World Bank invited the views of many freightforwarders from India, who are playing a significant role in the Indian logistics industry.

The survey responses will help generate the LPI-2014, a data-set closely monitored by policy-makers and professionals worldwide. The LPI will be based on a worldwide survey of global logistics operators that allows participants to express their professional views on several logistics dimensions: transportation, infrastructure, and clearance procedures.

Commenting on the partnership, Amar More, Sr. VP, Kale Logistics Solutions said that the survey was deployed through its multi-modal cargo community platform.

corporate houses as well as policy-makers.

Addressing the gathering, Anand Sharma, Union Minister for Commerce and Industry, emphasised the importance of logistics services for the building the nation’s economy and proposed a Competitiveness Council for Services Sector to make the industry worldstandard. “India’s services sector contributes to around 60 per cent of our GDP, 35 per cent of employment, a quarter of the country’s total trade and more than half of its foreign investment inflows. However, in a global market of US$ 4 trillion of services exports, India’s share is still low. It’s US$ 227 billion,” the minister pointed out. “Logistics services is

The Conclave was also addressed by several logistics service providers including Tushar Jani, Chairman, SCA Group and Chairman, Blue Sea Shipping Agency; Vasant Murthy, CEO, Container & Logistics Business, Adani Port & SEZ and Pritam Banerjee, Senior Director, Corporate Public Policy, Deutsche Post DHL. According to them, to strengthen the logistics services in India, the need is to set up a Nodal Body under the Cabinet secretary to bring in proper coordination between several ministries involved with this sector.

CBEC calls for more trade participations in Customs functioning and resolving issues n a recent circular, the Central Board of IFinance, Excise and Customs (CBEC), Ministry of Government of India has directed all major industry associations including FICCI, CII, PHD Chambers and FFFAI to take part in all customs-related matter to expedite the cargo operations in India.

To interact with the industry stakeholders CBEC has created a Permanent Trade Facilitation Committee (PTFCs) in each Custom House, which includes local trade and logistics associations as well as Customs Brokers associations.

The Board also noted that issues could be better resolved at the local level, if presented

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one of the sectors that requires our attention in the context of services exports,” added SR Rao, Commerce Secretary, Government of India.

to the Chief Commissioners/Commissioners by the apex trade bodies. Hence, CBEC stressed on the apex trade bodies to meet the Chief Commissioners/Commissioners.

The apex trade bodies could also attend the PTFCs along with their constituents, who are members of the PTFCs. www.cargotalk.in

National News News in Brief

n Seminar on warehousing opportunities in Lithuania

he Federation of Indian Export Organisations (FIEO) recently organised a seminar on TManaging logistics and warehousing opportunities in Lithuania. Chaired by TS Ahluwalia, MemmerCommittee, FIEO and addressed by Diana Mickeviciene, Minister Counsellor, Embassy of the Republic of Lithuania and Vytautas Nauduzas, Ministry of Foreign Affairs of the Republic of Lithuania, the seminar was attended by leading exporters and logistics companies in India.

Lithuania is strategically located on the crossroad of three large markets, which includes EU markets of Western Europe and Scandinavian countries (Denmark, Norway, and Sweden), while the Eastern markets of Russia and the Commonwealth of Independent States (CIS) are on other side. Sectors like inorganic chemicals, fabrics, pharmaceutical products, fertilisers, organic chemicals, miscellaneous chemical products, iron and steel, electrical machinery and equipment and parts, textiles, leather and handicrafts have a sizeable market in the Baltic republics (Estonia/Latvia, besides Lithuania) besides CIS and Scandavian countries.

n India is the 3rd largest garment exporter to Australia ustralia is the focus country for garment exporters in India, considering that India and “A Australia are at an advanced stage of negotiations for a Free Trade Agreement and also that the Australian buyers wanting to reduce their over-dependence on China,” said A Sakthivel, Chairman, AEPC at Australia International Sourcing Fair (AISF) in Melbourne. A delegation of 30 garment exporters participated in this fair to explore opportunities for the Indian exporters to tap the Australian clothing market. “We are the third largest exporter of garments to Australia, and has all the potential to boost the business further. The garment exporters must take this advantage to tap this huge US$ 5.61 billion Australian apparel market.

India’s apparel exports to Australia in 2012 were around US$ 111 million,” he added. The AISF is the only textile and clothing exhibition for the Australia and New Zealand region. The Indian pavilion was inaugurated by Manika Jain, the Counsel General, CGI India, at Melbourne.

n Million Minds’ 3rd Logistics Talent Hunt-2014,

Season 3 holds its first event in Delhi

he first event of ‘Logistics Talent Hunt 2014, Season 3’ was recently organised by MillionTat Institute Minds in New Delhi. The event was organised in association with its education partner of Marketing & Management. Million Minds and Chartered Institute of Logistics & Transport (CILT) plan to take this event to other regions in India including Jaipur, East UP/ Lucknow, Mumbai, Patna, Chennai, Jalandhar and NCR/West UP-II (final round to provide participants one last chance).

The Talent Hunt competition saw active participation of teams from various B-schools like JIMS, Shikshapeeth, Lloyd, Meridian and IMM comprising of more than 100 students. “The students made very well thought-out and informative presentations on current topics as Reverse Logistics, Just-in-Time and GST (Goods & Services Tax),” informed Amit Shankhdhar and Prem Prakash, Directors, Million Minds.

n APM Terminals honoured with ‘Star of the Industry’ ecently; APM Terminals India, a part of the Inland Services division of the APM Terminals R Global Terminal Network, was declared the winner of the ‘Execution Champion Award’ at the recently-held “2013 Star of the Industry Awards’. These awards are organised by the Star of the Industry Group and supported by World HRD Congress.

Subhasis Ghosh, Managing Director, APM Terminals India and Director, Inland Services, South Asia, was awarded the Super Boss Award in Logistics and Supply Chain Industry, 2013.

“This award recognises our effort in aligning people to business objectives and engaging the team towards superior execution,” said Ghosh.

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International Airport One-on-One

Amsterdam Airport Schiphol A gateway for Indian pharmaceutical freight

Amsterdam Airport Schiphol, which is located in the heart of the Amsterdam Metropolitan Area, is an important international logistics hub and is positioning itself as Europe’s preferred airport. Speaking to Cargotalk, Bart Pouwels, Director, Amsterdam Airport Schiphol Cargo, maintained that the airport’s prime focus for Indian market would be pharmaceuticals from India to Europe and beyond, via Amsterdam.

Ratan Kr Paul

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msterdam Airport Schiphol Cargo would showcase its facilities for handling of pharmaceuticals through Indian Pharma Shippers’ Forum. The forum is focussing on sector demands and airfreight opportunities of India’s US$20 billion pharma industry. India is fast emerging as a global manufacturing hub for pharmaceutical products, and the country’s booming pharma industry is expected to achieve annual growth of around 8 per cent by 2015.

“We have set up a strong infrastructure to handle pharmaceuticals at our airport.

We are expecting a huge volume of pharma products from India,” said Pouwels, who is the co-organiser of the Pharma Shippers’ Forum. He is an expert on pharma, lifescience and perishables, whose career has also included several years as the senior manager of pharma business for a major global logistics provider. “Schiphol itself already has a strong commitment to this sector, having successfully facilitated growth of pharma traffic from India, using Amsterdam as a gateway to other continents such as the Americas. But there is potential for much more growth, both on our route and to other major markets,” observed Pouwels.

Meanwhile, there are some seven handling companies present at Schiphol Airport with all modern facilities for shippers and freight forwarders. Recently, KLM has opened new facilities for temperature-sensitive cargo.

We have set up a strong infrastructure to handle pharmaceuticals at our airport. We are expecting a huge volume of pharma products from India” Bart Pouwels Director, Amsterdam Airport Schiphol Cargo

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Pouwels asserted that Schiphol Airport is an attractive transshipment hub with huge connectivity by regular passenger as well as freighter aircraft. It has 317 scheduled destinations in more than 90 countries, connected by 103 scheduled airlines, 24 scheduled freighter operators in 2012. The fast, efficient and safe cargo process at this airport is driven by continual supply-chain innovation, close cooperation with the entire cargo community and the added-value knowledge and expertise of its team.

Schiphol is optimally connected by air, sea, rail and road. Access to all main European commercial and industrial centres is fast and easy. Over 150 logistics service providers have operations situated at or in the direct vicinity of Amsterdam Airport

Performance º The growth in cargo throughput at

Amsterdam Airport Schiphol continued throughout the third quarter. A strong September, up 3.9 per cent at 130,631 tonne, brought the total for the first nine months of 2013 to 1,120,389 tonne – a growth of 1.6 per cent on 2012.

Asia continued in the top slot, with N. America retaining second position.

Schiphol tonnages have shown growth in 5 out of 9 months this year.

Schiphol, and over half of all American and Asian European Distribution Centres are located here.

e-freight initiatives

According to Pouwels, the less transit times and fast clearance of cargo at Schiphol Airport is possible because of the successful implementation of e-freight project. Meanwhile, ‘e-Freight@NL’ – the Dutch Government-funded project to encourage the move towards paperless air cargo through its main airport, Schiphol - has completed its programme with a string of successes. Launched in July 2010, the project has successfully achieved a five-fold increase in e-Freight shipments through Schiphol in 2012.

In view of huge potential of pharmaceuticals export from India, Pouwels recommended for more capacity and freighter services between India and Amsterdam.

He is expecting a good volume of pharmaceuticals from Delhi, Hyderabad and Bengaluru. Accordingly, the Forum will organise road-shows in these cities in the months to come to interact with exporters and freight-forwarders. www.cargotalk.in

International News News in Brief

ELITE introduces new facilities for freight forwarders LITE Association of Logistic Elogistics Networks, the independently-owned and freight-forwarder networks in the world, has made significant progress since its foundation less than 12 months ago. Roy Stapleton, President, Global Logistics Network (GLN) and cofounder, ELITE, said, “With a combined membership of over 3,450 logistics companies in 7,000+ offices around the world, ELITE members have a combined annual turnover of over US$60 billion. With 10 of the world’s leading freight forwarder networks joining the association, ELITE has made significant inroads in providing the industry with a clear pathway for logistics companies and shippers to locate and utilise networks.

