Cargotalk November 2013 by Ashish Chakraborty

Cargotalk

South Asiaâ&#x20AC;&#x2122;s Leading Cargo Monthly

november 2013

RNI No.: DELENG/2003/10642 Date of Publication: 22/10/2013

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Major Ports in India

Carrier Transicold

Study unveils declining volume

introduces new products for cold chain

Ports Indian

An unfinished agenda

editorial

SanJeet Editor

4 i cargotalk i November 2013

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

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

Some recent researches reveal that growth in long distance and containerised trade has led to the growth in establishment of transshipment hubs. It is not possible to establish direct shipping connections between every country because either there may not be enough volume, or the ports may be located distantly from each other. Therefore, a set of direct or transshipment connections are required to link all country pairs by maritime shipping. For this purpose, the transshipment terminals and intermediate hubs have been started. The emergence of major intermediate hubs favoured a concentration of large vessels along long-distance, high capacity routes, while smaller ports can be serviced with lower capacity ships. Consequently, the emergence of intermediate hubs has permitted liner services that would otherwise be economically unfeasible.

Editor SanJeet

Asst. Vice President Gunjan Sabikhi

Winds of changes in port sector he shipping and port sector in India is expected to receive a boost in the near future with the increase of projected trade volume. A reviving economy in the major markets viz USA and Europe and search for new markets by Indian exporters are the indications that the Indian ports will have to face tough times once gain in managing the prospective growth. It is commendable that the Government of India as well as private companies have taken some significant moves to create capacity at the Indian Ports. And, launching of International Transshipment Terminal (at Vallarpadam in Kochi for instance) may be termed as a landmark initiative in this direction.

Cargotalk

Assistant Manager: West Roland Dias Sr. Marketing Co-ordinator Gaganpreet Kaur Design ruchi sinha Photo Journalist simran kaur Advertisement Designer Vikas Mandotia, Nitin Kumar Aarushi Agrawal

The need to develop transshipment hub ports in India was documented by the Planning Commission in its Tenth Five Year Plan. The Vallarpadam terminal in Kochi has been identified as a transshipment terminal for the sub-continent by the Government of India. The objective of the Vallarpadam Terminal, the first-of-its-kind in India, was to cut down logistics costs for shipping lines, transshipping cargo in and out of the country. Currently, the containerised cargo, to and from India, is transshipped through the ports at Colombo, Dubai, Singapore and Salalah. However, from the very beginning the terminal was facing tremendous challenges to receive big vessels because of the existing Cabotage Law, which discourages coastal shipping, and as a consequence transshipping. It is commendable the Government of India recently relaxed the law to some extent, especially for this new terminal. The prospective investors for the shipping and port infrastructure sector are now eagerly waiting for a greater change in the mind set of the policy makers for the interest of the country’s economy.

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Contents November 2013

SECTORS

36 I Calendar of

8 I Allcargo acquires 100%

Cargo Performance

National News

stake in LCL company ‘Econocaribe Consolidators’

TIACA invites Hall of Fame Award Nominees

10 I Tata Sons to carry forward its legacy in aviation

12 I Emphasis on increase of skilled manpower

Mergers & Acquisitions 14 I Kewill takes over India’s leading logistics software company Foursoft

Logistics Services

International Events

34 I Airlines’ wise exim

cargo performance from Delhi International Airport for September 2013

35 I Airlines’ wise exim

cargo performance from Mumbai International Airport for September 2013

36 I Airport-wise domestic

cargo performance from Indian airports for July 2013

38 I Airport-wise

international cargo performance from Indian airports for July 2013 Product Display

16 I Safexpress on the

48 I Carrier Transicold

Skill Development

COLUMNS

Services becomes one of IATA ATCs

20 I Indian Logistics

growth track: Completes18 Logistics Parks, more to be launched by 2016

19 I Tirwin Management

introduces new atmosphere control technology for perishables

Viewpoint

On the Move

Industry: Making headway despite challenges

Virgin Atlantic Cargo as Regional Vice President

27 I Major Ports in India

18 I Neil Vernon joins

Anupam Shah takes over Chairman EEPC India Industry Events 30 I Supply Chain Workshop in Bengaluru emphasises on collaboration and IT

32 I ELSC Conclave gives out strategies, ideas to innovate

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Study Report

show decline in cargo volume Guest Column

40 I What Ails Indian Ports 50 I Future of Organised Retail in India: Need for Policy Support Academic Institutes 54 I UPES to enter Shillong to provide aviation and logistics courses

n Cover story

22 I Calling Indian Ports:

Big vessels diverted for long pending issues

The port and shipping sector has witnessed significant growth during the last two decades, especially in terms of traffic handled. This has pushed port facilities to be utilised at maximum level leading to congestion. Though the Government of India, in association of private players has taken a number of initiatives to build the required capacity, certain policy issues and low pace of implementation of a set agenda desisting big vessels from calling Indian ports www.cargotalk.in

National News News in Brief

Allcargo acquires

100%

stake in LCL company ‘Econocaribe Consolidators’

llcargo Logistics has announced that it has acquired 100 per cent stake in the US based company Econocaribe Consolidators, through its wholly owned subsidiary, Ecu Line. according to Allcargo sources. Established in 1968, Econocaribe is the 3rd largest LCL consolidator (NVOCC) in the US. Econocaribe specialises in freight consolidation and FCL services to Latin America, the Caribbean, Europe, the Mediterranean, the Middle East, Africa and Asia. They also offer import LCL/FCL transportation services from around the world into the United States. “Econocaribe has been our partner in the US and we have worked very closely with them. They have an extremely efficient and capable management team that has taken the company to being amongst the top NVOCCs in the US,” said Shashi Kiran Shetty, Executive Chairman, Allcargo Logistics India.

Apparel export grows

15 per cent

by in September

he apparel export for the month of September 2013 has registered by 14.95 per cent showing the US$ 1.11 billion for September 2013. This is the sixth consecutive month where garment exports grew at an average of 13 per cent. Commenting on this growth A Sakthivel, Chairman AEPC said that the trade body organised fairs last month, they went to BSM New York and Spain and we got the positive signals of the revival of the economy in USA and EU. “We are

requesting the Government, to put exports in the priority sector which was accepted by the Padmanabhan Committee, and can solve the problem of credit crunch for the Industry,” he said. He also maintained that the lowest trade deficit in the last six month is good news for the entire industry. “The good monsoon, positive manufacturing core sector and revival of the US economy can spin the game and export may be very good this year,” Sakthivel added.

Menzies Aviation Bobba obtains ISAGO registration

enzies Aviation Bobba (Bangalore) recently received the notification from the International Air Transport Association (IATA), confirming its status as having successfully obtained the ISAGO (IATA Safety Audit for Ground Operations) registration. According to Venkata Reddy, CEO, MABBPL will be one of India’s first major cargo terminal operator (CTO) to be registered on the ISAGO Registry,

helping to set worldwide industry benchmarks. “We are committed to offering our customers risk-free and safe cargo handling as far as possible whereby the airlines can focus on their core business. The enormous challenges faced by our business will not affect our dedication to offer a secure working environment that benefits our airline customers, the air cargo community and our staff,” Reddy said.

TIACA invites Hall of Fame Award Nominees T

he International Air Cargo association (TIACA) is seeking air cargo industry nominations for its 2014 Hall of Fame Award from across the world. The award has been presented annually since 1997, recognising business leaders whose contribution to the growth and development of the industry deserves to be recognised for its innovative spirit, leadership and achievements. Candidates for the award can be nominated by any individuals in the 8 i cargotalk i November 2013

air cargo business and the closing date for submissions is November 15, 2013. The 2013 Hall of Fame Award recipients were Philip Wei, past Chairman of China Airlines, and Bill Boesch, President of Logistics, Council for Logistics Research. The presentation takes place each year at a special gala dinner to honor the winners during the Association’s AGM and Executive Summit. www.cargotalk.in

National News Airlines News

Tata Sons to carry forward its

legacy in aviation

After the recent announcement of the agreement (MoU) between Tata Sons and Singapore Airlines for the launch of a full-service airline in India, there was a lot of discussion in the travel trade industry about its significance for this market. TravTalk spoke to officials from Tata Sons responsible for this venture, on what prompted them for this new launch. n Ratan Kr Paul

demand and that is the reason for Tata Sons to enter into two initiatives— recently with Air Asia in the low cost carrier segment and now with Singapore Airlines in the full service segment.

Tata Sons believes that the civil aviation sector in India offers sustainable growth. There is sufficient distinction in

“It is Tata Sons’ evaluation that civil aviation in India offers sustainable growth potential. We are delighted that we are partnering in this endeavour with the world renowned Singapore Airlines,” said

eanwhile, the 51:49 per cent stake holding new venture between Tata Sons and Singapore Airlines has applied for Foreign Investment Promotion Board (FIPB) approval to establish a new airline in India.

Prasad Menon, Chairman of the proposed joint venture. According to Mukund Rajan, MemberGroup Executive Council, Tata Sons, greater competition in civil aviation in India will foster benefits for the passenger in terms of greater choice in fares and services. “The trend of increasing urbanisation and growth in travel across India has opened up more opportunities for a differentiated full service offering. With the right world-class partner, in Singapore Airlines, we are confident we can participate in the undoubted growth potential of the sector, and create significant value,” he said. He also maintained that Tata Sons will fully participate in the management and operations of the airline. As with its other joint ventures with globally respected companies, Tata will play an active role in operations, and leverage its understanding of the Indian industrial landscape and contribute with its long years of experience towards the creation of a fruitful partnership and collaboration.

We would like to ensure that we are able to realise the original vision of launching a full-service, world-class airline that India can be proud of.

We are delighted that we are partnering in this endeavour with the world renowned Singapore Airlines

Mukund Rajan Member-Group Executive Council Tata Sons

Prasad Menon Chairman

10 i cargotalk i November 2013

Rajan underlined the history of previous efforts of Tatas and SIA to partner with each other to launch a world-class airline in India. “We would like to ensure that we are able to realise the original vision of launching a full-service, world-class airline that India can be proud of. The Tata Group’s own contribution to the aviation industry in this country is also well known, and we hope to carry forward the legacy of having launched in past decades one of the world’s most admired airlines (Air India),” he emphasised. He, however refrain to make any comment on their business plan. The venture now is waiting for the FIPB and other regulatory approvals to give a final shape to the proposed airline. www.cargotalk.in

National News Civil Aviation

Need of the hour: Increase skilled manpower The University of Applied Sciences Frankfurt hosted an Aviation Conference on Capacity Building in the Indian Aviation Industry on September 20 in New Delhi.

t this day-long conference, several government officials, trade practitioners and industry experts were present to discuss the current aviation industry scenario, future opportunities, challenges and requirement of skilled man power. Yvonne Ziegler, Dean University of Applied Science Frankfurt; Prabhat Kumar, Joint, Secretary, Ministry of Civil Aviation, Government of India; A Sengupta, Dean College Management & Economics Studies, University of Petroleum and Energy Studies; Kapil Kaul, CEO South Asia, CAPA; Deepak Brara, Director Commercial, Air India; Saroj Dutta, former ED, Jet Airways; Suresh Nair, GM-India, Sri Lanka, Bangladesh & Nepal, AirAsia Group and several other eminent industry players addressed the conference. 12 i cargotalk i November 2013

