CargoConnect January 2017 by Surecom Media

www.surecommedia.in Postal Registration No.: DL (S)-01/3372/2016-2018 WPP No.: U(S)-81/2016-2018 Posted at NDPSO on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

VOL VIII ISSUE II january 2017 `20

FORESEEING 2017

Special Feature Dynamic Custom Brokersâ&#x20AC;&#x201C; The Backbone of EXIM Business Securing Air Cargo: The Crucial Need The real heroes in the wake of Demonetisation

CargoConnect - january 2017

Contents

Volume VIII • Issue II • JANUARY 2017

Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Feature Writer Tariq Ahmed Nicin Varghese Gaurav Dubey Director Marketing Ajeet Kumar

24 COVER STORY

Foreseeing 2017 FEATURE

SPECIAL FEATURE

Dynamic Custom Brokers – The Backbone of EXIM Business

INTERVIEW Keki Patel, Cargo Manager - India and Nepal, Emirates SkyCargo .........................................70 Samir J Shah, Chairman of FFFAI and the Partner in JBS Group of Companies ...........72 Xavier Britto, Chairman, Indev Logistics Pvt Ltd ...........................................................74 Securing Air Cargo: The Crucial Need ................................................50

FOCUS OF THE MONTH

Shankar Shinde, MD, Global Express Multilogistics Pvt Ltd ....................................................76 Abhay Pathak, Executive Director - Cargo, Air India ..............................................................77 Martijn Tasma, National Sales Director, Geodis India ..............................................................78

shippers speak .....................80

Manager Marketing Niti Chauhan Marketing Executive Rajesh Basu Asad Mohammad Mehuli Choudhury Marketing Support Sheetal Singh Administration Vipin Marwah Lavish Thakur Senior Designer & Visualiser Shaique Ahmad Designer & Visualiser Mayank Bhatnagar

All material printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same.

profile ..............................90-91

CargoConnect is printed, published and owned by Smiti Suri, and is printed at Compudata Services, 42, Dsidc Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014.

EVENTS ..............................92-101

Editor–Smiti Suri

NEWS ...............................................82-88

PEOPLE CONNECT

SURECOM MEDIA

We bring you a wide spectrum of updates that will keep you informed about the industry’s plans, performance and initiatives.

Doug Brittin, Former Secretary General of TIACA ..................................................102

GUEST COLUMN ........................81 The Real Heroes In The Wake Of Demonetisation .............................64

TOTAL PAGES: 104 (inclusive of cover)

6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 9711383365, 9810962016 Email: cargoconnect@gmail.com info@surecommedia.in Website: surecommedia.in

Upfront

“India’s economy is expected to grow fivefold by 2040. While global economy goes through uncertainty, India has shown tremendous resilience. FDI is at the highest level,”

said PM Narendra Modi at Petrotech Exhibition, New Delhi

IOT will have significant impact on supply chain. Only

“Air cargo is key in supporting the current global trading system, with

in the supply chain industry,

an estimated 35 per cent of value of global trade carried by air, even

value at stake is estimated to be

though it covers less than 1 per cent

approximately $1.8 trillion by

by volume. The role of air cargo is even greater for trade in advanced

2025 in a collaborative study

industrial, high value goods, and other sectors that rely on rapid,

by CISCO and DHL. Supply

reliable and secure transport.”

Brian Pearce, Chief Economist at IATA

chain professionals are already considering adoption of IOT in different ways. In a research “In logistics, they say that your strength is as strong as your weakest link. I believe that is true for all the other aspects of life as well.”

Dr Manoj Singh Adviser – transport, NITI Aayog

CargoConnect - january 2017

conducted by ATandT, out of 600 global supply chain professionals, 87 per cent has shown willingness to expand IOT usage in their supply chain. (Source: Aviral Consulting)

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special feature

Dynamic Custom Brokers â&#x20AC;&#x201C; The Backbone of EXIM Business Custom brokers play a vital role in the business of export and import and this would not be an exaggeration if they are termed as the backbone of the exportimport sector. They act as a bridge between traders and Customs authorities and make the process of Customs clearance a cake walk for their clients with their professional expertise. Gaurav Dubey presents an extensive report based on the subject of Customs brokerage and their crucial role in the logistics sector 8

CargoConnect - january 2017

special feature

ustoms brokers act as intermediaries between traders and Customs in the clearance process of goods at ports. These professionals make this hassle process of Customs clearance a trouble-free task, which directly impacts the efficiency of companies that deal with large consignments of goods on daily basis. A person can act as a local Customs broker only after passing an examination that covers broad range

of topics, which includes Customs law, Customs classification, Customs tariff schedule, import and export regulations, shipping procedures, trade document etc. After qualifying the exam, he or she can act as a professional Customs broker and render services to the clients. The services of an efficient custom broker or a Customs brokerage firm can help the business to grow by leaps and bounds in the present cut-throat competition of the logistic world. So, hiring a knowledgeable and trusted Custom broker is an essential thing for any business. Brokersâ&#x20AC;&#x2122; knowledge of Customs

laws and processes in addition to their work experience in the trade supply chain can be useful for both traders and Customs. Brokers support traders by providing all necessary documentation and undertaking formalities related to cargo clearance and they are also expected to maintain government interests by ensuring compliance with Customs and other regulatory requirements and the collection of appropriate duties and taxes. In line with ongoing Customs reforms and to further enhance their service delivery, nowdays some Customs brokers are transitioning towards a more comprehensive

january 2017 - CargoConnect

special feature

The role of freight forwarders in India would be the crucial one to script the success of the campaigns like “Make in India” and to reach the set target of exports from India. The theme of the convention “Indian Customs Broker - Trusted Single Entity Logistician - Capable and Dynamic” is the most apt illustration to focus on the crucial role. Samir J Shah, Chairman, FFFAI and Partner, JBS Group of Companies

consultancy and advisory role, rather than being confined to merely filing declarations/ documents for Customs release and clearance. They have been collaborating with other actors in the supply chain on behalf of traders, such as freight forwarders, carriers/agents, warehouse operators and transporters. In

carry through knowledge of the Customs regulations and their expertise in clearing different types of goods ranging from electronic, machinery, consumable, edibles, white goods and various raw materials, in turn, helps clients in the hassle free clearance of goods from the Customs.

Use of Customs brokers 72

Traders may handle Customs clearance theselves or use a Customs broker

A Customs broker must be used for all Customs clearance transactions

some cases, Brokers have even expanded to provide many other services in the supply chain, such as cargo handling, warehousing, multi-modal transport carriage, packaging, consolidation, insurance coverage, delivery services, as well as providing consultancy in compliance and dispute resolution. Indian Customs brokers provide a wide range of Customs brokerage services with through efficiency to their clients. The professional Indian brokers carrying years of experience render the services within a stipulated time frame for the convenience of the clients. They are also known for providing flawless and cost-effective services to their clients. Indian Customs brokers

10 CargoConnect - january 2017

A Customs broker must Third Parties other than be used, except for some Customs brokers may specified categories be used of Customs clearance transactions, threshold value and good A licensed Customs broker gets more preference in the export-import business. Several custom brokers operate as an individual and practice their profession without having any linkage to a Customs brokerage entity. The licenses are required to be renewed/validated periodically (such as in annual, five or ten years period), while in some cases the license remains valid until suspended/revoked on specific grounds. It is also seen that some administration issues port-specific licenses and identity cards to brokers to transact business. They need to have an ID and/or endorsement of their license for each of the ports where they want to transact business.

Licensing/accreditation requirements vary, but in general it includes sound knowledge of Customs laws and other regulatory requirements; clean track records in terms of security and other compliance matters; financial solvency – surety bond, security deposit; minimum educational qualification; specified working experience; in some cases a written and/or oral examination and even minimum hours of training. Some administrations also prescribe certain licensing obligations for brokers in respect of business ethics and professional conduct; due diligence on clients; and/or correctness of the information provided.

Efficient Customs brokerage service can take a business up to a new height Doing export and import is by no means a simple endeavour. There are documents to be collected and e-forms to be filled. Depending on the nature of the goods, there are various taxes, duties and excises to be paid. Also, international trade is governed by a whole host of regulations. To maximise compliance, importers/exporters need to be familiar with all the applicable laws. As experts in the field, Customs brokers help you to navigate the sea of changing regulations and understand import specifications related to particular commodities. They are highly knowledgeable in all entry procedures, admissibility requirements, classification, valuation, and the duties and taxes imposed on imported goods. Here are some points which clearly state the necessity of Customs brokers in the field of Export-Import business. • Knowledge of complex regulatory requirements Some businesses can’t afford personnel versed in the complex regulatory requirements

• Safe and secure cargo at cargo terminals

• First in paperless transaction for cargo operation through web-based EDI mode.

•

Automation / Mechanisation of cargo handling activities at AAI managed airports.

• Benchmarking parameters for Cargo operation vide Citizen Charter of

•

Augmentation of Infrastructure at Chennai & Kolkata airport with state-of-the-art facilitieslike elevated Transfer Vehicle(ETV) for Export Unitized Cargo and Automated Storage & Retrieval System (AS&RS) for Import Cargo.

• AAI is also exploring the possibility of crating Free Trade Zone (FTZ) at

•

Appointment of Ground Handling Agency to improve service levels at airports.

