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Cargotalk

South Asia’s Leading Cargo Monthly

June 2013

RNI No.: DELENG/2003/10642 Date of Publication: 22/5/2013

Vol XIII No.7 Pages 64 Rupees 50 cargotalk.in

By DDP Publications

No.1 in Circulation & Readership

Postal Reg. No.: DL (ND)-11/6002/2013-14-15. WPP No.: U (C)-272/2013-15, for posting on 25th-26th of advance month at New Delhi P.S.O.

Cold Chain

Concerted efforts needed

Cargotalk

editorial

Editor SanJeet

Sr. Assistant Editor Ratan Kumar Paul

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Cargotalk

Cold Chain

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

JUNE 2013

RNI No.: DELENG/2003/10642 Date of Publication: 22/5/2013

U (C)-272/2013-15, 02/2013-14-15. WPP No.: Delhi P.S.O. Postal Reg. No.: DL (ND)-11/60 of advance month at New for posting on 25th-26th

for Common Users

However, shippers in India often face huge challenges owing to lack of basic infrastructure ie an integrated cold chain system. Analysing the demand side, some recent studies pertaining to the requirement of cold chain unveiled that the total value of the cold chain industry would be around USD 3 billion and it would grow at 20-25 per cent a year. The total value is expected to reach USD 8 billion by 2015 through increased investments, modernisation of existing facilities, and establishment of new ventures via private and government partnerships.

Meanwhile, the Government has taken some initiatives to reduce post harvest wastage for the greater interest of the country. The Finance Minister in his budget speech for 2012-13 proposed to earmark `5,000 crore for creating warehousing facilities (including cold

SanJeet Editor

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Deputy General Manager Harshal Ashar Regional Head: North & West shiv kumar Assistant Manager: West Roland Dias

A

ccording to a report released by Technopak, a leading consulting firm, India’s food industry, which is currently estimated to be at approximately USD 100 billion will grow to USD 300 billion by 2015. Industry experts say total volumes of fruit and vegetable cargo flown out of India stand at around 70,000 tonne a year. India’s fresh meat export is estimated to be at around 30,000 tonne a year. Volume of pharmaceuticals and life science products flown out of India is to be around 50,000 tonne a year. Indian pharmaceutical exports have been set at $25 billion by 2014. For the period ending March 31, 2013, exports were projected to grow by 25 per cent to around `75,000 crore.

Asst. Vice President Gunjan Sabikhi

Vol XIII No.7 Pages 64 Rupees 50

By DDP Publications

Assistant Manager Marketing yogita Bhurani Sr. Marketing Co-ordinator Gaganpreet Kaur Design ruchi sinha

COLD

CHAIN

Photo Journalist simran kaur

CONCERTED EFFORTS NEEDED

Advertisement Designer Vikas Mandotia

storages) from the allocation under RIDF. Moreover, during 2011-12, there was provision of `2,000 crore under RIDF VII for the first time. In 2012 the Government of India established National Centre for Cold-chain Development (NCCD) as an autonomous centre to work in close collaboration with industry and other stake holders. The objective was to promote and develop integrated cold chain in India for perishable F&V and other perishable allied agri-commodities. The objectives of the centre are also to recommend standards and protocols for cold chain infrastructure, suggest guidelines for human resource development and to recommend appropriate policy-framework for development of cold chain in association with the industry stakeholders.

However, the need is to intensify the government efforts with a time-bound manner. It should also take serious efforts to engage not only the growers and exporters but also service providers (read third party logistics service providers), who have domain knowledge and eager to invest in cold chain infrastructure. A broad outlook with a goal of creating facilities for common users only can guarantee a strong and uninterrupted cold chain system in India.

Production Manager Anil Kharbanda Circulation Manager Ashok Rana DDP Publications Private Limited New Delhi: 72 Todarmal Road, New Delhi – 110001, India.

Tel.: +91 11 23731971, 23710793, 23716318, Fax: +91 11 23351503, E-mail: cargotalk@ddppl.com, Website: www.cargotalk.in Branch Offices

Mumbai: 504, Marine Chambers, New Marine Lines, Opp SNDT College, Mumbai – 400020, India Tel.: +91 22 22070129, 22070130 Fax: +91 11 22070131, E-mail: mumbai@ddppl.com Middle East: Z1-02, P.O. Box 9348, Saif Zone, Sharjah, UAE Tel.: +971 6 5528954, Fax: +971 6 5528956 Email: uae@ddppl.com CARGOTALK is a publication of DDP Publications Private Limited. All information in CARGOTALK is derived from sources, which we consider reliable and a sincere effort is made to report accurate information. It is passed on to our readers without any responsibility on our part.The publisher regrets that he cannot accept liability for errors and omissions contained in this publication, however caused. Similarly, opinions/ views expressed by third parties in abstract and/or in interviews are not necessarily shared by CARGOTALK. However, we wish to advice our readers that one or more recognized authorities may hold different views than those reported. Material used in this publication is intended for information purpose only. Readers are advised to seek specific advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the readers’ particular circumstances. Contents of this publication are copyright.

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

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Contents June 2013

SECTORS Airlines News 8 I Virgin Atlantic Cargo resumes capacity from Mumbai National News

10 I Warehousing & Cold

Domestic Cargo Performance at Indian airports for February 2013

38 I Airport wise

International Cargo Performance at Indian airports for February 2013 Family Album

Chain Infrastructure: Industry and government meet at PHD Chamber

48 I United and Global

14 I DTDC Courier &

50 I A friendly cricket

Cargo acquires Nikkos Logistics to offer endto-end logistic services On the Move

18 I TIACA gets new Chairman and Vice Chairman

Stephen Richard Schueler appointed as CCO, Maersk Line

Aviation honour top agents in New Delhi tournament between forwarders and carriers

Logistics Services 55 I Fresh and Healthy Enterprise: Creating facilities for all Shipping & Ports 54 I Projects FPS handles giant cargo from Chennai

Sanjay Malhotra joins Penta Freight as GM-NI

Two new major ports in West Bengal and Andhra Pradesh approved

Calendar of Events

COLUMNS

international cargo and logistics events

FFFAI Convention 2013 22 I From CHA to Customs Broker: Striving for greater role amidst challenges

20 I Calendar of

Cargo Performance

34 I Airlines wise exim cargo performance for April 2013 at Delhi International Airport

35 I Airlines wise exim cargo performance for April 2013 at Mumbai International Airport

36 I Airport wise 6 i cargotalk i june 2013

n Cover story

40 I Cold Chain:

Industry urge for integrated policy Despite India is one of the largest producers of fruits and vegetables in the world and there is tremendous potential of pharmaceutical exports from this country, the basic infrastructure viz cold chain is at its nascent stage. The government of India through the National Centre for Cold-chain Development is trying to cater to the requirements. However, the focus is apparently missing as industry players, especially logistics companies are yet to be integrated with this venture at the policy level.

Cargotalk highlights some critical areas to draw attention of the authorities concerned.

BOOK Review

Viewpoint 27 I Customs Brokers in India recommend well-defined and pragmatic policies

60 I A guide for CHAs and

Guest Column

Customer: The way forward for win-win benefits

56 I Long Term Shipping Contracts and Indexing

logistics service providers Users Perspective

62 I Satisfying Customer’s

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International News Airlines Services

Virgin Atlantic

Cargo resumes full capacity from Mumbai

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irgin Atlantic has announced that it would offer 15 tonne capacity a day in its flights from Mumbai. Like other airlines, Virgin Atlantic had also reduced payload capacity from this airport after night-time runway closures for maintenance work by the airport operators. The work has been completed now.

mentioning that bi-lateral trade between India and Britain is likely to increase in the days to come. Recently, Britain’s Prime Minister, David Cameron, led a second trade mission to India as part of the target to double Britain’s trade with India from £11.5bn in 2010 to £23bn by 2015. It currently stands at £16.4bn. “We are confident India will remain one of the bright spots in our network as it has been for that last 12 years with our daily New Delhi operation,” Jones added.

Commenting on the development, Nick Jones, Head of Sales, Virgin Atlantic Cargo said, “Our return to the Mumbai market in October was met with such positivity not just from the “We certainly appreciate Nick Jones local customers, but from our Head of Sales, Virgin Atlantic Cargo the understanding of our customers around our network. customers during this time We are very happy to be re-establishing and we are pleased that our service quality ourselves in such a dynamic commercial in London and network connectively market and thank our customers (freight has given them a compelling reason to forwarders) for their support.” The airline stay loyal to Virgin Atlantic,” endorsed is bullish about the increase of cargo Aminder Bal of Interglobe, Virgin Atlantic traffic from India to London. It is worth Cargo’s GSA in India.

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National News Industry Associations

p Dignitaries at the dais are releasing the study report ‘Warehousing & Cold Chain Infrastructure in India: Opportunities & Challenges’

Warehousing & Cold Chain Infrastructure Industry and government meet at PHD Chamber PHD Chamber of Commerce & Industry in association with Warehousing Development and Regulatory Authority, Government of India recently organised a Conference on ‘Warehousing & Cold Chain Infrastructure’ at PHD House, New Delhi. The conference was well-attended by industry stakeholders, facilitators and government officials.

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he Conference was attended by over 150 delegates which included senior government officials from the Ministry of Consumer Affairs, Food & Public Distribution, Ministry of Agriculture as well as Ministry of Food Processing Industries; senior officials from Warehousing Development & Regulatory Authority (WDRA) as well as Central Warehousing Corporation (CWC); Senior representatives from Embassies; Senior officials from Banks & other Financial Institutions such as National Spot Exchange Limited (NSEL) and National Bank for Agriculture & Rural Development (NABARD) and Senior representatives from Warehousing and Cold Chain Industry.

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In his welcome address Suman Jyoti Khaitan, President, PHD Chamber stated that over the years with the increase in food production, wastage of food grains has also increased. He underlined that about 65 -70 per cent of the food grains are stored at the farm level and (about 6.0 per cent to 10 per cent of total production) is damaged owing to poor handling of pre and post harvest period. Most of the warehouses in the country are not mechanised and are still at a very elementary level. He emphasised that warehousing and Cold Chains are the critical issues which need to be addressed urgently to solve the problem of wastage of food grains and fruits and vegetables.

Even though India is the second largest producer of fruits and vegetables, overall

contribution to the food stock is very poor due to lack of storage facilities.

Providing industry perspective RS Bedi, Chairman, Task Force on Logistics Management, PHD Chamber also stated that warehousing is a critical link in the food supply chain. It brings about efficiency in food procurement and is also a financial tool for the rural economy.

Bedi further emphasised that World class warehousing facilities should be provided for the agricultural community.

The government should provide cold chain trolleys at airports and facilitate the transportation of perishable cargo along with refrigerated containers at international ports. He pointed to the lack of sustained www.cargotalk.in

National News Industry Associations

investment in the cold chain and ware housing sector and the need to promote Public Private Partnership (PPP) models to accelerate investment in this sector.

Addressing the delegates PK Jha, Additional Secretary and Financial Advisor, Department of Food and Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution, Government of India emphasised that the government needs to focus much more on the warehousing sector. The warehousing sector should be rightly incorporated as an infrastructure sector. It should be given benefits in terms of finances and policies.

“Lack of storage facilities in the country has prevented farmers from going into more productive areas,” Jha observed.