Recently, the association introduced three new facilities for its members. The new benefits include ELITE Insurance, ELITE Technology and ELITE Courier.

ELITE is now able to offer all member companies world-beating, flexible and high-quality cargo and freight services liability (FSL) insurance products through ELITE Insurance.

To ensure that all freight forwarders are able to meet and exceed current and future demands for electronic global connectivity and security regulations in the new ‘paperless environment’, the association has also created ELITE Technology. With the Worldwide Information Network (WIN), all member forwarders now have access to this system. It is connecting forwarding agents with each other and with brokers, air/sea carriers and other logistics service providers.

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Emirates SkyCargo adds capacity by acquiring a new Boeing 777 freighter to its fleet SkyCargo is expanding its capabilities and capacity to meet current needs and for EThismirates long-term growth. The airline recently acquired a new Boeing-777 Freighter to its fleet. latest delivery brings Emirates SkyCargo’s B-777F fleet to 10, and comes ahead of the move of its freighter operations to Dubai World Central’s Al Maktoum International Airport in May 2014. It is a dedicated freighter cargo terminal that will be able to handle 700,000 tonnes of cargo annually.

The B-777F aircraft is one of the most modern, technologically advanced freighters available and has the lowest fuel-burn of any comparable-sized aircraft. The aircraft is capable of carrying 103 tonnes of cargo and its main cargo deck is the widest of any freighter aircraft at 3.7 metres, which enables it to uplift outsized cargo and carry larger consignments.

IAG Cargo launches new services to Hong Kong connecting Delhi Cargo, the cargo The flight to Hong Kong will IandAGbusiness of British Airways stop in Frankfurt and will return Iberia, decided to expand to London via New Delhi. “The its operations in Asia Pacific with the introduction of an additional air-freighter service into Hong Kong. With this new service, IAG Cargo offers customers six freighter flights into the territory per week. The additional flight was scheduled to commence on a scheduled basis from October 31 out of London and support the two daily British Airways flights into the territory.

According to Steve Gunning, Managing Director, IAG Cargo, the additional flight will be serviced by a Boeing 747-8 freighter and will depart the Hong Kong airport at 0605 on Saturday mornings.

service connects businesses to IAG Cargo’s network of 350 destinations and helps them take advantage of high-growth markets such as Latin America, where IAG Cargo offers one of strongest networks on the market,” he said.

He also maintained that the stop in India is a huge benefit for their customers as the Hong Kong-Delhi route is vital for a range of businesses. With this additional freighter, IAG Cargo now provides the Hong Kong market with around 700 tonnes of freighter-lift a week, in addition to the established line flights which can provide about 200 tonnes.

www.cargotalk.in

Guest Column Skill Development

New professional courses for Logistics & Supply Chain Management

Recently, an MoU has been signed between Million Minds and IL&FS Skills to carry out pan-India logistics & supply-chain training and placement activity. Talks are in progress with more organisations where Million Minds will function as the knowledge partner to impart training programmes. Dr. Veni Mathur, Dean, Million Minds shares about the importance of the new initiatives.

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of computers will be imparted to the students to make them ready for the logistics industry at the entry level. These candidates will be trained to handle jobs as delivery agents and operations assistants at warehouses and express cargo companies efficiently.

n the process of planning, implementing, and controlling the efficient flow of goods and services from the point of origin to the destination, logistics involves detailed coordination of complex operations involving many people, facilities or supplies.

Whether it is inbound or outbound logistics, the process involves careful planning and a deep understanding of the subject matter.

Unfortunately, logistics in India is largely an unorganised sector with untrained manpower.

The organised sector is responsible for only six per cent of the market share; the good news is that this meager share is likely to double (12 per cent) by 2015.

The growing demand of consumers and intense competition among companies to reduce costs has led to the growth of 3PL in India. Many of these companies are planning to broaden their areas of operation and are also planning to develop their own logistics parks across the country. If this trend continues as per the estimates, the organised logistics players will need human resources to manage increased operations.

Logistics costs in India are amongst the highest in the world (10-20 per cent of GDP as against 8 per cent for the rest of the world). Inefficiencies in transportation, poor condition of storage infrastructure, a complex tax structure, low rate of technology adoption are some of the causes, but primary among these is the poor skills of the logistics human resource. The manpower lacks analytical skills that are required for this sector. Acute skill shortage is perceived at all levels – from the drivers, couriers, loading/ unloading staff to supervisors to senior-level managers and entrepreneurs.

Million Minds: New Courses

There are no proper institutes for improving 16 i cargotalk i december 2013

It also includes industry visits as well as 15 days on-the-job training for the students to have a realistic experience of the working environment of a logistics company.

Logistics costs in India are amongst the highest in the world; 10-20 per cent of GDP as against 8 per cent for the rest of the world” Dr. Veni Mathur Dean, Million Minds the skills of those aspiring to make a career in logistics. Million Minds Management Services, a company dedicated to the task of bringing together academicians and industry, has successfully developed two basic courses —Logistics Assistant and Logistics Supervisor to meet the needs of the industry.

The Logistics Assistant course is the programme open for 10+2 pass students.

It is a three-month training programme wherein the basics of logistics, along with soft skills, elementary English and knowledge

The Logistics Supervisor course is designed for students at the graduate level, where MBA students can also undertake the course as an additional qualification. This training course is of six months’ duration and covers various modules of logistics and supply chain management to get an in-depth knowledge of this field. The two modules on operations will help to increase efficiency and responsiveness that is vital to meet the dayto-day challenges of the logistics industry.

Besides, there are modules on costing and taxation, warehousing and inventory management, customer care, 3PL and intermodal transport.

This course includes a one month on-thejob training with a logistics company, after which the candidate will find placement at operational and supervisory level.

These training programmes cover the requirements of most of the logistics industries as courier & cargo, warehousing, inventory, transport & logistics, aviation and shipping.“We, at Million Minds, have had an encouraging response from the industry about the contents of the programmes in enabling the employability of the candidates,” said Mathur. www.cargotalk.in

Movements New Appointments

Emirates appoints new Regional Manager Airline has strengthened its team in North and East E mirates India with the appointment of Tarun Sharma as the Regional Manager for North and East India. Sharma will oversee the Passenger, Cargo, Airport, Engineering, Finance and Administration activities for Emirates’ Commercial Operations in North and East India. He will be based out of New Delhi.

Prior to joining Emirates, Sharma was working with Thomas Cook (India) where he was the Associate VicePresident Sales, responsible for top-line growth in the markets of North and East India as well as Gujarat. He is an alumnus from the Indian Institute of Foreign Trade, from where he graduated with a Masters’ Degree in Marketing & Finance.

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Subodh Sachan joins Seagull Maritime Agencies ubodh Sachan has recently joined Seagull Maritime Agencies S as its new Vice-President. Seagull Maritime Agencies is one of the leading international freightforwarding company in Northern India and a group company under Worlds Window Group. Sachan, a management graduate from IMS, Indore, has 16 years’ of experience in the field of logistics. He will be responsible for developing business excellence and strategy. Sachan will also be responsible for strategy development, quality management, process development and would involve areas encompassing detailing of logistics, exploring new business opportunities, tracking external environment as well as competition. Prior to joining Seagull Maritime, he was working with Satkar Logistics and before that, Sachan worked with various shipping lines and NVOCC companies.

www.cargotalk.in

Industry Associations Exclusive Interview

‘Simplify the process’ says new FFFAI Chairman

Debashish Dutta, the recently-elected Chairman, Federation of Freight Forwarders’ Associations in India (FFFAI), in an interview with Cargotalk underlined that his focus would be primarily on the problems faced by the customs brokers in dealing with their day-to-day work. FFFAI, under his leadership, will also chalk out plans and programmes for making the process simple and easy, with the overall objective to remove unnecessary hurdles.

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he customs brokers are playing a crucial role as the main facilitator of supply-chain management in the entire delivery system of the country.

This involves preparation of documents, electronic submission, calculation of duty and facilitating communication with ports, customs, banks, importers, exporters, steamer agents, CFSs, freight-forwarders, handling agents, etc. Hence, a customs broker provides a focal point for importexport trade of the region.

According to Dutta, with the advent of increasing all-round competition in the respective areas, coupled with globalisation and liberalisation, customs brokers are faced with stiff challenges in their multi-dimensional responsibilities and performances.

The concept of customs brokers in today’s world has been changing rapidly. This has been possible because we are aware of the need of change. ” Debashish Dutta Chairman, FFFAI

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Of these, one of the main challenges is to fulfill the obligations on KYC on the part of the customs brokers to verify the antecedents, correctness of import-export code (IEC No), identifying the client and function of their clients in the declared address by using reliable, independent, authentic documents, data of information as per circular no.9/2010-Customs dt.08.04.2010 of CBEC. Whereas such obligations are not applicable on the part of other logistics operator. “We have to overcome this difficult task— a real challenge of compliance risk for us,” he pointed out.

Dutta, however, was of the opinion that despite challenges, new avenues are now opening in front of customs brokers in the logistics fields, and in fact, customs brokers are successfully making progress in extending their functional arenas to CFS, ICD and other

areas of operations. As a result, opportunities as well as responsibilities of customs brokers have been broadened to a large extent. “The concept of customs brokers in today’s world has been changing rapidly. This has been possible because we are aware of the need of change. We always acted in anticipation of change,” he emphasised.

Commenting on the role of FFFAI as an association for freight-forwarder community in India, Dutta said, “With my association with FFFAI over13 years, I have felt that FFFAI have been protecting and safeguarding the interest of its members, promoting their professional skills through training, seminars, workshops, etc.”

He was of the view that today, India is at a point of change. The customs brokers need to drive this movement once again, and this will open up new opportunities and avenues for them. The significant role of FFFAI in conveying regular meetings, biennial conventions and interactive sessions with the appropriate forums to analyse the more active role of customs brokers in the logistics field, are always on the move towards success with set objectives.

On AEO and Self Assessment

According to Dutta, the AEO programme implementation, which envisages benefits to different categories of economic operators is a good effort.