•

Implementation of EDI under Customs ICES 1.5 version at Chennai & Kolkata Air Cargo Terminals.

•

AAI is in the process of establishing pharma zone at Chennai and Aurangabad airport

•

AAI has empowered its GHA in obtaining Regulated Agent (RA) Status at Chennai Airport and RA3 status for Chennai and Kolkata Airports is also being expedited.

•

Provision of e-warehouse for e-commerce entities and express cargo handling counter are in the pipeline at various airports.

•

Commissioned International Air Cargo handling facility at Trichy, Mangalore and Indore Airports and proposed at Madurai and Vizag Airports.

•

Steps initiated towards e-Banking / e-payment facility.

AAI.

its airports.

• Commissioned Common User Domestic Air Cargo Terminal (CUDCT) facilities at Port Blair, Coimbatore, Jaipur, Lucknow(outbound), Vizag, Mangalore, Amritsar(interim), Madurai, Chennai, Bagdogra and Indore Airports up to 2015-16.

• During the FY 2016-17, Ahmedabad, Raipur, Aurangabad, Bhubneswar,

Ranchi, Goa, Guwahati, Vijayawada, Varanasi and Trivandrum Airports are being commissioned.

• AAI is planning to commission the CUDCT facilities at Pune, Amritsar, Surat and Srinagar Airports, during the FY 2017-18.

• Plan to introduce Air Cargo Community System(ACS) in co-ordination with MoCA

• Plan to commission International Courier handling facilities at Trivandrum and Trichy airports apart from existing facilities at Chennai and Kolkata airports.

• Frequency based incentive for Cargo Freighters introduced

w.e.f.01.012015 at Chennai & Kolkata airports apart from the existing 20% discount in export TSP charges for lean hour transaction by exporters.

MAKE IN INDIA

special feature

FFFAI serves not only as a catalyst between Customs brokers community and Government but it plays a catalytic role between different national and international trade bodies too. Our professional opinions are sought for formulating policies and uniform implementation internationally by the concerned authorities from time to time. VS Pradeep, Vice Chairman, FFFAI and CEO, Sagar Shipping

governing the transport of goods across borders. In this case, they can outsource this business hassle and hire a Customs brokerage company. Good companies offer a complete portfolio of import/export services, including logistics, freight forwarding, warehouse and distribution, so one can rest assured that business would be fully taken care of. • Skills to facilitate the Customs clearance process Customs brokers make sure your shipments cross the border and reach their intended destination safely. They have the skills to facilitate the entire Customs clearance process, regardless of the port of entry. • Help in avoiding unnecessary cost Rules and regulations in cross-border transactions keep changing. As experts in the requirements for each type of goods, Customs brokers can help you avoid

• Convenient paperwork Although you’re not required by law to use the services of a Customs broker, many companies prefer to work with one. This is because of the convenience in entrusting all the paperwork and communication with relevant agencies to an expert. Even more importantly, their expertise in the field can save you from making costly mistakes. • Correct identification of goods Customs brokers are well versed in the Harmonized Tariff Schedule – a compilation of duties or taxes levied on goods as they enter a country. Each good receives a specific classification number and they are divided into major groups and sub-groups to allow correct and easy identification for the purposes of charging Customs duty.

Customs brokers who act on behalf of traders to handle Customs clearance and related activities? 95

4 Yes costly delays, fines, confiscation of the merchandise and other penalties. • Verifications of declarations Another thing to keep in mind is that you are legally responsible for all Customs declarations prepared on your behalf. As faulty declarations can result in audits, fines and even sanctions for your business, make sure to have your declarations verified by a licensed Customs broker.

12 CargoConnect - january 2017

No • Easy clearance of shipments with formal entry Some commodities automatically require a formal entry (formal declaration of specific information on the imported goods). This applies to food and pharmaceutical products, cosmetics, chemicals, biological materials for research and medical use, as well as agricultural and dairy products.

Problems which hassle importers in the absence of Customs brokerage service Deciding to step in the import-export business without the support of Customs brokers could land a company into huge financial losses, as the business of International shipping has been subject to numerous import controls and regulations. The process of Customs clearance becomes a costly and time-consuming affair when a client fails to comply with these rules and regulations. Non-compliance of rules could lead to heavy penalties, delays, unexpected hike in costs and these kinds of problems create major hurdle during the transit of shipment. Sometimes despite compliance of regulations importers have to face delays and unexpected loss with the import shipments. Here are the most common problems importers might face with their import shipments due to the absence of Customs brokerage service. • Custom Exams: Import containers could be subjected to several different types of examinations due to unusual reasons. These examinations cause extra costs to importers like exam fee, demurrage, per diem which unnecessarily delays the delivery process of the shipments. These exams includes – – Document review (at either the carrier manifest level or Customs entry document level) – VACIS (Vehicle and Cargo Inspection System) Examining the containers with X-ray without opening / breaking the seal of the containers. – Unloading and physically inspecting of all or part of a shipment (CET / AQI / MET / USDA) – Sampling and laboratory testing of products from a shipment (FDA Exams) • Damage: Sometimes damages occur due to the inefficient and unprofessional handling of cargo or containers. Activities like improper stuffing of cargo in containers,

TBSL/CARGO/0117

special feature

It is a matter of great pleasure for us that for the first time the FFFAI is going to organise its convention at a global level. It would be the largest ever conglomeration of the world community in India and we are really grateful to the government especially the Ministry of Finance, Commerce and External Affairs for their support. S Ramakrishna, Vice Chairman, FFFAI and MD, Balaji Mariline Private Limited

during the transit or containers, might get damaged due to careless work of the terminal or vessels operators. • Demurrage: Demurrage is a cost, charged by steamship lines which occur at the port area when the containers are held longer than the agreed standard free time for the use of their shipping containers. Demurrage might be caused from many different reasons like late freight release and/or custom release of the containers, long exams, damaged or overweight containers, which will cause the importers to pay additional costs and also will delay the cargo delivery. • Custom Clearance Problems: In order to prevent any delay in custom clearance procedures, importers should provide complete and accurate information to the Customs brokers/freight forwarders

so that the clearance process could be smoother and the shipment will be less likely become subjected to exams

Evolution of freight forwarders’ associations In today’s volatile market, Customs brokers play a fundamental role in the functioning of import-export business and their history goes way back in the 19th century. One has to peep inside the pages of history to understand the evolution of an organised custom brokerage sector in India. The growth in the sector also opened the way for the formation of associations of Customs brokers’ in the country. In the 19th century, Customs clearance work of cargo at ports was primarily handled by three kinds of people who were regulated by the Customs. Dalal or ‘Pass writers’ is

Customs brokers help you navigate the sea of changing regulations and understand import specifics related to particular commodities.

14 CargoConnect - january 2017

the oldest known category predating even the establishment of the Bombay Port Trust in the year 1873 and the enactment of the Customs Act in 1878. Dalals were responsible for preparing documents at the Customs. Muccadams were another kind of people engaged in the physical handling of cargo at the docks but they had no authority to process documents through Customs. The third category emerged towards the end of the eighteenth century. They were Clearing Agents licensed by the ‘Sea Customs Act – 1878’. They could assume the activities of both the Dalals and Muccadams, they also had the added authority of signing documents on behalf of merchants.

Emergence of Federation of Freight Forwarders Associations in India (FFFAI) In 1960, with the new Custom House Agents Licensing rules and with modifications to the then existing CHA Licensing Rules 1957 were notified. With the notification of new CHA rules, a need for a joint representation before the Government and collective action was felt. It facilitated the way of organising a joint conference of all Clearing Agents Associations of Bombay, Calcutta, Chennai, Cochin, and the Karachiwala Association which was held in Mumbai. In this joint conference, it was decided to form a united federation of all the Customs clearing agents Associations working across the country. Hence, on December 2, 1962, the then Union Minister of Finance, Late Morarjee Desai inaugurated the Federation of Customs Clearing Agents Associations of India (now Federation of Freight Forwarders’ Associations in India). Federation of Freight Forwarders Associations in India (FFFAI) emerged as an apex body of freight forwarders in the country. The FFFAI solely represents 27 member

special feature

The conventions of FFFAI always offer critical take away to its members. Our Conventions provide an ideal platform for updating the knowledge on the latest developments and also offers expert guidance on re-engineering the new business paradigm required by our fraternity to stay relevant in today’s ever-changing market. AV Vijayakumar, Vice Chairman, FFFAI and MD, Paramount Shipping Services Pvt Ltd

associations and around 5000 Customs brokers and Brokerage Firms which have been employing over 1,00,000 people across the country. In addition to this organisation is also directly or indirectly connected with the several independent freight forwarders, shippers and commerce companies.

