Cargotalk
Vol XIV No.5 Pages 44 Rupees 50 cargotalk.in By DDP Publications
SOUTH ASIA’S LEADING CARGO MONTHLY
MAY 2014
No.1 in Circulation & Readership
RNI No.: DELENG/2003/10642 Date of Publication: 22/4/2014
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AIRadding FRANCE-KLM cargo capacity in India
WAREHOUSING IN INDIA
Challenges and Opportunities
PLUS
SMART SUPPLY CHAINS FOR LOGISTICS SECTOR
editorial
SanJeet Editor
4 I CARGOTALK I MAY 2014
Sr. Sub Editor HRITVICK SEN
Manager - Marketing PARAMJEET KAUR
W
The role of CRWC in providing the facility of the full train warehouse with the capacity of five to six train loads, attracting traffic to railways and fast turnaround of wagons
Desk Editor NEELAM SINGH
Deputy General Manager HARSHAL ASHAR
arehouses are an integral part of any supply chain and logistics industry. The Indian warehousing sector is progressively getting redefined from the traditional concept of ‘Godowns’ to modern day automated set-ups. On the demand and supply side of the warehousing sector, recognising the need for better services and mass customisation, logistic companies look towards modern techniques and data management systems to attain more efficiency and smarter fulfilment.
The cover story of this issue highlights the challenges and opportunities of the warehousing sector in India and provides an analysis of the current situation. In order to highlight the views on issues related to warehousing development in India, we spoke to a few industry stakeholders. Few government initiatives, such as an apparent consensus to stop the impasse on the ‘Land Reform Bill’ and relaxations in the existing SEZ policy, announced in the Foreign Trade Policy Supplement for 2013-14, are likely to boost the industry.
Editor SANJEET
Asst. Vice President GUNJAN SABIKHI
Storing the future of India
There had been lack of sustained investment in the warehousing sector in India. The private sector initiatives were small and sporadic. Besides, most of the private sector warehousing capacities available in the country are inadequate, small, fragmented and do not meet the requisite infrastructure standards.
Cargotalk
Sr. Marketing Co-ordinator GAGANPREET KAUR Design NITYANAND MISRA Photo Journalist SIMRAN KAUR Advertisement Designer VIKAS MANDOTIA NITIN KUMAR
has helped the stakeholders, especially during hostile weather conditions, traffic restrictions on roads, non-existent facilities for offloading in late night hours and non-availability of adequate trucks and labour. The Managing Director of CRWC has shared more such information and new initiatives taken by them in his interview.
Production Manager ANIL KHARBANDA Circulation Manager ASHOK RANA DDP Publications Private Limited NEW DELHI: 72 Todarmal Road, New Delhi – 110001, India. Tel.: +91 11 41669575, 41669576 Fax: +91 11 41669577 E-mail: cargotalk@ddppl.com, Website: www.cargotalk.in %rancK 2IÀces MUMBAI: 504, Marine Chambers, New Marine Lines,
Read about national and international news related to the cargo industry in our news-in-brief section. A National Conference on ‘Smart Supply Chains’, organised by PHD Chamber of Commerce and Industry, highlighted the current developments and major challenges in the field of sourcing and supply chain and discussed the way forward for the Indian logistics industry. Find out what initiatives are taken by the Indian Institute of Logistics to meet the need of the industry for specialised services in this sector. And last but not the least, do not miss to read the article on how Air Cargo is transforming the daily lives of people worldwide, authored by IATA’s Director General and CEO, Tony Tyler.
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 MAY 2014
SECTORS
NATIONAL NEWS
8 I Mundra Port crosses the 100 million tonnes mark IATA welcomes COMPAT’s order Cathay Pacific to set up air cargo port in Ahmedabad
16 I Revised expansion plan of Gujarat Pipavav Port INTERNATIONAL NEWS 10 I New destination for Lufthansa Cargo’s Boeing 777F
14 I Air France-KLM adding cargo capacity in India India and China boosting Etihad’s cargo growth
20 I COVER STORY
VIEW POINT 28 I CRWC Expanding the network of RWCs CARGO PERFORMANCE 30 I Airlines-wise exim cargo performance for March 2014 at Delhi International Airport
31 I Airlines-wise exim cargo
New Container vessel for TGS
performance for March 2014 at Mumbai International Airport
12 I Varner Retail expands
38 I Shipping & Ports
cooperation with DB Schenker
FAMILY ALBUM
36 I ACAAI and ACFI
MASkargo’s new A330-200 freighter service
host symposium
Damco extends partnership with Kerui
37 I New champions of NISAA Cup 2013-14
IAG Cargo boosts capacity between Europe and Panama City
SKILL DEVELOPMENT 40 I Attracting young people should be the goal
jointly
Warehousing in India
Challenges and Opportunities Warehouses are an important part of any supply chain and logistics industry. Driven by an increase in production and organised retail, the warehousing sector is the major segment contributing towards the growth of Indian logistics industry. Growing at a rate of 35-45 per cent every year, it is expected to grow more than US$20 billion by 2015. Despite this, the warehousing sector faces the challenge of strategic and operational planning with the use of modern day technology and automation. COLUMNS GUEST COLUMN 34 I Tony Tyler, Director General and CEO, IATA: Air Cargo transforming lives worldwide INDUSTRY ASSOCIATION 42 I Indian export to see US$750 bn by 2018: FIEO President
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National News New initiatives
Mundra Port crosses the 100 million tonnes mark M
undra port in Gujarat crossed the 100 million tonnes (mt) mark in cargo handling in a year—a first among India’s ports—during fiscal year 2013-2014. Mundra is now India’s biggest port by cargo handled across all formats—state-owned or private. Mundra port is one of the two Indian ports listed on BSE—the other being Pipavav port, also in Gujarat. Mundra handles cargo such as dry bulk, liquid bulk, containers and automobiles. It is also India’s highest revenue-earning port.
Among Indian ports, Mundra has the fastest turnaround time for ships, that is, 18-20 hours. The average turnaround time for ships at state-owned ports is as high as five days, including a waiting period of two days to get a berth to dock. The port also boasts the world’s biggest coal import terminal with a capacity to handle 60 mt of the commodity a year.
PR Day celebration at Airports Authority of India Poster developed by AAI on the occasion of Public Relations Day depicting the importance of communication tools of modern day communications viz.-a-viz. the conventional ones.
IATA welcomes COMPAT’s order Competition Appellate Tribunal has disposed of a plea seeking to T(IATA)herestrain implementation of International Air Transport Association’s cargo accounts settlement system. The tribunal has upheld fair trade regulator CCI’s ruling that had rejected Air Cargo Agents Association of India’s plea in this regard. IATA in a statement today said it welcomes COMPAT’s order recognising that CASS operates within the bounds of India’s competition law. “With the order, COMPAT has disposed of an injunction on CASS by the Air Cargo Agents Association of India (ACAAI) following ACAAI’s withdrawal of their appeal,” it added.
Cathay Pacific to set up air cargo port in Ahmedabad ndia is an important market for Cathay Pacific Airlines. In terms of Icontribution, contribution, India is third only to China. In view of this significant the airline is planning to set up an air cargo port in Ahmedabad and supplement its freight operations with addition of two more freight carriers in the HongKongDelhi route. Cathay Pacific operates passenger and freighters from Delhi, Mumbai, Chennai, Hyderabad and Bangalore. 8 I CARGOTALK I MAY 2014
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International News News in Brief
MoU for a New Shared Fresh Center lbert Heijn and Norbert Dentressangle have signed a A Memorandum of Understanding for a new center. In order to realise a major Shared Fresh Center (SFC), they have established a long-term partnership that will service more than 900 Albert Heijn stores. This new, joint SFC for suppliers and Albert Heijn will be managed by Norbert Dentressangle, a specialist in the field of logistics services. The SFC will be centrally located in Nieuwegein and is expected to become operational in 2015. In order to optimise the fresh supply chain and to have fresh products reach the stores in an even fresher state, Albert Heijn decided to start working with Shared Fresh Centers (SFCs) to which suppliers can transport their products directly after production. This will reduce the number of stock points and transportation, and make it possible to deliver fresh products to stores sooner.