Dinesh Rai, Chairman, WDRA in his Key Note address highlighted that 10 to 13 per cent of the GDP is wasted because of inefficient infrastructure and supply chain system. “The private sector should come up in a big way to improve supply chain infrastructure. Farmers are looking for

better prices to sell their stocks and they need more choices. The farmers should be provided higher returns on their produce and the consumers should be satisfied,” he added. He also suggested that efforts should be made on construction of warehouses near to the farms so that wastage of time could be reduced.

“Warehousing should be declared as full-fledged infrastructure status and the request for which has already been made to the government by WDRA. The farmers should be provided higher returns on their produce and the consumers should be satisfied. Warehouses should not be situated very far from the farms,” Rai suggested.

Rai pointed out that only 10 per cent of the warehouses in the country are modernised and only 2 percent of the agricultural produce are stored in temperature controlled environment.

Interestingly, India is the third largest producer of fruits and vegetables and occupies the top position in the production of spices.

At this conference Pankaj Kumar, Director, Ministry of Food Processing Industries, Government of India spoke on Government subsidy policies for Cold Storage & Cold Chain Infrastructure (MOFPI) Schemes. He also underlined the fact that the value of annual wastage of fruits and vegetables in India is `13309 crore. Currently, the total cold storage capacity is available for 30 MMT, which is not even 10 per cent of the total produce.

Capt. Pawanexh Kohli, Chief Advisor, NCCD and Principal Advisor, CrossTree Techno-visors spoke on “Future of Cold Chains- The way ahead for India.”

According to him, warehousing facilities is about storage and care for produce under transit. “If the country had better warehousing facilities, farm produce could have been sold five times more. India’s cold chain infrastructure has not been able to progress due to a lack of strategic leadership,” he emphasised. He urged the industry to step in for investing in the cold chain sector in a big way.

CRWC holds interactive meet on cold storage facilities

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RWC, as a part of diversification activities, has planned to develop Pan-India cold storage facilities. In this regard, an interactive session was organised with the representatives of the companies and organisations engaged in providing cold storage facilities. The

interactive session was attended by logistics companies, financial companies, technology service providers and consultants.

The conference was addressed by Vinod Asthana, Managing Director, CRWC and Gokul Patnaik, Chairman,

Global Agri System, who are working on a cold chain project. Asthana and Patnaik informed that a Joint Venture would be set up for promoting cold-chain based storage facilities, which would help in reducing the wastages of perishables.

The JV will also work with other stakeholders to provide comprehensive logistics support.

CRWC is a part of the diversification activities of CWC, which developed a warehousing facility of Railway land along a Railway siding as a pilot project at Whitefield Goods Terminal at Bangalore. Meanwhile, the Ministry of Railways identified land near various Railway Terminals and started working for development of warehousing complexes with handling facilities in order to improve the utilisation of the Railway facilities. Indian Railways had an objective to boost rail freight transportation by meeting other logistics requirements of its customers. It is expected the cold chain related venture would further boost the rail freight movement in the country.

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National News Joint Venture

DTDC Courier & Cargo

acquires Nikkos Logistics to offer end-to-end logistic services India’s leading express courier company, DTDC Courier & Cargo, has recently acquired Bangalore-based Nikkos Logistics with majority stake in the company. The new entity is called “DTDC Nikkos International Logistics”.

p (L-R) Pradeep Pillai - Business Head; Kochat Narendran – Director, Nikkos Logistics; Subhasish Chakraborty- CMD, DTDC and Suresh Bansal, Director, Head of International Business and Supply Chain Solutions, DTDC

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n this joint venture DTDC owns 70 per cent and 30 per cent is owned by Nikkos Logistics. Nikkos Logistics is a Bangalore based company established

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in the year 2011. According to Abhishek Chakraborty, Executive Director of DTDC, the acquisition of Nikkos complements and expands DTDC’s strategy to offer complete end-to-end logistic solutions to customers in national and international markets. Nikkos Logistics solutions will also help expand DTDC’s network by linking the domestic offerings globally and vice versa.

“The acquisition allows DTDC to combine its strength with Nikkos to penetrate and consolidate its presence globally. Tapping on opportunities will further enable more feet on street,

robust infrastructure and quality delivery capabilities for DTDC around the globe.” said Chakraborty. Nikkos has a strong base of customers across various industry verticals including pharma, construction, aviation, food, agriculture, handicrafts and engineering. The company is involved in the business of complete logistics services by land, sea and air.

Commenting on the development, Kochat Narendran, Director, Nikkos said, “DTDC group with global presence and being one of largest domestic logistic player combined with Nikkos network and international expertise could be the key factor for change in the Indian logistic arena with local expertise and global reach in supply chain solution.”

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International News Airlines Services

IAG Cargo introduces online booking IAG Cargo has launched customers, regardless of whether their Recently, online booking facilities for its cargo will be serviced from the Heathrow customers via iagcargo.com web portal. Now customers will be able to book online for IAG Cargo’s Prioritise, Perform and Constant Fresh services, with e-booking extended to additional IAG Cargo services later in the year.

According to the airline sources, the addition of e-booking to the site provides customers with faster confirmation of bookings and 24/7 availability.

or Madrid hub teams. “It is a major step forward in realising our vision of a single commercial platform for all our customers, along with delivering world class distribution channels that make it easier for our customers to do business with us,” he added.

The sources also maintained that the launch of e-booking marks a step forward in IAG Cargo’s goal of offering a full range of online services that deliver a seamless end-to-end customer experience. IAG Cargo customers have already benefitted from being able to access other e-services such as eAWB, Track & Trace and online flight schedules via iagcargo.com.

According to Steve Gunning, Managing Director of IAG Cargo, the announcement is an important milestone in the IAG Cargo story, providing a single online booking platform for all

agreement with IATA for eFreight

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ufthansa Cargo has recently signed a worldwide agreement with the International Air Transport Asssociation (IATA) on the use of electronic Airway Bill, to make it easier and more efficient.

Following the new IATA multilateral electronic air waybill standard, forwarders need to sign only one agreement with IATA to gain acceptance from multiple carriers for their eAWB. All signatory airlines are then automatically included in the accord.

The agreement spells out clear rules on the usage of the eAWB and renders complex bilateral eAWB agreements on legal aspects and interfaces between carriers and freight forwarders unnecessary.

LuxairCARGO joins Cargo 2000 uxairCARGO has joined Cargo Lprogramme 2000’s (C2K) quality management to benefit its customers.

LuxairCARGO, a business unit of Luxair Group operates one of the largest air cargo platforms in Europe. The company currently handles in excess of 677,000 tonne of cargo a year for major airlines and air logistics partners.

Commenting on the development Dirk Schmitt, AVP Business Administration, LuxairCARGO said, “We decided to join because we see Cargo 2000 as the premier quality standard and quality management system for the air cargo industry. The time airfreight spends on the ground is one of the most decisive factors in the whole supply chain. Hence it is obvious that ground handling agents need to be committed to quality. The difference between success and failure today is more in ground operations than elsewhere.”

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Lufthansa Cargo signs

According to Karl Ulrich Garnadt, CEO and Chairman, Lufthansa Cargo, this industry-wide agreement is a major milestone on the road towards a completely paperless air cargo transport. “Both our customers and we as an airline will profit from easier utilisation of the eAWB as well as from more efficient and faster processes,” he said.

Lufthansa Cargo plans to switch entirely to the use of eAWB by 2015. In the course of this year the eAWB is to become standard for transporting from all German stations to all destinations in the global network of Lufthansa Cargo.

Garnadt informed that More than 60 of Lufthansa customers, worldwide, have already signed up to using the eAWB.

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On the Move New Appointments

TIACA gets new Chairman and Vice Chairman O

liver Evans, Chief Cargo Officer of Swiss WorldCargo and Enno Osinga, Senior Vice President Cargo, Amsterdam Airport Schiphol, have been elected as the new Chairman and Vice Chairman respectively of The International Air Cargo Association (TIACA)..

They were formally elected at the association’s AGM, which took place following its 2013 Executive Summit in Dallas, hosted by Dallas/Fort Worth International Airport.

Oliver and Enno will serve in the roles of Chairman and Vice Chairman for a two-year term.

Oliver, who has held the post of Vice Chairman for the last two years, succeeds Michael Steen, Executive Vice President and Chief Commercial Officer of Atlas Air Worldwide, who took over as TIACA Chairman in 2010.

q (L-R) Enno Osinga and Oliver Evans

Stephen Richard Sanjay Malhotra Schueler appointed as joins Penta Freight as CCO, Maersk Line GM-NI M

aersk Line recently announced the appointment of Stephen Richard Schueler as Chief Commercial Officer, effective as of May 27. Stephen joined Maersk Line from Microsoft Corporation where he was the head of global retail sales and marketing.

Prior to Microsoft, Stephen was with Procter & Gamble for more than 20 years, developing his sales and management skills in a variety of roles across Europe, South America and Asia before becoming Procter & Gamble’s head of global retail sales.

As CCO, Stephen will be responsible for more than 9,000 Maersk Line employees in 125 countries, which includes the global country organisations and all global sales, customer service and communication related tasks. He will also be focusing on sales efficiency, value selling and customer needs.

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eading freight forwarding company Penta Freight recently appointed Sanjay Malhotra General Manager - Northern India, based in New Delhi. Malhotra as brings in rich experience of more than 25 years of working with Lufthansa Cargo. During his tenure with Lufthansa Cargo he has worked in various capacities - starting his career in 1988 with cargo and flight operations, moving onto business development and into senior positions to steer sales.

Penta Freight was founded in 1993.

Today the company is well-established with a network across the country. With active participation on the World Cargo Alliance platform, the company’s policy is to continue to enhance its international footprint in order to constantly fulfill the logistics requirement of its customers around the world.

Prof. J Ramachandran joins Allcargo Logistics A

llcargo Logistics, a leading multinational integrated logistics company has announced that Prof. J Ramachandran has joined the Board of Directors in the company.

A professor of strategy and international business at IIM-B, Prof. Ramachandran is deeply involved in the study of growth and governance challenges of business groups, multinational corporations and creative firms. A qualified Chartered and Cost Accountant, and a Fellow of the IIM-A, Ramachandran have been a visiting Professor at INSEAD, University of Pennsylvania and the University of Minnesota, USA. Currently, he is the Chairman of Redington (India) and Aditya Auto Products and a member of the Boards of Reliance Communications, Sasken Communication Technologies and few others.