FFFAI events – An opportunity for members to enhance domain knowledge The Federation was formed with the aim of organising united action to project and promote the interests of freight forwarders at the national level. To achieve the purpose of promoting interests of freight forwarders, FFFAI organises conventions, sessions, general meeting, executive level meet, conferences from time to time for its members. These kinds of events help Custom House Agents Associations and their members to ascertain and disseminate information on the subjects of common interest. Such conferences give the stage to members for keeping their common problems before authorities, getting solutions to legitimate problems and ultimately which helps in laying down a common code of ethics for the Customs House Agents or members of the Federation. In the present circumstances Customs works in India has been witnessing a drastic change, amid this changing scenario FFFAI is going to organise its 23rd Biennial Convention in Cochin from January 19 to January 21. The theme of the convention is “Indian Customs Brokers – Trusted Single Entity Logisticians – Capable and Dynamic.” In the three-days-convention, the members of the federation will participate in the extensive discussions based on the current issues of Customs brokerage sector. The need of striking uniformity amongst the different Customs commissionerate with

16 CargoConnect - january 2017

respect to the licensing regulations could also be discussed with priority in the convention. Emphasis would be laid on increasing the use of technology coupled with high domain knowledge of the sector which would prove helpful for the members in a long run. The office bearers of FFFAI and freight forwarders see conventions and other events of the federation with their own views. CARGOCONNECT held discussions with several functionaries and freight forwarders of the federation and tried to ascertain their viewpoints on prevailing challenges, key issues and opportunities in the Customs brokerage sector. We also tried to find about how such kinds of events help the members of the federation to take their business all up to a new level. Here are the inputs of some of the big shots of Customs brokerage sector and who also hold key positions in the executive board of FFFAI.

same time the world trade scenario is under severe stress. With rapidly changing global trade landscape in respect of compliances, tremendous pressure on yield and cost management, and increasing importance of safety and security aspects have positioned Customs clearing/freight forwarding business at a critical juncture. On the other hand, our government is constantly endeavoring to establish the “Brand India” image across the globe through its campaigns called “Ease of Doing Business”, “Digital India”, “Make in India”, etc. Accordingly, the role of freight forwarders in India would be the crucial one to script the success of those campaigns like “Make India” and to reach the set target of exports from India. The theme of the convention “Indian Customs Broker - Trusted Single Entity Logistician - Capable and Dynamic” is the most apt illustration to focus on the crucial role. We

LET’S HAVE A QUICK LOOK ON PREVIOUS THREE CONVENTIONS 1

20th Biennial Convention

Udaipur

25-27th August, 2011

CHA – Beyond Customs: Emergent Global Logistician

21st Beinnial Convention

Gurgaon 14-16th June, 2013

Custom Broker: New Paradigm, New Opportunities, New League

22nd Biennial Convention

Mumbai

Inspired India - Surging ahead on Agile, Adept, Accelerated Logistics

21-23rd May, 2015

Samir J Shah, Chairman, FFFAI and Partner, JBS Group of Companies throws light on the convention and says, “The 23rd Biennial Convention of Federation of Freight Forwarders’ Associations in India (FFFAI) is being organized at such a time when the country is witnessing several landmark and unprecedented decisions in terms of trade and commerce and its economy. At the

are all presently witnessing great changes in the way Customs works in India. Introduction of RMS in assessment, self-assessment, single window in imports, PCA, differed payment in import duty, RMS in examination, sweeping changes in warehousing process and large number of facilitating measures to name a few. We are also aware that many other changes are in the offing. All these changes will have a

special feature

The federation feels that apart from capacity building at the infrastructure level (including IT infrastructure) there is an urgent need of enhancing skills among Customs brokers, freight forwarders and logistics practitioners at every level of operation. Amit Kamat, Honorary Secretary, FFFAI and Partner, Kamat and Company

big impact on the Customs brokers and freight forwarders’ day to day function and business.” VS Pradeep, Vice-Chairman, FFFAI and CEO Sagar Shipping based in Kochi talks about the importance of the federation in Customs brokerage sector and says, “Ever since the inception of FFFAI the federation has been a trade body and no one can undermine the importance of such a body which comprises members who serve as a vital link that caters to the international movement of cargo. With the changing socio - an economic scenario the

“There are many issues if you take the case of Kochi we were one of the first ports to containerise and positioned geographically right as well. We have one of the best and first of its kind PPP models, international air port, well-connected roads and rail from nearby ICDs. Inland water and coastal shipping are too gaining momentum through collective efforts by trade bodies like ours (FFFAI) and various others Chamber of Commerce and the central and state governments. Five minor ports have been constructed and cargo movement has gained momentum by the

The main challenge before Customs brokers is the integration of information through an efficient integrated system

importance of FFFAI is increasing by every passing day. It serves not only as a catalyst between Customs brokers community and Government but it is a catalyst between different national and international trade bodies too. Our professional opinions are sought for formulating policies and uniform implementation internationally by the concerned authorities from time to time.” Highlighting the major issues of the sector, challenges and opportunities Pradeep say,

18 CargoConnect - january 2017

sustained efforts of all the stake holders. However, there is a lot to be done in this area where we are expecting a substantial reduction of cost and reducing congestion and pollution in national highways. But connectivity to the major ports, deepening and widening the inland waterways to facilitate better tonnage vessels to ply and placing proper equipment to handle all types of cargo, providing/ increasing incentives to cargo and making available cheap finance to

ship/barge builders etc is yet to materialise . There are many challenges as well as opportunities before the Customs brokers and freight forwarders. The main challenge before them is the integration of information through an efficient integrated system and fine-tuning the process in accordance with it with zero or 99.9 per cent accuracy. For this, every business establishment should necessarily upgrade, restructure and re-engineer the organisation to cope up the challenges of globalisation. More importantly, the entire gamut of logistic sectors worldwide is setting standards which need to be understood through skill development and up gradation.” S Ramakrishna, Vice Chairman, FFFAI and MD, Balaji Mariline Private Limited is very optimistic regarding the growth of Customs brokerage business of the country and said, “In the present situation all banks have been inundating with the funds which is really a positive sign for the growth of businesses across the country and it will shoot-up investments too. As the manufacturing sector and Customs brokerage business work in a tandem the growth in the manufacturing business will directly boost the Customs brokerage business of the country. The Goods and Service Tax (GST) would also prove a boon for the Customs brokerage business, and we are hopeful that the GST council would accept our request of centralising registration procedure which will avoid the duel control of State and Center.” On the challenges which are being faced by the Indian custom brokerage firms, Ramakrishna said, “The business in the manufacturing sector in terms of imports and exports is very less as compared to the business in trading. In the present circumstances, banks are reeling under huge pressure due to the demonetisation move of the government which is delaying bank

special feature

FFFAI conventions strive to keep the members aware of the industry changes, industry dynamics and give a platform to share best practices and standards and also provide a chance to discuss and resolve industry issues. Kamesh Joshi, Director, Om Freight Private Limited

Conventions of FFFAI really help in the growth of a business as it opens windows of thoughts which ultimately lead in the generation of tremendous business opportunities.

transfers or demand drafts of shipping lines, airlines etc considerably.” On FFFAI’s 23rd biennial convention, he said, “It is a matter of great pleasure for us that for the first time the FFFAI is going to organise its convention at a global level. It would be the largest ever conglomeration of the world community in India and we are really grateful to the government especially the Ministry of Finance, Commerce and External Affairs who trusted and backed FFFAI and gave recommendatory letters. Globally India is attracting huge attention due to the title of fastest growing economy in the world. In the upcoming convention, we will conduct discussions with all our partner countries and try to extract best out of them and try to implement the same in our system. We also had a meeting with Colombo Freight Forwarders Association in Colombo and discussed our agendas. We are also in touch with the other SAARC countries which would participate in our Cochin convention. In the convention, we would also organise the B2B meetings of Indian freight forwarders with the invited dignitaries.”

20 CargoConnect - january 2017

AV Vijayakumar, Vice Chairman, FFFAI and MD, Paramount Shipping Services Private Limited on the subject of the growth rate of Customs brokerage sector says, “With the new initiatives of Make in India is slowly picking up the momentum, there will be increased velocity in both inbound and outbound foreign trade in the coming years. But, it would be difficult to predict a definite number and it is reasonable to assume that the sector could grow at the growth rate of least a ten percent a year for the next five consecutive years. “As the government is eyeing to make Customs procedures paperless, the custom brokerage will emerge as a sector of key knowledge people who offer seamless facilitation to both the trade and the regulator. One of the commonly held views is that the trade and service providers are behind the curve in adopting the various electronic initiatives rolled out by the Government of India. This will certainly help shrink the time required in regulatory clearances, and the role of technology in digital uploading of documents will surely

catalyse the drastic improvement in dwell time compression. The conventions of FFFAI’s always offer critical take away to its members. Our conventions provide an ideal platform for updating the knowledge on the latest developments and also offers expert guidance on re-engineering the new business paradigm required by our fraternity to stay relevant in today’s ever-changing market.” Amit Kamat, Secretary, FFFAI and Honorary Secretary talks about the role of the federation in the development of logistics industry of India and says, “FFFAI has taken several initiatives to strengthen the freight forwarding and logistics industry in India. The federation feels that apart from capacity building at the infrastructure level (including IT infrastructure) there is an urgent need of skill development among Customs brokers/ freight forwarders/logistics practitioners and at every level of operation. We have been in constant touch with Government, especially with Ministry of Finance, Ministry of Commerce, Ministry of Shipping and Roadways, and Ministry of Civil Aviation, CBEC, DGFT and allied agencies since last couple of years. Remarkably, FFFAI has been included as one of the members of the National Committee on Trade Facilitation (NCTF) constituted by the Government of India, under the Chairmanship of the Cabinet Secretary. We also jointly acted with other trade associations/stakeholders across the country to bring in policies favorable for our industry. As a result, we are pleased to see policies like AEOs, 24x7 Customs Clearance, Single Window Customs Clearance, Service Tax exemption for freight forwarding community and recently a very pragmatic decision on reduction in dwell time related to export and import air cargo. We are expecting very soon there will be