Underlining the increasing importance of capacity building to cater to the future demand Kumar pointed out that India would be the 3rd largest aviation market by 2020, where about 170 thousand skilled manpower would be required by 2017. “Currently, there is a huge shortage of skilled manpower for the aviation industry,” he admitted. He also stressed on a conducive policy and changed mindset among the industry stakeholders. While making a presentation on gradual growth of aviation market in India and CAPA’s latest traffic forecast for this country, Kaul maintained that during next 10 years international passenger traffic will grow 10 per cent year-onyear. “Already, there is a tremendous pressure on infrastructure and demand for skilled manpower, which would be further aggravated in the years to come, unless pragmatic solutions come from the policy makers and facilitators,” said Kaul. He also maintained that the industry is facing serious challenges because of a continued policy and regulatory vacuum. He, however, argued that despite the policy and regulatory challenges, a significant amount of the cost of the aviation industry can be reduced by enhancing skill and

management sides, by the industry practitioners on their own. Participating in the panel discussions, Brara expressed disapproval to the ‘Policy vacuum’ concept. “We should think judiciously about the changing scenario and gradual development in the field of aviation sector in India. And, these cannot happen without policy support from the government. It is rather our responsibility to bring discipline in the industry for everybody’s growth with a level playing field. For example, the airlines should stop suicidal pricing policy,” he argued. Nair stressed that pricing is determined by market forces and regulators should get away from it. He foresees great future for low-cost/low-fare airlines in India. In his remarks in the panel discussions, Dutta urged for early adoption and implementation of the long-awaited Civil Aviation Policy for the greater interest of the aviation industry as well as the economy of the country. “Without a clear and transparent policy, India will fail to attract foreign investors towards this industry, despite the new FDI policy initiatives,” Dutta cautioned. www.cargotalk.in

Mergers & Acquisitions Logistics Technology

Kewill Foursoft

takes over India’s leading logistics software company

Kewill, a leading provider of multimodal transportation and logistics management software for seamless supply chain execution, has acquired Foursoft—its assets and also its subsidiaries. With the acquisition value of US$ 43.4 million, the assets of Four Soft including over 500 employees have transferred to Kewill. In an interview with Cargotalk Bob Farrell, CEO and Evan Puzey, CMO-Kewill spoke on the impact of this development for this emerging market.

ewill, a Francisco Partners portfolio company, is a global leader in multimodal transportation management software, providing organisations with a comprehensive end-to-end platform for managing the complexities of transportation, logistics and trade compliance. The company is creating a business with in excess of US$110m in revenues and 7,500 customers, across more than 100 countries. Kewill now has all of the top 10 global logistics providers amongst its customers. “India offers huge opportunity to IT solutions providers for logistics industry. IT solutions for logistics and supply chain management would be in great demand in this emerging market, which ahs immense potential of being a manufacturing and

Key Solution Four Soft brings leading edge software to extend and enhance the Kewill MOVE platform - a comprehensive end-to-end solution for managing the complexities of transportation, logistics and trade compliance. The Kewill MOVE platform helps companies reduce costs, manage volatility and gain greater visibility across the logistics value chain. The acquisition will provide an opportunity for many Kewill and Four Soft customers to expand their supply chain visibility and control, through a broader multimodal transportation and supply chain execution platform. 14 i cargotalk i November 2013

logistics hub in the South Asia Region,” with its employees having multimodal said Farrell. He also underlined the steady transportation domain expertise. In increase of global trade (import & export) addition, Kewill will benefit from Four to and from this country. As a result, Soft’s J2EE framework that enables there will be tremendous code creation with 40-60 business opportunities for per cent being generated 3PL and 4PL companies automatically,” maintained in India. “Technology Farell. solutions for better visibility, documentations, EDI Kewill’s aim is to offer connectivity and cost easy, cost effective and management will be the core tailor-made solutions for areas to make a difference this market. The company in the whole logistics chain. is targetting three key In addition, proper asset groups as its customer management, ability to grow base—logistics service Bob Farrell skilled manpower, value providers, manufacturers and CEO-Kewill addition, a proactive and retailers & distributors. “Our changed mindset will also be solutions will be catering the focus areas to strengthen to multimodal transport the logistics and supply chain service providers fulfilling system. And, IT solution the demands— from order providers will have to play the management to trading and key role in this regard,” He distributions,” said Puzey. underlined. According to Farell, the “Kewill transportation acquisition of Four Soft is management platform gives a strategic move by Kewill customers the insight, agility that will help the company and tools they need to deliver to deliver immense value Evan Puzey better customer service and to its customers, partners, CMO-Kewill streamline global supply chain employees, and shareholders. execution for strategic advantage,” “With this acquisition, we have put in added Puzey. place the foundation to support organic growth over the coming years, as well According to the Kewill officials, the as the resourcing and skills necessary to acquisition of Foursoft will provide an quickly deliver,” he maintained. Asked opportunity for many Kewill and Four Soft about the distribution and sales network of customers to expand their supply chain the company after this acquisition, Puzey visibility and control, through a broader shared that Kewill would utilise direct multimodal transportation and supply as well as sales agent network in India. chain execution platform. “As part of the Currently the company has its own offices transaction, Kewill has gained a leading in five metro cities viz Hyderabad, Chennai, software innovation centre in India, Bengaluru Delhi and Mumbai. www.cargotalk.in

Logistics Services One-on-One

Safexpress on the growth track

Completes18 Logistics Parks, more to be launched by 2016 Having already launched 18 logistics parks across India, Safexpress is all set to unleash few more logistics parks in next three years to fully harness the growth opportunities in the supply chain industry in India. According to Rubal Jain, Director – Corporate Strategy, Safexpress, there is a huge potential for the warehousing business in India. n Anita Jain

ne of India’s foremost supply chain & logistics companies, Safexpress serves over 5000, enterprise customers and has presence in over 600 locations across India. Said Jain, “We are aggressively moving forward with a strong focus on developing world class infrastructure for supply chain & logistics business. At various industrial hubs, we are building medium to large logistics parks which will cater to the supply chain requirements of India Inc.” Despite the slowdown, there is still demand in the market. However, managing that demand is one of the

One set of strategies consists of managing things which are in our control and the other consists of the ones which are not in our control. We plan our ‘in-control’ strategies as per the ‘not-in-control’ strategies Rubal Jain Director – Corporate Strategy Safexpress 16 i cargotalk i November 2013

biggest challenges faced by the logistics companies in India. “Logistics parks provide us a competitive edge to manage demand. They help us to manage load and traffic, provide space for movement & proper material handling and make us more efficient,” he added.

Growth strategy

The company has recorded a double digit growth in the first six months of this fiscal and is expecting to maintain this growth in the next six months ending March 2014. To sustain the profitability and work towards better growth, the company is focusing on two different sets of business strategies. “One set of strategies consists of managing things which are in our control and the other consists of the ones which are not in our control. We plan our ‘in-control’ strategies as per the ‘not-in-control’ strategies. For instance, in last six to eight months, three Indian states announced different sales tax figures as well as entry & exit check point rules. That’s not in our control and we need to have a strategy to cope up with such a situation. But, more importantly, given the ever-changing environment variables how fast do we change our plans, alter our strategies and execute the same is definitely in our control.” Apart from two sets of business strategies, the company is also focusing on growth strategy. “The key elements in this being ‘consistency’ in transit time as well as service quality, which helps our customers to plan their supply chain efficiently,” he said. Safexpress is also utilising mobilebased technology for augmenting the information sharing with its customers. www.cargotalk.in

On the Move Appointments

Virgin Atlantic Cargo

eil Vernon has joined Virgin Atlantic Cargo as Regional Vice President Sales for Asia Pacific region. Neil spent 13 years as part of the bmi cargo team and has huge experience in the European, Middle Eastern, African and South Asian cargo markets. At Virgin Atlantic Cargo, he is based in Hong Kong and reports to Nick Jones, Head of Sales, and is responsible for revenue for the

18 i cargotalk i November 2013

EEPC India A

entire Asia Pacific region. Prior to joining Virgin Atlantic Cargo Vernon was Regional Manager, Middle East and Africa at bmi cargo. He was responsible for overall sales and operational activity. At bmi, he held a variety of positions including UK Account Manager, Business Development Manager and Commercial Manager for Europe and Asia.

nupam Shah has taken over as the new Chairman of EEPC India (formerly Engineering Export Promotion Council). Prior to this, he was the Senior Vice Chairman of EEPC India. He has also been the Past President of Merchant Chamber, Kolkata. He succeeded Aman Chadha. Shah (age 46), has done his B.E. (Electrical Engineering) from Boston University, USA. Further, he did his MBA (Marketing & Corporate Strategy) from University of Michigan, USA. Shah is taking over at a time when the engineering sector faces difficult times in export markets. With his engineering- management background, vast exposure and experience in the international market, he is expected to provide key inputs to the policy makers. Shah is the Director of Kolkata based Nipha Exports, which is a premier engineering export house exporting a wide range of high technology engineering products to Middle East, the USA, Europe, Australia, Africa and South-East Asia.

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Skill Development DGR Handling

Tirwin Management Services becomes one of IATA ATCs

According to Ismail Albaidhani, Head Global Learning Innovation, ITATA Training & Development Institute, Tirwin Management Services, an IATA Accredited Training School (ATS) for Dangerous Goods Regulations Training will now operate both as ATS as well as Authorised Training Centre (ATC) for ATC programme too. B Govindarajan Chief Operating Officer, Tirwin Management Services elaborates on the new developments while speaking to Cargotalk.

urrently, Tirwin provides DGCA approved and IATA accredited training for Dangerous Goods Regulations. ATCs are independent training facilities that are authorised to teach IATA training programmes that covers all segments of airline and aviation industry. Tirwin is already an IATA Accredited Training School (IATA ATS). “However, IATA ATS and ATC frameworks are totally different. Only Dangerous Goods Regulations training are covered under ATS whereas ATC covers varied airline and aviation training from micro functional to macro management subjects,” said Govindarajan. An ATS offers a DGR training that is approved by the civil aviation authority of the country and the certification issued by the ATS is recognised by IATA, whereas under ATC, the training module, material, examination and certification are of IATA.

Even though colleges and training institutions come up with new courses on logistics, many suffer because of content deficiencies and defective delivery B Govindarajan Chief Operating Officer Tirwin Management Services

www.cargotalk.in

According to Govindarajan, the ATC status by IATA will give Tirwin an opportunity to offer different training modules. “Initially we propose to focus on Air Cargo operations and management training and then take it forward,” he shared. There are specific air cargo modules that cover cargo-rating, live animal regulations, perishable cargo and cargo claims.

Benefits to the industry

In Govindarajan’s opinion, lack of skills and knowledge is the core issue in the air cargo & industry. Even though colleges and training institutions come up with new

courses on logistics, many suffer because of content deficiencies and defective delivery. “Tirwin believes that its highly experienced subject matter experts can make a difference in developing cargo professionals and equip them with contemporary global knowledge,” he stressed. Tirwin is receiving responses for different cargo training modules. Its DGR training registers is also increasing. The institute recently announced International Maritime Dangerous Goods-Code training. “Though, Tirwin is just five years old, I am associated with our community for almost four decades. We are in constant touch with the community since we do not stop just with training. We are committed to meet their expectations at all times,” he asserted. Tirwin’s primary target segments include freight forwarders, airlines, aerodrome operators, ground handling agents and shippers. “However intentions are to take the ATC training to the aspiring generation- next as well in association with schools and colleges on pan-India basis,” Govindarajan added. Currently, Tirwin also conducts training in all major metro locations. It has special instructors positioned in some of the Indian cities. “Today, we partner with trade bodies who arrange these training sessions in their places to keep the cost affordable. We believe this module works since we are in a position to train more people,” shared the Tirwin COO. November 2013 i cargotalk i 19

Logistics Services Viewpoint

Indian Logistics Industry

Making headway despite challenges The logistics and supply chain industry could well be termed as the barometer for the economic situation in the country. When there is a sudden emergence of multitude of small and medium so called “3PL / Logistics” companies, it is a clear indication that the economy is booming and the need to produce, store and move is at its peak. Vikram Mansukhani, National Operations Head – DIESL, discusses about the emerging opportunities, challenges before the industry and the ways out.

nterestingly, when the downturn sets in, there is a sudden dearth of quality 3PL / Logistics which can add value to a customer’s supply chain rather than just taking on ‘outsourced problems’ related to manpower management, relevant license management and property leasing. The current INR fluctuation, where the rupee slipped dramatically, sent shockwaves down the industrial backbone and forced every single organisation to look at costs in a far more focussed and objective manner. Logistics costs for an organisation could range from about 1.5 per cent to approximately 12 per cent of an organisation’s turnover depending on the industry and complexity of the supply chain.