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International Events Logistics Events

Calendar of International Logistics Events in 2013 11th Annual Cold Chain and Temperature Management Global Forum

September 30-October 4 Hyatt Regency McCormick Place, Chicago, IL Contact: newsletter@ coldchainiq.com

Transportation Fair

October 14-16 Shenzhen Convention and exhibition Center Contact: Tel: 86-75583581250 / 83581353 E-mail: scm002@scmfair. com; iscm002@scmfair.com

Air Cargo & Logistics Asia

October 16 – 18 Marina Bay Sands Convention & Exhibition Centre, Singapore Contact: nvfenema@acla. asia / nvfenema@vfpr-media. com Mobile: +65 92206504

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November 5-8 Ahoy, Rotterdam Contact: Ahoy-weg 10 3084 BA Rotterdam T: +31 10 293 32 50 E-mail: info@europort.nl

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FIATA World Congress Green Port Congress

October 9-11 Antwerp, Belgium Contact: Karen Tolley Conference Administrator ktolley@mercatormedia.com nnn nnn nnn The 8th China (Shenzhen) International Logistics and

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October 15-19 Suntec Singapore Convention and Exhibition Centre Contact: Ace: Daytons Direct (International) Pte Ltd Tel: +65 6379 5260 / +65 6379 5262 (ops) Email: admin@fiata2013.org nnn nnn nnn

Southern Asia Ports Logistics & Shipping – Mumbai

October 23-24 The Leela Kempinski Hotel Mumbai, India Contact: Transport Events Management, 2nd Floor, 53-3, Jalan USJ 9/5R, 47620 Subang Jaya, Selangor Darul Ehsan,Malaysia +(60)-(3)-80235352

Air Cargo Americas

November 6-8 Double Tree by Hilton & Miami Airport Convention Center Miami, FL 33126 Contact: Tel:(305) 871-7910 Email: info@worldtrade.org

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FFFAI Convention 2013 Exclusive Interview

From CHA to Customs Broker

Striving for greater role amidst challenges 22 i cargotalk i june 2013

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The Federation of Freight Forwarders’ Associations in India (FFFAI) is holding its 21st Biennial Convention from June 14 to 16 at Gurgaon, NCR Delhi with a number of new initiatives. Cargotalk had a tête-à-tête with Shantanu Bhadkamkar, Chairman, FFFAI about the changing industry scenario, rules and regulations and role of the Federation to make the Customs Brokers and Freight Forwarders prepared to fight the ensuing challenges. n Ratan Kr Paul

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he present trend in international trade in general and air cargo market worldwide in particular is not encouraging. Not only the cargo business has been affected due to incidence of high fuel surcharge and security surcharge, but also there has been decline in export volume of many exporter commodities, which is further compounded by a shift of certain industries. For example garment industry has moved its base to other countries. The manufacturing cost and the ease of doing business in countries like Bangladesh and Vietnam. In addition, their cargo handling is better. The cases of pilferages are much lower. This has also resulted into diversion of cargo capacity by some airlines.

“For a rebound in future we need a number of structural changes, which includes greater encouragement to infrastructure to support good quality manufacturing. The infrastructure not just at the airports and sea ports should be developed, connectivity and availability of manufacturing space should also be set up. For our exporters to be globally competitive, we need to ensure that they are locally competitive,” said Bhadkamkar.

Rules and Regulations

Bhadkamkar pointed out that globally the customs departments are undergoing lot of transformation and changing the focus.

The role of customs in many countries is now less driven by revenue consideration and is more driven by security matters, environmental concerns and such issues.

For example, said Bhadkamkar, Know Your Customer (KYC) is now a global phenomenon and is applicable not only for freight forwarding industry but it also applies to almost all service providers including banking sector and insurance sectors. “The Custom House Agents, now Customs Brokers (since enactment of the Finance Bill 2013) have always believed in exercising due diligence while accepting business. However, www.cargotalk.in

For a rebound in future we need a number of structural changes, which includes greater encouragement to infrastructure to support good quality manufacturing. The infrastructure not just at the airports and see ports should be developed, connectivity and availability of manufacturing space should also be set up Shantanu Bhadkamkar Chairman, FFFAI

the provision of checking antecedents or expectations of visiting customer in each case is not just unviable but there is also a situation of impossibility of performance as the Custom Brokers are neither empowered by law to investigate the customers nor they are trained to function like an investigating agency,” he stated.

He, however, made it clear that Custom Brokers, the members of FFFAI, do not have resistance for KYC and SelfAssessment but have serious issues about the way it has been implemented. India has a complex taxation structure, which is in addition riddled with uncertainty.

“We have instances of experiencing variation in the practices for assessment (both classifications and valuation) at different customs stations. The practices also have changed from time to time.

Customs Clearance under self-assessment has been introduced for facilitation, we welcome the concept of Self Assessment as a facilitation measure. However as conceived and implemented, it is only a change in nomenclature without change in working practice,” he pointed out. He also highlighted that the entire liability has been shifted to the importers and customs brokers. In reality customs clearance is in many cases subjected to intervention by customs officer. This intervention is termed as ‘verification’, which is defacto an assessment by Customs. “In such circumstances holding the customs broker or importer accountable both in terms of responsibility and liability is not just unfair but the uncertainty it breeds is counterproductive for stability and growth,” the FFFAI Chairman maintained.

Meanwhile, FFFAI have made some suggestions to CBEC to make this provision reasonable and practical, while increasing their affectivity. “We are in continuous dialogue with the CBEC for their issuing a feasible guideline for the implementation of this provision,” Bhadkamkar informed. june 2013 i cargotalk i 23

FFFAI Convention 2013 Exclusive Interview

trained workforce. “We therefore have a paradoxical situation where fresh graduates have challenges in finding jobs. On the other hand the Freight Forwarders and Custom Brokers find shortage of trained work force at every level,” Bhadkamkar underlined.

FFFAI has taken a commendable initiative in launching Indian Institute of Freight Forwarders (IIFF) which offers six months International Diploma with a minimum 330 hours learning since the syllabus of IIFF is validated by FIATA. This diploma is recognised in about 70 countries. The Federation also assists the students for internship.

To proliferate the training initiative, FFFAI has signed Memorandum of Understanding (MoU) with 5 of its Member Associations and 3 leading Management Institutes. Its aim is to make available this programme nationwide through classroom training.

Challenges also include the surge of global and multi-local forwarders in India. As many of global companies India being a relatively new market, they adopt penetration pricing. While Indian Forwarders entirely depend for their present earnings in India, foreign Forwarders have the ability to cross subsidise so as to strengthen their future earnings.

FFFAI is better equipping its members through some direct initiatives and through Member Associations to compete with these forces of attrition by instituting “Golden Jubilee Series Knowledge Sessions”, creating networking opportunities and creating better awareness for financial options such as merger and acquisitions including Foreign Direct Investments (FDI).

Now Freight Forwarders and Custom Brokers are also entitled to be Authorised Economic Operator (AEO). There is also a dialogue amongst the customs administrative worldwide to have a Mutual Recognition Agreement (MRA) so that AEO in one country is equally recognised in the counterpart country.

Other global initiative includes the Economic Competitive Packages and Global Connected Customs projects of the World Customs Organisation. “Such trade 24 i cargotalk i june 2013

facilitative measures will bring down the transaction cost and will facilitate faster clearance of the goods at the border. The countries that adopt it faster and better, will experience a greater growth in International trade,” he said.

Initiatives to Face Challenges

Apart from new rules and regulations, there is a wide spectrum of other challenges that Indian Freight Forwarders are facing.

These challenges are mainly related to infrastructure and non-availability of

There is one critical challenge Indian Freight Forwarders are facing is the increasing tendency amongst Indian customers to pay late and withhold the money due to the forwarders and custom brokers slightest ‘faults’ and causes arising due to the situation that is beyond their control.

FFFAI is pursuing this issue with the Apex Chamber and Trade Bodies with an option that their members adopt a fair business practice and honour the Standard Trading Conditions to create a healthy business environment. Custom Brokers and Forwarders also have several issues with carriers and custodians both air and ocean. www.cargotalk.in

FFFAI Convention 2013 Exclusive Interview

Importance of 21st FFFAI Convention

“Through dialogue with their national bodies and local operators FFFAI is trying to resolve them amicably,” said Bhadkamkar.

Why So Many Associations?

According to Bhadkamkar, since India is a vast country, logistics business is fragmented across the country. It is also fragmented into various segments. In some cases there is a super specialised segmentation. Naturally there is a divergence of interest of different regions and different sectors. This divergence of interest can often lead to being at crosspurposes with other stakeholders. This is even in areas where there is a commonality of interest, but the priorities are very different. There are also cultural issues, where the methods and means of dealing with the issue in different organisations could be very different. “To deal with the scenario of fragmentation and lead it to creation of a single common platform, for not just logistics industry but trade in general, the apex bodies need to evolve a mechanism where the concerns of all the stakeholders get equal priority,” he urged.

He, however, maintained, in a democratic set up with diversity like India, where both aspirations and concerns are varied the trade bodies can often be at cross purposes.

“It is very difficult to create a common platform, nonetheless I believe there is sufficient wisdom amongst the leadership of apex bodies in logistics sector to form a common forum such as Maritime Forum and Grievance Redressal Forum, where there is a conscious efforts to strive resolution of contentious issues and work towards for a common goal. It would facilitate the trade and create a better business environment and pursue for better infrastructure for ensuring efficiency and growth.

26 i cargotalk i june 2013

With the theme: ‘Customs Broker: New Paradigm, New Opportunities, New League’ this year’s Convention of the FFFAI will focus on the emerging issues for the Customs Brokers & recent changes in Customs Law, including the change of nomenclature from ‘Custom House Agent’ to ‘Customs Broker’. It will also discuss on contemporary issues in Global Supply Chains.

“The convention will coincide with Board of Directors Meeting and Annual General Meeting of `International

Theme: Customs Broker: New Paradigm, New Opportunities, New League Highlights:

n Overwhelming response of registrations n 330 delegates registered till May 17 n 225 rooms of the venue hotel sold

New features:

n International Participation of delegates from 25 countries. n Participation from neighboring countries n Mini-Trade Fair on sidelines the convention n B2B Meetings during the convention n Convention to coincide with Annual General Meeting of International Federation Of Customs Brokers Association

Business sessions:

n 5 business sessions over 2 days n International perspective n Insights from experts in various fields and leaders of industry n In depth overview of business and state of industry n Knowledge Session for families of delegates

Federation of Customs Brokers Association` (IFCBA), and therefore it will be an event with international participation.

More than 400 delegates representing the leaders from fraternity of Customs Brokers, other stakeholders from all the segments in the logistics sector, special guests and expert speakers and other dignitaries of will participate in this convention,” shared Bhadkamkar.

New Initiatives

In addition to regular features, there are also some new initiatives in this convention, which includes mini trade fair giving an opportunity to the members and vendors to showcase their services and products. In addition, there will be B2B meetings including international participants and a mini seminar in cooperation with IFCBA to present a worldwide perspective.

FFFAI is also planning to to launch an All (Transport) Modes Trade Fair. It will be a full scale Trade Fair with B2B meetings and multi track seminars for dealing with specialised issues.

Some other future initiatives include cooperating with professional consultancy firms for coming out with a ‘State of Industry Report’. FFFAI is discussing with some consultancy firms for cooperating on Thought Leadership in various segments of freight forwarding and custom brokerage business.

Recent developments at FFFAI

Recently, FFFAI has initiated branding exercises, and have launched in-house news magazine, FFFAI News, both in print and e-version. Moreover, it has released a Handbook for members and has been made available to the members free of cost.

FFFAI is now more active with apex trade bodies like IFCBA, FICCI & ASSOCHAM. Trade Facilitation Seminars were organised in association with FICCI at various stations. FFFAI also has been interacting with the World Customs Organisation from the Platform of CBEC and IFCBA..