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special feature

Conventions of FFFAI really help in the growth of a business as it opens windows of thoughts which ultimately lead in the generation of tremendous business opportunities. The office bearers decide a theme of the convention as per the prevailing status of Global Business and Economic scenario of Freight Forwarding and Logistics Industry. Parvez Akhtar, Director (Sales), Radiant X-Ways Logistics Private Limited

additional capacity both at airports/ports with adequate emphasis on connectivity and approach roads. At the same time FFFAI has also initiated the most important task pertaining to skill development by setting up and expanding its own training institution called IIFF (Indian Institute of Freight Forwarders) for the betterment of freight forwarding services.” Kamesh Joshi, Director, Om Freight Pvt Ltd see immense scope in the field of

Speaking much more specifically, Joshi said, “Changes in technology is largely governing the documentation and information flow in the International trade, for e.g. Smartphone apps are being used for filing of the bill of entry/shipping bill and for checking the status of International cargo. ‘Internet of things’ has been leading the logistic sector and compliances solutions have been aligned to the concept of smart cities, smart port, smart borders etc in the

Custom brokerage sector and said the events like biennial convention of FFFAI helps a lot in the overall growth of the industry, “FFFAI conventions strive to keep the members aware of the industry changes, industry dynamics and gives a platform to share best practices and standards and also provides a chance to discuss and resolve industry issues. The association has also made some of the technological and global changes like introduction of Smartphone apps, enhanced attention to safety and security, changes in manufacturing methodology and technology, the composition of various modes of transport triggering changes and focus on single window concept.”

international trade. Government’s priority has also changed – Greater participation in the global value chain, responding to a free trade agreement, inclusive growth and economic well-being of citizens and enhanced attention to safety security. The merger and acquisition of global players who carry tremendous bargaining weight age have changed the trade dynamics of the business. Change in manufacturing methodology and technology – from economies of scale of ‘Subtractive manufacturing’ to customised, close to the close to the customer, ‘Additive manufacturing’ technology of the type of 3D Printing etc. Change in infrastructure

22 CargoConnect - january 2017

supporting movement of goods and composition of various modes of transport has been triggering a change in the velocity of trade. Change in level of Government facilitation with a focus on Single Window concept due to international bilateral and multilateral trade agreements have also increased the compliance of non-tariff barrier and allied laws. On the concluding note, FFFAI has been focusing to direct all its efforts in creating, facilitating, and enabling infrastructure to participate in building up of an ecosystem in the EXIM industry.” Parvez Akhtar, Director (Sales), Radiant X-Ways Logistics Pvt Ltd is very optimistic regarding the growth of Customs brokerage service sector and says, “The sector could grow possibly by the growth rate of 7.66 per cent in the year 2017. Conventions of FFFAI really help in the growth of a business as it opens windows of thoughts which ultimately lead in the generation of tremendous business opportunities. The office bearers decide a theme of the convention as per the prevailing status of global business and economic scenario of freight forwarding and logistics Industry. The knowledge and information provided by these events can take the business all up to a new level.” However, introduction of RMS in assessment, single window in imports, sweeping changes in warehousing process and large number of facilitating measures have completely changed the working of Customs in India. And, the FFFAI office bearers are hopeful that Single Window in Exports would soon be notified which would further ease the working of Customs brokers in the country. The Kochi convention will certainly provide new guiding light to the members of the federation and by utilising the domain knowledge of visiting dignitaries they could take their business up to a new height.

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cover story

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cover story

The logistics industry in India is evolving rapidly and it is the interplay of infrastructure, technology and new types of service providers that will define whether the industry is customer savvy. After observing changing government policies on taxation and consistent growth in 2016, the Indian logistics industry is looking forward to another promising year with great hopes and aspirations. Nicin Varghese talks to industry stalwarts to know their expectations and master plans for 2017

O 2

E S E E I N R 17

january 2017 - CargoConnect 25

cover story

he logistics sector in India has today become an area of priority. One prime reason for the same stems from the reason that years of high growth in the Indian economy have resulted in a significant rise in the volume of freight traffic moved. The large volume of traffic

the logistic sector is likely to be one of the key determinants of the pace of the future growth of the economy. Looking back over 2016, the evolution of the logistics and supply chain industry might, at the first glance, appear to have been imperceptible. But, looking at all what has happened and it becomes clear that the pace of development and change has been,

Improvements in infrastructure is still on a bit slow pace. The government is already on the job and is expected to accelerate the processes to overcome the infrastructure problem to an extent by late 2017.

Connectivity between metros and states will have to be improved for the fast delivery of cargo. The government has already launched several projects all over India to address this problem and it is expected to be fixed in the soonest possible time.

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Dwell time of exports and imports shipments, which was earlier 48 hours, has now been reduced to 18 hours and in the coming time the government has set the benchmark of 12 hours.

has provided for growth opportunities in all facets of logistics including transportation, warehousing, freight forwarding, express cargo delivery, container services, shipping services, etc. The growth path also suggests that increased demand is being placed on the sector to provide the solutions required for supporting future growth. Strength of

26 CargoConnect - january 2017

and continues to be, more rapid than one might realise. With the new Civil Aviation Policy, GST bill and Warehouse Management Syste m , t he i ndust r y i s e x p e ct i n g tremendous growth in 2017. “India’s logistics sector is expected to grow exponentially in the year 2017,” says PSS Prasad, President, Apollo LogiSolutions. He continued to

say, “The growth will be mostly led by GDP revival, better transport infrastructure, more e-com merce penet rat ion, GST implementation and initiatives such as ‘Make in India’. Further, this is also related to the infrastructural bottlenecks in the Indian logistics industry, which are being resolved by the government. Also, supply chain management and third party logistics businesses are expected to chart a steeper growth path.” The Indian logistics industry spends around 14 per cent of the GDP on different types of cost incurred in logistics operation. The amount of cost incurred is very high in comparison to the logistics cost incurred by different nations. The logistics firms are moving from a traditional setup to the integration of IT and technology to their operations to reduce the costs incurred as well as to meet the service demands. The industry as a whole has moved from being just service provider to the position, where they provide end to end supply chain solutions to their customers. According to Dr R Arunachalam, CEO, ProConnect, “Infrastructure development is expected to take place in April 2017, which would be the trickle-down effect of GST implementation. Better roads and the lack of check posts and sales tax stops would lead to an improvement in lead time for movement of materials. The cashless initiatives taken by the Honourable Prime Minister would also develop faster transit times through toll plazas. The next step of this, which is being tested, would be the use of RFID tags at the toll plazas which automatically debit the charges from a prepaid module. The demanding nature of the retail customer would lead to the rise of faster delivery to customers, making even next day deliveries the norm. We might also see the emergence of logistics parks and warehousing hubs, to cater to a client’s logistics needs. This would make transportation easier for service providers and enable smoother flow of goods across state borders.”

Air Cargo: Rapidly Growing Market The Indian air cargo industry is growing by leaps and bounds. Industry experts have great expectations about the growth of the industry especially in terms of infrastructure, e-commerce and security. “The world is focused on Indian aviation – from manufacturers, tourism boards, airlines

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cover story “We can see the emergence of logistics parks and warehousing hubs, to cater to a client’s logistics needs. This would make transportation easier for service providers and enable smoother flow of goods across state borders.”

“The growth will be mostly led by GDP revival, better transport infrastructure, more e-commerce penetration, GST implementation and initiatives such as ‘Make in India’. Also, third party logistics businesses are expected to chart a steeper growth path.” PSS Prasad President, Apollo LogiSolutions

Dr R Arunachalam CEO, ProConnect

and global businesses to individual travellers, shippers and businessmen. If we can find common purpose among all stakeholders in Indian aviation, a bright future is at hand,” said Tony Tyler, Director General and CEO, International Air Transport Association (IATA). According to one of the reports by Frost and Sullivan, at its present compound

annual growth rate of 5.5 per cent, cargo demand in India is expected to boost the air freight market to 2.8 million tonnes by 2018. Also, with various government initiatives in place, such as the review of Foreign Direct Investment (FDI) policies, GST bill, emphasis on public-private partnerships to improve airport infrastructure, export tax rebates, etc., India has all the ingredients

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to become one of the world’s leading air cargo hubs. SGK Kishore, CEO, GMR Hyderabad International Airport Ltd is hopeful about 2017. He said, “Boosted by government initiatives such as “Make in India”, “Digital India” and “Skill India”, we foresee investments and industrial development in 2017. These investments and build up of industrial base will have a cascading effect on movement of goods which also augurs well for air cargo industry. However, this will also need investment in the logistics infrastructure space to meet the growth. With the focus to reduce dwell time as envisioned in National Civil Aviation Policy, we foresee government thrust to have smarter regulation, seamless 24X7 discharge of regulatory requirement by having all the regulators under one roof within airport logistics/cargo park.” On a positive note, Huned Gandhi, MD, Air and Sea Logistics-India, DACHSER says, “I expect very positive changes in the air cargo industry. The New Civil Aviation Policy is very forward looking and we can expect the airport infrastructure to improve significantly as heavy investments are being planned on the same. The government is also ramping up highways and building freight corridors, which would help in easing congestion. Overall, the next five years should be very productive in terms of improvements on the infrastructure and security.” A great emphasis is being placed on infrastructural constraints along with processes. Whereas simplification of processes is essentially in government domain and is being addressed while i n f rastr uct ura l issues need broader involvement of stakeholders like the agents, the custodians, the airport owners, airlines, etc. We can expect a change in

cover story “I expect very positive changes in the air cargo industry. The New Civil Aviation Policy is very forward looking and we can expect the airport infrastructure to improve significantly as heavy investments are being planned on the same.”