The retail sector of India is now among top five fastest-growing markets globally and by 2015, it is going to touch US$637 billion.” Vikram Mansukhani National Operations Head – DIESL 20 i cargotalk i November 2013

It is therefore inevitable that organisations would do everything possible to ensure that when the markets are under pressure, logistics costs are minimised and value adds are sought for every rupee spent. In such times, companies look for 3PL service providers who can provide benefits of scale based on a diverse and well spread customer portfolio that they have. Resources must be shared, automation and technology needs to be deployed and infrastructure needs to be easily scalable so that an uncertain demand in the market place can be catered to in quick time through inventory management and transportation optimisation. In an industry (supply chain) that is highly unforgiving,

scalability and operational excellence are vital especially when an uncertain market at large is cutting all corners.

Areas of Opportunities

Manufacturing companies are now more actively looking at inplant management within their factories of a flexi-scalable mode, rather than engaging with fixed workforce unless the skill set demands a high retention factor. While this has already been in an advanced stage in the automobile sector, other engineering companies are also catching up. Kitting and packaging while not new are definitely on the rise for 3PL operators who can provide a semi skilled workforce with scalability in numbers at short notice. On-site management for infrastructure projects is also being now outsourced to 3 PL companies. In short, any activity that requires inventory management, fast movement of goods and scalability of infrastructure and manpower deployment is now an open playing area for 3 PL companies. According to DIESL’s analysis on the sector wise data, organised retail has seen a phenomenal growth in modern India over the past 5–7 years. The retail sector of India is now among top five fastest-growing markets globally and by 2015 it is going to touch US$637 billion. Most of it is going to be through modern retail i.e. through shopping malls, which www.cargotalk.in

is expected to increase by 22 per cent by 2015. The number of malls is going to touch a promising figure of 500 approximately by 2015. The total mall area available in India is more than 900 lakh sq ft. All of this requires an extremely lean and JIT (just-intime) supply chain to ensure that the store front never faces a stock-out and neither it is over-supplied. All of this will entail forward stocking locations by 3PL operators within city limits in easy striking distance of the final outlets as well as transportation consolidation given that parking and docking space is not freely available within high street market / mall areas. In addition, the e-commerce market in India has grown by 34 per cent in the last seven years, was about US$ 600 million in 2011-12 and is expected to touch US$ 9 billion by 2016 and US$ 70 billion by 2020. According to Forrester, the Indian e-commerce market is expected to grow at a CAGR of over 57 per cent between 2012 and 2016, which is the fastest within AsiaPacific region. The key factors that are driving this growth are the rise of Internet usage (growing at 20 per cent) and 3G penetration, and increasing smartphone users with availability of Internet on mobile phones. It is estimated that currently there are 27 million mobile Internet users in India, out of which 4 per cent are buying products on mobile. This figure is expected to increase to 20 per cent mobile shoppers in the next four years. www.cargotalk.in

This explosion will need supply-chain capabilities that are nimble, widespread and provide visibility of inventory and delivery both to the manufacturer/retailer and the end consumer. Physical dispatch capabilities, minimising order processing errors, providing secondary in-city distribution channels and embedding technology into the entire transaction is the only way to survive.

DIESL’s Focus

DIESL’s focus is to constantly upgrade its physical infrastructure, workforce skill sets, bring in automation/technology and deliver constantly improved services to its customers. With specific reference to e-commerce, retail, inplant logistics and on site management the company is positioning a mix of technology solutions (based on WMS and DMS), leveraging our in city distribution network, capability of providing skilled / semi-skilled and un-work force and wide spread warehouse availability on a pan-India basis.

Challenges and Bottlenecks

Customers must agree to move to outsourcing of supply-chain management to 3PL companies. If organisations continue to maintain a force of supply chain experts within their fold and also outsource the management of actual supply chain to a 3PL, the net result will be an increased overall cost of logistics which finally transcends to overall higher

cost of product. The chosen 3 PL must be able to execute the KPIs on the ground far better than they display on PowerPoint slides. The 3PLs need serious help with labour regulations to make it more industry-friendly. Today, a warehouse is in many ways akin to a midsized factory and availability of skilled/ semi-skilled/ unskilled workforce is becoming more and more difficult. In certain pockets, the workforce is completely under ‘local influence’ and 3 PL operators are held to ransom at the most inopportune moments. The policy-makers must ensure that the entire local administration supports a work-friendly environment. The policy-makers may also look at the feasibility of allocating land-banks to 3PL operators / logistics infrastructure developers over a 10 to 20-year loan moratorium within reasonably striking distance of main cities. For the overall development of the industry, there is a need of a separate Ministry of Logistics. A separate ministry would benefit not only the logistics industry, but also the manufacturing, and retail industries as logistics is an integral part of ‘go-to market’ strategy for any B2B or B2C organisation. It is a much-required voice for the logistics industry, which today survives primarily on individual strengths and market forces at large. November 2013 i cargotalk i 21

Cover Story Shipping & Ports

Calling

Indian 22 i cargotalk i November 2013

Ports

Big vessels diverted for long-pending issues The port and shipping sector has witnessed significant growth during the last two decades, especially in terms of traffic handled. This has pushed port facilities to be utilised at maximum level leading to congestion. Though the Government of India, in association of private players, has taken a number of initiatives to build the required capacity, certain policy issues and low pace of implementation of a set agenda are dissuading big vessels from calling on Indian ports. n Ratan Kr Paul

n 2012-13, the Government of India has awarded 32 port projects at an estimated cost of Rs. 6765 crores to add capacity of about 136 million tonne per Annum (MTPA). This financial year also the government is targeting to award 30 projects to increase the capacity by 282 MTPA at an investment of around `25000 crore. It is pertinent to mention that approximately 95 per cent of the India’s trade by volume, and 70 per cent by value, is moved through maritime transport. As a part of this overall effort, India’s busiest port JNPT has drawn up a plan to increase its capacity to handle projected container traffic of 10 million TEUs by 2016-17. The port has recently awarded the project to extend a container berth by 330 metres. JNPT has also re-invited the tender for the 4th Container Terminal which is designed to add 4.8 million TEUs capacity at an estimated cost of about `7000 crores. In the same manner, Mumbai Port Trust is also implementing capacity augmentation projects. With 13 major ports and more than 180 minor ports, India’s 7, 517 km long coastline plays a vital role in maritime transport along with offering huge international trade capabilities. The current port scenario in the country offers a huge scope for expansion of international maritime transport; both for passengers and cargo handling. India’s 12 big ports, which account for about 58 per cent of the total cargo shipped through the country’s ports, handled 137 million tonnes (MT) of goods in the first quarter of FY14. Container cargo volumes at these 12 ports stood at 1.87 million standard containers. It is forecasted that by the end of 2017, port traffic will amount to 943.06 MT for India’s major ports and 815.20 MT for its

p GK Vasan, Union Cabinet Minister of Shipping, along with Milind Deora, Minister of State, Communications, IT and Shipping and other dignitaries is inaugurating the 25th Year Celebration of JNPT

minor ports. India plans to triple cargohandling capacity at its ports to 3.2 billion tonne by 2020 by investing private funds worth `3 trillion (US$ 50.56 billion).

which have been very successful,” said GK Vasan, Minister for Shipping, Government of India.

To achieve the target, the Cabinet Committee on Economic Affairs (CCEA) has recently given its nod for setting up of new major ports in the states of West Bengal and Andhra Pradesh. The new major port at Sagar Island in West Bengal would be under Public Private Partnership (PPP) model.

Recently, the Shipping Ministry came out with new guidelines for determination of tariff for projects and major ports in the country. The new guidelines are aimed to pave way for increased investment flows into the port sector. The new norms also set out performance standards for port projects to improve accountability and ensure improved quality of service.

“The government is aware of the issues facing the port and shipping sector, and we have taken initiatives to systematically identify and analyse the various issues, formulate appropriate solutions and take action to address the issues. In the port sector, we have directed our efforts to increase capacity and operational efficiency primarily through augmentation of capacity, mechanisation and improving the draft at the ports. The government has been encouraging private partners to invest in these efforts through the PPP model,

Under the new guidelines, the highest tariff for a commodity at a major port fixed under 2008 tariff guidelines, indexed to 60 per cent of WPI would become the Reference Tariff on which the bidding would take place. The private operator under the new guidelines has the freedom to charge any amount up to a ceiling of 15 per cent over and above the applicable indexed Reference Tariff for that financial year provided the operator has achieved the minimum performance standards as committed by him in the Concession Agreement. November 2013 i cargotalk i 23

Cover Story Shipping & Ports

“The new guidelines allow the competitive market forces to play a greater role in tariff determination and impart flexibility,” said Vasan. Important projects which will be covered under the new guidelines include: the 4th Container Terminal at JNPT, Container Terminal at Kandla, Diamond Harbour Container Terminal at Kolkata Port and Bulk Terminals in Paradip, Cochin and Mumbai Ports.The projects already awarded will not be covered under the new guidelines. The 2005 and 2008 guidelines shall continue to apply to projects bid under them.

Private Initiatives

Speaking to Cargotalk Prakash Tulsiani, MD, Gujarat Pipavav Port informed that the existing capacity on containers is 850,000 TEUs and 5 million MT on bulk. Liquid bulk capacity of an additional two million MT will come on stream by the end of 2013. APM Terminals Pipavav is a Gateway Port in the Saurashtra Region of Gujarat. Its geographical location is well suited to serve the industrial belt in eastern Gujarat, as well

as north and north west India. The port is well connected by rail, road and sea.

TEU to 1.5 Million TEU and allied equipment,” informed Tulsiani.

The port is fully equipped with its own marine department and is EDI linked to Customs, state of the art equipment, people and processes further enhancing the service offering.

He also highlighted some challenges before the industry players involved in the port and shipping industry. “The major challenge at this time is the macro economic downturn which is a global Prakash Tulsiani phenomenon, however the MD, Gujarat Pipavav Port Recently the port policy makers could aid us by commissioned three state of the art Rail creating a level playing field, relaxation Mounted Gantry Cranes (RMGC’s) in on Cabotage and TAMP deregulation are January this year. The cranes span three two such policies that could help enhance tracks and can simultaneously operate on growth. three trains. The RMGC commissioning was further enhanced by the Double stack He pointed out that the trade growth High cube capability which we received in on the Indian west coast is now limited to July this year – with this capability; APM under 1.5 per cent and compared to last Terminals Pipavav now offers the best rail year, APM Terminal Pipavav is growing product on the west coast of India. its volumes at around 10 per cent. “It stands to prove that our clients are seeking “For the future, we are expanding – a value proposition in difficult times and we are investing `800 crore to expand APM Terminals Pipavav is providing the our facilities from the present 850,000 answers,” he stressed.

Commodity wise port wise capacities C apacit y o f M aj o r p o rt s a s o n 3 1 . 5 . 2 0 1 3

SL. COMMODITY KOLKATA HALDIA PARADIP VIZAG CHENNAI ENNORE VOC COCHIN NO.

(in million tonnes)

NEW MAN MORMU MUMBAI KANOLA -GALORE -GAO

J.N.P.