FFFAI as a Member of Expert Group of International North-South Transport Corridor (INSTC) is working with the Government of India for a study of Multimodal Route to & from CIS countries. . www.cargotalk.in

FFFAI Convention 2013 Viewpoint

Customs

Brokers in India

The role played by Customs Brokers and Freight Forwarders in India is crucial in respect of responsibilities they take to expedite the cargo traffic to and from the country. However, the ground reality is not supporting their business to grow as an industry.

Cargotalk spoke to some leading players in this trade to highlight the challenges pertaining to Customs 1.5 Version, KYC and Self Assessment.

Recommend for well-defined and pragmatic policies

A

ccording to Samir J Shah, Partner, JBS Group of Companies, the framework for Customs Clearing and Freight Forwarding business is on order. However, the implementation and some legalities of the same need to be streamlined. A proper implementation of Customs 1.5 EDI version and Self Assessment would propel growth in this area. “This however needs to be supplemented with capacity building on both sides - department as well as Customs Brokers,” he observed.

Endorsing Shah, George Joseph, President, the Bombay Custom House Agents’ Association said, “The Customs

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1.5 version and the KYC norms are definitely big steps in the right direction and very good in the long run for the logistics industry. Hoever, there are quite a few glitches yet to be removed.

As regards self-assessment, though it is a concept that cannot be argued against, the issue has become quite contentious with the Custom Brokers as well as the exim trade. “We are not happy in the way it is sought to be implemented particularly with regards to the threat of penal action. I think that because of our very complex duty structure, innumerous export / import schemes and innumerous exemption notifications, we are not yet ready for the concept of self-assessment if attached with a clause of penal action,” june 2013 i cargotalk i 27

FFFAI Convention 2013 Viewpoint

he stated. In his opinion, the government should first rationalise and simplify the duty structure before implementing selfassessment. “Nevertheless, I hope it is a case of “ work in progress ” and we will finally reach a situation where self-assessment will be welcomed by both the trade and the Customs Department,” he added.

Samir J Shah Partner, JBS Group of Companies

George Joseph President, Bombay Custom House Agents’ Association

Shah was of the view that the biggest challenge is the feeling of loss of trust and respect from the department towards the Custom House Agent - now Custom Broker. “Self Assessment and KYC though wonderful initiatives and welcomed by us have thrown open unexpected interpretations from the field formations and consequent actions against Custom House Agents. This should be dealt with by the department through internal sensitisation. Additionally, the procedural and software changes that Self Assessment requires should be urgently corrected and implemented,” he supplemented.

Pankaj Shah. Chairman, PMP Logistics said that Custom Version 1.5 in EDI has nothing to offer to CHA or Freight Forwarders, but has made the Customs operations very efficient. “Transition of version 1 to 1.5 was smooth in JNCH and not much of challenge was faced as our association had addressed the challenges in advance based on the feedback from other Customs stations,” he felt.

Commenting on KYC concept he argued that since the CHAs/Freight Forwarders do not have either mechanism or authority power, it is practically difficult to verify the antecedents of the importers/ exporters.

Pankaj Shah Chairman, PMP Logistics

TV Sujan CMD, ACT Group

“To implement the KYC norms successfully, it is important that Customs, CHAs and Freight Forwarders work together to make the venture a success. We also suggest that the antecedents of the importers / exporters should be verified at the time of issues of IEC,” Pankaj Shah said.

He also maintained that In India, due to complex Indirect Tax structure, complex exim policy, age-old functions of allied agencies and mind sets of officers are the challenges for the self assessment. The transaction cost and dwell time of import clearance/export shipment is increasing with existence of self assessments.

“Implementation of ICES 1.5 was

28 i cargotalk i june 2013

done with a target to make the custom clearing process paperless and to reduce the processing time. Unfortunately, even after two years from implementation, the system has not stabilised to achieve the intended targets. The paperless process of Custom clearance still remains a distant dream. The technical soundness of the system is not a challenge, but because of the malfunctioning of the system, the entire good intentions are tarnished. It is imperative that the root causes are rectified in the system,” stressed TV Sujan, CMD, ACT Group.

According to Sujan, the target of paperless speedy clearance can be facilitated only with the support of introduction of supportive governing policies. Importers are already at a stake after implementation of self assessment. Recently introduced various amendments in Customs Act, 1962 also have a negative impact on the trade as a whole.

“The Government policies are being wrongly evoked against importers and CHAs in many cases. Target set by the government gets deviated at the execution level. Ultimately, the importers and the Custom Brokers suffer and over a period time the whole industry is affected,” he said.

“KYC is another instance of implementation with good motive, but being executed in a harsh manner. The Department should realise that the Custom brokers do not have the means or authority to investigate and find out the antecedents.

In fact, the Department has got ample resources to find out the genuineness of an importer/exporter,” Sujan pointed out.

C Karthikeya Prabu, Joint Managing Director, Diamond Shipping Agencies, however maintained that the 1.5 Version has solved some of the problems faced by the Custom Brokers and still it is an evolving process. The linkage with DGFT and ICEGATE Servers are having some issues and it needs to be addressed. Shipping Bill updation after EP Copy release to DGFT and License updation from DGFT server to ICEGATE is getting stuck due to technical errors.

“The KYC procedure advised by CBEC should be restricted to collection of required documents and verification of the facts and antecedants should not be insisted with the Custom Broker,” Prabu urged. He also pointed out that there are few areas www.cargotalk.in

FFFAI Convention 2013 Viewpoint

C.Karthikeya Prabu Joint Managing Director, Diamond Shipping Agencies

Capt. AV Samarth Director, Samson Freight

where the Custom Broker will not have the expertise and necessary inputs to do the Self-Assessment with respect to Valuation.

“The declared invoice price can only be known to the Custom Broker. Invariably, the value is being enhanced thereafter by the Superintendent or Appraiser either arbitrarily or after raising some customary queries,” he added.

often without a proper show cause notice, even for less serious cases,” he stressed.

He felt that even after introduction of self assessment the situation is not different because the discretionary power vested with customs to recall the bill of entry (BE) at the time of customs examination. In most cases the shipments get stranded because of complicated procedure to recall a BE.

Capt. AV Samarth, Director, Samson Freight put the things from a different perspective. “The policy, procedures and infrastructural measures adopted by the government today are in line with the basic objective of facilitating the exim trade, freeing them from authoritative controls.

The Customs EDI version 1.5 has been a stupendous facilitating initiative undertaken by the authorities. The RMS modules used within the system are designed with a sincere thought of facilitating the trade without compromising the security and revenue aspects, which are of paramount importance to the nation,” he said.

Appeal to the Government

In his opinion, the self assessment scheme is extending the freedom and responsibility. “The question which is, are we ready for it? Our duty structure is still complex and the ways in which exemptions are interpreted vary— not only between the trade and the authorities but between two customs stations,” he underlined.

Taking cue from Samarth, VS Pradeep, CEO, Sagar Shipping observed that the introduction of 1.5 version has no doubt made CHAs life easier and now they are at ease to file shipping bill, bill of entry, or import and export manifest online from anywhere in India. But there is also lot of hurdles in implementation of these when it comes to reality. Many a times the systems hang at the most untimely situation.

VS Pradeep CEO, Sagar Shipping

30 i cargotalk i june 2013

“With regard to recent regulations on K Y C & Self Assessment, we have been pushed to untold miseries and bottlenecks.

Though as professionals we work within the strict parameters set by these regulations we are expected to do the job of an investigating agency by putting the responsibility of verification of antecedents of our clients, his financial viability or source of funds,” said Pradeep. He also emphasised on a serious threat to the Customs Brokers/CHAs’ existence. “When some unlawful act is done by a client and detected by customs or any other authority, the first victim becomes the CHA .The CHA license is suspended most

Samir Shah viewed that government must recognise that logistics is a stand alone activity - a very important contributor to the GDP. Logistics must be treated with respect and urgency to bring about the changes required to achieve the Indian dream of becoming an economic superpower. The governmentt should not over regulate the logistics space. Domain knowledge amongst the law makers is very essential. “Trust the trade and industries, have detailed interactions with them and then bring in legislations. It is an industry which requires discipline and hard work - consistently. This makes the industry also capable of being self regulating,” he suggested.

“There are many fault lines in a policy which are made without much thought process and discussions and consultation with the stakeholders, to fine tune the concept of any policy. This creates many grey areas to the officials to escape the responsibility of implementing the policy and also gives enough room for misinterpretation of the policy provisions; thereby the intended benefits are not imparted to the trade and industry,” endorsed Sujan.

“My appeal to the Government would be to create infrastructure or allow the private sector to create infrastructure and to simplify the tax structure and procedures,” added Joseph. Endorsing him, Samarth urged for simplifying the duty structure and cutting down exemption notifications.

He also recommended that verification of bill of entry/shipping bill (if done by the proper officer) should be considered as assessments, with the officer equally be accountable for the assessment. In addition, KYC should be done using government machinery and at the initial stage of granting the IE code, similar to a passport issuing system of police verification. As most brokers do not have the where withal to verify antecedents, the use of biometrics and authentication by such means would serve both the trade and the authorities. www.cargotalk.in

Industry Associations News Update

Sanjiv Edward of DIAL Cargo elected to TIACA Board

S

anjiv Edward, Cargo Head, Delhi International Airport (DIAL) has recently been elected as a Board member of the global air cargo body ‘The International Air Cargo Association’ (TIACA) for a 4 year term.

Currently, Edward is spearheading DIAL’s initiatives to makeIGI Airport the Cargo Gateway of India. Under his leadership DIAL is taking up various initiatives at this airport like development of air cargo infrastructure, Cargo Community System and developing Air & Road Connectivity.

Sanjiv Edward Cargo Head, Delhi International Airport (DIAL)

32 i cargotalk i june 2013

At present IGIA has two cargo terminals with one newly constructed Greenfield Cargo Terminal operated by CSC India and the existing Brownfield Cargo Terminal (refurbished) operated by Celebi Delhi Terminal Management. DIAL has also earmarked area for development for Cargo Village in close proximity to the Cargo

Terminals. IGI Airport has also recently developed a Transshipment facility at airside for facilitating faster movement of transshipment cargo.

Prior to joining DIAL, Edward had worked in British Airways for over 10 years managing different geographies in South Asia for the Cargo Business. He has a good understanding of the airport related and regulatory requirements of the different segments related to cargo industry.

Commenting on being elected as board member to TIACA, Edward said, “This election to the TIACA Board is an honour and yet another demonstration of the growing importance of India and particularly Delhi Airport on the global map.

This will provide an opportunity to make the air cargo and logistics industry in this Region aware of the significant role being played by TIACA for improvements in the global air cargo supply chain.”