“Boosted by government initiatives such as “Make in India”, “Digital India” and “Skill India”, we foresee investments and industrial development in 2017.” SGK Kishore CEO, GMR Hyderabad International Airport Ltd infrastructure for air cargo in the upcoming year far exceeding what we have witnessed in the last year. With new airports and upgradation of existing airports, the cargo handling capacity will grow in tune with the demand increase. There is hardly any airport handling international cargo which is not undergoing expansion and modernisation today. Digitalisation plays an important role in modernising air cargo in the future. Initiatives such as e-freight and e-airway bill aim to take paper out of air cargo and to replace it with the exchange of electronic data and messages. It will not only impact the logistics processes but also the airport and warehouse infrastructure that has to be adapted to the new possibilities. Observing the same, Kishore affirms, “The IT infrastructure of all the stakeholders including airport operators, regulatory agencies, airlines and end users will need to be modernised and integrated to an extent to make paperless transactions, including automatic payment of duties and clearances a possibility in true sense.” Security being a critical element of the air cargo supply chain, Kishore continued, “Increasing perceived threat from terrorist action will shift the focus to having secure cargo. The security infrastructure has to be ramped up to meet the increasing threat perception.” The right technology, developed specifically for the air cargo industry’s needs, enables the cargo department to access historical, near and realtime information for confident longterm planning and provides the agility needed to respond correctly to emerging conditions. IT solution that extends its benefits across the entire organisation, streamlining

30 CargoConnect - january 2017

Huned Gandhi MD, Air and Sea Logistics-India, DACHSER

compliance with regulatory demands and industry standards, staunching revenue leakage, enabling supply chain efficiency can position the industry for sustainable growth. Freight is a direct reflection of the health of the global economy and despite airfreight being a smaller portion of the entire trade, it represents significant amount of countries’

The government is also ramping up highways and building freight corridors, which would help in easing congestion. A great emphasis is being placed on infrastructural constraints along with processes.

total imports and exports by value. “When one third of exported goods out of India travel by air, development of air freight infrastructure, with specialised facilities to handle express cargo, dangerous goods, etc., becomes all the more important. In 2017, we expect airports to upgrade their air cargo handling infrastructure for safe and secure operations. Facilities certified with Transported Asset Protection Association (TAPA) and Goods Distribution Practice (GDP) will have to ensure the safety and quality of products in the warehouse and during their transportation. We foresee the government’s ongoing effort of introducing dedicated cargo hubs across airports and setting up Special Economic Zones (SEZs) to gain momentum which would lead to growth. The government is putting plans in place for the development of the International Air Cargo Hub at gateway airports in India. Under the plan, airports will be developed as regional cargo hubs, integrating multimodal transport facilities, cold chains and other commodity specific requirements. The turnaround time for cargo will also be upgraded to international standards. E-freight initiatives like the one prevalent at AISATS Airfreight Terminal at Bengaluru International Airport would increase efficiency of cargo operations. There is an increased need to develop more dedicated air freight stations with 24X7 custom clearances, Free Trade Zones (FTZs), logistic parks and cargo villages for a more focused approach to improve infrastructure for faster movement of air cargo,” said Mike Chew, CEO, AISATS. Observing the current industry, experts found that, in accordance with the various initiatives taken by the government, in the next years India’s

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cover story “In 2017, we expect airports to upgrade their air cargo handling infrastructure for safe and secure operations. We foresee the government’s ongoing effort of introducing dedicated cargo hubs across airports and setting up Special Economic Zones (SEZs) to gain momentum growth.”

“Time tabled goods train are going to be the game changer of the year. We are moving in the direction where we can assure some kind of transit time.”

Mike Chew CEO, AISATS

Samir Kumar Director (FM), Railways

MAJOR EXPECTATIONS from 2017 Infrastructure Advancement in road transport and air freight sectors

Time Tabled Goods Train and Dedicated Freight Corridors to reduce transit time

E-commerce Penetration will create high demand for express deliveries

Implementation of GST

With GST in the pipeline, there would be consolidation in warehousing sector and Industries would prefer to build a hub and spoke warehousing model

Bharat Mala programme will enable seamless connectivity by linking ports, logistic hubs, border areas

Project Sagarmala will ensure development of ports

with the application of GST, the logistics costs is expected tocome down by up to 20 per cent

ranking in ease of doing business is likely to reach at the level of 50 from existing 130 points among 189 countries. Make in India and Implementation of GST would be a game changer. Trucking industry is becoming more competitive to air transportation due to domestic demand volume which is much more than export. Introducing of Single Window system by Customs would definitely help speedy growth of air cargo. The domestic air cargo industry is expected to grow at six to eight per cent over the upcoming years on account of expected growth in domestic economy and most importantly due to increasing penetration of e-commerce. In value terms, gems and jewelry, pharmaceutical products, organic chemicals, and apparel and clothing accessories account for over half of the air cargo exports from the country. The demand for these commodities are highly sensitive to the global economic

32 CargoConnect - january 2017

growth, thereby leading to huge fluctuations in air cargo movement. We can foresee lot of improvements in operational excellence along with restructuring of ports and airports. India has emerged as the second fastest growing air cargo market after the Middle East and is expected to grow at a compound annual rate of about seven per cent by the upcoming years.

Indian Rail Freight: Key Trends and Growth Drivers The Indian Railway system is one of the largest transportation and logistics networks in the world. Indian Railways carries the entire gamut of goods, ranging from parcel traffic and small consignments, agricultural products, raw materials like iron ore and petroleum, and finished goods like automobiles. Over the last few decades, Indian Railways has made an effort to move

away from small consignments or piecemeal freight, and to increase the number of block rakes where a shipper contracts for an entire rake assigned to carry a shipment. These are more profitable for IR as the rake does not have to be split up into or amalgamated from individual wagons going to or coming from different points, saving on marshalling time, transit time, and scheduling. Most of Indian Railway’s freight revenue now comes from such block rakes carrying bulk goods such as coal or cement. As against a growth of four per cent to 4.5 per cent in the last few years, Indian Railway achieved only one per cent growth in 2015– 16. Due to lower prices, some bulk traffic like coal, iron ore and even cement is now moved by coastal shipping. Indian Railway’s freight policy, where freight subsidises passenger segment, has had two major implications. On one hand, it makes railway’s competitors in

cover story “The megatrend in the shipping logistics industry in 2017 would be Big Data Analytics, ICT and digital technology, making businesses more competitive. It can also help in keeping the valuable data easily accessible and creating procedures more user friendly.”

“The Dedicated Freight Corridors with faster transit time, terminal capacity building, increased throughput and cut in operating cost by 40 per cent, for sure, will be a driving force in the infrastructural development of logistic sector of our country.” Dinesh Goyal Head - Rail Division, Darcl Logistics Limited

K K K Chand CEO, RECAMS

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the freight business more competitive even if they do nothing because railways have priced themselves out. On the other hand, low passenger fares results in greater demand for rail services reducing capacity for freight movement. The Minister of Railways, Suresh Prabhakar Prabhu, proposed three solution sets for reversing the trend of declining modal share of freight trains – expanding the freight basket of Indian Railways, rationalising the tariff structure and building terminal capacity. Introduction of time tabled freight trains is considered as a major solutions for the issues faced by railway regarding assurance of transit time. According to Samir Kumar, Director (FM), Railways, time tabled freight trains will make revolutionary changes in 2017. “Time tabled goods train are going to be the game changer of the year. We are moving in the direction where we can assure some kind of transit time. There are different varieties of

34 CargoConnect - january 2017

cargo which need time bound transportation. For example, perishable products. They are time sensitive products. And to that extent, time tabled goods train can be a game changer.” The increased transportation cost in railways forced the end users to move away from railways and think about alternative transportation options. This has made a huge impact on the freight volumes in Indian Railways. And, that is how the government decided to bring down the freight charges and also the surcharges such as port congestion charge, busy season surcharge, etc. Railways has removed the existing ten per cent port congestion surcharge and reduced tariffs for the ‘merry-go-round’ scheme. Kumar believes the reduced fright charges will definitely help the rail freight sector. He says, “The economy is not growing as fast as it would had been in the past and globally the oil charges are coming down. As a result, the transportation cost via roadways

is also coming down. So, railways could not stand in isolation. We are a government initiative and we are not here to make profit. And we also found out that there were so many surcharges like port congestion charge, which are not required. So, we avoided such charges and thus the total cargo charges are brought down. In this way, we believe we have done justice to the industry and also to our customers. We also hope this move will bring more business to us in the coming year.” Another major change which is expected to happen in 2017 is the implementation of Dedicated Freight Corridors. Dinesh Goyal, Head - Rail Division, Darcl Logistics Limited says, “The genesis of the Dedicated Freight Corridor is due to saturation in rail transportation capacity of Indian Railways on the Golden Quadrilateral. The Indian Railways’ network linking the four metropolitan cities of Delhi, Mumbai, Chennai and Howrah, along with its two

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cover story “Availability of drivers is a major challenge in the road transport sector. Smooth implementation of GST, improved socioecological conditions of drivers, technology and infrastructure development etc. can bring developments in this industry.”