Gold returns to Bogota merican Airlines Cargo has completed the safe A return of more than 200 pieces of gold and ancient artifacts from London to the Museo del Oro in Bogotá, Colombia. Working in close collaboration with specialist art movement logistics company Momart, the airline shipped the items from the Beyond El Dorado exhibition at the British Museum. On-board couriers hand carried gold pieces which needed to be maintained upright, and special artwork cases protected the other pieces during transport which moved over Miami.
New destination for Lufthansa Cargo’s Boeing 777F L
ufthansa Cargo now sends new Boeing 777F daily to Shanghai Pudong Airport. Shanghai is Lufthansa Cargo’s largest freighter station in the global route network. With the arrival of the third ‘Triple Seven’, the fleet is now big enough to allow the company to serve this long-haul route daily with the new freighters.
As a sign of the special ties with China, the Boeing 777F bearing registration D-ALFC was christened Ni Hao, China (Good Day, China) on arrival in Shanghai. The idea to give the aircraft this name originated from tyhe winning submission to a public competition held by Lufthansa Cargo to find a naming convention for its entire fleet inadvance of the arrival of the B777. 10 I CARGOTALK I MAY 2014
New Container vessel for TGS Transworld Group, Singapore, has added a new container vessel named M.V.OEL BANGLADESH to its fleet. This would enable the group to replace some of its chartered tonnage with its own vessels and to go forward with its plans to expand into newer trade routes. Transworld Group Singapore operates five subsidiaries that provide a comprehensive network of services including ship-owning, feeder services, liner shipping, logistics and agency representation of major shipping lines.
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International News News in Brief
Varner Retail expands cooperation with DB Schenker B Schenker will expand its cooperation with Varner Retail. Under the new contract, D all store distribution in Norway will be conducted by the company. Varner Group operates international fashion retail outlets across Scandinavia, Germany and Poland. “The project will contribute to a higher utilisation of Schenker’s Alnabru hub in Oslo and our network throughout Norway,” said Bjørn Tore Elstad, Director Sales and Customer Solutions, Schenker AS. There will be a visible increase in parcels at Alnabru because Varner Group has decided to put the transport by PostNord over to DB Schenker.
MASkargo’s new A330-200 freighter service
MASKARGO, the cargo division of Malaysia Airlines, has launched an A330-200 freighter service to Hanoi, Vietnam, via Singapore. Hanoi is noted for its burgeoning exports of electronic parts and fashion garments and footwear.
Damco extends partnership with Kerui lobal freight G forwarder and logistics provider, Damco extended its partnership with the Shandong Kerui Holding Group Co., Ltd. (Kerui). Since 2013, Damco has successfully delivered oilfield products from Tianjin and Zhengzhou, China to South America and Europe. Recently, Kerui is gaining further strength on logistics lead time and cost, capitalised on Damco’s legacy of ocean and air freight expertise. Damco has designed and implemented various sophisticated logistics solutions which enabled Kerui to meet the requirement of global customers in a more costeffective manner.
IAG Cargo boosts capacity between Europe and Panama City AG Cargo has Ibetween increased flights its Madrid
Russian Railways Logistics to showcase new services at TransRussia 2014
hub and the high growth region of Panama, improving connectivity between the European and Latin American markets. From June 2014, an additional weekly flight will be added to the existing five flights per week, before moving to a daily service in July. The route, served by Iberia’s A340300, A340-600, as well as the airline’s brand new A330-300, will deliver increased lift in and out of Panama City and boost capacity by 24% following the introduction of daily flights. Iberia, operating as part of the IAG Cargo network, is the only airline to have flown between Europe and Panama without interruption since 1971.
Russian Railways Logistics is going to present new projects and services during the 19th Moscow International Transport & Logistics Exhibition to be held on April 22-25 in the premises of Crocus Expo, International Exhibition Centre in Moscow, Russia. One of the key partners of Russian Railways Logistics in providing transit solutions on Trans-Siberian route is Austrian Far East Land Bridge.
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International News Aviation
Air France-KLM
adding cargo capacity in India In an effort to revamp its full freighter operations in India, Air France-KLM-Martinair has dropped Delhi as a destination and added more capacity in Mumbai as it seeks proďŹ tability from its Indian operations. The full freighter services from Mumbai would double from two to four from April, while those from Chennai would increase from three to four. CT BUREAU
A
ccording to Christophe Boucher, VP, Asia & Middle East, Air France KLM Martinair Cargo, “We are starting a new set-up for our full freighter operations in India as we want to make it profitable. The first few flights are already quite full, so now our focus will be to get the right rates and we will increase the rates as soon as possible.� Boucher did not give an estimate as to how much the rates could be increased by, as the company is still chalking up the increase. At the same time, he admitted that the group is struggling with its freighter operations globally but said that the idea behind the revamp of the Indian operations is to make it profitable in the Air France KLM Martinair cargo universe. “We are competing internally,� said Boucher. “We will assess the profitability after a few months and India needs to be near the top of our freighter network. We do believe that linking Chennai and Mumbai
with Hong Kong is a good combination.� Overall, as a result of the change the group will be adding 40 tonnes per week additional capacity in Mumbai, while Chennai remains the same and Delhi drops out of its network.
We do believe that linking Chennai and Mumbai with Hong Kong is a good combination.� Christophe Boucher VP, Asia & Middle East, Air France KLM Martinair Cargo
Air France KLM Martinair Cargo, which had 26 freighters operational at one point of time, now flies only 10 freighters. Apart from the revamp in terms of operating points in India, Air France KLM Martinair Cargo will also focus on high value pharmaceutical products being exported from India. “We have a dedicated sales team working with customers in the pharmaceutical industry,� said Boucher. “We will also a launch a new cargo service to Brasilia. Brazil and India are among the fastest growing ‘pharmerging’ groups, along with China, Mexico, Turkey, Korea and Russia,� he said, adding that this group is expected to account for almost three quarters of world market growth.
AF-KL-MP Cargo Products offered to/from Indian Stations are: %QUATION
6ARIATION 0HARMA
6ARIATION &ASHION
6ARIATION &RESH
s IS THE PREMIUM PRODUCT OF !& +, #ARGO s &OR SHIPMENTS OF KGS AND A PARCEL WEIGHT OF KGS THE COMPANY PROVIDES THE SHORTEST possible delivery times s IS A SPECIALIZED PRODUCT FOR TRANSPORTING CARGO of the pharmaceutical Industries s !&+,- OFFER SPECIALIZED HANDLING AND equipment to guarantee the best protection of the Temperature needed for these products s IS THE HANGING GARMENT SOLUTION ESPECIALLY designed for the ‘ready to wear and ‘Haute couture’ apparel industry s !LL GOODS ARE SHIPPED IN @'ARMENT ON (ANGER containers for crease-free and on time delivery s IS DESIGNED FOR SPECIFIC PERISHABLES FROM FROZEN meat and fish, to fruits and vegetables, and even flowers.
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s !&+,- PROVIDES A CLEAR STANDARD IN TERMS of minimum and maximum temperatures for acceptance, transportation, storage and delivery.
6ARIATION "IG $'2
s IS DESIGNED FOR /VERSIZED 3HIPMENTS AND FOR dangerous goods acceptance and transport according to IATA regulations
6ARIATION 3AFE
s ADDS EXTRA SECURITY MEASURES TO OUR BASIC general cargo products, ensuring that the must-have shipments consignments arrive at their destination safely and on time
#OHESION
s OFFERS A COMPLETE TOP QUALITY SOLUTION BASED on a joint dialogue between the shipper, the forwarder and AF-KL Cargo with personal VIP service offered by a dedicated team
$IMENSION
s IS FOR 'ENERAL #ARGO PRODUCTS
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National News Shipping & Ports
Revised expansion plan of Gujarat Pipavav Port
G
ujarat Pipavav Port Ltd. approved a revised expansion plan that envisages an increase in container handling capacity from the present 0.85
Million TEUs to 1.35 Million TEUs as against 1.5 mn TEUs as originally planned. Bulk Capacity will remain constant at 4-5 mn MT as against the earlier plan of
increasing it to 20 Million MT. The Revised Capex of INR 4,600 mn will be implemented in a phased manner and will consist of, s 0URCHASE OF 0OST 0ANAMAX CRANES TO replace 3 existing Panamax cranes s 3TRENGTHENING OF EXISTING "ERTH s $REDGING OF "ERTH 0OCKETS s 0HASED CONTAINER YARD DEVELOPMENT s 0URCHASE OF 2UBBER 4YRED 'ANTRY Cranes s $EVELOPMENT OF INTERNAL ROADS AND GATE complex s %LECTRICAL AND OTHER ALLIED WORKS s 0OST %XPANSION BULK CAPACITY WILL REMAIN at 4-5 Million MT and liquid Capacity at 2 Million MT The revised plan will see the expanded capacity come on stream in CYQ1 2016 as against CYQ4 2015 as originally envisioned
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Logistic Services National Conference
Logistics Sector
requires smarter Supply Chains The PHD Chamber of Commerce and Industry organised a National Conference on ‘Smart Supply Chains’ on April 9, 2014 at the PHD House, New Delhi. More than 140 delegates from different parts of the country attended the Conference. Cargotalk reports... CT BUREAU
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here were more than 12 speakers from both the government and the private sector who shared the current developments and major challenges in the field of sourcing and supply chain and discussed the way forward for the Indian logistics industry.