1 P.O.L 4.50 17.00 43.00(1)+3 17..65 17.65 3.00 2.30 19.01 49.17 1.50 32.00 66.60+0.8 5.50 +4.0 (3+2BJ) SBM (4) (4) (1) (1) (3)+SPM (5+SPM) (1) (5) (8+3SBM) (2) (7)+A 2 IRON ORE 6.00 4.50 12.50 12.50 6.00 7.50 27.50 (2) (1) (1) (1) (1) (1) (1+3 Trans) 3 COAL 7.00 20.00 21.00 12.55 5.40 (1) (THERMAL) (2) (2) (3) (3) 4 FERTILISER 7.50 1.00 0.80 (2) (1) (1) 5 GEN. BREAK 6.74 12.75 27.30 33.50 17.92 1.00 13.49 12.35 14.70 7.40 11.53+6.0 19.42 0.90 BULK CARGO 0.51 (8) (9) (15) (14) (1) (10) (12) (8) (4) (25)+(A) (12) (1) (22)+A 6 CONTAINERS 5.90 4.00 2.68 42.00 5.00 12.50 1.00 7.20 59.48 (4) (2) (1) (7) (1) (2) (1) (2) (9) In lakhs TEUs 4.58 3.33 2.08 35.00 4.17 10.00 0.83 6.00 45.50 TOTAL (Upto 31-3-2013) 17.14 46.75 102.30 67.33 85.59 31.00 33.34 44.66 76.77 36.40 44.53 93.22 65.88 +4.51 ( 17)+2BJ ( 15)+3SP ( 22) ( 24) ( 6) ( 15) ( 18)+SPM (15+SPM) (6+Trans) +6.0 +0.8 (12) (33)+A (31)+A (22+3SBM) +A Capacity Addition during 0.00 0.00 0.00 7.18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 April 2013 to May 2013 TOTAL (Upto 31-05-2013) 17.14 46.75 102.30 74.51 85.59 31.00 33.34 44.66 76.77 36.40 44.53 93.22 65.88 +4.51 (17)+2BJ (15)+3SP (22) (24) (6) (15) (18)+SPM (15+SPM) (6+Trans) +6.0 +0.8 (12) (33)+A (31)+A (22+3SBM) +A

TOTAL 278.90+4.80 (43+8SBM+ 2BJ) 72.00 (8+3 Trans) 65.95 (11) 9.30 (4) 179.0+6.50 (141)+A 139.76 (29) 114.19 744.91 11.31 (236+8SBM+ 3 Trans+2BJ +A) 7.18 752.09 11.31 (236+8SBM +3 Trans +2BJ+A)

The figures are Provisional. Source: Ministry of Shipping Figures in the parenthesis indicate the number of berths. BJ - Barge Jetties, T - Transhippers, A - Anchorages, SBM - Single Buoy Mooring

24 i cargotalk i November 2013

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Cover Story Shipping & Ports

Port Congestions

Indian ports are the gateways to India’s international trade, and are handling over 90 per cent of foreign trade. Though the bulk of Indian trade is carried by sea routes, the existing port infrastructure is insufficient to handle trade flows effectively. A Deloitte study unveiled that the current capacity at major ports is overstretched. The capacity utilisation at major ports has been increasing over the years owing to growing trade. The capacity utilization now is about 100 per cent signifying increasing congestion in all the major ports. Another major challenge faced by Indian shipping industry is the relatively low hinterland connectivity with the ports. Indian ports are finding it difficult to handle additional traffic because of slow evacuation from ports. Therefore, it is important that connectivity of major ports with the hinterland is augmented not only to ensure smooth flow of traffic at the present level but also to meet the requirements of projected increase in traffic.

High Port Charges

According to an Exim Bank report, high port charges, like port dues, berth hire, pilotage and cargo-handling charges, in India are also affecting the Indian shipping industry. India is known to be having high ship-calling cost as compared to other competitor countries in the region. According to industry sources, port calling costs for a ship that can carry 1,200 standard cargo containers is US $ 19,000 (` 8.4 lakh) at Kochi. The rate is US $ 3,300 in Colombo, Sri Lanka, and US $ 5,700 in Jebel Ali, United Arab Emirates. This makes the Indian ports non competitive compared to other foreign ports. High prices would normally deprive a port, a part of its patronage (vessels and cargo owners), and thus reduce demand for port services.

Channel Deepening

The Deloitte study observed that the available depths in entrance/approach channels in Indian ports are inadequate for large size new generation vessels to pass through them. As a result, mainline vessels bypass Indian ports. This is particularly relevant for container vessels where inadequate depth in the port channels continues to be a major factor contributing to transshipment of a significant portion of Indian-origin. 26 i cargotalk i November 2013

Indian-bound container traffic in neighbouring ports outside India. This increases the transportation costs for Indian traders. With a view to overcoming this challenge, concerted measures to deepen channels in various major ports have been taken.

companies will lose significant market share hence their concerns must be heard. Remarkably, recently the Government of India relaxed the Cabotage Law to some extent by allowing costal shipping from DP World’s International Container Transshipment Terminal in Cochin.

Cabotage Rule

Despite Challenges

Movement of goods by coastal shipping Rajat Khosla, Country Manager, Indiais one of the most energy-efficient and FedEx Trade Networks, observed that the least environmentally damaging form over the last few years, ocean freight of transport. Given that India has a long business has been growing. As a whole, coastline of 7,517kms, coastal shipping can it has improved in terms of reliability and act as a complementary mode of transport flexibility and has evolved into a more to facilitate reduction of logistics cost. The viable option for many companies. Most developed countries recognize coastal customers shipping via ocean still move shipping as an inseparable and important goods via air, and each customer has part of the overall transport network varying reasons for the mode of transport of the country. There is huge scope for they choose. its development in India. However there are some “The numbers indicate challenges faced by coastal the global freight forwarding shipping in India that include market increased 3.1 per cent lack of integrated transport in 2012, and the growth was policy to promote inter-modal due primarily to sea freight coordination, non-availability forwarding. As rising fuel of concessional finance rates prices continue to challenge the to acquire coastal vessels, air freight forwarding segment, cumbersome customs shippers are choosing to utilise procedures, lack of quality ocean for international moves. manpower, high import duties Rajat Khosla FedEx Trade Networks on bunker oil & spares, etc. Country Manager delivers a choice of three India- FedEx Trade Networks The present Cabotage distinct international ocean Law bars foreign vessels freight forwarding solutions from carrying cargo between Indian ports providing coverage in major markets and (coastal trade) but exceptions are made if trade lanes, including North America, no suitable Indian vessel is available. The Europe, India and Latin America The market of shipping industry being highly products are: FedEx International Direct volatile, such protection creates a certain Economy OceanSM, FedEx International degree of stability for the Indian vessels. Direct Priority and FedExSM International Few countries practice absolute Cabotage DirectDistribution Ocean. law while others practice a tailored one. According to the industry experts, In FedEx International Direct Priority India, the Cabotage Policy is not absolute. Ocean was launch recently, which offers It is regulated through provisions of Sec. services for cargo to ship from Bangalore, 406 and 407 of the Merchant Shipping Chennai, Delhi and Mumbai for less-thanAct, 1958. The Draft Coastal Shipping container load (LCL) and full-container Policy submitted to Ministry of Shipping load (FCL) shipments to New York/New for approval recognised that due to lack Jersey. From the U.S. destination port, of containerisation and restrictions on LCL shipments will be delivered via feedering of the cargo under the current FedEx Freight to the final destination. Cabotage policy, a considerable part of FCL shipments will be delivered via Indian cargo for transshipment through FedEx Trade Networks preferred carrier’s containers gets diverted to Colombo, trucks. Along with a single customer Singapore and Jebel Ali Ports. If coastal contact at FedEx Trade Networks, FedEx shipping in India is opened up to foreign International Direct Priority Ocean offers a flag vessels, it will provide a significant reliable transit that can be 2-7 days quicker boost to containerisation levels and related to final destination versus International infrastructure. However Indian shipping Direct Economy Ocean service. www.cargotalk.in

Shipping & Ports Study Report

Major Ports in India show decline in cargo volume

ICRA (formerly Investment Information and Credit Rating Agency of India) has recently published a study on Indian port sector, which revealed the continuing pressure on major ports, with decline of iron ore and containerised cargo. Iron ore has dropped in the first five months of FY 2014, registering a 44 per cent decline on y-o-y basis. Container volumes have also declined by 5 per cent y-o-y due to the effect of slowdown globally. K Ravichandran, Sr. VP, Co-head Corporate Sector Ratings, ICRA highlights issues that create pressure on the port & shipping industry in an interview with Cargotalk.

n July 31, 2013, the Ministry of Shipping (MoS) announced new guidelines for setting of tariffs in major ports. The new guidelines have come into effect from the same date and will be applicable to projects bid out since. The guidelines were adopted with a view towards providing flexibility to the major ports, and private terminal operators operating therein; to set market linked tariffs for their services. The major deviations in the final tariff guidelines as compared to the draft guidelines circulated earlier by the MoS are with respect to the tariff ceilings that are now applicable.

There should be simplified tariff principles for the existing operators within major ports under the PPP regime, faster resolution of cases between the landlord ports and private parties under PPP, and better hinterland connectivity K Ravichandran Sr. VP, Co-head corporate sector www.cargotalk.in

The draft guidelines did not specify any cap or ceiling on the market linked tariff which can be proposed by the port/ operator; instead incremental revenue share (subject to a minimum of 50 per cent) was to be levied on the difference between the reference tariff and the actual tariff. As per the final guidelines, the tariff which can be proposed by the operator would be subject to a ceiling of 115 per cent of the inflation indexed reference tariff. According to the ICRA study, although the new tariff guidelines do not permit full flexibility to the operators in terms of setting market linked tariffs (as proposed under the draft guidelines), the it can be considered to be positive for attracting investments into major ports. “Nonetheless, given the other structural issues hampering development at major ports - such as delays in obtaining requisite approvals, etc - the actual materialisation of project awards as planned by the MoS remains to be seen,” said Ravichandran.

Other Major Issues

In addition, other long term issues which hamper the growth of India’s port & shipping include, poor hinterland connectivity, both on rail and road side, inadequate investments in deepening the channel and berth draft levels, relatively low levels of mechanisation amongst the Major Ports and lack of a level playing field on tariffs between Major and Non Major Ports. In Ravichandran’s opinion, as regards infrastructure within the ports, November 2013 i cargotalk i 27

Shipping & Ports Study Report

Talking figures At JNPT and Chennai (which handle the majority of the container cargo at major ports), the decline in container volumes was pronounced, with 10% and 5% decline in TEU volumes respectively during April-August 2013. Revival of container volumes would be dependent on pickup in the overall manufacturing sector activities and correspondingly exim trade

Non-major ports faring better:

The listed non-major port entities have, however, reported robust increase in throughput, with volumes of Adani Ports and Special Economic Zone Limited (APSEZL) and Essar Ports Limited (EPL) increasing by 35 per cent and 11 per cent y-o-y respectively. The growth at APSEZL’s flagship Mundra port has been driven mainly by upscaling of liquid cargo

and dry bulk volumes by 23 per cent and 68 per cent respectively, even as container traffic growth has been relatively muted at 11 per cent y-o-y. The growth at Essar’s port terminals has been on the back of expanded capacity and increase in offtake by its group companies, with Vadinar registering 10 per cent y-o-y throughput growth and Hazira registering 1 per cent growth during the quarter on yoy basis. EPL also benefitted from the new volumes of the iron-ore terminal at Paradip, which had commenced operations in December 2012. Pipavav port, under Gujarat Pipavav Port Limited, has also reported a 17 per cent improvement in its volumes y-o-y and 5 per cent growth on a qoq basis on the back of significant revival of bulk volumes after a slight slump in Q4FY13.

the responsibility should be that of the Ports, either through their own resources or through privatisation. However, responsibility for connectivity would fall within the domains of external entities such as RVNL, NHAI and State Maritime Boards, wherein there can be some involvement of the concerned ports through SPVs wherein all the partners can be shareholders. Commenting on the government policies and rules & regulations, he maintained that these could have been better for an orderly growth of the industry. “There should be simplified tariff principles for the existing operators within major ports under PPP regime, faster resolution of several arbitration cases between the landlord ports and private parties under PPP, further autonomy to the Boards of Major ports to decide on PPP projects, better hinterland connectivity and good co-ordination with State Maritime Boards so that the sector is developed in a holistic manner,” he suggested.

Success & Achievement/ Logistics Services

GATI-KWE honoured by BCCI as Best 3PL Logistics Company 2013

ATI-KWE was awarded as the ‘Best 3PL Logistics Company 2013’ in the large enterprise category at ‘E & NE India Supply Chain & Logistics Summit and Excellence Award 2013’ held recently at Kolkata. The Bengal Chamber of Commerce and Industry organised the E & NE India supply Chain & Logistics Summit & Excellence Awards. The Excellence

28 i cargotalk i November 2013

Award is presented to those companies that are making significant contributions in this field and offering best-in-class services to their clients. Vikash Khatri, Head - Product Development & Marketing, GATI-KWE, received the award on behalf of the company. According to GATIKWE sources, it currently has a reach of 99.3 per cent covering 653 districts out of 657 districts in India.