“Shipping companies, in the wake of mergers, are consolidating their ships, their routes and their equipments; thereby trying to regularise their freight levels. Shipping lines need to comply to these trends quickly to sustain in the long run.” Xavier Britto Chairman, Indev Logistics Pvt Ltd diagonals (Delhi-Chennai and MumbaiHowrah) commonly known as the Golden Quadrilateral, adding up to a total route length of 10,122 km, carries more than 58 per cent of its revenue earning freight traffic. The DFC with faster transit time, terminal capacity building, increased throughput and cut in operating cost by 40 per cent will be a driving force in the infrastructural development of the logistics sector of our country.” It will be one more step in making India an easier and attractive place to do business. To a large extent, the success of the Make in India programme too hinges on a rapid execution of the dedicated freight corridor as does the plan to build smart cities (to manage migration of masses from rural areas to urban areas in search of employment). Referring to saturation of the capacity in different routes, the Railway Minister in his Budget speech in 2016 said, “On a single track, the Indian Railways have to run fast express trains like Rajdhani and Shatabdi, ordinary slow passenger trains as well as goods trains. Is it surprising that though Rajdhani and Shatabdi are capable of doing 130 kmph, the average speed does not exceed 70? Is it surprising that the ordinary train or a goods train cannot average more than around 25 kmph?” It is noteworthy that the two dedicated freight corridors can allow train speeds up to a maximum of 100 kmph. Samir also agreed to this while saying, “The biggest constraint we faced for time tabled goods trains is the lack of separate path for freight trains. The freight trains and the passenger trains had to use the same path for travel. So, there was a massive demand and pressure for the lines. We are already in the process of building dedicated freight corridors. Now there are two lines for trains. We are making it into four, two for passenger

36 CargoConnect - january 2017

Sumit Sharma Co-founder, GoBolt trains and two for freight trains.” The domestic auto sector is one of the largest in the world with annual production of about 24 million vehicles. Indian Railways is planning to make advantage of this in the coming year through the new time-tabled freight train for auto sector. “Automobile is a crucial sector for railway. As of now, majority of Indian railways’ cargo focuses on ten major products such as cement, coal, petroleum products and fertilizers. But in the coming year we are planning to expand our focus. Currently, we are carrying only five per cent cargo from the automobile sector. Within a couple of years we will be able to perform well in the auto sector. We have already developed an auto hub in Chennai. Railway is so ambitious about developing and improving its focus,” Sameer seems confident about railways’ growth in 2017.

The increased transportation cost in railways forced the end users to move away from railways and think about alternative transportation options. This has made a huge impact on the freight volumes in Indian Railways. Indian maritime expects a better future according to the Ministry of Shipping, around 95 per cent of India’s trading by vol-

ume and 70 per cent by value is done through maritime transport. India has 12 major and 200 notified minor and intermediate ports. Cargo traffic, which recorded 1,052 Million Metric Tonnes (MMT) in 2015, is expected to reach 1,758 MMT by 2017. The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. India is the 16th largest maritime country in the world, with a coastline of about 7,517 km. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a ten year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports. Nitin Gadkari, Minister for Shipping, Road Transport and Highways, announced a massive investment in India’s ports and roads sector, which is likely to help boost the country’s economy. The Indian Government plans to develop ten coastal economic regions as part of plans to revive the country’s Sagarmala project. The zones would be converted into manufacturing hubs, supported by port modernisation projects, and could span 300–500 km of the coastline. The government is also looking to develop the inland waterway sector as an alternative to road and rail routes to transport goods to the nation’s ports and hopes to attract private investment in the sector. “The megatrend in the shipping logistics industry in 2017 would be Big Data Analytics, ICT and digital technology to be more in use in the shipping sector, making the business more competitive. It can also help in keeping the valuable data easily accessible and creating procedures more user friendly.

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“The graph will continue to go up with GST and the consequential changes it will bring across the supply chain. The warehouses will become bigger and it would be imperative to deploy technology solutions to maximise output.”

of 10 to 15 per cent in the year 2017 as Industry is undergoing number of changes and businesses are looking to enhance speed and efficiency to their supply chain management.” Akash Bansal Head-Logistics, Om Logistics Limited Ship’s Energy efficiency Design Index would be a vital parameter before a vessel is taken on hire. This not only improves the logistics efficiency but also helps to conserve energy, reducing carbon foot print to make it environmental friendly, thereby making it less expensive and improves productivity,” says K K K Chand, CEO, RECAMS. X av ier Br itto, Cha i r ma n, Indev Logistics Pvt Ltd feels that major changes

Rahul S Dogar Director – Strategy and Business Development, Holisol Logistics mergers, are consolidating their ships, their routes and their equipments; thereby trying to regularise their freight levels. Shipping lines need to comply to these trends quickly to sustain in the long run. Hanjin failed because of mounting debts, overcapacity, idling, etc. These mergers are going to be huge in 2017, and more are in the pipeline. This will definitely help the overall shipping industry,” he said.

The Indian Government plans to develop ten coastal economic regions as part of plans to revive the country’s Sagarmala project. The zones would be converted into manufacturing hubs, supported by port modernisation projects, and could span 300–500 km of the coastline. This will definitely help the overall shipping industry. will happen in mergers. “In the shipping sector, many mergers are already taking place and I have a feeling that in the coming years, there will be only around eight to ten shipping lines. These lines want to work with the economies of scale, in the sense that each of these lines are efficient in their core competency, and along their desired routes. Shipping companies, in the wake of

38 CargoConnect - january 2017

The Indian shipping industry has great expectations about the new Sagarmala Project, though the topic is still a subject for d iscussions. The project aims at constructing new ports by securing privatesector participation through PPP models and improving the port connectivity via various rail corridors, freight friendly expressways and inland waterways. On

similar lines, Chand said, “Project Sagarmala had taken the cabinet approval and this is going to make a huge difference as there would be modernisation of major ports. In addition, six new major ports are going to be developed, one each in Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and West Bengal. The whole idea of ports modernisation and technological adva nceme nt is to e nsu re t h at t he turnaround times can be compressed and evacuation of cargo can be made in shorter time, besides making these ports the drivers in the economical advancement of the nation through efficient trade and commerce.” Britto also feels that Sagarmala Project will have a significant impact on the share of sea freight in India. He emphasised, “We have 7,517 km of coastal line, which is one of the longest in the world. So, the Sagarmala Project will ensure development of many smaller ports, and along the coastline, SEZs can be created. And once the Waterway Bill is passed, there will be relaxation of the cabotage rules and coastal shipping will start to flourish. This would probably reduce the overall cost of transportation. Generally, when we transport by road, it costs around `1.50/km. By rail, it’s 75 paise to `1/km. But, when it comes to coastal shipping, it’s less than 50 paise. Therefore, the Sagarmala Project will certainly help in establishing ports and more and more industries along the coastal lines, thus encouraging coastal shipping. Coastal shipping of cars has already started in Chennai and it has been really successful. They have figured out it’s less than half the cost they used to incur by road transport.” Like Britto pointed out, industry is keen about the newly introduced coastal shipping of cars. Analysing the recent trends, we can see a shift in the transportation pattern

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cover story “I anticipate that we will move towards low storage costs, fueled by an increasingly high responsiveness to meet the changing demands of the customer. The advent of technology will ensure that there is a higher visibility of shipment-related operations.”

“It is also expected that smaller warehouses would vanish or merged to build a commercially viable and large scale built to suit warehouses of bigger size up to two lakh sqft and above.” Oliver Bohm CEO, Schenker India

Rooso Ramachandran Director, EFL India.

Source: (Kilde: DHL)

of cars from road and rail to the coastal shipping. Since it reduces the delivery time to atleast 50 per cent and also reduces the delivery cost, chances are higher for the growth of this trend. “Indirectly this is going to reduce environmental pollution as well as road congestion and traffic congestion,” said Chand. He also pointed out some major challenges that need to be overcome. They are; 1. The average speed of the Indian ships are much below when compared to those of the developed nations. This would be improved from an average of 10 knots to 14 knots for the ships which are going to be built. This improves the sea cargo transport time upto 40 per cent making a significant improvement to compete in the global markets. 2. The use of modern technology for the

40 CargoConnect - january 2017

evacuation of cargo by employing self unloading ships which will drastically reduce the turnaround time. 3. Connectivity is still playing a major role for the fast dispatch of cargo to the end user. Rail, road and air connectivity should be improved to avoid cargo idling and slow dispatch, thereby the production cycle can be optimised.

Surface Transport: Rise or Fall? Road transport is vital to the economic development and social integration of our country. Easy accessibility, flexibility of operations, door-to-door service and reliability have earned road transport an increasingly higher share of both passenger and freight traffic vis-à-vis other transport modes. Road transport today carries, on an average, more than 80 per cent of inland freight volume.