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Cargo Performance Export/Import

Delhi International Airport Cargo Department, IGI Airport, New Delhi (Airline-wise Import/Export Cargo Performance for the month of APRIL 2013) S. No. Airlines

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65

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

34 i cargotalk i june 2013

Export With- Out Peri- shable (MTs) 1164 806 1116 921 1000 346 640 587 537 482 386 325 478 377 473 311 406 314 405 298 181 309 141 316 230 51 220 130 132 0 125 32 136 144 94 119 107 103 80 0 76 68 49 90 63 27 59 68 58 35 36 6 24 16 9 20 14 10 3 0 9 2 2 3 2 14771 14145 4.43%

Export Export with Perishable Perishable Cargo (MTs) (UPL) (MTs) 188 13 390 1060 46 26 8 102 10 147 1 14 18 41 55 0 43 22 12 0 1 4 7 35 102 12 6 11 6 0 3 0 1 0 6 17 29 0 33 0 0 2 11 0 18 5 0 0 1 0 0 25 5 0 0 0 1 1 0 0 0 0 1 0 0 2538 2611 -2.79%

1352 819 1506 1982 1046 372 648 689 547 629 387 339 497 418 528 311 449 336 417 298 182 313 148 351 333 62 226 142 138 0 128 32 136 144 100 136 136 103 113 0 76 70 60 90 81 31 59 68 58 35 36 31 30 16 9 20 14 11 3 0 9 3 3 3 2 17309 16756 3.30%

Import (MTs) 1847 1959 1153 607 896 1050 715 628 682 329 508 469 298 364 189 389 137 224 104 162 239 108 265 55 9 250 73 144 117 210 56 148 37 27 59 19 2 15 3 116 38 36 33 3 7 53 17 0 0 16 9 3 1 6 13 0 4 5 12 13 1 0 0 0 0 14932 14654 1.90%

Total Cargo (MTs) 3199 2778 2658 2589 1942 1423 1364 1317 1229 958 895 807 794 782 717 700 586 560 520 460 422 420 413 406 342 312 299 286 254 210 183 179 173 172 159 156 138 118 116 116 114 106 94 93 88 85 76 68 58 51 45 34 31 22 22 20 18 16 15 13 10 3 3 3 2 32241 31410 2.65%

% of Total 9.92% 8.61% 8.25% 8.03% 6.02% 4.41% 4.23% 4.09% 3.81% 2.97% 2.78% 2.50% 2.46% 2.42% 2.22% 2.17% 1.82% 1.74% 1.61% 1.43% 1.31% 1.30% 1.28% 1.26% 1.06% 0.97% 0.93% 0.89% 0.79% 0.65% 0.57% 0.56% 0.54% 0.53% 0.49% 0.48% 0.43% 0.37% 0.36% 0.36% 0.35% 0.33% 0.29% 0.29% 0.27% 0.26% 0.24% 0.21% 0.18% 0.16% 0.14% 0.11% 0.10% 0.07% 0.07% 0.06% 0.06% 0.05% 0.05% 0.04% 0.03% 0.01% 0.01% 0.01% 0.01% 100.00%

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mUMBAI csi aIRPORT

eXPORT/iMPORT cARGO tONNAGE hANDLED IN april 2013 S.No. Airlines

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

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

TOTAL %Variation over March 2013 %Variation over April 2012

Export General

Export Perishable

Total Import Export

Total Exp+Imp

1138.22 1416.20 1024.85 612.35 1125.92 942.08 477.14 535.79 545.67 527.53 622.03 426.07 320.63 646.40 205.67 373.26 148.30 354.49 217.21 0.00 153.70 302.98 313.49 103.13 235.63 0.00 61.76 74.86 155.22 54.88 31.55 68.44 73.19 49.59 48.48 0.00 53.53 38.96 45.46 18.86 27.86 17.67 13.94 11.36 0.00 0.00 0.00 0.00 0.00 0.00 72.50

1372.04 1815.53 1127.93 605.64 45.01 301.81 606.79 393.27 100.64 64.20 144.12 130.15 100.44 7.57 67.01 39.56 0.00 76.47 138.01 0.00 2.22 19.55 3.03 179.12 23.00 0.00 151.59 23.89 4.66 99.52 103.84 1.26 0.00 1.47 36.98 81.95 6.66 10.52 1.96 18.40 9.44 0.00 0.00 0.00 2.45 0.00 0.00 0.00 0.00 0.00 120.46

2510.26 3231.73 2152.78 1217.99 1170.93 1243.89 1083.93 929.06 646.31 591.73 766.15 556.22 421.07 653.97 272.68 412.82 148.30 430.96 355.22 0.00 155.92 322.53 316.53 282.25 258.63 0.00 213.35 98.75 159.88 154.40 135.39 69.70 73.19 51.06 85.46 81.95 60.19 49.48 47.42 37.27 37.30 17.67 13.94 11.36 2.45 0.00 0.00 0.00 0.00 0.00 192.96

2262.45 1127.05 984.85 1490.43 1398.23 1094.50 689.76 610.73 578.36 317.97 49.19 251.78 363.12 18.04 384.34 229.62 466.05 177.05 161.56 438.32 282.40 55.34 4.33 6.32 0.00 244.64 0.95 75.57 5.36 1.25 4.37 51.02 16.47 35.59 0.21 0.00 10.99 0.61 1.76 3.52 1.12 2.16 0.09 2.21 0.00 0.00 0.00 0.00 0.00 0.00 867.54

4772.72 4358.78 3137.63 2708.42 2569.15 2338.39 1773.69 1539.79 1224.68 909.70 815.34 808.00 784.19 672.00 657.02 642.44 614.35 608.02 516.78 438.32 438.32 377.87 320.86 288.57 258.63 244.64 214.29 174.32 165.23 155.65 139.76 120.72 89.66 86.65 85.67 81.95 71.18 50.08 49.18 40.79 38.43 19.82 14.03 13.57 2.45 0.00 0.00 0.00 0.00 0.00 1060.49

13686.87 5.36 15.78

8038.16 5.20 9.07

14767.17 (-) 11.63 (-) 2.53

36492.21 (-) 5.88 6.26

21725.04 (-) 1.52 13.21

* Airasia,Jade Cargo,Air Cargo Germany,Austrian Airlines, Pakistan Airways are Presently not Operating at CSIA. Sriya Arab are Presently not Operating.

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june 2013 i cargotalk i 35

Cargo Performance Airports in India

Traffic statistics D omestic F reight

S. No. Airport

Freight (in Tonnes)

For the Month For the period April to February

February 2013 February 2012

% Change 2012-13

2011-12

% Change

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

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

6472 6330 2738 149 117 396 46 482 172 6 288 17196

6998 6393 2793 386 163 497 16 401 186 10 193 18036

-7.5 -1.0 -2.0 -61.4 -28.2 -20.3 187.5 20.2 -7.5 -40.0 49.2 -4.7

71613 73738 32379 2374 1359 5484 318 6260 2830 83 1985 198423

77315 74831 16760 3661 1310 7324 171 5849 2179 82 2139 191621

-7.4 -1.5 93.2 -35.2 3.7 -25.1 86.0 7.0 29.9 1.2 -7.2 3.5

13977 13565 6321 2609 647 410 37529

16305 14610 6620 2701 649 331 41216

-14.3 -7.2 -4.5 -3.4 -0.3 23.9 -8.9

172615 166815 75406 30662 8041 4428 457967

183480 173708 76124 31513 7759 4292 476876

-5.9 -4.0 -0.9 -2.7 3.6 3.2 -4.0

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

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

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

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

1591 184 422 186 298 0 19 180 10 3 104 0 2997

2440 210 514 199 128 0 22 251 31 140 94 0 4029

-34.8 -12.4 -17.9 -6.5 132.8 - -13.6 -28.3 -67.7 -97.9 10.6 - -25.6

18234 2073 5615 1948 1459 0 263 2325 286 1106 960 0 34269

21713 3471 6667 3165 856 0 242 2738 338 1518 764 0 41472

-16.0 -40.3 -15.8 -38.5 70.4 - 8.7 -15.1 -15.4 -27.1 25.7 - -17.4

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Bhubaneswar Indore Jammu Agartala Raipur Imphal Vadodara Ranchi Bhopal Aurangabad Leh Udaipur Rajkot Tirupati Dibrugarh Jodhpur Silchar Total

305 375 113 404 148 278 137 175 68 41 34 0 31 0 25 0 28 2162

223 332 115 564 240 386 226 113 86 63 38 0 55 0 41 1 28 2511

36.8 13.0 -1.7 -28.4 -38.3 -28.0 -39.4 54.9 -20.9 -34.9 -10.5 - -43.6 - -39.0 -100.0 0.0 -13.9

2992 4341 1360 5251 2137 3673 1807 1355 889 680 1084 0 291 16 287 18 319 26500

2091 4389 1140 6405 2598 4574 2044 1528 806 1103 1244 0 676 25 315 39 471 29448

43.1 -1.1 19.3 -18.0 -17.7 -19.7 -11.6 -11.3 10.3 -38.3 -12.9 - -57.0 -36.0 -8.9 -53.8 -32.3 -10.0

91 59975

117 65909

-22.2 -9.0

1163 718322

1370 740787

-15 1 -3.0

(D) 17 Domestic Airports

(E) Other Airports Grand Total (A+B+C+D+E) * Estimated 36 i cargotalk i june 2013

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Cargo Performance Airports in India

Traffic statistics

I N T E R N AT I O N A L F R E I G H T

S. No. Airport

Freight (in Tonnes)

For the Month For the period April to February

February 2013

February 2012

% Change 2012-13

2011-12

% Change

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

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

17093 3052 986 212 1914 3 2077 18 0 80 0 25435

19844 3213 792 241 4129 0 2222 20 0 382 0 30843

-13.9 -5.0 24.5 -12.0 -53.6 - -6.5 -10.0 - -79.1 - -17.5

216285 38231 11585 2146 35751 18 24650 159 0 1300 0 330125

249576 40328 10807 1879 42198 0 22625 206 0 6275 0 373894

-13.3 -5.2 7.2 14.2 -15.3 - 9.0 -22.8 - -79.3 - -11.7

27879 33948 11626 3613 3084 43 80193

28669 35787 11722 3354 2157 29 81718

-2.8 -5.1 -0.8 7.7 43.0 48.3 -1.9

323530 411496 129742 41788 34235 366 941157

335110 426209 128585 39925 31622 343 961794

-3.5 -3.5 0.9 4.7 8.3 6.7 -2.1

0 64 55 0 0 307 0 0 0 0 0 0 426

0 96 36 0 0 107 0 0 0 0 0 0 239

- -33.3 52.8 - - 186.9 - - - - - - 78.2

0 1076 518 0 0 2509 0 0 7 0 0 0 4110

0 742 418 0 0 1833 0 0 1 0 0 0 2994

- 45.0 23.9 - - 36.9 - - 600.0 - - - 37.3

0 0 106054

0 0 112800

- - -6.0

202 0 1275594

0 0 1338682

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

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

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

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

(D) (E)

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

-4.7

* Estimated

Barcelona Conference for forwarders starts from June 20

S

ino-European Freight Forwarders Conference in Barcelona all set to take place from June 20-23. It is an important event for SME freight forwarders in the region. The conference is co-organised by the Chinese Ministry of Commerce through the China International Freight Forwarding Association (CIFA). It is open to all independent freight forwarders from around the world. The event is also open to a wide range of companies that 38 i cargotalk i june 2013

deal directly with the freight forwarding community such as ports, airports, charter brokers and IT companies.

Principal sponsor, Port de Barcelona has seen the hugely positive influence the previous events have made on its business and that of independent forwarders that attend. Rosa Puig Vidal, Directora Comercial of the Port said: “This conference has proved in the past that

it is a vital platform for establishing new business between European freight forwarders and their international partners from around the world.�

The event will see huge number of prearranged meetings using the unique oneon-one meeting scheduler, ensuring that each delegate meets the target companies to enhance their business and open new trade routes. www.cargotalk.in

Cover Story Current Issues

Despite India is one of the largest producers of fruits and vegetables in the world and there is tremendous potential of pharmaceutical exports from this country, the basic infrastructure viz cold chain is at its nascent stage. The government of India through the National Centre for Cold-chain Development is trying to cater to the requirements.