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Industry Events Frost & Sullivan

Supply Chain Workshop in Bengaluru Emphasises on collaboration and IT

A study by Frost & Sullivan, which was unveiled at its workshop titled ‘Supply Chain Transformations 2013’, held recently in Bengaluru, says that the transportation and logistics market in India grew at a CAGR of 15.1 per cent between 2007 and 2012. But 2012 posed a challenging scenario that has been carried forward into 2013. The key challenges facing the Indian logistics sector today are decline in domestic manufacturing and output, and decline in export and import of goods that affected both domestic and international logistics services industry. and emerging solutions in mechanisation, automation, IT, and communications systems in order to achieve excellence in logistics. Mechanisation solutions such as dock levelers, forklifts, cargo tracking mechanisms including RFID, barcoding, and GPS systems, etc. were recommended by the logistics fraternity. “Mechanisation, automation, and IT solutions are increasingly becoming means to gain efficiency and attain international standards in process and performance. However, very few LSPs and end users actually use these solutions, primarily stating the non-affordability of such solutions as the limiting factor. Investments in such solutions need to be made by both LSPs and end-users.”

rost & Sullivan, aiming to be a “Growth Partnership Company”, works in collaboration with clients to leverage innovations that addresses the global challenges and related growth opportunities. In the 2013 edition of the workshop in Bengaluru, Frost & Sullivan discussed specific areas that included – role of logistics service providers in generating new opportunities for the Indian manufacturing sector; capabilities of technology service providers and emerging IT solutions to fulfill evolving business needs of the logistics sector and implications of FDI in retail on the country’s manufacturing and logistics sectors. The speakers and logistics service providers present at this workshop agreed that in the domestic market, growth can be achieved by providing collaborative 30 i cargotalk i November 2013

logistics and sharing information about warehousing space, position of trucking assets, etc. On the other hand; to tap the international market, it was revealed that LSPs need to enhance their overall cost competitiveness, visibility, service flexibility, and IT infrastructure to enable smooth and error-free information exchange. “Lack of seamless collaboration between LSPs and their customers, and lack of cooperation within the LSP fraternity is resulting in several inefficiencies affecting all the stakeholders of the logistics fraternity,” observed Gopal R, Global Vice President, Transportation and Logistics Practice. The workshop also emphasised on the importance of leveraging existing

At a panel discussion at the workshop, the panellist concluded that the FDI in retail policy offers significant opportunities for domestic LSPs, but simultaneously they need to buckle up to deliver service levels to match international standards. According to them, warehousing, cold chain logistics services and value added services in packaging are the new areas of opportunities before the logistics companies. The workshop also emphasised on the huge importance of skill development with an overview of available logistics and supply-chain courses and the profile of graduating talent from key logistics institutes in the country. It also discussed about the expectations of the logistics fraternity from the talent-pool and logistics institutes, with an appeal for improving education quality. www.cargotalk.in

Industry Events Conclave Report

ELSC Conclave gives out strategies, ideas to innovate

10 elements of a vested agreement by Andrew Downard n Rule 1: Outcome Based vs Transaction Based business model n Element 1: Business Model n Element 2: Shared Vision statement and statement of intent n Rule 2: Focus on the WHAT, not the HOW n Element 3: Statement of objectives/workload allocation n Rule 3: Clearly defined and measurable desired outcomes n Element 4: Performance metrics for desired outcomes n Element 5: Performance management n Rule 4: Pricing model incentives are optimised for cost/service tradeoffs n Element 6: Pricing model (margin matching/incentives framework) n Rule 5: Insight vs Oversight governance structure n Element 7: Relationship management framework n Element 8: Transformation management n Element 9: Exit management plan n Element 10: Special concerns and external requirements 32 i cargotalk i November 2013

onsidered as Asia’s largest end-toend Logistics and Supply Chain Conference, the event witnessed attendance of over 450 attendees, 100 speakers and 35 exhibitors. The Conclave successfully revealed unique strategies to deploy in business models to meet the requirements of the new economic era, drive renewed growth and gain market share. As a keynote speaker, Rob O’Byrne, Group Managing Director, Logistics Bureau spoke about the different levers which impacts the bottom-line of a supply chain. During his presentation, he discussed the ‘high leverage’ areas of supply chain management to gain the biggest bottom line improvement, ideas to focus on for real business improvement. Andrew Downard, Director, AD Supply Chain Group was the next keynote speaker of the day who focused on delivering better service, reducing cost and increasing innovation.

Next step for leadership

There were good numbers of panel discussions staged at the event to make the attendees understand the challenges, trends and strategies for the business in coming times. One of the most interesting panels was focussed on Supply Chain. Themed as – ‘Built to Last Supply Chain: Fast, Streamlined, Customized’; the panelists were P John Winnie, Director – Value Chain, GlaxoSmithKline Consumer Products;

The seventh edition of Express, Logistics & Supply Chain Conclave 2013 was recently concluded in Mumbai on the positive note. Themed as ‘Fast, Streamlined, Customised – The Next Step of Leadership’, the two-day event was packed with multiple business sessions and Supply Chain forums focused on CPG, Chemical, Hi-Tech, e-Commerce, Container and Procurement strategies. n Anita Jain Satish Karunakaran, Vice President – Planning & Supply Chain, Madura Fashion & Lifestyle; S K Tyagi, Director – SCM, Raymond Ltd; Pramod Sant, Vice President – Logisitics, Siemens Ltd; Rajeev Mehta, Executive President – Business Development, Ultratech Cement and Tej Nirmal Singh, Director – Supply Chain, Ericsson India. According to Singh, supply chain strategy needs to be inline with the global product strategy of a company. He said, “The biggest challenge today is to align both local supply chain and global product strategies. In such cases, a company should always revisit or revise their strategies frequently to bring in customer satisfaction. Also, companies should be flexible enough to tweak their strategies as per their target customer needs.” Echoing similar thoughts, Sant said, “Companies can’t have long term strategy as customer needs are changing at a faster pace. Also, we need to adapt to changing technology and customer needs and at the same time ensure that the changes are not impacting on the bottom-lines.” He also informed that companies should absorb knowledge coming from both customers and competitors. The power-packed business sessions and panel discussions at the event were well attended and proved to be an excellent knowledge-sharing platform for the industry. The event was followed by the seventh Express, Logistics & Supply Chain Awards 2013. www.cargotalk.in

Cargo Performance Export/Import

Delhi International Airport Cargo Department, IGI Airport, New Delhi (Airline-wise Import/Export Cargo Performance for the month of september 2013) S. No. Airlines 1 Cathay Pacific 2 Jet Airways 3 Air India 4 Emirates 5 British Airways 6 Singapore 7 Lufthansa Cargo Airline 8 Thai Airways 9 Etihad Airways 10 Fedex Express Corpation 11 Qatar Airways 12 Kalitta Air 13 Uzbekistan 14 Swiss Intl Airline Ltd 15 Klm 16 Malaysian Airline System 17 Air France 18 Virgin Atlantic 19 All Nippon Airways 20 Finnair 21 Turkish Airlines 22 Japan Airlines 23 Saudia 24 Aeroflot Cargo Airlines 25 China Southern Airlines 26 China Eastern Airlines 27 Martin Airline 28 Lufthansa Cargo Ag 29 United Airlines 30 Air China 31 Indigo Cargo 32 Spice Jet 33 Hercules Aviation 34 China Air 35 Mahan Air 36 Dhl Express 37 Blue Dart 38 Air Arabia 39 Gulf Air 40 Air Mauritius 41 Air Shagoon Pvt. Ltd. 42 Asiana Airlines 43 Oman Air 44 Ethopean Airlines 45 Sri Lankan Airlines Ltd 46 Biman Bangladesh 47 Air Astana 48 Ariana Afghan Airlines 49 Kuwait Airlines 50 Kenya 51 Royal Jordanian Airlines 52 Ups 53 Turkmenisthan Airlines 54 Mihin Lanka Airlines 55 Pakistan International 56 Kam Air 57 Jetlite 58 Iraqi Airways 59 Tajik Air 60 Druk Air 61 Safi Airways 62 Eva Air 63 Kyrgyzstan Air Company 64 Air Moldova 65 Flywell Aviation Pvt. Ltd 66 Spice Jet 67 Abakan Avia 68 Uni-Top Airlines 69 Flywell Aviation Total Cargo handled in September ‘12’ % VARIATION

34 i cargotalk i November 2013

Export With- Out Peri- shable (MTs) 982 1105 1244 679 1180 681 662 275 444 540 494 467 528 500 451 301 401 355 361 394 406 138 273 280 107 178 154 157 243 113 162 158 150 120 117 0 92 112 97 94 109 49 97 57 48 35 38 40 1 19 19 0 8 7 2 4 0 2 1 0 0 0 0 0 0 0 0 0 0 15728 14314 9.88%

Export Export with Perishable Perishable Cargo (MTs) (UPL) (MTs) 56 81 275 1140 64 12 68 28 86 2 100 0 24 17 25 20 3 16 2 9 25 13 111 85 0 0 2 5 4 0 1 0 0 0 9 0 3 0 24 16 0 0 5 2 0 0 15 0 30 1 0 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2385 2207 8.09%

1037 1186 1519 1818 1243 693 730 303 530 542 594 468 552 517 476 321 405 371 363 402 431 152 384 365 107 178 155 162 246 113 162 159 150 121 126 0 95 112 121 110 109 49 102 59 48 35 53 40 31 19 19 0 12 7 2 4 0 2 1 1 0 0 0 0 0 0 0 0 0 18113 16521 9.64%

Import (MTs)

Total Cargo (MTs)

% of Total

1972 1624 1105 693 824 745 659 938 556 451 396 363 258 261 238 375 201 228 201 126 93 282 25 38 279 208 193 130 45 170 34 29 35 58 9 134 34 11 2 1 0 60 2 26 12 19 0 0 3 1 1 17 0 4 2 0 3 0 0 0 0 0 0 0 0 0 0 0 0 14173 13442 5.44%

3009 2810 2624 2512 2067 1437 1390 1241 1087 992 990 831 810 778 714 696 606 599 564 529 525 433 409 403 386 386 349 292 291 283 196 188 184 179 135 134 130 123 122 111 109 109 103 85 60 54 53 40 34 21 19 17 12 11 5 4 3 2 1 1 0 0 0 0 0 0 0 0 0 32286 29963 7.75%

9.32% 8.70% 8.13% 7.78% 6.40% 4.45% 4.30% 3.84% 3.37% 3.07% 3.07% 2.57% 2.51% 2.41% 2.21% 2.16% 1.88% 1.86% 1.75% 1.64% 1.62% 1.34% 1.27% 1.25% 1.20% 1.19% 1.08% 0.90% 0.90% 0.88% 0.61% 0.58% 0.57% 0.55% 0.42% 0.41% 0.40% 0.38% 0.38% 0.34% 0.34% 0.34% 0.32% 0.26% 0.19% 0.17% 0.16% 0.12% 0.10% 0.06% 0.06% 0.05% 0.04% 0.03% 0.01% 0.01% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

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mUMBAI csi aIRPORT

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

Export General

Export Perishable

Total Import Export

Total Exp+Imp

1118.85 1317.05 615.87 656.78 647.19 748.28 857.86 573.24 509.33 858.59 742.90 786.44 288.71 402.85 357.52 257.76 272.89 334.69 70.04 400.66 0.00 110.25 0.00 291.46 112.54 178.09 96.40 180.42 53.72 0.00 93.22 64.94 111.10 74.71 0.07 44.70 60.01 41.41 47.80 53.51 27.72 13.54 13.85 8.20 8.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 178.45

909.64 1502.48 560.59 1228.00 216.51 127.66 74.75 213.85 280.35 208.46 79.67 102.80 119.34 32.33 133.81 61.06 32.36 36.94 401.37 1.66 0.00 0.00 0.00 0.22 141.03 68.29 118.71 1.34 107.71 57.92 54.68 15.63 9.95 7.76 100.13 1.31 7.89 0.00 3.22 4.62 12.15 0.00 0.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19.76

2028.49 2819.53 1176.46 1884.78 863.70 875.94 932.61 787.09 789.68 1067.05 822.57 889.24 408.05 435.18 491.33 318.82 305.24 371.63 471.41 402.33 0.00 110.25 0.00 291.68 253.57 246.38 215.11 181.76 161.43 57.92 147.90 80.57 121.05 82.46 100.20 46.01 67.90 41.41 51.02 58.13 39.86 13.54 14.40 8.20 8.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 198.21