To make the Self-Assessment schemes a success and realistic, it is necessary to recognise the institute run by FFFAI as Self-Regulatory Authority and empowering them to issue Certificate / Licence to act as customs brokers like other professional institutes. www.cargotalk.in

Industry Associations Convention Report

ACAAI calls for strong coordination

between industry and different ministries

The 40th Annual Convention of the Air Cargo Agents’ Association of India (ACAAI), which was held from October 24-27 in Jaipur with the theme of ‘Air Cargo in Aviation Industry—A Vital Link’, discussed the critical role of aircargo in a complete and integrated supply-chain system and logistics industry. The convention observed that lack of proper communication between industry and government agencies and ministries remains one of the major hurdles before the air cargo and logistics chain.

p SL Sharma, President, ACAAI lighting the inaugural lamp along with other dignitaries

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The global uncertainty has driven all assumptions and forecasts of marketing gurus upsidedown. In this world of uncertainty, it is imminent that the logistics industry performs to perfection.

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he Convention was inaugurated by S. Machendranathan, Special Secretary/Adviser, Ministry of Civil Aviation. Attended by a large number of ACAAI agents from across the country, several eminent speakers and air cargo and logistics experts were present on the occasion to address the delegates. Apart from Machendranathan, other speakers included Pawan Jain, Commissioner Customs (Preventive), Jodhpur; Vikram Joshi, Member, Board of Jaipur Integrated Texcraft Park; PS Nair, CEO, GMR; Amber Dubey, Partner & Head-Aviation, KPMG; Alok Shekhar, Secretary, AERA; Bart Pouwels, Director, Amsterdam Airport Schiphol Cargo and several other industry practitioners (both service providers and users).

In his speech, SL Sharma, President, ACAAI, urged for a robust infrastructure and a strong coordination between industry stakeholders and different ministries

through Air Cargo Logistics Promotion Board. He also emphasised on recognition of the air-cargo and logistics sector and quick adoption of evolving market needs and changing trends of the logistics environment.

“The 21st century has been the most uncertain period in the history of business.

The global uncertainty has driven all assumptions and forecasts of marketing gurus upside-down. In this world of uncertainty, it is imminent that the logistics industry performs to perfection. The air-cargo segment of the supply chain has begun to play an even important role for effective movement of goods,” he underlined. He also maintained that businesses across the world are learning how to become leaner and work more efficiently. Also, the buyer is becoming smarter and is making better use of effective air-freight solutions to buy closer to date of sale rather than stocking up. “In www.cargotalk.in

this world of fierce competition, only efficiency can make the difference,” he added.

Sharma pointed out that never before has the importance of the air cargo logistics industry in India been as crucial. In the rapidly-changing profile and environment, the fullest participation, attention and the most effective deliberations of all players in the industry is required to establish the vital nature of the link in the entire global logistics chain.

“The focus of everyone, the policy-makers, the implementers and the business community has to be on growth. This convention seeks to recognise the booming logistics arena and to establish how the aircargo is a vital link for economic prosperity,” the ACAAI president stressed. He also urged that some of the archaic regulations and procedures need timely rationalisation and simplification. He welcomed the recent initiatives taken by the Ministry of Civil Aviation, especially by the formation of Air Cargo Logistics Promotion Board. Sharma appealed to the Ministry to call a meeting for the industry at least once in a month as there are issues that need urgent attention.

Addressing the gathering, Machendranathan said that it is partly true that MoCA was more interested in facilitating passenger traffic. But for last two years, there have been a lot of developments for air-cargo operations and facilitation. The government is serious about an industry-friendly air-cargo policy, and

ACAAI Awards

Best Cargo Airline-Emirate SkyCargo º First Runner Up-BA World Cargo º Second Runner up-Cathay Pacific and Singapore Airlines Best Cargo Airport-HIAL º First Runner Up-MIAL º Second Runner Up-BIAL and AAI Best Cargo Ground Handling Agent º Menzies Air Cargo Hyderabad º First Runner Up-Menzies Bobba Bangalore º Second Runner Up-CSC Mumbai

www.cargotalk.in

p ACAAI office bearers and dignitaries during the inauguration of ACAAI Convention 2013

For last two years, there have been a lot of developments for aircargo operations. The government is serious about an industry-friendly air-cargo policy, and creation of the ACPL is a reflection of that. creation of the ACPL is a reflection of that.

He, however emphasised on the change in mind-set about air cargo and logistics industry from all quarters. “In addition, skill development, capacity-building, ease in procedures especially by customs, decongestion of airport, creation of offairport facilities like AFS, and integration between industry stakeholders have to be the prime focus,” said Machendranathan.

Earlier, Jain asserted that the CBEC has taken several initiatives for trade facilitation. “Our goal should be how to reduce transaction cost to make exports competitive. However, there should an integrated approach from every one,” he said.

Concerns on Customs’ Programmes

The 40th Annual Convention of ACAAI witnessed serious discussions on government policies related to Customs clearance. Speaking at a business session, Pawan Kumar Jain elaborated on the recent initiatives taken by the Ministry of Finance pertaining to Customs clearance.

Interacting with Jain, several delegates expressed concerns over the anomalies related to self-assessment and Authorised Economic Operator schemes. Reacting

to the agents’ concerns, Jain emphasised on collective responsibilities and proper training. He also assured further discussions between the Customs Department and industry representatives to resolve the issues.

Highlighting the issues related to Customs Samir J Shah, Partner, JBS Group maintained that the Customs Version 1.5 has to be identical at all 108 locations across the country and all-inclusive. “It unfortunately not reached the stage of either being identical or inclusive,” he said.

Focus on Transhipment Cargo

According to industry practitioners and experts, a mix of hub-and-spoke mechanism and transhipment cargo movement will be the key to the success of a hub airport in India. Speaking at a Business Session, Amber Dubey said that India is as of now unable to utilise the transhipment opportunities from surrounding countries.

He also stressed that the industry should stop depending on the government and it should take some initiatives on its own.

“The government will act according to its own course, agenda and compulsions.

The industry should bring excellence in manufacturing and cargo-handling. The objective should be reducing cost and dwell time,” added Dubey.

Alok Shekhar emphasised on the higher performance levels by the industry stakeholders. “We will have to ensure operational quality even though there are so many agencies involved. AERA is already monitoring the performance level through its Act, and in the days to come, it would be intensified for the greater interest of the industry and the country,” he stated. december 2013 i cargotalk i 23

Viewpoint Airport Infrastructure

Making a cargo

hub Through strong connectivity

by Indian carriers

Making a Hub: Key Elements

º Airports to be an effective gateway first º A regional cargo hub next º A strong economic development focus º Cluster approach º An internationally oriented civil aviation policy with focus on regional connectivity º Increasing connectivity with neighbourhood º Strong Indian and base carrier º An effective airport policy º Free Trade Zone º Industry-friendly regulatory approach º Drastic change in Custom law º Single-window clearances º Robust infrastructure º Connectivity from smaller towns to gateway airports º Development of complete customs station at smaller towns º Off-airport facility like AFS º A mindset change amongst the policy makers, government officials and airport operators 24 i cargotalk i december 2013

Strong connectivity of Indian carriers from Indian airports is the prerequisite for establishing an aviation or cargo hub in the country, feels RG Panicker, CEO, CSC India, while speaking at the 40th Annual Convention of ACAAI in Jaipur.

He also emphasised on a Civil Aviation Policy, beyond metro-centric approach and robust infrastructure at airports and off them.

T

he fundamentals behind the ‘hub & spoke’ model are that one carrier has to fly to many destinations using one central point, without just flying point-to-point. According to Panicker, in a system with 10 destinations; the hub-spoke system requires only 9 routes to connect all destinations, while a true point-to-point system would require 45 routes. However, there is poor connectivity to these markets

by Indian carriers, though some efforts are being made by low-cost carriers.

India has an ideal geographical location in the trade-lanes from East-to-West and West-to-East. India is surrounded by production centres on the one hand (like Bangladesh, Pakistan, Nepal, Sri Lanka,Vietnam, Indonesia, Thailand) and exciting countries on other hand (CIS, Egypt, Turkey). Hence, there is a huge scope for transshipment cargo. Unfortunately, the country has almost zero transshipment cargo out of 2.64 million MT of cargo processed annually. No international cargo company or integrators have made India their hub. Citing the facts he pointed out that top 10 hubs account for more than 50 per cent of global freight volume. “A proactive international aviation policy through multilateral co-operation among neighbouring nations has to be taken to integrate air-transport market. In addition, an aggressive marketing strategy has to be adopted to attract investment for development of hubs,” he said.

Panicker maintained that the development of hub airports is evolution, and not just a starting point. It depends on economic vision for the region, infrastructure development, regulatory policy, civil aviation policy and airport vision. “Vision drives the development,” he emphasised. The government policy for economic growth has to be in sync with the ease of doing business and single-window clearance system, with industry-friendly business laws and taxation policy. Also, a 6-8 per cent growth scenario is not sufficient to make a hub successful.

Panicker underlined the utmost importance

on beyond airport connectivity. Infrastructure outside the airport connecting hinterland to the airport would be one of the key drivers.

Our highways should be 16 lanes instead of present ones.

In his opinion, there is a need for a long-term vision by airport—how they look at the development of an airport from the

A proactive int’l aviation policy through multilateral co-operation among neighbouring nations has to be taken to integrate airtransport market.”

RG Panicker CEO, CSC

economic perspective of the country. “Are they internally focused on their profitability or do they have a vision for the community, the region or the country? How do they look at cargo development? There should be long term vision for cargo- not adhocism. There should be flexibility and transparency in their policy for the airport,” Panicker maintained.

He also added that affordable logistics and business centres need to be created. www.cargotalk.in

Cover Story Emerging Sector

Service providers gearing up with cautious optimism Though presently sluggish, India is an emerging market for the automobile industry. However, are the 3rd party logistics service-providers in this country ready to cater to the demand from this sector?

Cargotalk presents the perspective of leading logistics service-providers in the automotive sector.

Photo Courtesy: Fiat India Automobiles

Ratan Kr Paul

26 i cargotalk i december 2013

R

ecent reports reveal that twowheeler market will be the only segment to register marginally positive demand growth in the near term. The sales of two wheelers have increased by 18 per cent in September and October 2013. Reports also unveiled that the auto component industry has been hit hard, except for the two-wheeler segment. The commercial bus and truck segment has suffered the most with sales falling 32 per cent yearon-year in October to 14,261 units. The segment has been seeing negative sales for the past 20 months.