Smart-card Technology is needed Dr. Saumitra Chaudhuri, Member, Planning Commission, Govt. of India, was the Chief Guest. He emphasised upon the need to work out a way to ensure smooth flow of activities in the logistics sector. He suggested that the use of smartcard technology needs to be promoted as it will ensure the minimisation of paperwork. The problem of taxes also needs to be settled in a smooth and an efficient manner. A framework needs to be created that will help resolving issues being faced in this sector. During his address, he also laid stress on the need of
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Railways need to adopt a multi-modal framework for the smooth transportation of food grains”
The Government needs to facilitate logistic parks in the country and should give concessions on land for the setting up of these Parks”
Dr. Saumitra Chaudhuri Member, Planning Commission, Govt. of India
Dinesh Rai IAS (Retd.), Chairman, WDRA, Government of India
MAY 2014 I CARGOTALK I 17
Logistic Services National Conference
creating an authority for the development of logistic sector in the country. He suggested that Railways need to adopt a multi-modal framework for the smooth transportation of food grains. Since the waterways offer a cheaper mode of transportation for the logistics sector, they should be promoted in an effective manner, he opined.
100 per cent FDI is required for Logistics Dinesh Rai, IAS (Retd.), Chairman, Warehousing Development and Regulatory Authority (WDRA), Government of India, delivered the keynote address during the Conference. During his address, he emphasised on the need for 100 per cent FDI in the logistics sector for a greater response from the industry. He suggested that the Government needs to facilitate logistic parks in the country and should give concessions on land for the setting up of these Parks. Adoption and integration of modern successful systems needs to be introduced to reduce the cost of supply chains. In his address, he also laid stressed on the fact that more and more Negotiable Warehouse Receipts (NWR) System should be promoted in the rural areas, as it will protect farmers from the distress sale of their produce, as farmers are one of the critical links in the food supply chain.
The need for a scientific approach enabled by technology is a better way to tackle the challenge”
The promotion of modern warehousing helps to build a robust supply chain in the country”
Sharad Jaipuria President, PHD Chamber
R. S. Bedi Chairman, Task Force on Logistics Management,
Scientific approach helps Sharad Jaipuria, President, PHD Chamber, in his welcome address, mentioned that greater and more intense competition and global value chains are leading to substantial shifts in what is expected of the supply chain function. It is no longer enough to simply connect supply and demand at optimal cost and service levels. Today’s business leaders are demanding more from their supply chains, including competitive advantage. Hence,
the need for a scientific approach enabled by technology is a better, and may be the only way to tackle a challenge of such magnitude.
Empowering the logistics sector RS Bedi, Chairman, Task Force on Logistics Management, PHD Chamber, in his presentation of the ‘Industry Perspective’, emphasised on the need of improving the governance of the logistics sector, development of transportation infrastructure and encouragement to private players to invest in logistics infrastructure projects for the promotion of modernised and scientific warehousing in the country, and thus, building a robust supply chain in the country. Sudhanshu Pachisia, Co-Chairman, Task Force on Logistics Management, PHD Chamber, delivered the formal vote of thanks and Dr. Ranjeet Mehta, Senior Secretary, PHD Chamber concluded the Conference with his concluding remarks.
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PHD Chamber
Cover Story Current Topics
Warehousing Challenges and Opportunities Warehouses are an important part of any supply chain and logistics industry. Driven by an increase in production and organised retail, the warehousing sector is the major segment contributing towards the growth of Indian logistics industry. Growing at a rate of 35-45 per cent every year, it is expected to grow more than US$20 billion by 2015. Despite this, the warehousing sector faces the challenge of strategic and operational planning with the use of modern day technology and automation. Cargotalk presents an analysis and viewpoints of industry experts regarding the growing demand and global trends of the warehousing sector. CT BUREAU
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in India
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MAY 2014 I CARGOTALK I 21
Cover Story Current Topics
W
arehousing is the most important auxiliary service for the development of agriculture, trade and commerce. The warehousing segment, which makes up to 20 per cent of the Indian logistics industry, still remains largely unorganised and lack of development rules has hampered it from taking advantage of the growth the country recently experienced in the logistics sector.
farmers will further fuel growth of warehouses in India.
IMPORTANCE AND OPPORTUNITIES Growth in organised retail and increasing manufacturing activities in India are the key demand generators for warehousing space in India. Presence of extremely affordable and desirable e-Commerce options is also driving the warehousing demand. Further, the growth in international trade is providing huge impetus to the growth in warehousing market. Rising containerised cargo traffic which leads to the growth in CFSs and ICDs adds on to the growth in warehousing sector. Rising income and consumption levels along with increased demand from
Electronics, pharmaceutical and engineering goods are the sectors which can create outstanding opportunities for the warehousing industry.” Harpreet Singh Malhotra MD- Tiger Logistics India
Harpreet Singh Malhotra, MD- Tiger Logistics India, believes, “Rising real estate costs is one the concerns which somehow demoralising the growth of warehousing industry. But still there are lots of drivers which are pulling the demands for Logistics market like burgeoning Indian economy strongly supported by increasing FDI, improved market reforms and regulations, Govt. Investment in infrastructure, adoption of PPP model and growing consumption levels which, in turn, creating the need to set up new warehouses. Manufacturing industry is very hopeful for major reliefs and some packages from the budget once the newly formed govt takes control after the general elections. If this happens then it will add more fuel to the already existing demand for the warehousing industry.”
STRATEGIC CHALLENGES Despite an optimistic future for the logistics industry, the overall growth potential is limited by several key challenges. While high price sensitivity of customers and infrastructure connectivity limit a service providers capabilities to offer world-class services, the usually underdeveloped state of industry-specific customization capabilities, asset-heavy nature of the business, need for large capital and issues related to land acquisition make things all the more difficult for service providers.
Infrastructure Infrastructure is one of the most important components of the warehousing sector. An efficient warehousing operation hinges critically on high-quality supporting infrastructure that includes a good national highway network, interstate roads and congestion-free city roads. The total share of organised warehousing space is less than eight 22 I CARGOTALK I MAY 2014
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Current Status of Warehousing Capacity in India Warehousing sector plays a very vital role in promoting agricultural marketing, rural banking and financing and ensuring food security in the country. It enables the markets to ease the pressure during the harvest season and to maintain uninterrupted supply of agricultural commodities during the off season. The warehousing capacity available in India, in public, cooperative and private sector is about 108.75 million MTs, the details are as follows:
S.No.
Name of the organization /sector
Storage capacity in million MTs
1.
Food Corporation of India (FCI)
32.05
2.
Central Warehousing Corporation (CWC)
10.07
3.
State Warehousing Corporations (SWCs)
21.29
4.
State Civil Supplies Departments
11.30
5.
Cooperative Sector
15.07
6.
Private Sector
18.97 Source: Annual Report of WDRA, 2012
per cent of the total warehousing space in India. The industry is fragmented and largely unorganised and is dominated by small players with small capacities, not welllinked with the national highway network and interstate roads.