2283.91 732.46 1313.07 381.90 1220.87 936.88 799.10 642.07 588.69 47.75 217.24 11.27 381.15 280.11 200.57 370.78 276.07 180.14 2.61 7.86 372.41 259.70 319.15 11.99 3.97 0.00 3.76 2.58 1.59 102.55 3.40 49.95 0.00 33.00 3.60 39.67 13.58 23.30 11.74 0.82 0.02 1.90 0.34 1.16 0.29 0.00 0.00 0.00 0.00 0.00 0.00 0.00 193.12

4312.40 3551.98 2489.53 2266.68 2084.56 1812.81 1731.72 1429.16 1378.37 1114.80 1039.81 900.51 789.21 715.28 691.90 689.60 581.31 551.77 474.02 410.19 372.41 369.95 319.15 303.66 257.54 246.38 218.87 184.34 163.02 160.47 151.30 130.52 121.05 115.46 103.80 85.68 81.48 64.71 62.77 58.95 39.88 15.44 14.74 9.36 8.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 391.33

13682.07

7102.78

12328.07

33112.92

Airlines Handled By Mial & Ai 1 Jet Airways 2 Emirates 3 Lufthansa 4 Air India 5 Singapore Airlines 6 Cathay Pacific 7 Etihad Airways 8 British Airways 9 Qatar Airways 10 Saudi Arabian Airlines 11 Turkish Airlines 12 Ethopian Airlines 13 Swiss Intl. Airlines 14 Malaysian Airlines 15 Air France 16 Thai Airways 17 Virgin Atlantic 18 Federal Express 19 Bangkok Airways 20 Kenya Airways 21 Martin Air 22 UPS 23 Air Cargo Arologic C/O Lufthansa 24 South African Airlines 25 Gulf Air 26 KLM Airlines 27 Kuwait Airways 28 Air Mauritius 29 Air Arabia 30 Delta 31 Oman Air 32 Korean Air 33 Fin Air 34 United/Continental Airlines 35 Air India + Air India Carriers 36 EL-AL Airlines 37 Srilankan Air 38 Blue Dart 39 Iran Air 40 Indigo Air 41 Yemenia Airways 42 Pakistan intl Airlines 43 Royal Jordanian 44 Air China 45 Egypt Air 46 Austrian Air 47 Baharin Airlines 48 Kingfisher Airlines 49 NorthWest Airlines 50 Qantas 51 Island Aviation (Maladvian) 52 Charters 53 Others

TOTAL

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20784.85

November 2013 i cargotalk i 35

Cargo Performance Airports in India

Traffic statistics D omestic F reight

S. No. Airport

July 2013

Freight (in Tonnes)

For the Month For the period April to July July 2012

% Change 2013-14

2012-13

% Change

(A) 16 International Airports 1 2 3 4 5 6 77 8 9 10 11 12 13 14 15 16

Chennai KOLKATA AHMEDABAD GOA TRIVANDRUM CALICUT GGUWAHATI LUCKNOW SRINAGAR JAIPUR COIMBATORE MANGALORE AMRITSAR TRICHY VARANASI PORTBLAIR TOTAL

6297 7321 3226 172 199 12 558 290 330 710 519 21 17 0 32 223 19927

6364 6897 3027 251 101 17 551 173 244 695 634 19 4 0 24 98 19099

-1.1 6.1 6.6 -31.5 97.0 -29.4 1.3 67.6 35.2 2.2 -18.1 10.5 325.0 - 33.3 127.6 4.3

23580 27400 11676 706 502 62 2130 922 1524 2435 1969 83 57 0 118 786 73950

27016 27081 11932 1017 503 53 2007 683 1174 2281 2260 104 20 0 103 513 76747

-12.7 1.2 -2.1 -30.6 -0.2 17.0 6.1 35.0 29.8 6.8 -12.9 -20.2 185.0 - 14.6 53.2 -3.6

16995 15609 8134 3109 739 437 45023

15927 15550 6867 2762 795 430 42331

6.7 0.4 18.5 12.6 -7.0 1.6 6.4

62210 59409 29365 11620 2936 1557 167097

65830 62981 28043 11077 3031 1641 172603

-5.5 -5.7 4.7 4.9 -3.1 -5.1 -3.2

(B) 6 JV International Airports 17 18 19 20 21 22

DELHI (DIAL) MUMBAI (MIAL) BANGALORE (BIAL) HYDERABAD (GHIAL) COCHIN(CIAL) NAGPUR (MIPL) TOTAL

PUNE VISAKHAPATNAM PATNA CHANDIGARH BAGDOGRA MADURAI GAYA TOTAL

1592 210 407 264 236 104 0 2813

1489 139 119 218 132 56 0 2153

6.9 51.1 242.0 21.1 78.8 85.7 - 30.7

6158 676 1541 1006 576 440 0 10397

7222 601 657 941 559 240 0 10220

-14.7 12.5 134.6 6.9 3.0 83.3 - 1.7

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

BHUBANESWAR INDORE JAMMU RAIPUR AGARTALA VADODARA IMPHAL BHOPAL RANCHI AURANGABAD UDAIPUR LEH TIRUPATI RAJKOT JODHPUR DEHRADUN DIBRUGARH TOTAL

272 378 148 275 589 140 359 68 198 66 0 74 0 15 1 0 20 2603

273 342 132 245 442 164 421 91 139 65 0 87 0 15 0 0 24 2440

-0.4 10.5 12.1 12.2 33.3 -14.6 -14.7 -25.3 42.4 1.5 - -14.9 - 0.0 - - -16.7 6.7

1081 1577 524 1050 2159 601 1260 278 732 232 0 395 0 59 5 0 100 10053

1063 1420 429 927 1970 786 1467 332 544 288 0 465 6 86 3 0 108 9894

1.7 11.1 22.1 13.3 9.6 -23.5 -14.1 -16.3 34.6 -19.4 - -15.1 -100.0 -31.4 66.7 - -7.4 1.6

129 70495

142 66165

-9.2 6.5

453 261950

585 270049

(D) 17 Domestic Airports

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

36 i cargotalk i November 2013

-22.6 -3.0

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Calendar of Events International Logistics Events

2nd Cold Chain Pharmaceutical Logistics

November 22, 2013 New Delhi, India The conference will provide a unique platform for industry experts involved in temperature sensitive logistics to share their experience on topics like distribution & management system, regulatory approvals, emerging trends and challenges, technological innovations in cold chain logostics, infrastructure development, cost effective logistics strategies within the country and how it is impacting the Indian pharmaceutical industry. l Contact: 80-49331000 l Fax: 80-49331003 l E-mail: enquiries@nispana.com nnn nnn nnn

The 10 China Air Cargo Summit 2013 th

November 20-22, 2013 Shanghai, China l Contact: marketing@aircargosummit.org l Tel: (8621)31266433 l Fax: (8621) 31267471 nnn nnn nnn

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Nordic Air Cargo Symposium

April 7-8, 2013 Sheraton Stockholm Hotel Sweden l Contact: Euroavia International l Tel. +46-33-129841 l Fax +46-33-228388 l email: conf@euroavia.com nnn nnn nnn

13th Annual Cool Chain Europe

January 27-19, 2014 Luxexpo, Luxembourg-Kirchberg, Luxembourg l Contact: +44 (0) 20 7368 9300 l E-mail: enquire@iqpc.co.uk nnn nnn nnn

5th Annual China Supply Chain & Logistics Showcase 2014 March 11-12, 2014 Shanghai, China l Phone: +86-21-5172 0000 l Fax: +86-21-5172 0088 l Email: marketing@jfpsgroup.com.cn

nnn nnn nnn

European Supply Chain & Logistics Summit 2014

June 16-17, 2014 Barcelona, Spain David Miller Customer Relation Manager l Tel: +44 (0)20 7202 7690 l E-mail: David.Miller@wtgevents.com

SCM Logistics & Manufacturing World 2014 June 23-24, 2014 Suntec Singapore International and Convention Centre, Singapore l Contact :Terrapinn l Tel: +65 6222 8550 l Fax: +65 6226 3264 l E-mail: enquiry.sg@terrapinn.com nnn nnn nnn

Global Liner Shipping Asia Conference

September 2014 Novotel Singapore Clarke Quay, Singapore Maritime Customer Services l Tel: +44 (0) 20 7017 5510 l Fax: +44 (0) 20 7017 4745 l Email: maritimecustserv@informa.com

November 2013 i cargotalk i 37

Cargo Performance Airports in India

Traffic statistics

I N T E R N AT I O N A L F R E I G H T Freight (in Tonnes)

S. No. Airport

For the Month For the period April to July

July 2013

July 2012

% Change 2013-14

2012-13

% Change

(A) 16 International Airports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Chennai Kolkata Ahmedabad Goa Trivandrum Calicut Guwahati Lucknow Srinagar Jaipur Coimbatore Mangalore Amritsar Trichy Varanasi Portblair Total

19634 4513 1360 138 2532 2055 0 166 0 20 79 0 92 435 0 0 31024

21938 4149 1187 114 4591 2515 0 251 0 22 40 0 122 211 0 0 35140

-10.5 8.8 14.6 21.1 -44.8 -18.3 - -33.9 - -9.1 97.5 - -24.6 106.2 - - -11.7

75811 14576 5785 595 9180 8819 8 386 0 76 285 0 388 1565 0 0 117474

85551 14442 4194 571 17864 10100 0 497 0 91 176 0 454 990 0 0 134930

-11.4 0.9 37.9 4.2 -48.6 -12.7 - -22.3 - -16.5 61.9 - -14.5 58.1 - - -12.9

33524 38249 13644 3884 4940 27 94268

30280 40873 12907 3756 2904 32 90752

10.7 -6.4 5.7 3.4 70.1 -15.6 3.9

128809 154963 51781 16816 15191 126 367686

122319 160034 49480 15097 11700 131 358761

5.3 -3.2 4.7 11.4 29.8 -3.8 2.5

0 0 0 0 0 0 0 0

- - - - - - - -

0 0 0 0 0 0 0 0

- - - - - - - -

0 0 125292

0 0 125892

0 0 485160

0 0 493691

-1.7

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

Pune Visakhapatnam Patna Chandigarh Bagdogra Madurai Gaya Total

(D) (E)

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

- - -0.5

International News

Turkish Cargo launches new storage area in Istanbul

ecently, Turkish Cargo inaugurated a new storage area in a ceremony held near the end of runway 06/24 at Ataturk International Airport, Istanbul. According to the airline sources, the newly built facility will play an important role in the growth of Turkish Airlines’ cargo operations. The technical features of the new

38 i cargotalk i November 2013

storage area are: total area- 70m X 150m; storage for 333 ULDs and 1000m² for handling mail; 700m² of cold weather storage space; 5 cold storage spaces with 2 providing 2C˚8C˚, 2 providing 15C˚-25C˚ and one adjustable temperature settings. A capacity for 56 ULDs in cold stores is also available. All cold storage has independent power generation.