However, from the long-term perspective, India would be the lucrative market for automobile/automotive manufacturers and logistics serviceproviders for the same. Projections say India will be the world’s 3rd largest automotive market by 2016 ahead of Japan, Germany and Brazil, riding on its domestic automotive sales.

According to IHS Automotive, a global market information provider, though the economic growth vulnerability and lower sentiment resulted in the market slowdown in 2012 and 2013, India is expected to regain strong growth trend from 2014 onwards.

“Yes, we are facing the pinch of the present slowdown prevailing in the market.

The only growth is visible from twowheeler segments,” said Vipul Nanda, MD, Mercurio-Pallia, the leading name in the automobile logistics arena. According to him, thanks to new product ranges added to the company’s account, they have not seen any slide in performance.

Commenting on the revival of the market, he said, “We are all waiting for the Parliament elections in the country due to take place next year. Till then, we will have to wait and watch. I think the period from January to March 2014 would be a very critical time for the entire industry,” he observed.

According to Nanda, an early implementation of GST would be the game-changer for the logistics industry.

After introduction of the proposed GST, the company is expecting a quantum jump in long-haul goods movement in the country.

To tap the logistics and warehousing market in post-GST era, the company has decided to launch ‘Car Compounds’ to cater to the demand of car-storage in different regions in India. The first one is likely to be either in East or North India.

Mercurio-Pallia is also planning an expansion of its operational area globally, initially with South and South-East Asian countries viz. Nepal, Bangladesh, Thailand, Indonesia and Vietnam. Already, the company has a liaison office in Singapore to explore business opportunities in that region.

Policy Framework & Customers’ Expectations

According to Areef Patel, Executive

Cover Story Emerging Sector

We are facing the pinch of the present slowdown prevailing in the market. The only growth is visible from two-wheeler segments”

Customers today are ever-demanding, very cost-conscious and want the best in quality & services from the logistics provider”

All 3PLs are ready to customise their network and deliverables to what is expected by the customers”

Vipul Nanda Managing Director Mercurio-Pallia

Areef Patel Executive Vice-Chairman Patel Integrated Logistics

Akash Bansal Head-Logistics Om Logistics

Vice-Chairman, Patel Integrated Logistics, though India is emerging as a market for the automobile industry, the government duties/levies issues need to be ironed out, if India is going to become a hub for this business. Moreover, the trucking industry, which has shown nearly double-digit growth for several years now, has slowed down for the past couple of years. The slowdown is due to the fact that the Indian automotive sector has not been able to keep pace with customer expectations. “The opportunities are tremendous, but if India can really gain from them is yet to be seen,” he said.

Pune, Chennai and Gurgaon. “We are also quickly ramping up our delivery centres to cater to the ever-expanding spare-parts sector. The idea is to provide just-in-time services, which is the need of the hour, and is being implemented across the automobile industry,” Patel added, informing that the company is currently covering nearly 80 per cent of the market.

logistics, observed that Indian 3PL organisations in India are also gearing themselves to cater to the demanding need of the automotive sector. Though there are many challenges, but the organised 3PL industry in India is all set to bring in all possible improvements and are also ready to take up any innovative changes as it is a customer-driven market. “All 3PLs are ready to customise their network and deliverables to what is expected by the customers,” he said.

Patel Integrated Logistics is concentrating on direct to-and-fro services to all major markets with special focus on automobile manufacturing hubs like

28 i cargotalk i december 2013

“Customers today are ever-demanding, very cost-conscious and want the best in quality & services from the logistics provider. One should study the customer’s requirements correctly, should be flexible and provide a solution which fits his needs,” Patel pointed out.

Akash Bansal, Head-Logistics, Om Logistics, a core player for automotive

“We at Om Logistics are ready to adapt to any possibility that comes to us from our customers, which can be a win-win model. We try to incorporate best practices from our global partners and also from our customers to enhance our deliverables,” he added. He stressed that Om Logistics provides a single-window solution to all the elements of supply chain, i.e. road, train and air transportation and a comprehensive 3PL management which provides its customer with a singlesolution provider concept for all elements of their value chain. www.cargotalk.in

Cover Story User’s Perspective

A perfect future for

automotive logistics According to Kalpesh Pathak, Vice President, Corporate SCM, Fiat India Automobiles; though the current trends in automobile industry are not very encouraging due to various economic factors and medium-to-long term clarity on fuel-pricing policy, there is a lot of scope for logistics companies dealing with automotive companies for growth in the days to come, in view of the fact the automotive industry would witness a surge soon.

A

t present, except the two-wheeler industry, all other sectors (passenger cars, commercial vehicles, etc) are seeing a negative trend.

“However, this is not going to be a permanent phenomenon, and things are going to change.

Looking at the per-capita penetration of passenger cars in India, as compared to developed economies, we are still far behind.

And even if it improves by a few percentage points; in absolute numbers, it is going to see a huge growth,” Pathak pointed out.

There is no doubt when it comes to top leadership’s commitment level for customers, but at the operational level, the intent gets diluted which results into unwarranted grievances in relationships” Kalpesh Pathak Vice President, Corporate SCM Fiat India Automobiles

30 i cargotalk i december 2013

In his opinion, the growth in passenger cars’ demand and improvement in other economic parameters will drive the growth of commercial vehicles as well. “The logistics companies need to think innovatively and provide more value-added service solutions for customers,” he observed. For example, for transportation services, service providers have to think about and materialise multimodal solutions. Similarly, the logistics movements across the country are going to remain imbalanced and they will have to figure out smart balancing solutions through collaboration amongst players in the auto industry. Further beyond, they also need to think about collaborating across the industry to reduce the turnaround time of assets and reduce ‘vacant trips’, thereby reducing the costs.

3PLs for Automotives: Are They Ready?

Pathak believes that 3rd party logistics service providers still have a long way to go in terms of solutions, efficiencies, costs and responsiveness. The pace is slow for such improvements due to fragmented serviceproviders’ market. In medium-to-long range, eventually, it has to consolidate. However, consolidation doesn’t mean only mergers and acquisitions, but it can also mean tactical arrangements between service providers who can work together and offset their

relative weaknesses in the market. “The process has begun, but the pace has to be expedited,” he said. The skill gap issue is also affecting the capabilities of service-providers for providing solutions, since the operation teams are not able to convert the vision of their leadership into workable solutions. This is the most crucial area, in which serviceprovider leaderships need to start tackling by minimising the skill gap. “There is no doubt when it comes to top leadership’s commitment level for customers, but at the operational level, the intent gets diluted which results into unwarranted grievances in relationships. Again, this gap can be diluted once companies focus on skill gap minimising, where certain soft skill issues are also addressed,” Pathak maintained.

Challenges and Solutions

There are several challenges before the automobile industry, like the sudden change in demand at a specific variant level. This is due to the limitation for forecasting in complex market like India, where a number of bottlenecks and incidents. “These situations are not unique, but the difference which can be made is (1) the ability of service-providers to quickly communicate such exceptions to the customer, (2) the ability of the service-provider to work with the customer to quickly put ‘Plan B’ in place and materialise it, and (3) the ability of service providers and customer-teams to work as one team, rather than blaming or defending each other in such situations,” Pathak suggested.

“Also, one issue that needs to be addressed from the customer’s standpoint is that service provider appointments have to be made on a medium-term basis (at least 3 years) rather than one year or less than that,” Pathak concluded. www.cargotalk.in

Emerging Segments Exhibition Logistics

Better infrastructure and connectivity urged for a thriving exhibition sector

Despite the slowdown, logistics services related to exhibitions and events across the world are gaining reasonable momentum. Ravinder Sethi, MD, RE Rogers India, said that the recession also impacted the exhibition industry. However, the effect was not as deep as it was on other sectors. In an interview with Cargotalk, Sethi reveals the present trends in exhibition sector.

Ratan Kr Paul

S

ethi maintained that there are two prominent developments (or rather awareness), which have taken place in this sector over the last few years. At the micro-level; health, safety and sustainability have taken prominence across the world.

“At the macro-level, India is now on top of the list as a destination point for the global exhibition world. Innovation, making full use of modern technology, electronic commerce and medical service are the trends now. However, though the market is conducive for business, the lack of suitable infrastructure in major cities proves to be a deterrent,” Sethi said.

According to Sethi, infrastructure in India is a big problem and this matter is being ignored by the government and all big players involved in exhibitions. Associations have failed to draw attention in this regard.

Handling of consignments out of India remains another big challenge since every country has its own rules and regulations and different sets of requirements for various product shows.

Hence, it is imperative to have a dedicated team of experienced staff.

Core Functions

The core strengths of RE Rogers are exhibition logistics, defence and special projects, sports events, musical concerts

We have an experienced team, expert technical operators, own transport and our own warehouse.

We are the only logistic company exclusively engaged in exhibition clearance, transportation and on-site handling services and all facilities are in-house Ravinder Sethi MD, RE Rogers India

32 i cargotalk i december 2013

and private demonstrations. “We have an experienced team, skilled manpower, expert technical operators, own transport dedicated to meet our own requirements and our own warehouse. We are the only logistic company exclusively engaged in exhibition clearance, transportation and onsite handling services and all facilities are in-house,” Sethi asserted.

RE Rogers have been emphasising the issue of safety and health hazard. The company is acquiring the relevant ISO-14001 accreditation. “We, being ISO accredited, do hold training programmes at different levels and on regular basis. We also keep on replacing our old equipment with new ones to strengthen our operations. Apart from regular services, we do extend various valueadded services like liaison with different government agencies for procurement of permits, etc,” he underlined.

Recommendations

“The Indian exhibition industry is mature and more than 30 years old, but it is not recognised by the government as an industry.

Apart from poor infrastructure, we lack standardising our clearance practices and local taxes. That is the reason why the industry still looks nascent,” Sethi observed.

He urged that facilitators and policymakers that there is a need to involve the government to declare exhibition as an industry. There should be adequate support from government to create infrastructure, followed by better connectivity with airport, ports, hotels for the convenience of participants in exhibitions/events. 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 October-2013) S. No.