Trucks are the most widely used mode of transportation in India. Despite having one of the extensive road networks in the world, India has long suffered a capacity shortage due to poor road quality. More than 25 per cent of national highways and 50 per cent of state highways are in poor conditions and congested. The major economic centers are not linked by expressways. The cost of transport by road per ton per kilometer isn’t the cheapest but it’s still preferred because of multiple reasons: Nature of the cargo, since there are many items that cannot be carried in any other modes or must not be handled at multiple points. Time of transit, because we forget to account for the time needed to transport cargo from the origin / to the destination from a port, or the time required for clearance by the port authorities, etc. Overall cost, which is usually quite high when we involve multiple modes of transport simply because of the cost of shifting from one mode to another and cost in terms of time delays and control/checks due to the extra handling required. So its confirmed that for short distances only road transportation works. So, there is definitely a need to improve the road network to make the surface transport of cargo easy and seamless. The Ministry of Road Transportation and Highways is working on widening of single and double lane highways into four or six lanes as per the international norms. Prasad tries to portray a clear picture of the initiatives taken by the Central and State Governments. He said, “Both Central and State Governments are taking steps to reform the transport sector. These include increasing funding to strengthen the surface transportation mechanism, speeding the development of National Highways, and accelerate development of interconnecting road network in India. There is still a lot to

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cover story “The vision of Indian Government to make India a preferred manufacturing destination is extremely promising and has associated benefits. Air cargo Industry will evolve while this change is in progress and will participate in the growth.”

“Globally, we see that the cargo industry is moving away from general cargo and moving towards more specialised offerings for various business verticals including pharma and retail.”

Paul Stephan Danne Managing Director, Kuehne + Nagel India.

Henrik Ambak Senior Vice President, Cargo Operations Worldwide, Emirates

Primary Warehousing Hubs on the basis of three main factors LOCATION

Delhi NCR

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Hyderabad

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Bangalore

Pune

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Source: NITI Aayog, Government of India

be done before results can be seen to improve the logistics infrastructure in India. Also, government functioning needs to be fastened further to remove the bottlenecks that exist in long route freight transportation through the road route. One is the multitude of taxes and duties which need to be immediately replaced with a uniform Goods and Services Tax.” Sumit Sharma, Co-founder, GoBolt speaks about a major challenge in the road freight industry. He said, “Availability of drivers is a major challenge in this sector. Also, different tax structures in states leads to long waiting time at the borders, which leads to overall lower asset rotation in trucking industry and overall cost increases.” He lists down certain things that can bring about a change to this sector. They are: 1. Smooth implementation of GST 2. I mprove me nt of so cio-e colog ic a l conditions of drivers (eg. Working hours, salaries, health, food, sanitation, etc.) 3. Penetration of technology to bring efficiencies in the sector. 4. Infrastructure development (freight corridors, smarter warehouses) 5. Skill development in trucking sector

42 CargoConnect - january 2017

(training and development of drivers/ logistics managers, etc. to improve efficiency of the sector) Akash Bansal, Head-Logistics, Om Logistics Limited has a very positive outlook towards the industry. He said, “India’s growing economy has seen an ascent sought after transport services. So, we can expect a base growth of 10 to 15 per cent in the year 2017 as the industry is undergoing number of changes and businesses are looking to enhance speed and efficiency to their supply chain management. I see immense growth in coming years. Industry will encompass enormous growth opportunities. Cashless policy introduction in the industry will make business running simple, reducing corruption. Transparency in services will bring professionalism in the industry.” The government is on its way to make 44 highway stretches totalling 27,000 km to be developed as economic corridors for seamless movement of cargo vehicles, cut delays, deepen economic activities and create jobs. This will further help in decongesting 30 top cities in the country as it will involve building ring roads and logistics hubs along these corridors. These stretches

pass through and connect major hubs of economic activities such as manufacturing clusters and ports, and have been identified as economic corridors. The new plan is expected to be completed in six years. “This network is expected to carry 80 per cent of the country’s freight and will ease the burden on the existing road network in India. This programme called the ‘Bharat Mala’ programme is a highway project that will enable seamless connectivity by linking ports, logistic hubs, border areas and will aid in boosting cargo movement and increase exports,” said Prasad. The new initiatives are bold and will have a significant impact on the industry as many of these routes are the most used trade routes. However, what needs to be understood is that any of these new developments will take a minimum of ten years to take shape and start working towards the betterment of the industry.

Warehousing Awaits Futuristic Projects An important wheel in the logistics industry is warehousing - a critical component in the supply chain management system, which has grown exponentially on the back of huge demand for ultra modern warehouses. To keep up with the competition, warehouses have been forced to adopt technology to efficiently manage supply and demand issues. Looking ahead, it is anticipated that companies will increase their investment in this space, especially with high-tech features. Warehousing sector has seen a spurt of development w ith i nteg ration of innovative technologies in the recent years like Warehouse Management System, smart material handling technologies, etc. “The increased integration of innovative technologies have made warehousing a more effective and efficient sector. This has

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cover story “Induction of modern technology and IT techniques will play an important role in increasing the visibility of cargo through efficient tracking systems and communications. Air freight stations and Cargo Village facility might come up to facilitate the air cargo business.”

“Direct benefit of GST to the logistics industry would be seamless cargo movement across the country owing to expected hassle-free interstate cargo vehicle movemenst. GSTN would have very positive effects on the manufacturing, EXIM and logistics industry.” Sunil Arora Director, Delta Freight

Sunil Kumar MD, Everfast Freight

also ensured reduced costs and wastages and economically viable. The implementation of higher margins for both the warehouse sector automatic picking systems and carousels or and better service delivery for the industries lifts would mean efficient and safe storage hiring the warehouses. In 2017, owing to GST and picking methods of stocks. Automatic implementation, owners and manufacturers picking cells can be smoothly integrated with warehouses (owned or leased) in into existing warehouse architecture; these multiple states, to avoid duplication of would be extremely economical considering taxes, will own or lease large warehouses the higher volumes handled by the large postper business requirements. The consolidation of the warehousing Getting GST-ready industry will also bring down the costs involved in the warehousing industry in India. GST will further push direct sales, i.e., inventory of LOTTERY goods will come down. This will TAX VAT SAD happen as more goods will move directly from manufacturing hubs to What is it SERVICE ENTRY distributors which will lead to lower TAX TAX going to do? warehousing costs and increased efficiency in the supply chain.” EXCISE LUXURY TAX TAX Agreeing to this, Arunachalam said, “The graph for such technology i mple me nt at ion a nd ad opt ion CVD LEVIES would always be moving upwards CST ADC exponentially. This is particularly important for the year 2017 as the consolidation of warehouses due to GST would demand an injection of Source: (Kilde: DHL) capital. This is bound to be followed Subsume multiple existing indirect taxes (both central & state level) by a n i ncrease i n adoption of automated systems for improved efficiency in GST warehouses. Broadly, technology would the larger post–GST warehouses. Automated generally mean better visibility to the end picking and put away systems through customer across his supply chain. This could the use of hand held devices are already be either through sophisticated ERPs or the commercially available in many facilities. broader implementation of RFID tags. This This implemented in parallel with narrow could mean the use of innovative dashboards aisle storage and very narrow aisle storage or data analysis systems to analyse and would be economically beneficial. The next improve the supply chain. We could also see step would be for fast moving products the emergence of drones for deliveries.” where operators would enable ‘pick to light’ Logistics costs, as a percentage of GDP, and ‘put to light’ systems for faster and more in developed economies is around seven per efficient picking. Automated and automatic cent, whereas the same in India is about systems for material handling would become 13-14 per cent. If logistics costs can come

GST

44 CargoConnect - january 2017

down by four to five per cent, the benefits for manufacturers could be immense. An increasingly sophisticated manufacturing industry is looking towards third party logistics providers to eliminate costs and support them as a driver of growth. This is an immense untapped opportunity for the warehousing industry. Experts anticipate that the industry will move towards low storage costs, fueled by an increasingly high responsiveness to meet the changing demands of the customer, as well as lower resource costs (such as storage area, labour and machine costs). Rahul S Dogar, Director – Strategy and Business Development, Holisol Logistics Pvt Ltd seems very hopeful about the coming year. He points out, “The graph will continue to go up with GST and the consequential changes it will bring across the supply chain. The warehouses will become bigger and it would be imperative to deploy technology solutions to maximise output. The customers would look for more automation in operations and would explore paperless picking, pick-to-light, pick to voice, automated sorting, ASRS, RFID and movable racking. Ecommerce logistics has taken a lead in using innovative technology and would continue to do so, acting as a catalyst to transform other supply chains.

GST: Expectations Overflow The logistics sector in India has four segments–transportation, warehousing, freight forwarding and value-added logistics. Transportation through land, air, rail and water and warehousing (industrial and agricultural storage) comprise logistics. In India, logistics is bogged down by higher

“Continually Innovative”

cover story “GST Bill is set to revolutionise logistics with unified and simplified structure versus multiple taxes at various levels. We expect the industry to move away from pure vanilla warehousing needs to contract logistics.”