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Guest Column Shipping & Ports

What ails

Indian Ports? P Indrajit Singh Merchant navy officer

40 i cargotalk i November 2013

ort operations involve synchronised and intricate planning, organisation and execution of interrelated chores ranging from shipâ&#x20AC;&#x2122;s manoeuvres in the breakwaters to moorings, from stemming the vessel to a suitable berth as per plan in harbourmasterâ&#x20AC;&#x2122;s office to arranging equipments and labour in the labour office, from optimal load and discharge of the vessels to supply of fuel and other wherewithal. Not only does it place the onus of responsibility on the port authorities for minimum stay of the ships in port, but also the optimum utilisation of resources. However differing levels of capacities, material resources and their ways

of deployment, staffing and stevedoring, natural conditions, depths encountered while ships make way through water to ports, rate of discharging vis-Ă -vis evacuation levels, connectivity with hinterland, efficiency of land logistics, presence of related amenities like customs clearance and green channels, IT infrastructure and numerous other factors cause aberration in efficiency of ports. This carries more gravity, considering the Indian scenario, which has a status quo of a big maritime nation with an large coastal line encircling the half of the country. International trade, being a large contributor in the economy, plays a significant role

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and shipping trade becomes even more pronounced as 95% of the international trades is routed through ships. Our ports are getting congested day-by-day. A few ports have already exhausted their capacity and others are on the verge of the same. The growth of marine traffic is gradually outpacing the growth of handling capacities in ports. When we are handling 4,000– 6,000 TEU ships, world-class ports are handling 8,000–10,000 TEU ships. When we are striving at increasing throughput, the others have many times better throughput than us. Singapore is a glaring example where economy of the city state survives on the state-of-the-art port-operations. When we have lost time and money for the cargo enroute to India getting transhipped in Dubai, Singapore and Columbo; the better ports of the world are directly inviting the mother-vessels. The major ports of India are being governed by Major Port Trusts Act, 1963 which has deputed a board of trustees to govern the ports. The ports run on subsidies and donations from the Centre, and the trustees get hard nuts to crack when requesting funds from the Centre for infrastructural developments or enhancements of existing material and nonmaterial resources. The Centre often goes astray as port infrastructure developments require relatively massive capital and the projects are risky in nature. It’s no wonder that major ports have shown sluggish growth trends in comparison to minor ports. Add to this the fact that, out of 187 minor ports, only 48 are operational. The CAGR of minor ports outstripping that of major ports endorses the thought of investment in minor ports. Procedural delays and lack of related amenities in Indian ports cause longer dwell-time. It takes around seven days for exports to clear off in India, whereas three days in Singapore. Also, on an average eight different papers are required for clearance here, whereas just four are needed for Singapore. Also, Indian Customs mostly use intrusive examination techniques, while better ports use non-intrusive cargo examination, saving time and costs. Natural conditions do pose impediments. The narrow channels, fairways and traffic separation schemes of the port approaches are mired with shallow depths. Silting and absence of breakwaters shrink depths/ widths of navigable waters. Add to this, www.cargotalk.in

tidal variation and ‘squatting’ of ships. The depths near Lower and Upper Gasper in Bay of Bengal is challenging for even mid-size ships. Even the deepest container ports in India are unable to handle 10,000+ TEU ships and ULCCs. The average depth in major Indian ports is around 12–13 metres. Periodic dredging and maintenance of adequate depths including increments of existing depths in approach fairways requires huge expenditure and hence the problem persists. Indian ports lag behind in handling transhipments. Our ports are de facto so laggard in this respect that inbound or outbound trades of India get transhipped in Colombo, Dubai and Singapore expending revenues of shippers and consignees. Rather, we send our cargo by feeder vessels to them, elongating transit times and costs. It’s rather the opportunity foregone, our share of revenue flows to neighbouring Sri Lanka.

Long waiting periods for getting suitable berths increases the overall time spent in port. Ships lying at anchor in ports lose money.” But, a sigh of relief comes to Indian merchants of late in the form of International Container Transshipment Terminal (ICTT) being made operational. The resource utilisation levels are dismal and uneven staffing levels in ports induce eccentric performance figures. In many of our ports, we are either getting along with old/obsolete handling equipments, or we have acute shortage of equipment or under-utilisation of equipment. Right from the berthing plan to stemming of vessels on board, from equipment allotment to individual ship to gang allotment to commanding hatches, from the availability of nets, slings, payloaders and cherrypickers to forklifts and straddles everywhere, there is a scope for better planning and execution. These factors also contribute to per unit cost of handling in ports, which has shown a

continuous rise in all ports over the last decade. Long waiting periods for getting suitable berths increases the overall time spent in port. Ships lying at anchor in ports lose money. The Port of Kandla is at the top where the average waiting time is around four days. JNPT performs the best with hardly a few hours of waiting, and hence with least dwell-time. The lack of good and integrated IT infrastructure is yet to be assimilated in port operations. This induces lack of visibility and coherence in clearances. All stakeholders don’t communicate on a single platform, which further complicates and lengthens the overall time in port. Some good softwares are already in place like Vessel Traffic Management System (VTMS) and the newly-deployed Integrated Port Management System (IPMS). But the desired level of adoption is yet to be achieved. An end-to-end capable software application will not only speed up the overall time for export or import processing, but also ensure that all parties are posted with the latest information and actions for the shipments. Indian ports are moving towards revamping to keep pace with rising marine traffic and diversified international trade requirements. The Government is taking steps to encourage private players to participate in port-development projects. 100% FDI is permitted in port projects and tax incentives are offered for various projects. The Five-Year Plan for ports propounded in 2007, has got a dint of Maritime Agenda 2010-2020 with greater emphasis on investment in shipping sector, increase in capacity and tonnage under the Indian flag and many other factors. The Mundra port (SEZ) has come up under Adani Group speedily with state-of-the-art handling, evacuation and connectivity with the hinterland. The corporatisation of Ennore port is a big step towards increasing efficiency, though it is met with mixed reactions. Despite all these moves, many more nautical miles are yet to be traversed before the IALA buoys of best operated port is visible on rational horizon. Indrajit Singh The author is a merchant navy officer and specialist consultant for shipping November 2013 i cargotalk i 41

Family Album Trade Associations

FFFAI

FFFAI elects new committee with Debashish Dutta as Chairman for 2013-15 The Federation of Freight Forwardersâ&#x20AC;&#x2122; Associations in India (FFFAI) hold its elections recently in Mumbai to elect new office bearers for the term 2013-2015. Debashis Dutta representing Calcutta Custom House Agents Association was unanimously elected as Chairman. Samir Shah, Sailesh Bhatia, Shailendra Jain, Shankar Shinde, D.Vijaykumar and C. Karthikeya Prabu were elected as Vice Chairmen. Amit Kamat was elected as Honorary Secretary for the second consecutive term. Sarafaraz Khan was unanimously elected as Honorary Treasurer. Shantanu Bhadkamkar is now the immediate past Chairman of FFFAI.

42 i cargotalk i November 2013

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Family Album Cricket Tournament

Cricket Tournament

ACCM organises ACP – Air Cargo Premier League The Air Cargo Club of Madras (ACCM) recently organised a two-day long Cricket Tournament at YMCA – Nanadanam Cricket Ground in Chennai. This year, the tournament has been named ‘ACPL – Air Cargo Premier League, participated by 22 teams. The winner and runner-up of the tournament were Worldwide Logistics India and Capricorn Logistics respectively. The sponsors of the event were VTL Logistics (India), Kerry Logistics, Indev Group, Visesh Cargo & Travels, Capricorn Logistics, Seawaves Shipping Services, Aachi Cargo Channels and LA Freight Lift.

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November 2013 i cargotalk i 43

Family Album Industry Event

ELSC Awards 2013

Industry stakeholders honoured for great jobs The much desired and prestigious Awards presented during the industry gathering on the occasion of Express Logistics and Supply Chain Conclave reached a new high this year. With huge participation from the cross section of express, logistics supply chain industry from across the country, the main attraction of the event was the glittering award winning ceremony.

44 i cargotalk i November 2013

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ELSC Service Excellence Category n Best Express Service Provider of the Year - Domestic

Blue Dart Express n Best Express Service Provider of the Year - International DHL Express (I) n Best Road Service Provider of the Year Gati-Kintetsu Express n Best 3PL Company of the Year Safexpress Mahindra Logistics n Best Air Freight Service Provider of the Year DHL Global Forwarding DelEx Cargo India n Best Sea Freight Service Provider of the Year Kuehne + Nagel n Best Freight Forwarder of the Year Schenker India n Best Air Cargo Carrier of the Year FedEx Express n Best Air Cargo Terminal of the Year Cargo Service Center India â&#x20AC;&#x201C; Mumbai & Delhi Terminals n Best Inland Service Provider of the Year APM Terminals India

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November 2013 i cargotalk i 45

Family Album Trade Associations

BCHAA

BCHAA discusses industry issues at its AGM in Mumbai The Brihanmumbai Custom House Agents Association (BCHAA) recently held its Annual General Meeting (AGM) in Mumbai with full participations of its members. At this gathering; George Joseph, President, BCHAA highlighted the major activities and achievements of the association during last one year. He also spoke about the present challenges and issues before the Customs Brokers in India that BCHAA will raise for viable solutions.

46 i cargotalk i November 2013

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Product Display Cold Chain

Carrier Transicold introduces new atmosphere control technology for perishables The recently-introduced Carrier Transicold’s new XtendFRESH Container atmosphere control system uses innovative technologies to help maintain the quality of shipped produce, while extending shipping distances to enable growers reach new customers. Pankaj Mehta, Country Head & Director, Carrier Transicold, India spoke to Cargotalkabout the importance of this product for Indian market. n Ratan Kr Paul

ndia is the largest producer of fruits and the second largest producer of vegetables in the world. It is the largest producer of milk with 105 million MT per year, produces 6.5 million tons of meat and poultry and 6.1 million tons of fish. However, the extent of processing is very low. “Indian cold chain industry is still in a nascent stage with large number of small and unorganised players. However, we are witnessing a clear shift towards usage of better technology, equipment and operating processes,” observed Mehta.

The entry of multinational retailers will help in bringing modern standards and protocols in food processing, handling and retail in India Pankaj Mehta Country Head & Director Carrier Transicold, India 48 i cargotalk i November 2013

for refrigerated trucks, trailers and containers, and is a part of UTC Climate, Controls & Security, a unit of United Technologies Corp. The XtendFRESH system is designed to be more affordable than Carrier’s prior atmosphere control solutions and relatively easy to install on existing equipment. XtendFRESH system actively controls oxygen and carbon dioxide levels and

He maintained that Carrier has played a very important role in reducing the waste of perishable commodities such as milk, fruits and vegetables. Over the last few years, organised retail and food service industries have emerged as new segments of cold chain mainly due to changing consumption pattern. In addition to the existing meat, poultry, ice-cream and dairy segments, there is a fast emergence of quick service restaurants, food processing and pharma as potential segments. “The entry of multinational retailers such as Wal-Mart, Tesco, Carrefour and Metro will help in bringing modern standards and protocols in food processing, handling and retail in India and will certainly lead to the emergence of cold chain,” Mehta pointed out.

XtendFRESH Container

XtendFRESH Container helps to improve global transport and shipping temperature control with a complete line of equipment

removes ethylene, a hormone given off by ripening produce that will accelerate ripening if left unchecked. XtendFRESH system will also aid in maintaining optimum quality of delivered produce, which can also result in less spoilage per shipment. According to Mehta, XtendFRESH significantly lengthens the amount of time produce can spend in refrigerated transit – by more than double in some cases. For example, bananas can be shipped for up to eight weeks rather than four, and beans for up to four weeks rather 10 days. “The www.cargotalk.in

XtendFRESH system will give the shipping industry a new, more economical way to implement container atmosphere control and, in turn, grow market opportunities,” he asserted.

designed to operate in ambient temperatures ranging from -30 C to +50 Celsius, in both single temperature and multi-temperature versions,” underlined Mehta.

For more than 40 years, Carrier Transicold has been an industry leader, providing customers around the world with the most advanced & energy efficient equipment and services for refrigerated transport and cold chain visibility. Since 1993, Carrier Transicold has served the transport refrigeration business in India, with a large network of service dealers and parts distribution.

Carrier Transicold India works with all stakeholders – including the leading truck manufacturers, insulated box manufacturers and reefer transportation logistics providers - at every stage to integrate the reefer equipment with the vehicle and to install and commission the equipment, using the right technology and resources. “Our strength lies in adapting products to suit Indian conditions, engineering them on the vehicles and supporting them with our after-sales team,” he concluded.

The company manufactures, sells and service intermodal transport, van, truck and trailer refrigeration systems for overthe-road and rail applications and container refrigeration systems and generator sets for ocean-going vessels. “Our products cover the complete range of customer requirements and integrated cold chain management from the smallest distribution van to large 12-meter trailers, and are

Mehta asserted that Carrier is a global leader and has immense focus on Indian market. He underlined that the total available basket of perishable products in India is estimated to be around 336 million tonne, which comprise fresh fruits and vegetables, milk and milk products, meat and marine products and poultry, ice cream and vaccines. “The perishable products transaction volume in India itself is

Presence in India

estimated to be around 104 million MT. We work closely with our industry partners and government ministries to develop the cold chain for safe transport of perishables across the country,” he shared. In view the fact that India is a cost sensitive market and logistics cost in India is already higher than other competing countries Carrier has specific services catering to this market. “Maintaining the product temperatures at the lowest operating cost during transportation is very important factor in cost sensitive markets like India. Our products used in India are ideally selected to meet these operational expectations. The recently introduced CitimaxTM range is a targeted for larger volume products like fruits and vegetables at minimal costs since these take power from the vehicle engine. The earlier introduced VientoTM range for smaller vans is very popular for city distribution of cakes, chocolates and processed foods. Carrier Transicold products provide a balance between high technology, temperature precision at optimum cost,” he concluded.