Airlines

1 Cathay Pacific 2 Jet Airways 3 Emirates 4 British Airways 5 Air India 6 Etihad Airways 7 Singapore 8 Thai Airways 9 Fedex Express Corpation 10 Lufthansa Cargo Airline 11 Kalitta Air 12 Qatar Airways 13 Uzbekistan 14 Swiss Intl Airline Ltd 15 Air France 16 Klm 17 Malaysian Airline System 18 Virgin Atlantic 19 M/S All Nippon Airways 20 Finnair 21 Turkish Airlines 22 Japan Airlines 23 Aeroflot Cargo Airlines 24 China Eastern Airlines 25 China Southern Airlines 26 Hercules Aviation 27 Lufthansa Cargo Ag 28 United Airlines 29 Saudia 30 Spice Jet 31 Air China 32 Atlas Air 33 Kazakhisthan Airlines 34 Indigo Cargo 35 China Air 36 Martin Airline 37 Dhl Express 38 Ethopean Airlines 39 Asiana Airlines 40 Air Shagoon Pvt. Ltd. 41 Mahan Air 42 Gulf Air 43 Blue Dart 44 Air Arabia 45 Air Mauritius 46 Oman Air 47 Flywell Aviation 48 Sri Lankan Airlines Ltd 49 Kuwait Airlines 50 Ariana Afghan Airlines 51 Biman Bangladesh 52 Air Astana 53 Kenya 54 Royal Jordanian Airlines 55 Turkmenisthan Airlines 56 Ups 57 Mihin Lanka Airlines 58 Pakistan International 59 Aerologic 60 Tajik Air 61 Jetlite 62 Kam Air 63 Iraqi Airways 64 Flywell Aviation Pvt. Ltd 65 Druk Air 66 Safi Airways 67 Eva Air 68 Kyrgyzstan Air Company 69 Air Moldova 70 Spice Jet 71 Abakan Avia 72 Uni-Top Airlines Total Cargo handled in October ‘12’ % VARIATION

34 i cargotalk i december 2013

Export With- Out Peri- shable (MTs) 726 990 777 1210 937 561 724 221 514 584 538 471 478 435 510 522 303 421 398 389 334 132 280 150 133 360 187 265 172 153 119 0 0 151 114 91 0 80 68 140 100 92 112 92 75 73 69 56 2 38 28 29 27 28 13 0 10 5 0 7 0 2 4 3 1 0 0 0 0 0 0 0 15504 13811 12.26%

Export Export with Perishable Perishable Cargo (MTs) (UPL) (MTs) 116 151 1146 178 203 409 43 29 1 82 1 169 33 28 14 19 29 7 15 2 7 7 82 0 0 6 10 21 125 0 0 0 0 0 0 0 0 5 0 0 12 26 0 0 8 5 0 0 39 0 0 7 1 0 7 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 3046 2288 33.13%

842 1141 1923 1388 1140 970 767 250 515 666 539 640 511 463 524 542 332 428 413 392 342 138 362 150 133 367 197 285 297 153 119 0 0 151 114 91 0 85 68 140 112 118 112 92 83 77 69 56 40 38 28 35 28 28 20 0 10 5 0 8 0 4 4 3 1 0 0 0 0 0 0 0 18550 16099 15.23%

Import (MTs)

Total Cargo (MTs)

% of Total

2295 1760 641 929 1092 649 834 1090 788 609 461 329 327 299 227 208 409 220 225 104 121 315 35 231 244 0 152 59 21 124 155 215 211 42 78 99 152 64 73 0 27 1 7 6 7 4 0 12 5 2 11 0 5 1 0 17 1 4 8 0 6 2 0 0 0 0 0 0 0 0 0 0 16014 14109 13.50%

3137 2901 2564 2317 2232 1619 1602 1341 1302 1275 1000 969 839 762 751 750 741 648 638 495 462 454 397 381 378 367 349 344 318 278 274 215 211 193 192 191 152 149 140 140 139 119 119 98 90 82 69 68 46 40 39 35 33 29 20 17 11 9 8 8 7 6 4 3 1 0 0 0 0 0 0 0 34564 30208 14.42%

9.08% 8.39% 7.42% 6.70% 6.46% 4.68% 4.63% 3.88% 3.77% 3.69% 2.89% 2.80% 2.43% 2.21% 2.17% 2.17% 2.14% 1.88% 1.85% 1.43% 1.34% 1.31% 1.15% 1.10% 1.09% 1.06% 1.01% 1.00% 0.92% 0.80% 0.79% 0.62% 0.61% 0.56% 0.56% 0.55% 0.44% 0.43% 0.41% 0.41% 0.40% 0.35% 0.34% 0.28% 0.26% 0.24% 0.20% 0.20% 0.13% 0.12% 0.11% 0.10% 0.10% 0.08% 0.06% 0.05% 0.03% 0.03% 0.02% 0.02% 0.02% 0.02% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

www.cargotalk.in

mUMBAI csi aIRPORT

eXPORT/iMPORT cARGO tONNAGE hANDLED IN oCTOBER-2013 S.No.

Airlines

Export General

Export Perishable

Total Export

Import

Total Exp+Imp

1310.54 1724.69 704.24 927.71 562.28 719.93 856.12 1038.02 523.36 1168.32 736.43 715.37 345.35 226.45 586.13 402.24 261.30 374.67 374.81 118.79 344.93 343.44 124.97 89.43 195.07 0.04 0.00 41.09 87.43 92.34 72.75 68.22 58.98 67.68 71.43 51.74 74.64 24.30 29.87 23.68 0.00 11.45 11.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 104.38

1115.12 1654.48 609.49 220.14 1065.79 618.13 51.99 65.38 328.68 10.52 247.58 56.41 177.80 151.53 84.21 24.58 64.97 68.42 44.28 0.00 1.88 3.55 173.73 159.25 1.89 187.78 0.00 120.81 13.73 7.57 66.33 0.34 55.47 40.97 4.19 1.51 2.14 9.56 2.36 1.29 0.00 0.91 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 18.78

2425.66 3379.17 1313.73 1147.85 1628.07 1338.06 908.11 1103.40 852.04 1178.84 984.01 771.78 523.15 377.98 670.33 426.82 326.27 443.09 419.09 118.79 346.81 346.99 298.69 248.68 196.96 187.82 0.00 161.90 101.16 99.91 139.08 68.56 114.45 108.65 75.61 53.25 76.78 33.85 32.23 24.97 0.00 12.36 11.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 123.16

2322.00 960.00 1599.10 1112.71 496.81 657.00 1067.21 711.33 533.24 8.55 104.04 303.00 463.12 499.01 182.33 297.64 351.11 220.72 177.85 279.15 7.38 4.12 3.55 0.84 4.80 4.97 165.42 2.59 47.27 44.95 2.31 70.01 21.99 0.00 16.81 35.56 2.68 0.34 1.58 0.60 20.01 2.07 1.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00 126.30

4747.66 4339.17 2912.83 2260.56 2124.88 1995.06 1975.32 1814.73 1385.28 1187.39 1088.05 1074.78 986.27 876.99 852.66 724.46 677.38 663.81 596.94 397.94 354.19 351.11 302.25 249.52 201.76 192.79 165.42 164.49 148.43 144.86 141.39 138.57 136.44 108.65 92.42 88.81 79.46 34.19 33.81 25.57 20.01 14.42 13.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 249.46

Airlines Handled By Mial & Ai 1 Jet Airways 2 Emirates 3 Lufthansa 4 Singapore Airlines 5 Air India 6 British Airways 7 Cathay Pacific 8 Etihad Airways 9 Qatar Airways 10 Ethopian Airlines 11 Saudi Arabian Airlines 12 Turkish Airlines 13 Swiss Intl. Airlines 14 Delta / KLM / Martin Air 15 Air France 16 Malaysian Airlines 17 Thai Airways 18 Virgin Atlantic 19 Federal Express 20 UPS 21 South African Airlines 22 Kenya Airways 23 Kuwait Airways 24 Gulf Air 25 Air Mauritius 26 Air India + Air India Carriers 27 Air Cargo Arologic C/O Lufthansa 28 Air Arabia 29 Korean Air 30 United/Continental Airlines 31 Oman Air 32 EL-AL Airlines 33 Blue Dart 34 Indigo Air 35 Srilankan Air 36 Iran Air 37 Bangkok Airways 38 Yemenia Airways 39 Pakistan intl Airlines 40 Royal Jordanian 41 Fin Air 42 Egypt Air 43 Air China 44 Austrian Air 45 Baharin Airlines 46 NorthWest Airlines 47 Kingfisher Airlines 48 Qantas 49 Island Aviation (Maladvian) 50 Charters 51 Others

TOTAL

www.cargotalk.in

15665.88

7480.67

23146.55

12933.86

36080.41

december 2013 i cargotalk i 35

Cargo Performance Airports in India

Traffic statistics D o m e s t ic Fr e i g h t

For the Month

S. No. Airport

August 2013

August 2012

Freight (in Tonnes)

For the period April to August

% Change 2013-14

2012-13

% Change

(A) 16 International Airports 1 Chennai 2 Kolkata* 3 Ahmedabad 4 Goa 5 Trivandrum 6 Calicut 77 Guwahati 8 Lucknow 9 Srinagar 10 Jaipur 11 Coimbatore 12 Mangalore 13 Amritsar 14 Trichy 15 Varanasi 1616 Portblair

Total

5884 7234 3118 191 195 10 591 269 244 594 535 18 5 0 40 170 19098

6268 6782 3064 174 117 38 562 176 252 310 517 21 16 0 74 164 18535

-6.1 6.7 1.8 9.8 66.7 -73.7 5.2 52.8 -3.2 91.6 3.5 -14.3 -68.8 - -45.9 3.7 3.0

29464 34634 14794 897 697 72 2721 1191 1768 3029 2504 101 62 0 158 956 93048

33284 33863 14996 1191 620 91 2569 859 1426 2591 2777 125 36 0 177 677 95282

-11.5 2.3 -1.3 -24.7 12.4 -20.9 5.9 38.6 24.0 16.9 -9.8 -19.2 72.2 - -10.7 41.2 -2.3