However, the focus is apparently missing as industry players, especially logistics companies are yet to be integrated with this venture at the policy level.

Cargotalk highlights some critical areas to draw attention of the authorities concerned. n Ratan Kr Paul

Cold Chain Industry urge for integrated policy

40 i cargotalk i june 2013

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Cover Story Current Issues

I

n each year, India produces roughly 63.5 million tonne of fruits and 125.89 million tonne of vegetables.

India is also the largest producer of milk (105 million metric tons per year). The perishable products transaction volume is estimated to be around 230 million metric tonne at present.

establishment of new ventures via private and government partnerships.

Role of NCCD

In addition, Indian pharmaceutical exports have been set at $25 billion by 2014.

For the period ending March 31, 2013, exports were projected to grow by 25 per cent to around `75,000 crore.

According to Pawanexh Kohli, Chief Advisor, NCCD, the National Centre under its agenda of inclusivity has held various interactions with stakeholders from inception, for inputs to develop its roadmap to targeted segments and to receive recommendations to ease the roadblocks. These stakeholder interactions are followed up for directed interventions by the government. “Our notable achievement is that NCCD has already redressed some concerns by project implementers by providing ready response to interpretations of subsidy guidelines. NCCD has brought about an improved understanding in allied sectors on the opportunity and remedial options in this sector,” he informed.

Ironically, the fundamental requirement to utilise the opportunities and achieve the target is grossly missing. The cold chain is yet to be developed across the country through a focused and integrated manner.

According to some recent studies pertaining to the requirement of cold chain, the total value of the cold chain industry would be as high as USD 3 billion and it would grow at 20-25 per cent a year. The total value is expected to reach USD 8 billion by 2015 through increased investments, modernisation of existing facilities, and

In another initiative, NCCD has opened participation to a wider base of stakeholders by including educational and research institutions, farmer producer organisations, self-help groups, student groups and other allied industry sectors. “We are surprised that some industry stakeholders who habitually profess interest in supporting cold-chain development have not walkedthe-talk by partaking in NCCD. The industry at large must realise that the government is a facilitator to support the ground action that they hope to fulfill. NCCD was formed to

Although India has the potential to become one of the world’s major food suppliers, the country’s inefficient cold chain network results in spoilage of almost 40 per cent of its total agricultural production.

42 i cargotalk i june 2013

Pawanexh Kohli Chief Advisor, NCCD

RG Panicker CEO, CSC India

www.cargotalk.in

Cover Story Current Issues

supporting them and as a measure of their interest,” Kohli stated. He feels that the larger initiatives need to arise from business enterprises in tandem with government interventions.

Keki Patel Cargo Manager, India & Nepal, Emirates SkyCargo

Sandeep Pingle Senior Director – Marketing & Sales, DHL Global

Rajesh Goel Chief Executive Officer, Çelebi Delhi Cargo Terminal Management

Elaborating on the specific initiatives and achievements so far (after more than a year now), Kohli informed that as part of its action plan, NCCD had recommended a nationwide base line survey on the status of cold storage infrastructure and this is being undertaken and monitored by National Horticulture Board (NHB). This study involves onsite visits to about 6500 cold stores and in its inception is already indicating some critical information which will provide directional impetus to policy makers.

“Relevant inputs from our industry participants have been passed on as recommendations to various other ministries including the finance ministry providing critical policy inputs to further develop this sector. These we expect to extend into even more positive support for the next phase of development in cold-chain,” Kohli added.

In his opinion, lack of appropriate skill sets both in management and operation of coldchain is a bane. Here, NCCD is undertaking actions to provide value-added training for this sector both for the private operators and for government officials. In April this year, NCCD signed an MoU with Cemafroid of France to collaborate in the development and dissemination of knowledge base, specific to India. “Cemafroid is the premier knowledge centre in the fields of refrigeration and cold-chain management; its roots go back to 1958 when initiated to develop cold-chain in France by the French

The main benefit the industry can expect from partaking in NCCD, is having direct representation to policy makers and thereby abetting in future direction setting exercises” Pawanexh Kohli Chief Advisor, NCCD Ministry of Agriculture,” Kohli underlined.

NCCD’s Future Plans

Kohli informed that most of the future initiatives undertaken in guiding policy interventions will be derived after review of the on-going cold storage study. In the field of transportation, NCCD shall promote multi-modal usage (both domestic and international) through collaborative initiatives at logistics hubs along the Dedicated Freight Corridors (DFCs) in the western and eastern sectors. In providing direct and immediate interface to its participating members and through its technical committees, NCCD is also ensuring stakeholders’ inclusion in future policy development and assistance progammes. NCCD also intends to promote alternate energy use in cold-chain, especially in low-grid or off-grid regions with government support to extend the cold-chain utility into such areas. The Centre is also considering optimisation of fast track road transportation for perishables in alignment with a concept wherein RFID tags would be fitted on transport trucks, and all interstate checks would occur only on toll points. “This would do away with intermittent checking enroute and speed up transit times for temperature sensitive cargoes,” said Kohli.

Benefits from NCCD

According to Kohli, the possible benefits that NCCD can promulgate are determined from inputs received from its participating member base. As more of the industry interfaces with NCCD, there will be many more action points that shall develop in the future. “It is noteworthy to understand that benefits cannot be eternally extrinsic to any trade. The industry has to implement technology and best practises such that 44 i cargotalk i june 2013

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Cover Story Current Issues

the benefit to them eventually accrues intrinsically from their business activities,” he pointed out.

“All existing financial support schemes are to the benefit of third party logistics.

The schemes facilitate use of modern technology, support upgradation and modernisation of old infrastructure; provide special incentive to reefer truck operators and support training and capacity building in this sector. These support options include 40 per cent to 55 per cent subsidy for either stand-alone development or for integrated projects,” asserted Kohli. He further stressed that industry should be aware that 150 per cent deduction on the capital invested in cold-chain is also permitted. All this is in addition to lowered custom duties and excise waiver on related infrastructure goods.

All third party service providers use these tools as part of their managerial service.

Furthermore, specifically for the service providers, service tax exemption in provided when servicing (storing, transporting, handling) agricultural produce. There are also special transport assistance in form of freight subsidy (up to 50 per cent) when exporting agricultural produce.

“The main benefit the industry can expect from partaking in NCCD, is having direct representation to policy makers and thereby abetting in future direction setting exercises. It is people from industry who will fulfill as our various committee members. These committees will give shape to future cold-chain development as part of our public-private participatory mandate,” Kohli believes.

Industry Perspective

According to Radharamanan Panicker, CEO, CSC India, it is too early to evaluate NCCD’s success. “The problem is we still don’t have any coherent policy on why we need the cold chain infrastructure and who will operate the same. Secondly, if the said body is only to help the exporters (most disappear after they get funded) to develop cold storage infrastructure, then it bound to fail. There are thousands of such facilities across the country but are they of any use?

Thirdly, the need to use the cold chain infrastructure whether fixed or movable depends on the understanding of the users as to why he is using such infrastructure and not otherwise. You still have large amount of fruits and vegetable moving in ordinary trucks but when they come to airports want cold storage facilities. Why? 46 i cargotalk i june 2013

The problem is we still don’t have any coherent policy on why we need the cold chain infrastructure and who will operate the same” Radharamanan Panicker CEO, CSC India Nobody has the answer,” he raised some pertinent issues.

Panicker also pointed out that a large part of the horticulture product domestically moves without any temperature controlled facilities. Nobody has found the justification for using it. “So unless you create a movement in the country for moving the horticulture product through a cold chain post harvest, you will not have a viable economy and justification spending on such facility,” he clarified.

“I still don’t see any role for the logistics service provider or third party independent service in creating and operating such a cold chain nor any incentive from government

for such players in terms of funding or other fiscal incentives,” he added.

Panicker recommended that there should be a clear policy on cold chain.

“What facilities are we referring to—normal general cargo warehouse at the airports and sea port or cold storage facilities at these ports and entire value chain?” he pointed out. He firmly believes in the justification of cold chain for certain products viz pharmaceuticals, that perhaps hitherto untouched by the policy makers.

Keki Patel, Cargo Manager, India & Nepal, Emirates SkyCargo endorsed Panicker. “We should make the policy makers and industry understood about the requirements of temperature control devices that differ commodity/product wise. For instance, you can’t use same device for handling fruits & vegetables and pharmaceuticals,” he maintained by saying that there is an urgent need of development of cold chain to handle pharmaceuticals, both at airports and beyond. “I think there is a serious break in the desired cold chain system, because of lack of understanding and cohesion among the custodians, customs, security people and shippers.

Temperature sensitive cargo Units should be rolled in or rolled out of airports with adequate and advance measures, especially www.cargotalk.in

products and its efforts to increase the shelf life of perishables so that farmers get higher incomes,” he said.

According to him, the perishable cargo movement (fruits and vegetables) remained almost stable compared to last year. He also observed that during past few years, Indian cold chain industry has witnessed some positive changes. Private sector participation has increased in the cold chain industry.

Recommendations

taken by customs, security (equipped with big x-ray machines), regulators (hasslefree clearance from drug controllers) and shippers (with cold chain facilities),” Patel underlined.

Taking cue from Patel, Sandeep Pingle, Senior Director – Marketing & Sales, DHL Global Forwarding, India informed that the company’s customers face various issues including poor quality and compliance to industry standards throughout the supply chain thereby increasing potential for digression. These include inadequate facilities at airports, lack of segregation of cargo, poor coordination across agencies, security issues and inappropriate disposal of waste/damaged goods. Additionally examination of cargo is done in uncontrolled temperature areas in most airports, processes are time consuming due to handling through multiple agencies and poor ramp side handling, all add to the tremendous challenges faced in temperature controlled pharma shipments.

“The most critical factor for handling pharmaceutical products from airports is the availability of temperature controlled zones for storage and processing of pharmaceutical products, which remains a challenge.

Pharmaceutical products, being time sensitive cargo, availability of proper supply www.cargotalk.in

chain arrangement is of utmost importance,” endorsed Rajesh Goel, Chief Executive Officer, Çelebi Delhi Cargo Terminal Management.

Goel appeared to be satisfied with the NCCD initiatives. “Definitely this initiative is an indicator of our Government’s focus towards promotion of temperature sensitive

The most critical factor for handling pharmaceutical products from airports is the availability of temperature controlled zones for storage and processing of pharmaceutical products, which remains a challenge” Rajesh Goel CEO, Çelebi Delhi Cargo Terminal Management

Panicker maintained that the government should forget funding the exporters or traders in creating cold chain infrastructure.

They should instead encourage and fund the third party independent service providers in creating and operating cold chain infrastructure. It will be cost effective, because they can create large scale common user facility for better utilisation, not for single user or single product facilities. “In this regard, I find the government decision to insist on the multibrand retailers to create backend logistics infrastructure as part of their mandate to be allowed into the country, a very unrealistic decision. The job of retailers is to market and sell products and not create logistics infrastructure,” he argued.