Land Acquisition According to Ram Tiwari, Director, Marketing, Shine Logistics, land acquisition is one of the major hurdles before the warehousing industry. There is no direction from Government as per land registry or change of land for warehousing. However, for other manufacturing industries, clear guide line has been given. “As a result, there are many illegal warehouses operating,
though they are not able to meet the client requirements, because they do not want to invest for a modern warehouse,” he highlighted.
Illegal warehousing Illegal warehousing is more of godown keeping which creates hurdles for the organised players when it comes to clinch the business because of the differences in the service charges. Since they are mainly built on non-commercial lands, especially agricultural land, therefore, their service charges are very low, thus they give unrealistic competition to the organised players, feels Malhotra.
Transportation related challenges In India road has become the predominant mode of transportation of freight cargo. It is recognised that movement of long haul bulk traffic by road is less efficient than by rail. But road is still preferred over rail because: s )MPORTANT RAIL NETWORKS ARE oversaturated s 2AIL FREIGHT TARIFFS ARE HIGH s 4RANSIT TIMES ARE LONG AND UNCERTAIN s 2AIL TERMINAL QUALITY IS POOR s ,ESS FLEXIBILITY IN CARRYING DIFFERENT TYPES of Products s 2AILWAY CARRIAGE NOT EASY FOR INDUSTRIES which cannot provide full train loads
Present scenario of warehousing in India Warehousing, which forms 20 per cent of the total logistics market, was traditionally used as godowns to store goods from the time of production till the time of consumption. Over time and with the changing role of the sector, traditional warehouses have transformed to collection and storage points, where raw material, intermediate and manufactured goods are collected, assorted, stored and distributed to the point of consumption/sale. The warehousing market in India is expected to grow at a rate of 35 to 40 per cent annually, displaying high potential for growth over the next few years. Currently, the sector is highly fragmented with small players holding small units distributed across states with many challenges:
s )NADEQUATE SKILLED LABOUR
s )NEFFICIENT MATERIAL HANDLING WITH OUTDATED HANDLING EQUIPMENT
s ,IMITED TECHNOLOGY PENETRATION AND INNOVATION
s ,ACK OF WORLD CLASS STANDARDS AND SPECIFICATIONS
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MAY 2014 I CARGOTALK I 23
Cover Story Current Topics
As a result, there are many illegal warehouses operating. They are not able to meet client requirements, because they do not want to invest in a modern warehouse� Ram Tiwari Director, Marketing, Shine Logistics
While road movement is preferred to rail, road movement has its own fair share of issues. These include: s )NADEQUATE ROAD NETWORK COVERAGE s 0OOR ROAD QUALITY s %XPRESSWAY NETWORK WILL TAKE TIME TO develop s (IGH LEVEL OF FRAGMENTATION OF THE trucking industry s -ULTIPLE CHECK POINTS In addition to roads and railways which carry the bulk of freight traffic in India other modes of freight carriage also suffer from their own issues. The ports sector in India suffers from following issues: s (IGH TURNAROUND TIMES s )NADEQUATE DEPTH AT PORTS s #OSTAL SHIPPING HAS NOT TAKEN OFF Air cargo sector is growing significantly in India. But with increased volumes of cargo major airports are getting congested resulting in long waiting time. The waiting time for exports in India is 50 hours compared to a World average of 12 hours while the waiting time for Imports in India is 182 hours compared to a World average of 24 hours. Also the airfreight sector suffers 24 I CARGOTALK I MAY 2014
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Cover Story Current Topics
Technology in warehousing „ As the Indian transportation and logistics market witnesses new heights, there has been increasing buzz around technology adoption, network optimisation, multimodal transportation and improving warehousing. Smart logistic companies see technology as a way to continually increase productivity and operating efficiency. A well-tuned and modern warehouse can help reduce space allocation, inventory management, labour costs and increase work flow and customer satisfaction by adopting followings:
s 3MART AND %FFICIENT ,IGHTING s $EDICATED 3TORAGE 3YSTEMS s !UTOMATED 3HUTTLE 2ACKING s !UTOMATED (ANDLING %QUIPMENT
26 I CARGOTALK I MAY 2014
from high fuel costs and tariffs as well as several manpower issues.
Logistic Parks In India, most logistics parks are just upgraded godowns or modern warehouses, but in actual meaning a logistics parks includes domestic and foreign trading activities, value added services such as warehousing, cold storage, multi-modal transport facilities, along with the inland container depot and a container freight station. Government’s active role in the recent time is a positive indication for the industry, which has been glittered by allowing 100 per cent FDI, eliminating CST, introducing VAT, improving multimodal transportation through projects WWW.CARGOTALK.IN
What the future holds A PWC Study underlined that warehousing has been gaining tremendous importance due to the growing need to reduce storage and lead times for inventory. In addition, the concentration of the auto manufacturing activity in a few places has led manufacturers to construct warehouses in strategic locations, which then serves as the central point for distribution and collection of finished and intermediate products including auto parts. This primarily works on the theory of augmentation and assortment. The government has also contributed to the growth of the warehousing sector. It has established Special Economic Zones (SEZs) especially for auto manufacturers, usually close to the ports, to cater to the growing demand in the automobile sector. SEZs in Haryana, Jharkhand, Karnataka, Maharashtra, Tamil Nadu and West Bengal are established by government.
THE WAY FORWARD The sustainable growth and development of warehousing sector’s manpower requires collaborative effort and commitment from industry leaders as well as the government of India. The government is required to support warehousing players in their initiatives and provide for a more conducive environment by providing tax havens, funding facilities, upgrading infrastructure and accelerating the consolidation of the industry. The PPP model can also be developed for building dedicated training institutes for the logistics industry. Increase in IT adoption and knowledge infrastructure
such as dedicated freight corridor, encouraging public private partnership (PPP), and 100 per cent income tax exemption for port development projects. All these steps are furiously changing the face of logistics industry and paving the way for the evolution of multimodal logistics parks in India where global and local players are taking interest for the huge investments. “Multi-modal Logistics is the new concept in India as it was found in the world’s most industrialist nations before, which is anyhow helping Indian businesses in overall cost cutting in terms of processed time and money,” says Malhotra. WWW.CARGOTALK.IN
can provide a boost to the growth and maturity of warehousing players in India.
CONCLUSION With positive growth in the warehousing sector, Indian logistics companies need to modernise and optimize their warehouses. The companies should start from basic modernisation and optimization techniques to make a place in the global market. Also, they are required to follow the trends with a more futuristic and modern outlook. The growing Indian economy provides the suitable platform for the companies to grow and expand and to make a mark on the international arena.
The ray of hope The growth in the Indian economy in coming decade is likely to be driven by the increased activity in the manufacturing and retail sectors. To enable these sectors to contribute effectively to India’s growth the logistics sector will have to step up to provide value-enabling solutions for these sectors. This would require action on three fronts: s #REATING AN ENVIRONMENT FOR GRADUATING THE )NDIAN LOGISTICS MARKET TO provide value propositions in logistics solutions
s )NCREASING THE CAPABILITY OF THE )NDIAN ,OGISTICS )NDUSTRY TO PROVIDE SUCH SOLUTIONS
s 2EQUIRING 'OVERNMENT AND OTHER REGULATORY MECHANISMS IN THE COUNTRY TO provide an enabling environment for value propositions in logistics services Source: Deloitte and ICC
MAY 2014 I CARGOTALK I 27
View Point Interview
CRWC
Expanding the network of RWCs Vinod Asthana, the Managing Director of Central Railside Warehouse Company (CRWC) talks about the company’s future prospects, the problems plaguing the industry, and what solutions can be drawn up for improving the state of railside warehousing in India. CT BUREAU
Q
How do you see the importance and opportunities of the logistics industry, especially warehousing in India? Logistics is the backbone of the economy, providing an efficient, cost-effective flow of goods on which other commercial sectors depend. The logistics sector in India has today become an area of priority. One prime reason for the same stems from the reason that years of high growth in the Indian economy have resulted in a significant rise in the volume of freight traffic moved. This large volume of traffic has provided for growth opportunities in all facets of logistics including transportation, warehousing, freight forwarding, express cargo delivery, container services, shipping services, etc. The growth path has also meant that an increase in demand is being placed on the sector to provide the solutions required for supporting future growth.