17493 15495 7912 3071 809 487 45267

15539 14835 6989 2765 819 407 41354

12.6 4.4 13.2 11.1 -1.2 19.7 9.5

79703 74904 37277 14691 3745 2044 212364

81369 77816 35032 13842 3850 2048 213957

-2.0 -3.7 6.4 6.1 -2.7 -0.2 -0.7

1719 149 372 311 90 80 0 2721

1512 123 161 204 131 59 0 2190

13.7 21.1 131.1 52.5 -31.3 35.6 - 24.2

7877 825 1913 1317 666 520 0 13118

8734 724 818 1145 690 299 0 12410

-9.8 14.0 133.9 15.0 -3.5 73.9 - 5.7

Bhubaneswar 343 Indore 360 Jammu 148 Raipur 299 Agartala 673 Vadodara 166 Imphal 406 Bhopal 82 Ranchi 207 Aurangabad 57 Udaipur 0 Leh 63 Tirupati Rajkot 19 Jodhpur 1 Dehradun 0 Dibrugarh 23 Total 2847

204 351 121 226 501 154 450 90 117 56 0 88 0 12 0 0 22 2394

68.1 2.6 22.3 32.3 34.3 7.8 -9.8 -8.9 76.9 1.8 - -28.4 2 58.3 - - 4.5 18.9

1424 1937 672 1349 2832 767 1666 360 939 289 0 458 -100.0 78 6 0 123 12900

1267 1771 550 1153 2471 940 1917 422 661 344 0 553 08 98 3 0 130 12288

12.4 9.4 22.2 17.0 14.6 -18.4 -13.1 -14.7 42.1 -16.0 - -17.2 -100.0 -20.4 100.0 - -5.4 5.0

129 64602

11.6 8.5

597 332027

714 334651

(B) 6 JV International Airports 17 Delhi (DIAL) 18 Mumbai (MIAL) 19 Bangalore (BIAL) 20 Hyderabad (GHIAL) 21 Cochin(CIAL) 22 Nagpur (MIPL)

Total

(C) 7 Custom Airports 23 Pune 24 Visakhapatnam 25 Patna 26 Chandigarh 27 Bagdogra 28 Madurai 29 Gaya

Total

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

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

36 i cargotalk i december 2013

144 70077

-16.4 -0.8

www.cargotalk.in

Cargo Performance Airports in India

Traffic statistics

I NTE R NAT I ONAL F R E I GHT Freight (in Tonnes)

For the Month

S. No. Airport

August 2013

August 2012

For the period April to August

% Change 2013-14

2012-13

% Change

(A) 16 International Airports 1 Chennai 2 Kolkata* 3 Ahmedabad 4 Goa 5 Trivandrum 6 Calicut 7 Guwahati 8 Lucknow 9 Srinagar 10 Jaipur 11 Coimbatore 12 Mangalore 13 Amritsar 14 Trichy 15 Varanasi 16 Portblair

Total

18350 4350 1119 193 3121 1549 0 89 0 17 81 0 250 401 0 0 29520

21358 3614 926 111 4426 2327 0 119 0 3 59 0 104 174 0 0 33221

-14.1 20.4 20.8 73.9 -29.5 -33.4 - -25.2 - 466.7 37.3 - 140.4 130.5 - - -11.1

94161 18926 6904 788 12301 10368 8 475 0 93 366 0 638 1966 0 0 146994

106909 18056 5120 682 22290 12427 0 616 0 94 235 0 558 1164 0 0 168151

-11.9 4.8 34.8 15.5 -44.8 -16.6 - -22.9 - -1.1 55.7 - 14.3 68.9 - - -12.6

31281 35747 12623 4035 3160 17 86863

25634 35959 11156 3723 3659 34 80165

22.0 -0.6 13.1 8.4 -13.6 -50.0 8.4

160090 190710 64404 20851 18351 143 454549

147953 195993 60636 18820 15359 165 438926

8.2 -2.7 6.2 10.8 19.5 -13.3 3.6

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 116383

0 0 113386

0 0 601543

0 0 607077

-0.9

(B) 6 JV International Airports 17 Delhi (DIAL) 18 Mumbai (MIAL) 19 Bangalore (BIAL) 20 Hyderabad (GHIAL) 21 Cochin(CIAL) 22 Nagpur (MIPL)

Total

(C) 7 CUSTOM AIRPORTS 23 Pune 24 Visakhapatnam 25 Patna 26 Chandigarh 27 Bagdogra 28 Madurai 29 Gaya

Total (D) (E)

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

- - 2.6

* Estimated

Lufthansa Cargo goes for fleet modernisation

R

ecently, Lufthansa Cargo acquired its first Boeing 777 freighter and started its first scheduled flight operation to New York. Lufthansa Cargo has ordered a total of five brand new freighters from Boeing (with a list price of USD 270 million per plane). With this major investment, Lufthansa Cargo is focusing on growth and the modernisation of its fleet. Speaking at the welcome ceremony for the new aircraft Karl Ulrich Garnadt, 38 i cargotalk i december 2013

CEO, Lufthansa Cargo said, “The Boeing 777F is not only the most powerful, efficient and ecological freighter in the world but also a highly visible symbol of our ‘Lufthansa Cargo 2020’ future programme.” Garnadt emphasised that the addition of the twinengine Boeing freighter to the fleet was an important milestone on the airline’s path to

shaping a company for the next generation.

The airline devised a comprehensive future programme two years ago with the “Lufthansa Cargo 2020” strategy. www.cargotalk.in

Infrastructure Update International Airport

GSEC facilitates entry of new airlines to Ahmedabad Airport The difficult times due to economic slowdown have increased the importance of the supply-chain as a function, and thereby increasing focus on the efficiencies of systems, processes and infrastructure.

Samir Mankand, Director, GSEC, is confident the logistics market will see an upturn soon and the company is poised for a long period of sustainable growth, starting from 2014.

F

or Mankand, the challenges in meeting the customer’s demands have two dimensions. One is in terms of providing quality infrastructurebuildings, x-ray machines, material handling equipment, etc. “To this end, we continuously keep investing in cold rooms, strong rooms and machines,” he said. Another dimension is that of efficient processes and customer orientation of the company’s personnel. “We are trying to imbibe the best practices at bigger airports. We train our personnel both for the knowledge base, as well as attitudinal issues,” he added.

GSEC has recently created a 3,500 sq mt warehouse which contains close to 300 sq mt of cold rooms. “We are adding two cold rooms every year, as the demand for pharmaceutical products grows. We have recently augmented x-ray machines, ETD machines and material handling equipment.

We will soon offer screening and palletisation facilities in collaboration with an approved regulated agent. For our customers, we offer track-and-trace facilities through our website,” informed Mankand.

“We have recently received a lot of enquiries from airlines who wish to start their operations from Ahmedabad. This year, therefore, we are focussing on facilitating their entries into Ahmedabad by becoming compliant with their standards in terms of security and

www.cargotalk.in

We will soon offer screening and palletisation facilities in collaboration with an approved regulated agent. We also offer track-and-trace facilities” Samir Mankand Director, GSEC

allied processes,” he further added.

GSEC is also planning to expand the scope of their services to enable the airlines to avoid multiple agencies.

december 2013 i cargotalk i 39

Agents’ Views Rules & Regulations

AEO and Self-Assessment Programmes

Are they industry-friendly?

Ratan Kr Paul Authorised Economic Operator

sions, viz.

Two crucial deci omic Operator Authorised Econ ent Schemes, and Self-Assessm EC have e CB introduced by th ts about its raised some doub tation in India proper implemen ple factors. because of multi ains if the The question rem the intended schemes can play litation in the role of trade faci otalk spoke real sense? Carg forwarders to a few freight ers to and customs-brok es. highlight the issu

A

ccording to Raghu Sankar G, ED, International Clearing and Shipping Agency, the Authorised Economic Operator (AEO) programme is a move in the right direction. But the pace of progress needs to be addressed. If and when implemented, it would definitely speed up the entire process. This, in turn, would translate to a reduction of transactional costs. In AEO, there should be two categories – one section of service providers to be mandatory, and the other optional.

Custodians, licenced by Customs and

The AEO programme is a move in the right direction. But the pace of progress needs to be addressed” Raghu Sankar G ED, International Clearing and Shipping Agency

40 i cargotalk i december 2013

handling the entire flow (irrespective of their clients – importers and exporters being AEO or not), should mandatorily be in the loop to ensure continuity of the chain.

Prem Kumar M, CMD, Uniworld Group, maintained that the AEO programme is a building block to secure international trade-flow against security threats during the global movement of goods. AEO encompasses all stakeholders in the supply chain process from door-to-door; i.e, exporter, importer, freight operators, custom brokers, terminal operators, distributors

AEO facilitates rapid cargo movement with reduced transport costs. Our country needs to harmonise the security system with global standards” Prem Kumar M CMD, Uniworld Group

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Agents’ Views Rules & Regulations

and warehouse operators who would be an integral part of the programme. AEO emerges under WCO framework of standards to secure and facilitate global trade (SAFE).

For the few who approach AEO for certification, they have to wait for a very long period for the verification” C Karthikeya Prabu Joint Managing Director, Diamond Shipping Agencies

“Securing the supply-chain process under SAFE Framework enhances the security standards of every nation. It is a matter of concern that only a few signatories (USA, EU, New Zealand and Singapore) have introduced the AEO programme. Terror-torn countries like India, Pakistan, Afghanistan and West Asia, where incidence of security threats through movement of goods and persons are vastly pronounced, have not embraced the programme, though most countries have acceded to in principle,” he pointed out.

“It is expedient on the part of Indian Customs to enforce the programme in the sole interest of countering the multi-pronged security risks. AEO indeed facilitates rapid movement of cargoes with reduced transport costs. Our country needs to harmonise the security system with global standards,” he further emphasised.