“India’s greatest need for an effective and economically viable cold chain solution can be achieved through increased investments, modernisation of existing facilities, and establishment of new ventures via private and government partnerships,” said Goel. He was of the view that an integrated process of supply chain for all commodities is imperative for India.

This will include transfer of perishable items from the production centres to the consumption centres, thereby reducing physical waste and loss of value of perishable commodities by maintaining the cool chain.

Pingle further added, “Simplify and streamline import/export processes at airports and sea ports via greater coordination between ground handling authorities, airport/port operators, regulatory bodies, customs, airlines, shipping lines and logistics companies, by using the same IT system.

“Achieve 100 per cent GxP compliance, which is the responsibility of both pharmaceutical manufacturers as well as relevant government regulators. Increase consumer awareness of product safety,” he recommended. . june 2013 i cargotalk i 47

Family Album Agents Awards

on

United and Global Aviati

honours top agents in New Delhi Global Aviation hosted United Airlines Cargo and Delhi on the occasion of a lunch on May 9 in New ector Sales, EMEA & the visit of Mirco Renfer, Dir rlet, Sr Regional Manager, Asia and Andreas C Gutbe this event the airline United Cargo in the city. At ts. Several leading agents honoured its top five agen sent at this event. in this region were also pre

48 i cargotalk i june 2013

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june 2013 i cargotalk i 49

Family Album Forwarders & Carriers

A friendly cricket tournament between forwarders and carriers Recently a friendly cricket tournament was organised between Magnum Cargo, FedEx Trade Networks Transport & Brokerage, British Airways and Rustomjee at Goregaon Sports Complex, Mumbai.

The final match, won by Rustomjee, was very exciting thanks to active participations by the officials and staff members of the companies.

50 i cargotalk i june 2013

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Academic Institutions Skill Development

University of Applied Sciences Frankfurt Steps in India to build capacity Recently, the University of Applied Sciences Frankfurt launched its India venture by introducing ‘MBA Aviation Management’ course. It is a classical MBA programme with a special focus on the Aviation Industry. The course also covers air cargo in the sessions on ‘Strategic Airline Management’ as well as on ‘Logistics/ Supply Chain Management’. In an interview with Cargotalk, Professor Yvonne Ziegler, Dean of Fachhochschule Frankfurt am Main (FH FFM) provides details. n Ratan Kr Paul

and operate within the ever-changing field of aviation so as to make a valuable contribution to the position of their respective employers. Cargo executives will also be equipped with the necessary knowhow to run a cargo operation successfully,” she added.

p The MBA Aviation Manegement Delhi Group with the project authorities and students

S

ome 28 students have already taken up their studies in the FH FFM that designed MBA in Aviation Management programme. Recently FHFFM rolled out its courses in Indian cities— at the metro hubs viz Delhi and Mumbai. It is worth mentioning that FH FFM, with a wide range of subjects and high academic profile, provides internationally oriented, application-oriented academic programmes. Its four faculties educate about 10,500 students in 50 innovative and promising degree programs with technical, economic and legal or social orientation.

The main objective of the programme “European Indian Institutional Capacity Building for the Civil Aviation Sector Aviation Diploma Project” is to strengthen the booming Indian aviation sector by educating highly qualified employees and establishing an institutional network between German and Indian universities and business communities.

According to Ziegler, at FHFFM research and teaching practice are closely linked, so that students can receive a practice-oriented and up-to-date education qualifying them for attractive entry 52 i cargotalk i june 2013

positions. In addition, a worldwide network comprising of about 100 international universities ensures global cooperation and student mobility.

FHFFM has dedicated complete one module of the MBA Aviation Management to the topic of logistics/ supply chain management. The costs for the entire 2-year part-time MBA programme are EUR 2,900 in India for a limited term because of the present support of European Union subsidy. ”We are very pleased that the EU has chosen our university to implement this programme.

We appreciate the recognition of the MBA in Aviation Management as leading MBA programme for aspiring leaders in the industry,” Ziegler said.

In India FHFFM has tied up with the University of Petroleum and Energy Studies (UPES). In team teaching sessions, professors from FH Frankfurt and from UPES will prepare the gradual transition to Indian faculty-led sessions.

While in Mumbai German professors present 90 percent of the lectures, in Delhi it will be 50 percent. A third batch of students has been scheduled to begin in Bangalore in this summer.

Commenting on the course details for air cargo industry to address challenges it faces she maintained, “From my point of view the major challenges for cargo airlines are to ensure the security of the entire transport chain from shipper to the consignee especially against possible Professor Yvonne Ziegler terrorist attacks, to prepare Dean of Fachhochschule for a possible worldwide plan Frankfurt am Main (FH FFM)

by ICAO to reduce carbon emissions and to improve Highlights of the courses yield management and capacity utilization.”

The four-semester, part-time MBA is aimed at aviation professionals with a minimum Ziegler informed that the MBA study of two years of professional experience programme is designed for current and and offers them an internationally oriented future executives with an international curriculum. Subjects of the curriculum focus who wish to improve their career include strategic expertise in aviation, chances. Graduates will be equipped with international management and leadership the skills necessary to hold an executive skills as well as consulting and project post in an Indian or international company. management.

“In this context, they will be able to analyse

www.cargotalk.in

Shipping & Ports News Update

Two new major ports in West Bengal and Andhra Pradesh approved

T

he Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of the Ministry of Shipping setting up a new major port at Sagar Island in West Bengal and Andhra Pradesh, through the Public Private Partnership (PPP) mode by following the existing procedures for project appraisal/approval, including obtaining environmental clearances.

For West Bengal the cabinet has also approved the appointing the transaction advisers and legal consultants and initiate the bidding process for award of the project and to finalize the project structure in consultation with the State Government and the Planning Commission.

The Cabinet suggested for commissioning a techno-economic feasibility reports for the new major port at Dugarajapatnam in Andhra Pradesh.

For both the cases, an Empowered Committee of Secretaries (ECS), to be chaired by Secretary (Shipping) and comprising Secretary, Department of Economic Affairs; Secretary, Planning Commission; Chairman, Railway Board; Secretary, Road Transport and Highways and Secretary, Department of Legal Affairs, will take appropriate decisions in regard to the project structuring, as well as other implementation related issues.

It has been observed that the existing port facilities at Kolkata and Haldia are insufficient and are facing severe draught limitations, because of the adverse morphological changes in Hooghly River which results in regular siltation. The present proposal is to provide a deep draught port at Sagar Island which would obviate the need for heavy maintenance dredging and would be able to handle large sized vessels.

The Cabinet Committee also observed that Rapid industrial growth in the hinterland of Visakhapatnam Port has rendered it necessary to have another major port in Andhra Pradesh. The new major port will facilitate the economic development of Andhra Pradesh and the surrounding areas.

54 i cargotalk i june 2013

Projects FPS handles giant cargo from Chennai

P

rojects FPS, a division of FPS Sri Lanka and one of the country’s leading project forwarders, has recently handled the urgent shipment of six giant wind turbines from Chennai to a site 200km inland from the port of Colombo. The shipment, which was for Naladanavi, the largest private sector power supplier in Sri Lanka, comprised 41 pieces, with a total weight of 784 tonne and volume of 5656 cu m. The six pylon base sections each weighed 33 tonne.

To carry the shipment a state-ofthe-art heavylift vessel Han Xin, with on-board crane capacity of 200 tonne, was chartered from Chennai. On arrival in Colombo, the pylon sections were transferred onto special extending trailers for the tortuous journey over twisting roads and narrow bridges to their final destination. FPS trucks operated convoys for six consecutive nights, to minimise traffic disruption.

The shipment required 30 truck journeys.

“The Shipper, Gamesa India, was extremely supportive in ensuring the

Cargo was under the hook with no idle time. On arrival of the vessel at berth in the Port of Colombo, our fleet was on stand-by to commence the nightly convoys with full escorts,” said Gihan Nanayakkara, Chairman of FPS Sri Lanka and Projects FPS He also informed that the company completed the project with zero demurrage, no truck detention and ahead of schedule, without a single scratch to the cargo.

Wind power is a major focus of the Sri Lankan Government, as a means of providing for the country’s fast-growing energy needs; many further similar shipments are therefore expected in the future.

Wind power is a major focus of the Sri Lankan Government, as a means of providing for the country’s fast-growing energy needs; many further similar shipments are therefore expected in the future.

www.cargotalk.in

Logistics Services Cold Chain

Fresh and Healthy Enterprise

Creating facilities for all According to, P Alli Rani, Director (Finance), CONCOR and CEO, Fresh and Healthy Enterprise Limited (FHEL), the potential for cold chain industry in a country like India with varying climate zones and a high population density is quite high and growing. However, there are some challenges, which include high capital costs, affordability and absence of regulation. n Ratan Kr Paul

F

HEL is a fully owned subsidiary of CONCOR. It was incorporated in February 2006 with `35 crore as equity from CONCOR. It has been set up to create world class cold storage infrastructure in the country, to provide complete cold chain logistics solutions to the various stakeholders in this area.

Services Provide n Back End Retailer Chain / Wholesalers: Supply of quality Fruits and vegetables to Retail Chain / wholesalers on regular basis Supply of all varieties of apple from Himachal Pradesh & J&K to cater all segments of market n Third party Logistics FHEL plan to provide complete Cold Chain logistic solutions to its customers customised to their requirements i.e. storage, transportation, inventory management, delivery as per customer schedule etc. n Infrastructure Leasing

www.cargotalk.in

quality of products to enable long term storage. Thus FHEL’s initiative contributes positively in enhancing horticultural productivity and at the same time helps farmers find a wider market for their horticultural produce,” she said.

In her opinion, the cold chain infrastructure is crucial for the economic progress of FHEL intends to derive the farming community as well its strength from CONCOR as for protecting the consumers its holding company that from inflationary forces has continuously achieved strengthened by seasonal commendable MOU ratings fluctuations in production. and has a track record of This can be achieved only excellence in the logistics if the middlemen are forced services sector. FHEL is to ease their stronghold on P Alli Rani dedicated to long term value pricing of agricultural produce.

Director (Finance), CONCOR This can be brought about that will be able to add to the and CEO, Fresh and Healthy fruits and vegetables by mandating transparency Enterprise Limited (FHEL) in marketing and pricing of Rani believes that with agricultural goods. Only the Agriculture Ministry focussing on this then can the cold chain infrastructure and area, industry can definitely see major its services become sustainable. “The progression in this sector. “It is heartening farmers currently cringe from the thought of to see that farmers are definitely looking adding costs, when they are not sure of the more and more at the export market and ultimate price they would receive and hence an increasing willingness to invest in cold chain infrastructure remains largely supporting infrastructure,” she pointed out. underutilised. Government should take positive and forceful steps to make pricing She shared that FHEL has brought into transparent at all stages. The industry the country, the latest technology to cater stakeholders should also contribute their to long term storage requirements and mite by adopting the technology to suite makes such storage available to farmers the Indian farmer pocket rather than merely at reasonable rates. “FHEL continuously importing technology that was meant for the educates farmers on the need to enhance developed countries,” Rani suggested. june 2013 i cargotalk i 55

Shipping & Ports Guest Column

Long Term Shipping Contracts and Indexing Indrajit Singh

A perfect balance between demand and supply in the shipping industry holds the key to success. Adding capacity (a ship) may be a risky proposition in view of massive capital investment required for it, an uncertain demand and volatility in the market. And, the obvious result is high freight rates and pressure on shippers.