28 I CARGOTALK I MAY 2014
The demand for logistics services in India has been largely driven by the remarkable growth of the economy. It is estimated that the Indian logistics sector will continue to show robust growth of 15-20% annually, leading the pace of growth of the economy at large. This growth is expected to gain greater momentum due to the exponential growth of the Indian economy. India is also experiencing a big retail boom as the buying capacity of the middle and upper middle segment of the population has scaled new heights.
Q
Could you please provide us a functional overview of CRWC as far as the development of warehousing industry is concerned? CRWC develops designs, constructs and operates rail-side warehouses for handling full train-loads of food grains, fertilisers and cement among other things. The warehouses have been developed along with related facilities for roundthe-clock operation. This avoids multiple
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handling of goods and provides storage facilities for a few days at the rail head. We are operating 18 such terminals across the country; complex at Jogeshwari (Mumbai) is under construction. The facility of the full train warehouse with the capacity of five to six train loads has helped the stakeholders especially during hostile weather conditions, traffic restrictions on road, non-existent facility of unloading during late-night hours and nonavailability of adequate trucks and labour. The above factors have made CRWC very popular with the industry and have helped in attracting traffic to railways and fast turnaround of wagons. Our logistics process has been providing cost-effective and hassle-free logistic support to our clients in marketing and distribution of cement, food grains and fertilisers, cargo, etc. While facilitating them to safely handle their rail borne cargo at its RWCs, it also enables them to avail value-added warehousing facility of transit nature. Parcel traffic on the railway system has been identified as one of the key segments for movement through special VPU rakes. CRWC has rail-based stock yards which can be utilised for aggregation and storage of parcels from the adjoining areas through the systematic collection process which can be loaded in the special VPU rakes provided by the Indian Railways through CRWC for different destinations. As far as development is concerned, CRWC wants to develop more rail-side warehouses. The more we develop, the more it would be convenient for the customers as it would bring down overall logistic costs. Procedure and process is regularly monitored to bring in the consistency in operations with a data based diligent studies to ensure more competitiveness and improvement in the working system.
Q
What is your opinion about the current trends in warehousing? The logistics sector in India has evolved over the past two decades from being a pure transportation / warehousing functional service to providing more value-added offerings like customs clearance, domestic / international freight-forwarding, cross-docking, reverse logistics,
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packaging, invoicing, labelling, freight consolidation, warehousing of modern standards, etc. The logistics industry in India has been showing a lot more new trends and it is the interplay of infrastructure, technology and new types of service providers that has been defining how the industry is able to help its customers for reducing the logistics costs and providing effective services. Whether it is the physical infrastructure of road, ports, water, power, etc., or the service infrastructure of logistics – all are being stretched to perform beyond their capabilities which was not the
Our logistics process has been providing costeffective and hassle-free logistic support to our clients in marketing and distribution of cement, food grains and fertilisers, cargo, etc� Vinod Asthana MD, CRWC scenario before. Such developments have spanned across all modes of transportation and logistics services and have involved the active participation of all stakeholders, ranging from logistics service providers and policy-makers to end-users and industry think-tanks which was not there before. At the firm level, the logistics focus is moving towards reducing cycle times in order to add value to their customers overcoming infrastructure-related constraints and logistics-centric inefficiency. Consequently, better tools and strategies are being sought by firms in order to enhance their decision making.
Q
What industry-friendly policies are you bringing in? With rapid increase in transportation services, markets are opening up in remote areas and new products are being introduced, the logistics and warehousing industry has come a long way. There has been a significant rise in demand for logistics
services, as the industry continues to witness growth. Despite this, environmental problems will continue to plague the logistics industry, particularly warehousing operations. In view of that, we are giving great importance to environmental concerns and also trying to lower carbon emissions for better prospects of business. In a bid to minimise costs and increase social responsibility, we are turning towards making our warehouses environment friendly. We are largely focussing on reducing consumption; reprocess materials and recycling waste in order to make their place eco-friendly.
Q
What are your initiatives to resolve issues like land, taxes, etc., to develop warehousing/ logistics park industry? Land acquisition is one of the main issues for warehouse developers as laws of the state play a crucial role in development of such facilities. However, if we have sufficient resources and risk mitigation measures in place, it is possible to acquire well-located land. Currently, we are expanding the network of RWCs and also tying up with the state govt. for setting up logistics parks. The existing tax regime places several challenges on the logistics industry. Unrealistic taxes and levies at different levels, such as intra-state check-posts, collection of toll/ tax, and also road policechecks cause delay. The organised players have to directly compete with unorganised operators who flout regulations and avoiding taxes. We are responding to this in three key ways. Firstly, we are adapting our supply chains to support rapid expansion and capitalise on the growing number of middleclass buyers in emerging markets, while managing risk. Secondly, we are further developing our existing supply chains to drive cost efficiencies and boost margins in their mature market operations. And thirdly, we are developing policies around sustainability and adapting how we can source materials and manufacture and distribute finished products to reduce their impact on the environment and the communities where they operate. MAY 2014 I CARGOTALK I 29
Cargo Performance Export/Import
DELHI INTERNATIONAL AIRPORT CARGO DEPARTMENT, IGI AIRPORT, NEW DELHI (AIRLINE-WISE IMPORT/EXPORT CARGO PERFORMANCE FOR THE MONTH OF MARCH 2014) S. No.
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63
Airlines
Export WithOut Perishable (MTs)
&DWKD\ 3DFLÂżF Jet Airways Emirates Air India British Airways Singapore Etihad Airways Fedex Express Corpation Lufthansa Cargo Airline Thai Airways Kalitta Air Uzbekistan Air France Qatar Airways Malaysian Airline System Japan Airlines Swiss Intl Airline Ltd Turkish Airlines Hercules Aviation KLM Virgin Atlantic M/S All Nippon Airways China Eastern Airlines Saudia $HURĂ€RW &DUJR $LUOLQHV Air China United Airlines Austrian Airlines Finnair Martin Airline China Air Indigo Cargo China Southern Airlines Air Shagoon Pvt. Ltd. Air Arabia Spice Jet Dhl Express Oman Air Ariana Afghan Airlines Mahan Air Blue Dart Gulf Air Ethopean Airlines Asiana Airlines Air Mauritius Kuwait Airlines Sri Lankan Airlines Ltd Air Astana Kam Air Kenya Biman Bangladesh Sun Aviation Pvt.Ltd Mng Airline UPS Turkmenisthan Airlines Pakistan International Flywell Aviation Pvt. Ltd Tajik Air Royal Jordanian Airlines Iraqi Airways Jetlite Druk Air Air Moldova Total Cargo handled in March ‘13’ % VARIATION
1040 1081 1279 866 702 735 690 732 549 568 685 592 520 416 360 491 589 705 435 339 422 237 265 169 252 197 186 113 139 185 87 181 151 81 0 114 65 122 105 98 63 91 80 37 58 32 21 23 18 19 0 0 13 10 15 9 11 8 0 4 0 18535 17183 7.87%
Export Perishable Cargo (MTs) 192 1164 320 45 20 106 2 94 11 2 45 25 105 39 10 6 4 4 3 4 3 0 145 0 9 10 1 4 2 0 10 0 0 0 0 24 8 1 0 26 1 0 13 43 0 12 0 1 0 0 0 0 1 0 0 3 0 0 0 0 1 2650 2543 4.22%
Export with Perishable (UPL) (MTs)
Import (MTs)
Total Cargo (MTs)
1232 2245 1599 910 722 841 691 826 561 569 730 617 625 454 370 496 592 709 438 343 425 237 410 169 261 207 187 117 141 185 96 181 151 81 0 138 73 123 105 124 64 91 93 80 58 44 21 23 18 19 0 0 14 10 15 12 11 9 0 4 1 21185 19726 7.40%
1798 547 1149 997 1083 741 763 571 804 532 337 378 289 422 438 298 181 0 199 273 174 215 21 228 119 144 120 154 100 38 92 0 8 69 150 3 63 8 23 2 61 22 4 7 15 0 18 6 8 0 17 16 2 6 0 0 0 0 5 0 0 15997 14879 7.52%
3030 2792 2748 1907 1805 1583 1454 1398 1365 1102 1067 995 914 877 808 795 773 709 637 616 599 452 431 397 381 350 308 272 241 223 189 181 159 150 150 140 136 131 128 126 125 112 98 87 73 44 40 29 26 19 17 16 15 15 15 12 11 9 5 4 1 37182 34605 7.45%
% of Total 8.15% 7.51% 7.39% 5.13% 4.86% 4.26% 3.91% 3.76% 3.67% 2.96% 2.87% 2.68% 2.46% 2.36% 2.17% 2.14% 2.08% 1.91% 1.71% 1.66% 1.61% 1.21% 1.16% 1.07% 1.02% 0.94% 0.83% 0.73% 0.65% 0.60% 0.51% 0.49% 0.43% 0.40% 0.40% 0.38% 0.37% 0.35% 0.35% 0.34% 0.34% 0.30% 0.26% 0.23% 0.20% 0.12% 0.11% 0.08% 0.07% 0.05% 0.05% 0.04% 0.04% 0.04% 0.04% 0.03% 0.03% 0.02% 0.01% 0.01% 0.00% 100.00%
$LUOLQHV ZKRVH ÂżJXUHV DUH QRW DYDLODEOH KDYH QRW EHHQ PHQWLRQHG
30 I CARGOTALK I MAY 2014
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EXPORT & IMPORT CARGO TONNAGE HANDLED AT CSIA FOR THE MONTH OF MARCH 2014 (FREIGHT IN METRIC TONNE)