The Flip Side

I would request the CBEC to expedite the registration of companies for the AEO programme for the trade” Sailesh Bhatia President, AMTOI and Vice-Chairman, FFFAI

42 i cargotalk i december 2013

C Karthikeya Prabu, Joint Managing Director, Diamond Shipping Agencies, was of the view that the AEO programme will definitely benefit the exim trade. However, the department is not well-equipped with the required team for assessing the compliance of required parameters with the concerned organisation approaching for AEO status. The awareness level with the customs brokers, logistics service-providers, exporters, importers and custodians are very less. For the few who approach for certifying under AEO status, they have to wait for a very long period for the verification by the concerned personnel.

“Invariably, many organisations are given show-cause notices and some of the appeals are in progress at the CESTAT level or at the High Court levels. This is a hurdle for those organisations who want to participate in the AEO programme,” he pointed out. Prabu maintained that this issue has to be clarified to the trade. In addition, he underlined that the AEO status will be a permanent feature, and a yearly review will be performed to verify their continuing eligibility. If some organisation does not pass the requirements, it can deprive the organisation of the status. This might be detrimental to those

organisations, as it might give them a negative image.

“There should be provisions to give some time limit, within which they should be allowed to rectify the lapses, and a chance shall be provided to improve the facility to the expected levels. Further, voluntary disclosure of any lapse should be treated as best practice, rather than victimising the said organisations. The way forward with proper corrective action, after such lapse in the organisation is very important to ensure that such lapses do not occur again,” Prabu stressed.

“The benefits of the AEO status should be substantial to ensure more organisations to implement the same. The basic necessity for getting the AEO status requires huge investments, and therefore a better financial package has to be considered to lure more organisations to opt for the AEO status,” he observed.

There should be provisions to give some time limit, within which they should be allowed to rectify the lapses, and a chance shall be provided to improve the facility to the expected levels.

Sailesh Bhatia, President, AMTOI and Vice-Chairman, FFFAI; pointed out that as of date, only a handful of companies have been certified for the AEO programme. Due to this, it has not penetrated a wider section of the trade. “I would request CBEC to expedite registration of companies for the AEO programme for the trade,” he urged.

Bhatia also highlighted that presently, with implementation of various programmes such as RMS, ACP and Self-Assessment, the trade at large is already enjoying many benefits for ease of transactions. However, due to the warped implementation of the same, in many instances, it is not giving the true benefits to trade. On the contrary, it is turning out to be an obstacle to smooth transactions rather than easing the same.

“As the AEO programme offers better facilitation for imports compared to RMS, www.cargotalk.in

Agents’ Views Rules & Regulations

and reduced percentage of inspection of export cargoes, we may expect reduction in transaction cost and dwell-time. However, the government should announce specific benefits, so that each agency in the supply chain wants to enroll under the scheme,” said G Balaraju, MD, Sindhu Cargo Services.

Self-Assessment: Boon or Bane?

Self-Assessment is a law, now and any and all declarations filed with Customs are treated as self-assessed. “For better understanding of the entire scheme, and to ensure compliance, the Government should come out with a manual that will list out product-wise requirements for Customs, which is a document that binds both the exim trade and the department. In the absence of such guidelines from the Government and by shifting the onus to the industry, futuristically many non-compliance issues may crop up,” Raghu Sankar said.

Elaborated Prem Kumar, “Earlier in 2003, self-assessment was confined only to ACP clients. Later on, the exponential growth in trade volumes, coupled with complexity in handling them, attributed to back-logs and high transaction costs. The Customs & Central Excise department was forced to study the clearance process in the back-drop of BPRE (Business Process Re-engineering) and emerged successfully with a high intelligence customised software called RMS (Risk Management System).” The objectives to embed the software in ACES are: To strike a balance between enforcement and trade facilitation; to reduce the dwell-time of the cargo; to minimise transaction costs and to strategically manoeuvre the under-staffed Customs & Central Excise offices.

He further highlighted the facts that RMS norms originally prescribed that the clearance process of cargoes, where specific intelligence is recorded positive, would be interdicted, thus mandating those cargoes to go through the manual process. Later, when the risk factors were frequented, the Commissioners of Customs were empowered to interdict. “This has resulted in the reduced level of facilitation, and as a result the current scenario is not industry-friendly,” he said. In his opinion, trust-based business environment should be encouraged by the government by augmenting facilitation measures. “We have today facilitation initiatives reaching trade only in the ratio of 50:50:40 for Air, Sea 44 i cargotalk i december 2013

and ICD clearances as against the objective of 80:70:60 respectively. The taste of the pudding is not in the eating. A substantial jump in the percentage of facilitation is paramount as more and more MNCs and FIIs have started investing in India. This will enhance the competitiveness of Indian business for a resurgent economy,” Prem Kumar added.

He was also quick to remind that while the industry debates (as above) on the import side, the self-assessment on export side is yet to take off in all EDI locations, although Customs notified the trade in July 2013 of extending the RMS facility to export goods. “This is a bottleneck to meet the planned vessel and claim draw-back timely.

Detention/demurrage and avoidable overheads make our exports uncompetitive. There are hopes in the horizon of our economy recovering. RMS in exports implementation in all EDI locations right now is a step in the right direction,” he emphasised.

“The Self-Assessment scheme is a welcome measure, if it is really followed in the right spirit by the Department. After the self-assessment by the customs brokers/ exporters/importers, the Shipping Bill or

I feel that the selfassessment scheme should be made optional for importers, rather than making it universal” G Balaraju MD, Sindhu Cargo Services

Bill of Entry is re-assessed again by the appraiser/superintendent under the guise of verification,” said Prabu. The Customs Department is gradually reducing the staff strength at every customs location. There is no fresh deployment of personnel by CBEC. “Probably, the department would have considered that, based on the SelfAssessment and RMS facility, the department may not require more staff. But, the officials are again advised to verify documents in detail. This results in clearance delays. The very purpose of Self-Assessment for speedy clearance is defeated,” Prabu argued.

He also asserted that the customs brokers are well-equipped with information for applying correct classifications, application of Duty, Exemption, etc., and they apply the value as per the documentary evidence from the shipper/consignee. The system should be having back-up data from NIDB to verify the value against the previous clearances of same cargo from same origin to accept the value on a system-based approval with about 5-10 per cent allowance as required. This will ensure that the Self-Assessment is really selfassessed and will benefit the exim trade.

“In the current method of implementation, Self-Assessment is not industry-friendly. On the contrary, many settled practices and assessments are now being challenged. The CBEC should address the representations made by FFFAI and sensitise field formations to have a friendly approach to assesses,” Bhatia supplemented.

According to Balaraju, the main advantage of Self-Assessment scheme is assured facilitation for compliant importers/ exporters. The importer/exporter will have to be sure of the legality of the assessment position adopted at the time of self-assessment. They would be held accountable for the declarations and assessment, even in cases where documents are scrutinised and passed by customs authorities. “The actual issue crops up where ambiguities are involved or different versions of interpretations arise. Also, it would be an issue for importers who may lack the capability to do a self-assessment.

Accordingly, I feel that self-assessment scheme should be made optional to importers, rather than making it universal,” he appealed. www.cargotalk.in

Expert Comments Current Issues

Self-Assessment of cargo:

Genesis and significance J Krishnan, Past President, ACAAI and MD, Natesa Iyer & Co, has unveiled several aspects of Self-Assessment Programme of CBEC, while he was speaking at the recently-held 40th Annual Convention of ACAAI in Jaipur.

Cargotalk presents the highlights of his presentations for the benefit of trade-practitioners.

A

After such examination and testing (by a proper customs officer), the duty, if any, leviable on such goods, save as otherwise provided in Section 85, shall be assessed.�

J Krishnan Past President, ACAAI and MD Natesa Iyer & Co

46 i cargotalk i december 2013

s the precursor of Self Assessment; Sections 2, 17, 18, 46, 50 and 157 of Customs Act were amended significantly in the 2011 Budget. As a result, the onus of classification and duty assessment was shifted to the importer/ exporter.

as the case may be, can be ascertained; and to furnish any information required for such ascertainment which it is in his power to produce-or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information.

According to the earlier Section 17 (PreBudget 2011) in the Customs Act, 1962 on Assessment of Duty:

Notwithstanding anything contained in this section, imported goods or export goods, prior to the examination or testing thereof, may be permitted by the proper officer to be assessed for duty on the basis of the statements made in the entry relating thereto and the documents produced and the

After an importer enters any imported goods under Section 46, or an exporter enters any export goods under Section 50; the imported goods or the export goods, as the case may be, or such part thereof as may be necessary may, without undue delay, should be examined and tested by the proper officer.

After such examination and testing, the duty, if any, leviable on such goods, save as otherwise provided in Section 85, shall be assessed.

For the purpose of assessing duty under Sub-Section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker’s note, policy of insurance, catalogue or other document whereby the duty leviable on the imported goods or export goods,

Basic Questions Are trade operators encouraged to conduct Self Assessments of their supply chains based upon the Customs security standards and recommendations? In the Customs administration, does high-level management staff support anticorruption activities and demonstrate integrity and leadership in combating corruption? Has a comprehensive integrity/anti-corruption action plan for Customs been developed? And, is this move (self-assessment) akin to placing the cart before the horse? www.cargotalk.in

information furnished under Sub-Section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty.

New Scenario after Budget 2011

An importer entering any imported goods under Section 46, or an exporter entering any export goods under Section 50, shall, save as otherwise provided in Section 85, self-assess the duty, if any, leviable on such goods.

The proper officer may verify the selfassessment of such goods and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary.

For verification of self-assessment under Sub-Section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker’s note, insurance policy, catalogue or other document, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which is in his power to produce or furnish, and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.

Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.

Where any re-assessment done under Sub-Section (4) is contrary to the selfassessment done by the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification issued therefore under this Act and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing; the proper officer shall pass a speaking order on the re-assessment, within 15 days from the date www.cargotalk.in

Regulatory Compliance º Explosives Act, 1884 and Explosive Rules, 1983 º Live Stock Importation Act, 1898 º Drugs and Cosmetics Act, 1940 and Drug and Cosmetics Rules, 1945 º Copyright Act, 1957 and Copyright Rules, 1958 º Arms Act, 1959 º Atomic Energy Act, 1962 º Insecticide Act, 1968 º Patents Act, 1970 and Patent Rules, 2003 º Wild Life Protection Act, 1972 º Gas Cylinder Rules, 1981 and S & MPV (Unfired) Rules, 1981 º Environment (Protection) Act, 1986 and Rules, 1986 º The Bureau of Indian Standards Act, 1986 and Rules, 1987 º Motor Vehicles Act, 1988 º Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989 º Trade Marks Act, 1999 º Hazardous Waste (Management and Handling) Rules, 2003 º Plant Quarantine (Regulation of Import Into India) Order, 2003 º Food Safety and Standards Act, 2006 º Legal Metrology Act, 2009 and Legal Metrology (Packaged Commodities) Rules, 2011 of re-assessment of the bill of entry or the shipping bill, as the case may be.