I

t’s a hard nut for shipping markets to maintain equilibrium of supply side and demand side given the inelastic nature of supply side. As the demand part i.e. the requirement of capacity in various baskets on the popular trade lanes in North Atlantic and Asia – Europe express routes touches new highs and lows in turbulent seas, the supply side i.e. supply of ships is relatively inelastic given eons it takes to rivet a new ship and afloat it.

The containerised freight index too is the harbinger of real world economy as it quintessentially graphs the flow of finished goods across the world 56 i cargotalk i june 2013

Add to the boil it’s pretty expensive to lay off ships as and when required to run in tandem with spiking demands. The vessels loose humongous revenues when anchored or grounded awaiting orders. A cape sizer can loose around $ 50000 a day lying idle.

Keeping a new vessel sea worthy is an anecdote of just 25 years pragmatically. In the abyss of massive capital investment as well as fast depreciation rate, taking vessels out of fleets is not a witty decision always.

Owing to these ratiocinations the supply of ships has never kept pace with sinusoidal or tangential seasonal demands.

Due to this necessary faux pas committed by carriers paltry change in demand for capacity causes large amplitude vacillations in freight rates. A mere look at the Baltic dry bulk index confirms this.

The same is prima facie evident from Baltic container index as well. The two indices which drill down to raw material and finished goods trades across ocean give picturesque rendition of what is said above.

To quell the flooding and ebbing seas of freight and surcharges GRA mechanism is just an anodyne in place which only sparingly addresses the ill. However to add to it long term shipping contracts are seen as panacea to this. A great step to anchor the prices at amenable levels this secures the businesses as well for the carriers and charterers. The real benefit of it can be further harvested if these contracts are indexed. The dry bulk index which is a prominent leading indicator of upcoming world market scenario oscillates pegged with velocity of real world economy as it depicts the flow of raw materials across the globe. The containerised freight index too is the harbinger of real world economy as it quintessentially graphs the flow of finished goods across the world. Given these indices are totally devoid of speculatory dints as is the case with stock markets, they play vital roles in creating a future graph economy and hence more pragmatic than any other indicators. Indexing the long term shipping contracts with these fundamental driven loci will be the further step to tame the spike waves. In fact looking at the statistics US has already pitched in for indexed shipping contracts. Today myriads of carrier contracts being filed with FMC are indexed ones.

Considering the reluctance of some shippers, charterers and carriers towards this the GRA still holds it’s role play even in long term shipping contracts.

(The author, Indrajit Singh, is Functional Specialist – Shipping, Four Soft) www.cargotalk.in

Shipping & Ports Cargo Performance

TRAFFIC HANDLED AT MAJOR PORTS

( D U R I N G A P R I L’ 2 0 1 3 * V I S - A - V I S A P R I L’ 2 0 1 2 ) (In ‘000 Tonnes)

Fertilizer

Coal

Container

Port Traffic period P.O.L Iron Fin. Raw Ther- Cooking Ton- TEUs Other Total

Ore mal nage Cargo

KOLKATA Kolkata Dock System

%Var. against 2012-13

44 59

27 28

5 -

- -

- -

- -

542 536

36 36

245 275

863 898

-3.90

428 633

193 155

25 -

6 18

168 206

340 322

118 167

8 12

794 701

2072 2202

-5.90

TRF APRIL, 2013 TRF APRIL, 2012

472 692

220 183

30 -

6 18

168 206

340 322

660 703

44 48

1039 976

2935 3100

-5.32

TRF APRIL, 2013 TRF APRIL, 2012

1697 1471

463 127

- -

367 204

2165 1380

516 347

4 10

1 1

604 536

5816 4075

42.72

TRF APRIL, 2013 TRF APRIL, 2012

1184 1349

989 1208

94 129

10 23

181 286

828 450

397 414

19 23

1000 1099

4683 4958

-5.55

TRF APRIL, 2013 TRF APRIL, 2012

159 47

- -

- -

- -

1574 1207

98 37

- -

- -

116 80

1947 1371

42.01

TRF APRIL, 2013 TRF APRIL, 2012

1151 1151

- -

- -

27 10

- -

- -

2319 2432

120 126

769 704

4266 4297

-0.72

TRF APRIL, 2013 TRF APRIL, 2012

31 61

- -

40 -

- 81

535 556

- -

736 655

38 34

592 1077

1934 2430

-20.41

TRF APRIL, 2013 TRF APRIL, 2012

1099 918

- -

- -

- 43

- -

- -

344 351

26 24

119 94

1562 1406

11.10

2129 1623

76 527

97 28

17 -

297 -

481 575

53 37

4 3

132 141

3282 2931

11.98

TRF APRIL, 2013 TRF APRIL, 2012

51 82

- 3083

- -

- -

- 92

701 601

18 13

2 1

138 115

908 3986

-77.22

TRF APRIL, 2013 TRF APRIL, 2012

2404 2921

- -

14 -

- 46

436 509

- -

31 39

2 5

967 2018

3852 5533

-30.38

TRF APRIL, 2013 TRF APRIL, 2012

578 214

- -

- -

- -

- -

- -

4534 5140

351 365

79 179

5191 5533

-6.18

TRF APRIL, 2013 TRF APRIL, 2012

4273 4276

188 -

91 161

108 24

320 264

74 93

110 144

6 9

1961 1798

7125 6760

5.40

15228 14805

1936 5128

366 318

535 449

5676 4500

3038 2425

9206 9938

614 639

7516 8817

43501 46380

-6.21

TRF APRIL, 2013 TRF APRIL, 2012

Haldia Dock Complex

TRF APRIL, 2013 TRF APRIL, 2012

TOTAL: KOLKATA

PARADIP

VISAKHAPATNAM

ENNORE

CHENNAI

V.O.CHIDAMBARANAR

COCHIN

NEW MANGALORE

TRF APRIL, 2013 TRF APRIL, 2012

MORMUGAO

MUMBAI

J.N.P.T.

KANDLA

ALL PORTS

TRF APRIL, 2013 TRF APRIL, 2012

Source: Indian Ports Association

58 i cargotalk i june 2013

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Book Review Customs & Logistics

A guide for CHAs and logistics service providers

Recently, Commercial Law Publishers has published the April 2013 edition of the Guide Book— ‘How to be a Successful Logistics Service Provider’. The Book is meant to be a practical guide for Logistics Service Providers, Customs House Agents, Air & Sea Freight Forwarders, Shipping Agents, Customs Consultants and students of foreign trade.

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he book is divided into 24 Chapters and the subjects covered include Customs Administration in India, Customs House Agents as Customs Brokers and Provisions of Licensing Regulations (CHALR), 2004, which are explained in details. Penal Provisions, Board’s Circulars on CHALR, Appellate Provisions, CHA Staff, cargo handling techniques, documentation, classification and valuation in customs, supply chain management, changes and challenges for logistics service providers, Authorised Economic Operator scheme are also discussed in this book.

The book enlightens the readers with the various aspects of Customs Clearance and the precautions to be taken by the CHA and his staff Rajendranath Bharati The Author 60 i cargotalk i june 2013

In addition, the book contains a full text of the Customs Act incorporating latest amendments made by the Finance Bill, 2013, provisions of the EXIM policy, the Foreign Trade (Development & Regulation) Act, Customs Valuation rules for imported and export goods, Electronic Declaration Regulations for Shipping Bills and Bills of Entry, List of Trade Bodies, Export Promotion Councils and Important websites and contact numbers. The Chapter on The Asian Tiger speaks about India’s growing importance in the W T O. The book is an enriched version of the author, Rajendranath Bharati’s over twenty five years experience in Customs Clearance, Freight Forwarding, Shipping, Warehousing, Cargo Insurance, Cargo handling and related aspects. Born with a legal instinct, the author’s penchant for detail is clearly evident in the writing of this book. The Book is the first of its kind to hit the markets as no one in the past has attempted to write about the lesser known profession of logistics service providers. “The CHA is a classic case

of full responsibility but no authority.

Unfortunately, whenever there is an infraction of the law, the CHA is the first to get entangled in arduous litigation,” said Bharati.

The author has made out a strong case for the CHAs and the book enlightens the readers with the various aspects of Customs Clearance and the precautions to be taken by the CHA and his staff so as to avoid a suspension and revocation of licences.

The author is well qualified to write the book as he holds degrees in Pulp & Paper Science and Law, and Diplomas in Business Management and Multimodal transport and Logistics Management from reputed Universities.

The book is available at all leading Law Book shops in the country. www.cargotalk.in

Users Perspective Micromax India

Satisfying

Customer’s Customer

The way forward for win-win benefits The telecom industry has seen phenomenal growth in the couple of decades - from simple landline telephony to a handheld device with much enhance features like, video calls, browse internet, voice recording, camera, SMS services, call logs, act as answering machine, and much more. Jitender Panjwani, Head Supply Chain for India Operations, Micromax, highlights some key concerns pertaining to supply chain management for telecom sector. n Ratan Kr Paul

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anjwani expects huge growth for telecom companies like Micromax to penetrate in new markets and deliver new technology at affordable prices. Today, being an India brand Micromax has been the 12th largest handset manufacturer in the World (according to Global Handset Vendor Market Share Report from Strategy Analytics). The Indian brand is reaching out to the global frontiers with innovative products that challenge the status quo that innovation comes with a price. “With an in-depth understanding of rapidly changing consumer preferences coupled with the use of advanced technologies, Micromax has been able to differentiate itself from the competitors through innovation and design,” said Panjwani.

Search for appropriate partner of logistics is always in demand irrespective of domestic or international logistics Jitender Panjwani Head Supply Chain for India Operations, Micromax

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According to him, today people don’t expect a phone to just do calls rather it does lots more than phone. The dependency with factor reliability is much higher. Apparently, in coming years, the demand would continue to grow with changes in technology.

However, challenge is to maintain an uninterrupted supply chain. “Accordingly, search for appropriate partner of logistics is always in demand irrespective of domestic or international logistics. Since, the vertical of telecom is growing faster, we can expect changes in this area,” Panjwani maintained.

He further observed that in the domestic market logistics companies must focus more on regional level set ups. “Today, in logistics field, we have more organisations focusing on national level and there are limited

companies focusing on regional, district and village level supply chain. The new growth and demand for business would come from T-II and T-III towns. Apparently, this niche market will be a target market for coming years,” he felt.

In his opinion, in the domain of supply chain, there are lots of factors involved to meet expectations from the industry. It is also essential to control major work flow and stay committed. “Commitment to self is the key to success. Sharing information on time enables your own customers to have them plan their work area. At present right communication or information at the right time to plan your space in market is essential,” Panjwani observed.

“It is really good to work with professional companies and let them manage your pain areas well. Any organisation can be professional provided they pay attention to customer needs and work towards customer satisfaction. Size of organisation really doesn’t matte,” he further emphasised.

Panjwan made it clear that in today’s world, the focus should be on customer’s customer. “I focus on my end customer and so on the service providers must focus on my customer rather than treating me a customer. This means, the complete chain of supply with on time delivery with less hassle would not only enhance my market share, but also increase the size of service provider in my business for him,” he concluded.. www.cargotalk.in