Huge Logistics Opportunities

Chinese companies sign MoUs for buying products worth US$ 338 from India In a bid to beef up exports from India to China, the Ministry of Commerce, Government of India has recently facilitated the process to sign 15 MoUs between Indian and Chinese companies, worth value of US$ 338 million.

ccording to the MoUs; the products that will be exported from India include zinc and copper concentrates, cotton yarn, frozen fish/ linter, cotton and cotton yarn, menthol, castor oil, guar gum, acrylic tow, Indian granite block and cedrus deodara seeds. The MoUs were signed at India-China Business Matchmaking Symposium for promoting exports from India to China in New Delhi. According to the ministry sources, this initiative will be followed by some more events in other cities in India. The Department of Commerce of India in coordination with Ministry of Commerce, People’s Republic of China is facilitating the visit of an important Chinese business delegation to India to explore procurement opportunities with their Indian counterparts companies. CII has been designated as

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the local co-organiser. The delegation is led by Jia Guoyong, Vice Director General of Trade Development Bureau, MOFCOM with representatives from 27 national-level Chinese companies. Some 60 companies from India from varied sectors attended the symposium and the B2B meetings in New Delhi. The sectors that the Chinese counterparts represented include textile, infrastructure, minerals and metals, chemicals, plastics, light industrial products, aero technology, steel, glassware and arts and crafts. The day-long programme began with the inaugural address by Asit Tripathy, Joint Secretary, in charge of China, Department of Commerce. The session was also addressed by Deep Kapuria, Chairman, CII National Committee, MSME and Wang Hejun Economic and Commercial Counsellor, Embassy of People’s Republic of China.

November 2013 i cargotalk i 49

Guest Column Emerging Verticals

Future of Organised Retail in India:

Need for Policy Support Arpita Mukherjee Professor, ICRIER

The growth of organised or modern retail in India in the past decade has drawn global attention. The high rate of growth of gross domestic product (GDP), rise in per capita income, growing middle class and the shift in consumption pattern from necessity items to discretionary consumption has propelled the growth of organised retail. The growth is also supported by liberalisation and globalisation of the Indian economy and entry of foreign brands and domestic corporates into the retail segment. However, there are some crucial issues need to be addressed soon.

cKinsey & Company in 2007 portrayed India as the fifthlargest consumer market by 2025 after the United States (US), Japan, China and the United Kingdom (UK). The retail sector in India was estimated to be over $ 500 billion in 2012. Estimates show that it is expected to grow at a compound annual growth rate of 15% between 2012 and 2017. The share of organised sector was around 7.8 per cent in 2012 and is expected to grow at around 19 per cent.

Areas of Concerns

In 2011, India was ranked fourth worldwide (after Brazil, Uruguay and Chile) and first among emerging Asian markets as an attractive destination for foreign retailers. However, in 2013, India slipped to the 14th position 50 i cargotalk i November 2013

In spite of the high growth in the past decade and optimistic projections, in recent years there have been some areas of concerns. The GDP growth rate has slowed down and the retail growth has also slowed down. AT Kearney in its market attractiveness index for global retailers have downgraded India significantly as an attractive retail destination. In 2011, India was ranked fourth worldwide (after Brazil, Uruguay and Chile) and first among emerging Asian markets as an attractive destination for foreign retailers. However, in 2013, India slipped to the 14th position while other developing countries such as Brazil and China continued to be in the topmost destinations. The slowdown in the economic growth in the past two years and the slow pace of retail liberalisation in India may have adversely affected the attractiveness of Indiaâ&#x20AC;&#x2122;s retail sector.

The government has opened up the retail sector in a phased manner, but it has not been successful in attracting FDI. The FDI inflow into this sector is low and shows a fluctuating trend. The FDI inflow in retail gradually increased after the liberalisation of the single brand retail policy in 2006 and reached a peak in December 2010 ($229.1 million). It thereafter declined sharply. By June 2012 retail FDI declined to $42.7 million with a share of only 0.02 per cent in total FDI inflows into India and stayed at that level till February 2013. In March 2013, FDI in retail revived to $95.36 million with a share of 0.05 per cent in total FDI into India. During the last two years, the government has issued several notifications on FDI liberalisation in the retail sector - both for single and multi-brand retail, but the restrictiveness of the conditions associated with the FDI liberalisation has made the policy unattractive. Specifically, foreign retailers have raised objections to mandatory back-end investment requirements, restrictive conditions of sourcing from SME and restrictions on e-retailing. Till date, none of the global multi-brand retailers have invested in India after the 2012 liberalisation of the multibrand retail policy.

Inter-state Barriers

It is important to note that FDI in retail is not an entry ban and foreign retailers can enter India through other routes such as franchising if the market offers www.cargotalk.in

Guest Column Emerging Verticals

potential. The market attractiveness is undermined by several restrictions on inter-state movement of goods (for example, restrictions on movement of agricultural commodities under the Essential Commodities Act). Moreover, taxes vary across states, which make it difficult to have a pan-India operation. The implementation of the single goods and services tax (GST) is long-pending.

across states. While some states are in the process of amending the old Acts, in states like Delhi such laws are very stringent. Non-availability of government land together with fragmented private holdings makes it difficult for retailers to acquire large plots of land. The property market is not transparent and lack of clear ownership/ titles and high stamp duties result in grey markets for property.

Fragmented Distribution Channel

Competition from Unorganised Sector

There is a dearth of third-party logistics service providers and in some states, integrated supply network and 3PL services are entirely missing. The distribution chain is fragmented and is marked by the presence of a large number of intermediaries. The logistics cost in India is high – a Planning Commission study estimated that approximately 14 per cent of a product’s cost represents logistics-related costs. This makes it difficult and costly to have an efficient supply chain which is the key to success of organised retail. Retail is regulated by multiple agencies and a typical food and grocery retailer has to obtain 40-50 licenses to set up operations for each store. A number of corporates are facing shortages of talents and they have to set up in-house training facilities to develop skills.

Real Estate Issues

The price of real estate is very high. Other real estate related issues include lack of urban planning, restrictive zoning regulations (which limit the availability of land for retail/commercial purposes) and high stamp duties. Laws relating to land conversions and Rent Control Acts vary 52 i cargotalk i November 2013

Although India has a large consumer base, Indian consumers are price sensitive and there is considerable heterogeneity in consumers’ tastes, product choices and shopping behaviour. They are experimenting across brands and brand loyalty is low. Moreover, the unorganised sector is strong and offer significant competition to organised players, especially in sectors such as food and grocery.

In Conclusion: The Policy Matters

The domestic corporates entered the retail segment with a lot of optimism but many of them have not been able to make profits

The logistics cost in India is high – a Planning Commission study estimated that approximately 14 per cent of a product’s cost represents logistics-related costs

and it has led to mergers and acquisition. Retail is a difficult business with long gestation lags. Its success depends on a number of factors including effective logistics network, availability of retail space, and supporting regulation. A number of regulations which can not only help this sector but the entire logistics network are pending. Implementation of GST in India is a much bigger reform for retail modernisation than allowing FDI in retail. The government should make necessary changes in the FEMA Act so that profit repatriation related issues of foreign retailers are addressed. Unless this is done, foreign retailers would not invest in India. FDI in retail should be delinked from domestic regulations. While it is important to regulate retail, regulations should be transparent and non-discriminatory. Also, regulations should support scale expansion, growth of manufacturing and linkages of Indian manufacturers into global value chains of retailers. Conditions restricting scale expansion of manufacturers such as requirements to source from SMEs will not enable Indian manufacturers to grow and become part of global value chain of retailers. The role of the government is to provide the supporting infrastructure and regulatory transparency. If that is done, industry will come forward and invest in retail. The growth of organised retail will lead to quality employment creation, enhance tax revenue earnings of the government, lead to investment in the supply chain and support the growth of local manufacturing and brand building, among others. It is closely interlinked with the growth of other sectors such as transport, tourism and constructions. Countries such as UAE (Dubai), Hong Kong, Singapore and Thailand earn a significant amount of foreign exchange through retail. Indians spend a lot in shopping abroad and India can itself become an attractive tourism and retail destination. At present, the number of tourists received by India is much lower than East Asian countries and Dubai. It is also important to note that consumerism and growth of retail have in the past enabled economies to come out of slowdown and India can return to the fast track growth path through a holistic approach to development of modern retail which takes into account its interlinkages with other sectors of the economy. www.cargotalk.in

Skill Development Academic Institutions

UPES to enter Shillong to provide aviation and logistics courses The aviation and logistics sectors are facing tough times because of escalating fuel prices, increasing taxes, stringent rules & regulations, poor infrastructure, lack of skilled manpower and reducing profit. Parag Diwan, Vice-Chancellor, University of Petroleum & Energy Studies, says the need of the hour is to increase efficiency at all levels by acquiring appropriate knowledge and education.

ased in Dehradun, Uttarakhand; the University of Petroleum & Energy Studies has been playing a crucial role as the supplier of skilled manpower for the aviation and logistics industry. It has established the Centre for Aviation Studies (CAS) in 2007 with an aim to act as the university’s interface with the aviation sector. CAS courses are designed with active participation of the industry with an aim to equip students with academic inputs and application skills. CAS runs a mix of management and teaching programmes for the aviation industry at the entry, management and working executive’s level. After tremendous feedback received from across the country for UPES in Dehradun, the associates of this university are now planning to launch more institutes of this kind in other parts of the country. In the near future, a university called University of Technical Management (UTM) will be launched in Northeast India (Shillong in Meghalaya) which will be mainly for aviation and logistics. UPES associates are also planning to open a university in South India as well.

UGC approved and NACC accredited, UPES offers over 50 graduate and PG programmes to more than 6,200 students Parag Diwan Vice-Chancellor, University of Petroleum & Energy Studies 54 i cargotalk i November 2013

“UPES is India and Pan Asia’s first Energy & Core Sector University. UGC approved and NACC accredited, UPES offers over 50 graduate and post-graduate programmes to more than 6,200 students in the high-growth sectors of oil & gas, power, aviation, shipping, automobile, infrastructure, electronics, IT and logistics & supply chain. With the Centre for Continuing Education (CCE) and Centre for Aviation Studies (CAS), UPES offer Executive programmes through distance-learning mode for working professionals,” he said.

“We are the pioneering institute providing special manpower to aviation and logistics. UPES is the first institute offering MBA, focussed on higher courses for fleet management, capacity management and cost management. We also introduced BBA in Aviation and BBA in Logistics, which is for more ground-level functions,” said Diwan. Currently, about 200 students are pursuing BBA in Aviation and about 150 students are pursuing BBA in Logistics from UPES. Of late, UPES has also introduced an Executive BBA course (3 years’ course) for 12th standard pass students to provide them job opportunities in aviation and logistics sectors. “Though we are not meant for placement services, however UPES offers 100 per cent job support to all the students who complete the respective courses successfully,” Diwan added. Commenting on aviation and logistics as a career option, Diwan maintained that aviation is already an organised sector in India, and there is huge demand for skilled manpower. Logistics, on the other hand though unorganised, is a sunrise sector and there will be huge opportunities for the aspiring candidates. “In recent times, the logistics industry in India is heading towards an organised and most promising future. The logistics entrepreneurs are now running their business in a very professional way,” observed Diwan. He also admitted the fact that there are a number of challenges and issues need to be addressed by appropriate authorities and the government to make the industry strong and hassle-free. Issues like check posts, taxes, infrastructure and fast clearance can be resolved by an empowered committee of all ministries of the Government of India. www.cargotalk.in