S. N.
Airlines
1 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Jet Airways Emirates Lufthansa Airlines Etihad Airways Air India &DWKD\ 3DFLÂżF Singapore Airlines British Airways Qatar Airways Turkish Airlines Saudi Arabian Airlines Federal Express Delta/KLM/Martin Air Swiss Intl. Airlines Air France Malaysia Airlines Ethopian Airlines Thai Airways Virgin Atlantic UPS Kuwait Airways South African Airlines
Export
Import
Total
S. N
Airlines
2666 3421 1704 1622 1959 1103 1071 1044 852 1025 743 334 492 577 436 738 382 330 241 346 355
2916 2075 2147 1774 889 1359 811 743 430 170 340 634 453 214 347 16 346 359 424 203 24
5582 5495 3850 3396 2848 2462 1883 1786 1282 1195 1083 968 945 790 784 754 728 689 665 549 379
23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
Aerologic Kenya Airways Gulf Air Air Arabia Indigo Air Korean Air Oman Air Blue Dart Air Mauritius United Airlines Srilankan Air EL-AL Airlines Spice Jet Bangkok Airways Iran Air Pakistan intl Airlines Yemenia Airways Egypt Air Air China Royal Jordanian Others
India and China boosting Etihad’s cargo growth Abu-Dhabi based Etihad Airways announced its strongest ever passenger and cargo volumes for a first quarter, together with US$1.4 billion in total revenues during the three-month period, marking a year-on-year increase of 27 per cent. There are a number of factors which contributed to this growth in the first quarter compared to the same period in 2013, including good performances in the Indian (up by 32 per cent) and Chinese (up by 14 per cent) markets, the launch of new routes to Brazil and Vietnam, and heavy demand for charter solutions. Cargo volumes were also strengthened by the launch of a joint freighter service with DHL, serving Pakistan and the Gulf Cooperation Council markets out of Abu Dhabi.
Total
Export
Import
Total
0 331 242 199 231 150 181 48 186 79 82 83 89 61 57 36 38 21 12 17 19
374 12 62 81 42 82 32 157 14 119 62 61 17 3 0 3 0 1 6 0 38
374 342 304 281 273 232 213 205 200 198 144 143 106 64 57 39 38 22 18 17 57
25150
19095
44245
Mahindra Logistics gets `200 crore investment Mahindra Logistics has received an investment of `200 crore for a significant minority stake from Kedaara Capital. This is Kedaara Capital’s maiden investment. Mahindra Logistics Limited (MLL), a subsidiary of Mahindra & Mahindra Ltd, is India’s leading Third Party Logistics (3PL) service provider. Commenting on the deal, Pirojshaw Sarkari, CEO, MLL, said, “Kedaara will add significant value to our expansion plans.� Speaking on the investment, Manish Kejriwal, Managing Partner, Kedaara Capital, said, “This investment is in line with our focus of partnering with leading Indian business groups to enhance the value of their businesses.� Sunish Sharma, Managing Partner, Kedaara Capital, added, “Third party logistics is one of the most attractive sub-segments of the Indian logistics industry.�
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MAY 2014 I CARGOTALK I 31
Cargo Performance Airports in India
TRAFFIC STATISTICS DOMESTIC FREIGHT
Freight (in Tonnes) For the Month S. No. Airport
January 2014
For the period April to January
January 2014
% Change
2013-14
2012-13
% Change
5441 6519 3086 303 136 9 797 305 277 618 484 22 12 27 262
5669 6392 2987 34 130 31 431 246 199 652 474 30 5 22 191
-4.0 2.0 3.3 791.2 4.6 -71.0 84.9 24.0 39.2 -5.2 2.1 -26.7 140.0 22.7 37.2
59372 69685 29997 2205 1577 135 6027 2567 3165 6036 5084 243 106 351 2222
65141 67540 29641 2238 1242 272 5088 1889 2658 5773 5193 249 77 276 1697
-8.9 3.2 1.2 -1.5 27.0 -50.4 18.5 35.9 19.1 4.6 -2.1 -2.4 37.7 27.2 30.9
18298
17493
4.6
188772
188974
-0.1
19480 14844 7833 3340 852 493 46842
15345 15143 6618 2880 715 366 41067
26.9 -2.0 18.4 16.0 19.2 34.7 14.1
177736 151473 76530 30961 7948 4343 448991
158638 153210 69085 28053 7394 4018 420398
12.0 -1.1 10.8 10.4 7.5 8.1 6.8
1774 152 432 190 187 103 2838
1568 145 192 95 100 123 2223
13.1 4.8 125.0 100.0 87.0 -16.3 27.7
17393 1391 3867 2776 1713 1026 28166
16643 1161 1763 2145 1103 856 23671
4.5 19.8 119.3 29.4 55.3 19.9 19.0
265 465 136 344 330 200 342 83 241 69 86 0 8 11 24 2594
281 471 146 177 378 137 295 82 54 45 120 0 45 22 23 2256
-5.7 -1.3 -6.8 94.4 -12.7 46.0 15.9 1.2 346.3 53.3 -28.3 -82.2 50 0 -50.0 4.3 15.0
3174 3809 1412 2747 5420 1730 3414 714 2039 696 905 0 138 16 16 234 26448
2687 3966 1247 1989 4847 1670 3395 822 1181 639 1050 16 260 18 18 262 24049
18.1 -4.0 13.2 38.1 11.8 3.6 0.6 -13.1 72.7 8.9 -13.8 -100.0 -46.9 11 1 -11.1 -10.7 10.0
140 70712
125 63164
12.0 11.9
1345 693722
1365 658457
-1.5 5.4
(A) 16 International Airports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Chennai Kolkata Ahmedabad Goa Trivandrum Calicut Guwahati Lucknow Srinagar Jaipur Coimbatore Mangalore Amritsar Varanasi Portblair Total
(B) 6 JV International Airports 16 17 18 19 20 21
Delhi (DIAL) Mumbai (MIAL) Bangalore (BIAL) Hyderabad (GHIAL) Cochin (CIAL) ( ) Nagpur (MIPL) Total
(C) 7 Custom Airports 22 23 24 25 26 27
Pune Visakhapatnam Patna Chandigarh Bagdogra Madurai Total
(D) 17 Domestic Airports 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Bhubaneswar Indore Jammu Raipur Agartala Vadodara Imphal Bhopal Ranchi Aurangabad Leh Tirupati Rajkot Jodhpur Dibrugarh Total
(E) Other Airports Grand Total (A+B+C+D+E)
32 I CARGOTALK I MAY 2014
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TRAFFIC STATISTICS
I N T E R N AT I O N A L F R E I G H T Freight (in Tonnes) For the Month S. No. Airport
January 2014
January 2014
For the period April to January % Change
2013-14
2012-13
183591 37583 13282 1614 23184 18792 32 992 193 803 57 1320 3885 0 285328
199192 35848 10599 1934 33757 22573 15 1012 141 463 0 1220 2202 7 308963
% Change
(A) 16 International Airports 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Chennai Kolkata Ahmedabad Goa Trivandrum Calicut Guwahati Lucknow Jaipur Coimbatore Mangalore Amritsar Trichy Varanasi Total
16190 3594 1244 210 2077 1706 21 144 19 69 12 13 440 0 25739
15855 3423 1155 291 2023 2237 3 66 10 46 0 54 311 0 25474
2.1 5.0 7.7 -27.8 2.7 -23.7 600.0 118.2 90.0 50.0 -75.9 41.5 1.0
-7.8 4.8 25.3 -16.5 -31.3 -16.8 113.3 -2.0 36.9 73.4 8.2 76.4 -100.0 -7.6
(B) 6 JV International Airports 15
Delhi (DIAL)
32018
29026
10.3
322923
295651
9.2
16
Mumbai (MIAL)
37724
34380
9.7
386285
377548
2.3
17
Bangalore (BIAL)
12187
11211
8.7
124511
118116
5.4
18
Hyderabad (GHIAL)
4012
3843
4.4
40953
38175
7.3
19
Cochin (CIAL)
3440
2855
20.5
34417
31151
10.5
20
Nagpur (MIPL)
46
29
58.6
343
323
6.2
89427
81344
9.9
909432
860964
5.6
Total
(C) 7 CUSTOM AIRPORTS 21
Pune
0
0
-
10
0
-
22
Madurai
0
0
-
1
0
-
Total
0
0
-
11
0
-
0 115166
0 106818
7.8 1
0 194771
202 1170129
2.1
(D)
17 Domestic Airports Grand Total (A+B+C)
News in Brief
Jettainer’s new office in Abu Dhabi
J
ettainer, the world’s leading service partner for outsourced unit load device (ULD) services, has opened a new office in the Abu Dhabi Airport Business City’s Logistics Park. In order to communicate more efficiently with the operative departments of the airlines in terms of managing pallets and containers for both passenger and cargo aircrafts, Jettainer added Abu Dhabi to its network of short-term leasing stations.