Where re-assessment has not been done or a speaking order has not been passed on re-assessment, the proper officer may audit the assessment of duty of the imported goods or export goods at his office or at the premises of the importer or exporter, as may be expedient, in such manner as may be prescribed.

For the removal of doubts, it is hereby declared that in cases where an importer has entered any imported goods under Section 46 or an exporter has entered any export goods under Section 50 before the date on which the Finance Bill, 2011 receives the assent of the President, such imported

If it is found that SelfAssessment of duty has not been done correctly by the importer or exporter, the proper officer may re-assess the duty. This is without prejudice to any other action that may be warranted under the Customs Act, 1962.

goods or export goods shall continue to be governed by the provisions of Section 17 as it stood immediately before the date on which such assent is received.

Did you know?

If it is found that Self-Assessment of duty has not been done correctly by the importer or exporter, the proper officer may re-assess the duty. This is without prejudice to any other action that may be warranted under the Customs Act, 1962. On re-assessment of duty, the proper officer shall pass a speaking order, if so desired by the importer, within 15 days of re-assessment. This requirement is expected to arise when the importer or exporter does not agree with re-assessment, which is different from the original Self-Assessment.

There may be situations when the proper officer of Customs finds that verification of self-assessment in terms of Section 17 requires testing/further documents/ information, and the goods cannot be reassessed quickly, but are required to be cleared by the importer/exporter on urgent basis. In such cases, provisional assessment may be done in terms of Section 18 of the Customs Act, 1962. Once the importer/ exporter furnishes security as deemed fit by the proper Customs officer for differential duty equal to duty provisionally assessed by him and the duty payable after re-assessment. december 2013 i cargotalk i 47

User’s Perspective Siemens

AEO for fast clearance

Compliance & mutual understanding is the key In India, the CBEC released its first circular about AEO (Authorised Economic Operator) programme introducing it as a pilot project on August 23, 2011. At the end of the pilot project on July 18, 2012; the AEO status was awarded to three companies. On November 16, 2012; the CBEC has issued revised guidelines for AEO. Pramod Sant, Vice President, Supply Chain Management, Siemens gives an overview on this issue.

What is AEO?

AEO (Authorised Economic Operator) is a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a National Customs administration as complying with WCO or an equivalent supply chain security standards. AEO may include manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors and freight forwarders.

The AEO certification finds its origin in the terrorist attacks in US on September 11, 2001. The risk of terrorist attack does not only concern the transportation of passengers, but also the transport of goods.

Therefore, the US also wanted to secure the flow of the goods.

Upon consultation with the American trade and industry, the Customs created C-TPAT (Customs and Trade Pact Against Terrorism). The C-TPAT is a certification for companies allowing them to prove to Customs that the company is ‘safe and reliable’.

existing AEO programmes, those in the process of being launched, and the customs compliance programmes. Meanwhile, more than 170 countries have expressed their intention to implement the SAFE Framework.

The Framework aims to:

Mutual Recognition Arrangement Mutual Recognition is a broad concept (by maintaining certain compliances) whereby an action or decision taken or an authorisation that has been properly granted by one customs administration is recognised and accepted Pramod Sant by another customs Vice President, Supply Chain Management, Siemens administration.

n Establish standards that provide supply-chain security and facilitation to goods being traded internationally n Enable integrated and harmonised supply-chain management for all modes of transport n Enhance the role, functions and capabilities of Customs to meet the challenges and opportunities of the 21st century n Strengthen networking arrangements between Customs to improve their capability to detect high-risk consignments n Promote cooperation between the Customs and business communities n Champion the seamless movement of goods through secure international trade supply chains

SAFE Framework of Standards

At the June 2005 annual sessions of the WCO Council in Brussels, Directors General of Customs representing the members of WCO adopted the ‘SAFE Framework’ of standards to secure and facilitate global trade by unanimous acclamation.

The implementation of SAFE Framework will be carried out on a phased approach by national customs authorities in accordance with its administration capacity and legislative authority. The WCO Compendium of AEO programmes (AEO Compendium) is updated annually to track the development of 48 i cargotalk i december 2013

Categories of AEO Status Holders º º º º º º º º º º

Manufacturers Importers Exporters Warehouse owners, distributors Customs brokers (CHA) Logistics providers Carriers / Forwarders Ports, airports, terminal operators Couriers Integrated operators

There is a need of mutual recognition efforts between national customs authorities, which will lead to an international recognition of AEO status. National customs authorities are expected to cooperate with each other and to achieve mutual recognition of national AEO programmes and customs control standards.

Challenges if you are Non-AEO

n Increasing barriers for international trade n Limitations/delays within supply chain n Increase of customs interventions and customs controls n Loss of reputation as a Non-AEO n More Audits

The Way Ahead

Voluntary AEO participation will be the precondition for maintaining an efficient customs-related supply chain process in the future. Other countries specially in APEC, EU, and even in Africa, has taken the lead in AEO approvals. India’s logistics cost are already high compare with developed countries. In the absence of AEO, it will further increase.

Indian suppliers/ service providers will be non preferred. Higher participation in AEO programme will bring pressure on Govt. to make AEO approvals on time and work on Mutual Recognition Arrangements (MRA). www.cargotalk.in

Family Album Industry Association

ACAAI-2013 JAIPUR

ACAAI 2013

s s u c s i d s e t a g Dele grow o t s e l o r g n i g chan e Air Cargo vention of th

th nual Con ld from The 40 An (ACAAI), he r many ia d In f o n o ciati ble fo Agents Asso in Jaipur, was remarka 7 during October 24-2 and cordial discussions evening ng rm reasons. Wa ns and interactions duri of Indian io s irit business ses monstrated the true sp s on nge s de programme ers to embrace the cha sthani ja rd a bience of Ra freight-forw m a e th t s id , am the horizon . nd heritage hospitality a

50 i cargotalk i december 2013

www.cargotalk.in

ACAAI-2013 JAIPUR

www.cargotalk.in

december 2013 i cargotalk i 51

Family Album Industry Association

ACAAI-2013 JAIPUR

52 i cargotalk i december 2013

www.cargotalk.in

Family Album Industry Association

ACAAI-2013 JAIPUR

54 i cargotalk i december 2013

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Family Album Club Function

ACCD Event

Diwali Celebration

in ACCD style

“Diwali ki Shaam Qali ke Naam” was the appeal from the Air Cargo Club of Delhi on the eve of the Festival of Light. The club members and their spouses enjoyed the “Sham-e-Qali” presented by Janab Hamid Sabir & Party during a glittering evening organised in New Delhi, followed by fabulous dinner.

56 i cargotalk i december 2013

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Face of the Month One-on-One

New FIATA VP from India to focus on collaboration and recognition

Keshav Tanna, a professionally-qualified logistics industry practitioner and an expert with over two decades of expertise in the air freight forwarding industry, has recently been elected as the Vice-President, International Federation of Freight Forwarders’ Associations (Fédération Internationale des Associations de Transitaires et Assimilés- FIATA) and Deputy Chairman of AFI-FIATA. In an interview with Cargotalk , he shares his thoughts on how to strengthen the aircargo and logistics industry in India with strong collaboration with the international cargo community.

CT: What is the significance of your election as Vice-President of FIATA for the development of air-cargo and logistics industry in India?

Tanna: India has had representations in the past in FIATA and as such, it would not entirely be correct to assume India’s importance in the logistics field only as of now. India has been a major player in the entire logistics industry. As a matter of fact, the Asia-Pacific Region is a major driver of global air cargo, and we constitute a substantial share in this market. India, with its sheer numbers, has always contributed healthily to this growth; however the last couple of years have been a bit slow.

Hopefully, things will pick up soon.

Rich Background

Keshav Tanna has been actively involved in promoting the cause of the freight-forwarding, shipping and logistics business through his association with various industry bodies. Currently a permanent member on the Advisory Board of the Air Cargo Agents’ Association of India (ACAAI), he is the representative of the association at FIATA and Federation of Asia Pacific Air Cargo Associations (FAPAA). Tanna was the President of ACAAI from 2007 to 2009. He is also a member of Indian Merchant Chambers (IMC) and Association of Multimodal Transport Operators of India (AMTOI).

Tanna did his B.Com from Mumbai University, IATA Cargo Basic Training in Air Cargo, DGR Training under IATA Regulations and Cleared Rule 9 Exams as a Custom House Agent.

58 i cargotalk i december 2013

CT: What are the major challenges facing the freight-forwarders in India?

Tanna: Presently, we are facing challenges, perhaps because of inconsistencies in Government policies, a very volatile exchange rate situation in addition to one of the most glaring challenges which we have had to battle with for years – inadequate infrastructure.

CT: As the new Vice-President of FIATA from this region, what will be your focus areas?

Tanna: Besides the local issues like inadequate infrastructure, service tax and TDS issues, we also need exposure at the international level to communicate effectively with the airlines and IATA, thereby ensuring that we have the same platform the international forwarder has. A level playing field is what we need to achieve for the Indian air-cargo agents, thereby making them as competitive or perhaps even better than any other international forwarder. This is where

A level playing field is what we need for the Indian air-cargo agents to make them as competitive or perhaps even better than any other international forwarder” Keshav Tanna Vice-President, FIATA FIATA can play the role of a catalyst for us.

CT: What will be the activities and programmes of FIATA for India?

Tanna: FIATA is not only about air cargo.

It also addresses issues related to World Customs Organisation, World Trade Organisation, International Chamber of Commerce, International Union of Railways, Vocational Training, Security and Legal issues. As a vision – it would be nice to perhaps host one of the FIATA Congress’ in India in the near future. www.cargotalk.in