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MAY 2014 I CARGOTALK I 33
Industry Leader Guest Column
Air Cargo
Transforming Lives Worldwide GUEST: TONY TYLER, DIRECTOR GENERAL & CEO, IATA Look around any household and you will see the influence of air cargo. Most kitchens are replete with exotic foods and other ingredients. Work areas and living spaces host computers; mobile phones and other technology produces assembled through global supply chains.
M
edicine chests in the houses contain pharmaceuticals manufactured using globally sourced ingredients. The car in the garage contains parts that were assembled from far flung makers. And the bedroom may contain flowers or jewels transported from places near and far. The front-end of the story is the value that air cargo literally delivers to make our daily lives richer. In total, about $6.4 trillion of goods traded internationally get to their destination by plane. The back-end of the story is equally impressive. The global marketplace facilitated by air cargo has created enormous opportunities for jobs, innovation, collaboration and the improvement of people’s lives. It is not as easy to measure. But it would be no overstatement to say that
34 I CARGOTALK I MAY 2014
The global marketplace facilitated by air cargo has created enormous opportunities for jobs, innovation, collaboration and the improvement of people’s lives air transport has transformed the way that the world lives and works. Despite all the good that air cargo creates, it is no secret that the industry has been going through a rough patch since 2010. Growth
has flat-lined. Yields have been under pressure. And our competitors are making a solid case to value-conscious customers. There is good reason to be optimistic about the future of air cargo. Some are postulating that there has been a ‘modal shift’ in the way that goods are transported. There are clear challenges. But the solution is to drive change as the economic cycle picks up. Much is in the hands of the industry itself. Technology investments are powering efficiencies from the terminals that we use to the aircraft that we fly. But, with a very few exceptions, the processes driving the industry remain largely paper-based even after years of efforts spent elaborating a vision for e-cargo. The industry has rallied around the call for a supply chain effort to modernise air cargo’s archaic processes. The Global Air Cargo Advisory Group is
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the 22 per cent target set by the IATA Board of Governors for this year.
To modernise air cargo’s archaic processes, the Global Air Cargo Advisory Group is leading the charge by uniting forwarders, shippers and the airlines.” Tony Tyler Director General and CEO, IATA
leading the charge by uniting forwarders, shippers and the airlines. But even the e-airway bill—a document mostly in the control of the airlines themselves—has only achieved limited market penetration.
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In Singapore, Dubai and Hong Kong, utilisation is virtually 100 per cent. This tells us that, with some degree of determination, change is possible. But globally, it will be a struggle to achieve
To modernise air cargo’s archaic processes, the Global Air Cargo Advisory Group is leading the charge by uniting forwarders, shippers and the airlines. The benefits of the e-airway bill are worth the effort. The growth of the express part of the business demonstrates what happens when you meet a fundamental shipper expectation such as knowing exactly where their goods are and when they will reach destination. This year we are commemorating the 100 th year of commercial aviation. What better way for air cargo to celebrate than retire its 1950 vintage processes? That would spearhead a revolution in quality and efficiency that will set air cargo on the path to continued success in the second century of commercial aviation revolution in quality and efficiency that will set air cargo on the path to continued success in the second century of commercial aviation.
MAY 2014 I CARGOTALK I 35
Family Album Industry Event
ACAAI and ACFI
jointly host symposium The Air Cargo Agents Association of India (ACAAI) and Air Cargo Forum India (ACFI) came together to organise a day-long symposium on ‘Progressing Air Cargo: Challenges & Opportunities’ on March 26 in New Delhi. The symposium was attended by more than 200 representatives from airlines, freight forwarders, airports, cargo terminal operators, technology service providers, government officials, experts and other industry stakeholders.
36 I CARGOTALK I MAY 2014
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New champions of 4 NISAedANYKCcriuckept tea2m,0reg1ain3ed-1 the coveted An inspir p, on March 8, NISAA Cup after a year’s ga et Stadium. All the 2014 at Greater Noida Crick were presented a small co-ordinators and mentors He also presented memento by Atul Sachdev. players of NYK and individual medals to all the Challengers XI.
Aviation News
Airports Authority of India signs MoU with Ministry of Civil Aviation
A
irports Authority of India (AAI) signed a Memorandum of Understanding (MoU) with Ministry of Civil Aviation (MoCA) for the financial year 2014-15. The MoU was signed by Ashok Lavasa, Secretary, Civil Aviation and Alok Sinha, Chairman, AAI. All the Board Members of AAI were also present on the occasion. This Memorandum spells the targets to be achieved by AAI on key performance areas during 2014-15. Ashok Lavasa, Secretary, Civil Aviation (Centre), Alok Sinha, Chairman, AAI (left) and Board Member of AAI alongwith other senior officers during the signing of MoU between MoCA & AAI for the year 2014-15
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MAY 2014 I CARGOTALK I 37
Cargo Performance Shipping & Ports
TRAFFIC HANDLED AT MAJOR PORTS (DURING APRIL TO MARCH’2014* VIS-A-VIS APRIL TO MARCH’2013) (In ‘000 Tonnes)
Fertilizer 3RUW
7UDI¿F SHULRG
Coal
Container
3 2 /
,URQ Ore
)LQ
5DZ
7KHU &RRNLQJ mal
7RQ nage
717 708
147 -
5 37
34 5
-
238 9
7062 6960
6105 6195
2170 1715
194 109
366 277
1598 1976
5350 4503
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
6822 6903
2317 1715
199 146
400 282
1598 1976
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
17703 16466
5593 3094
122 142
3932 4004
14009 15036
12999 12568
1771 2023
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
2340 1124
-
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
12784 13375
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013 TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
7(8V
2WKHU Cargo
7RWDO
9DU against 2012-13
449 463
4671 4125
12874 11844
8.70
2202 2869
114 137
10526 10440
28511 28084
1.52
5588 4512
9264 9829
563 600
15197 14565
41385 39928
3.65
25027 21394
7042 4627
99 171
9 13
8485 6654
68003 56552
20.25
795 565
2744 2951
6928 6845
4916 4554
263 247
14341 14498
58503 59040
-0.91
-
-
22127 14240
355 685
-
-
2515 1836
27337 17885
52.85
52
160 190
255 232
-
-
28330 29708
1468 1540
9576 9847
51105 53404
-4.30
479 792
-
388 487
790 564
6644 6661
-
10129 9372
508 476
10212 10384
28642 28260
1.35
14321 13896
-
36 22
271 331
28
-
4785 4607
351 335
1474 961
20887 19845
5.25
24647 24301
3123 2616
454 519
50 17
2928 2553
5420 4358
747 692
50 48
1996 1980
39365 37036
6.29
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
522 823
44 7421
179 78
-
768
7518 6606
235 213
22 20
3241 1784
11739 17693
-33.65
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
35982 34785
-
151 156
151 356
4459 4018
-
450 829
41 48
17993 17894
59186 58038
1.98
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
4566 4125
-
-
-
-
-
55234 57911
4161 4259
2546 2454
62346 64490
-3.32
TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013
53137 54355
586 1006
2644 3678
991 946
6080 4064
270 374
452 1935
29 118
22845 27261
87005 93619
-7.06
187312 185981
24662 28472
6104 7441
7635 7297
71607 58653
33121 28007
114641 119821
7465 7704
110421 110118
555503 545790
1.78
0.72
-13.38
-17.97
4.63
22.09
18.26
-4.32
-3.10
0.28
1.78
KOLKATA Kolkata Dock System TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013 Haldia Dock Complex TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013 TOTAL: KOLKATA
PARADIP
VISAKHAPATNAM TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013 KAMARAJAR (ENNORE)
CHENNAI
V.O.CHIDAMBARANAR
COCHIN
NEW MANGALORE TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013 MORMUGAO
MUMBAI
J.N.P.T.
KANDLA
ALL PORTS TRF APRIL-MAR.’2014 TRF APRIL-MAR.’2013 % Variation from previous year
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38 I CARGOTALK I MAY 2014
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Skill Development Viewpoint
Attracting
young people should be the goal India is blessed with huge human resources and the majority of Indians are between the age group of 20-35 years. However, there is a tremendous shortage of skilled manpower for logistics industry in this country. Capt. VJ Pushpakumar, Director, Indian Institute of Logistics, highlights some initiatives taken by the institute.
P
ushpakumar underlined the fact that the logistics industry in India is estimated to be around US$200 billion, i.e, about 15 per cent of the US$1.3 trillion economy. “The people of India should realise that to run this vast country and its economy, the need of the hour is young generation entering into the emerging and exciting international career in the logistics industry,” he said. He pointed out that the existing fragile condition of overall industry and of logistics industry, in particular, is owing to shortage of skilled manpower. “There is a dearth of quality human resources in all verticals of Indian economy, especially in logistics and shipping industry. Here, most organisations are poaching from each other and thereby creating a huge vacuum at the entry level of an organisation (trainee executive/ junior executive). In his opinion, this kind of non-proactive behavior of the industry is
According to a recent study conducted by National Skill Development Corporation (NSDC), about 17.7 million skilled manpower is required in the logistics industry of India primarily responsible for the huge shortage of availability of human resources. Nevertheless, of late, various institutes like Indian Institute of Logistics are endeavouring young people in this industry. “At times, I wonder at the behaviour of the entire logistics and shipping industry. We forget that we are in de facto competition with other industries like IT, BPO, KPO, engineering, media, hospitality, aviation, entertainment and others. Though, the margins of other industries are relatively higher than logistics and shipping, it is time for our industry to loosen its purse strings, pay higher compensation packages and come out with innovative rewarding
Capt. VJ Pushpakumar, Director, Indian Institute of Logistics 40 I CARGOTALK I MAY 2014
structures to attract, retain and expand HR requirements,” he felt. According to Pushpakumar, the topic of human resources and human resources development is closely and directly proportional to the belief of the philosophy of the management, shareholders, investors and promoters of the company. Organisations, especially like logistics and shipping industry should be more liberal and open to the new practices and dynamics of human resources management in various other industries. “Only then can our industry expect to have stable demand and supply with respect to human resources,” he emphasised. According to a recent study conducted by National Skill Development Corporation (NSDC), about 17.7 million skilled manpower is required in logistics industry in India. “When there is a dedicated IIT for technology and IIM for management, then why not an Indian Institute of Logistics (IIL) to fulfill the skill gap,” observed Pushpakumar. Headquartered in Chennai, the principal objectives of IIL are to enhance the competitiveness of the Indian industry and all the key sectors of the economy, which impact India’s growth through integrated initiatives in Shipping and Logistics domain area; and to meet the need of the industry for specialised services in this sector, ranging from education to research and to consultancy and information services. Though, the major focus of IIL is on fresh student, but it also offers opportunities to industry personnel to avail corporate training. IIL currently runs diploma, PG/advanced diploma, BBA and MBA programmes. (Interview courtesy: The Tamil Chamber of Commerce and Ratan Kr Paul)
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Industry Associations One-on-One
Indian export
to see US$ 750 bn by 2018: FIEO President Despite Indian exporters registering a shortfall of US$15 bn from their set target of US$325 bn for 2013-14, the Federation of Indian Export Organisations President Rafeeque Ahmed appeared to be gung-ho in an exclusive interview. For him, the international markets are already reviving, and Indian exporters can touch US$ 750 bn mark by 2018.
T
he FIEO president made it clear that in view of the present international market trends where India is traditionally strong, the country can achieve the target (i.e., US$750 bn by 2018) smoothly, if the required policy support from the government and infrastructure support from the facilitators at various levels are given. He voiced serious concerns over the present scenario at some major airports and sea-ports. “We are expecting remarkable changes in the policies to be adopted by the new government at the Centre, in their Annual Budget and Trade Policy. We have also drafted a 100-day programme for the new government for the greater interest of Indian exports as well as its economy. The draft will be handed over to the new government as soon it takes charges,” said Ahmed. According to FIEO’s estimate, India’s exports growth has been more than double
the global trade growth, and thus Indian exporters are expecting a minimum of 10 per cent increase in exports in 2014. “The world trade grew by 7.35 per cent on an average basis from 2005 to 2013, while India’s export jumped by 15.66 per cent on an average basis in the same period. However, since we recorded only a modest growth of about 4 per cent in 2013-14, we should look at 15 per cent increase in exports taking exports to US$360 billion in 2014-15,” he pointed out. Ahmed stressed on less logistics and transaction costs which hold the key to remain competitive in the international market. In his opinion, manufacturing, which has declined by 0.7 per cent in the FY 2013-14 period needs to be promoted at all cost. “We have to see that the share of manufacturing in GDP increases continuously to touch to 25 per cent by 2020. The new Foreign Trade Policy should initiate measures
In 2013, exports to Africa showed a 10 per cent growth and it will grow further in the ensuing days thanks to the increasing demand for pharmaceuticals, consumer items and rice from India” Rafeeque Ahmed President, FIEO
42 I CARGOTALK I MAY 2014
for competitive manufacturing in the country both for augmenting exports and substituting imports,” he said. According to him, focus on e-commerce, hi-tech products, merchandise trade and branded goods exports should be the focus of the new Foreign Trade Policy to bring exports back on track. He also highlighted the facts that some very important sectors of exports like gems & jewellery, engineering, electronics, iron ore, silk and woollen textiles, tea and coffee, etc., exhibited negative growth while pharmaceuticals, petroleum, agri-products and allied sectors posted very modest growth, pulling down overall exports. Indian exports to Latin America suffered a big blow with exports dropping by 20 per cent in 2013-14. Exports to GCC, primarily on account of lesser exports to UAE, and North Africa also witnessed declining trend in the last fiscal. Ahmed, however, is hoping better responses from the Africa market. “In 2013, export to Africa showed a 10 per cent growth and it would be further in the ensuing days, thanks to increasing demand for pharmaceuticals, consumer items and rice from India,” Ahmed said. Asked on the potential of East and South-East Asia market, he emphatically maintained that ‘Look East Policy’ in principle would not be enough. To further strengthen India’s position in this area and to avail the benefit of FTAs, Indian exporters would have to be incentivised through MDA schemes for marketing. The FIEO president also urged for intensive market researches to expand the horizon of Indian exports in new areas. “And, above all, the government has to go for a long-term plan and give long-term target to Indian exporters, which should not be less than three years,” Ahmed concluded. By Ratan Kr Paul
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