“I found GST a very positive move that will generate growth opportunities for the organised players within the logistics industry. It will lead to higher vehicle capacity utilisation resulting in increased efficiency.” Abhishek Chakraborty Executive Director, DTDC Express Limited

Regulatory improvements

costs and a complicated tax structure. The underlying reason for the same is that every state levies taxes on goods moving across their borders at different rates. This leads to a situation wherein freight is taxed many times over. A new report by CARE Ratings on the logistics industry titled ‘Impact of proposed GST on Indian Logistics Industry” says that the industry is expected to clock a CAGR of 15-20 per cent in the period 2015-16 to 2019-20. This means that with application of GST, the logistics costs will come down by up to 20 per cent. According to the report, the planned dual GST model (central GST and state GST) proposes to replace around 29 state and federal taxes and tariffs for a single tax at the point of sale. The current combined Centre and State statutory rate for most goods works out to be 26.5 per cent (CENVAT of 14 per cent, and VAT of 12.5 per cent), whereas post GST implementation the same is expected to reduce to standard rate of about 18-21 per cent which will be levied on most goods and all services. “The proposed roll out of GST will be

46 CargoConnect - january 2017

Prakash Tulsiani Executive Director and COO, Allcargo Logistics

Manufacturing Thrust

the mother of all reforms”, says Britto. “The standardisation of taxes will certainly reduce the time consumptions, as well as most of the checkpoint problems. Transportation will be quicker. Moreover, large scale warehousing can be established. But most importantly, economies of scale will work out. Previously, fragmentation was really costly. But now,

GST would create a mechanism for centralized registrations and compliances which would not only help the service providers to claim and utilize credits, but also would track the tax compliance.

Connectivity Push

we will be grouping our activities at the important centres and from there ultimate distribution will take place,” he continued. Oliver Bohm, CEO, Schenker India has great expectations from the GST. He said, “With GST in the pipeline, there would be consolidation in warehousing sector and industries would prefer to build a hub and spoke warehousing model, with big regional setup unlike today’s setup of warehouse in each and every state. It is also expected that smaller warehouses would vanish or merged to build a commercially viable and large scale built to suit warehouses of bigger size up to two lakh sqft and above. The inventory cost would also go down substantially as businesses can set up seamless and centralised information system such as ERP which will give real-time visibility into the stock and movement of goods. The government is in the process to finalise the GST bill. Post-declaration of the bill, the dynamics of its impact may change further. Currently 60 per cent of the logistics time is spent for tax compliance on the interstate

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cover story “Indian market is currently fragmented with each state having its own taxes and regulations. With the implementation of GST, we will see uniformity in taxation levels. Geographical boundaries will be removed and India will truly become “one market”.

“The GST Bill, if it is implemented in its entirety, will herald in an era of centralised indirect taxation where credit can be taken for taxes paid and end the current system of multiple agencies imposing taxes on products.” Dr P Alli Rani Director (Finance), CONCOR check points for scrutiny of records and tracking of the interstate sales tax. GST would create a mechanism for centralised registrations and compliances which would not only help the service providers to claim and utilise credits, but also would track the tax compliance.” Regarding the impact of GST in logistics, there are several positive points to watch out for: Warehousing - Companies will now be planning their warehousing differently as under VAT regime, warehouses in every state were essential to avoid taxation loss. We can expect to witness an incredible rise in larger

Increased globalisation has ensured that companies are developing products for markets spread across geographies and even sourcing raw materials and components from companies across the world. warehouses near end customers, enabling faster delivery of products. Trucking - Trucking is expected to witness incredible efficiency improvement with the government officials at state borders who will spend less time on vehicle checking in the short run and elimination of border check posts in the long run, helping

48 CargoConnect - january 2017

Satish Lakkaraju CCO, Agility Logistics Pvt Ltd save up to 20 per cent of transit time. E-commerce - Within three years, with smaller forward stocking locations implemented by larger companies, there is going to be a large last mile fulfillment need, through deliveries via small commercial vehicles and bikers, enabling an extended sales channel for existing e-commerce logistics companies. Overall Impact - Despite these positives, the first draft of GST has procedures which are applicable for manufacturing units only, but have made those procedures applicable for services too. A large number of processes might need an overhaul of the ERP used with an incredibly higher compliance need. For smaller entities, this would be a tough task with a major need for a larger finance and compliance team, adding to costs instead of saving them. Prasad tries to make the picture more clear. “In addition to passage of the GST bill, it is equally important to implement measures as introduction of dedicated freight corridors, effective warehouse management, development of consolidated warehouses at strategic locations, skill training pertaining to the logistics industry and a supportive business environment for the emergence of the e-commerce industry. But, it is the passage of the proposed GST bill that will have the biggest positive impact on the logistics industry in India. It will ensure that India becomes a major manufacturing hub, create jobs, lead to corporatisation of the logistics sector and fasten the process towards making India an economic superpower.”

Let the Year be Glorious 2017 is expected to see the consolidation of the warehousing sector which will be mainly a direct consequence of GST implementation.

Also, supply chain management and third party logistics businesses are expected to chart a steeper growth path. Industries will increasingly opt for third party logistics providers for their non-core operational activities. Increased globalisation has ensured that companies are developing products for markets spread across geographies and even sourcing raw materials and components from companies across the world. To ensure efficient functioning, companies will now hire third party logistics service providers for their non-core functions so that they can focus on core functions like manufacturing and sales. Yes, days of doing business in traditional ways using old technologies are fast coming to an end. Technology, coupled with logistics capabilities, is the only way to meet customer expectations. Supply chain leaders today focus on ‘time-in-trade’, ensuring that each component of the value chain arrives at precisely the right location, at the right time, in the right condition and at the most competitive cost. The future revolves around the concept of sychronising global commerce. Let us tie our hands together and make the year 2017 a glorious one!

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FEATURE

50 CargoConnect - january 2017

FEATURE

Securing Air Cargo:

The Crucial Need

Numerous industry and government bodies have identified threats and vulnerabilities in the air cargo system. Criminal activities such as placing explosives abroad aircraft, smuggling, theft, illegal shipments of hazardous materials and tampering with cargo are some of the major concerns of the air cargo. Nikhil Mishra with respective opinions from the experts, talks about the issues of safety and security in air cargo and the measures adopted regarding the same

january 2017 - CargoConnect 51

Feature

he air cargo logistics industry in India is a crucial component of the country’s economy and in the past has played a vital role in bringing about the development of the nation and continues to do so. Globally and nationally, there is a belief that this industry can reach greater heights with the passage of time. There is an undeniable link between the economic cycle of a country and the country’s logistics industry. A large portion of goods which is traded internationally is transported by air. Transportation of goods by air has become an essential component of today’s world economy, especially in the highvalue, “just-in-time” supply chain that serves many other industries. The Indian air cargo logistics industry is economically viable and has the potential to soar higher, yet there are certain impediments to this growth.

Mike Chew CEO, AISATS

as a significant player in the air cargo market and as per IATA’s forecast, India is poised to become one of the ten largest international freight markets by 2018. Moreover, the government announcing the 0/20 rule earlier this year paves way for more domestic carriers to fly international, thereby facilitating international trade. Increased air cargo volume thus requires increased safety and security at the terminal, and significant progress has been made in that direction in compliance with international standards. Induction of the Central Industrial Security Force (CISF) in the passenger and air freight terminals, and implementation of electronic access control systems have led to enhanced protection of the terminals. For air cargo safety, it is imperative for an air freight terminal to have a Security Management System in place to ramp up security. Conducting proper access control checks like ID checks, thorough search of persons and vehicles before entering

The air transport industry plays a major role in global economic activity and development. Despite enhancements to existing security, anti-social elements continue to develop new ways and means to dodge those security measures to exploit vulnerable air cargo. As a consequence, there is an increased need for better developed security systems to govern air cargo.

Challenges and remedies The air cargo system is vulnerable to several security threats including potential plots to place explosives aboard aircraft; illegal shipments of hazardous materials; criminal activities such as smuggling and theft; and potential hijackings and sabotage by persons with access to aircraft. The lack of adequate screening machines, absence of ULD screening facilities for heavy and palletised cargo, CCTV coverage often limited to specific areas of air cargo complex, are some of the key issues which lead to security breach air cargo. Various efforts are being made at national as well as global level in order to tighten the security at air terminals. Mike Chew, CEO, AISATS says, “India is fast emerging

52 CargoConnect - january 2017

into the premises, carrying out proper background / character checks of the employees before their employment with the organisation, restricting access to sterile operations and protecting the premises by the armed forces are some of the steps which ensure proper security at the terminal.” Stressing on the importance of security, Radharamanan Panicker, Director, Dangerous Goods Management India Pvt Ltd asserts, “The cargo security in earlier years was much neglected all over the world. However, India was amongst the first few countries that had taken all the necessary steps to strengthen the security of the cargo, as per standards and recommended practices prescribed by the ICAO. India had also for-

mulated a guideline for setting up the business of Regulated Agents, which could be any entity, which was consolidating and securing cargo. However, this scheme didn’t find many takers due to the perceived stringency of some of the provisions of the guideline. However, many cargo handlers operating at various airports were authorised to do cargo screening under the Regulated Agent scheme. I think India has come a long way since, in terms of securing the air cargo shipment and tightened security at air terminals. There are very specific guidelines issued and followed by all operators and handlers, as far as terminal security management is concerned.” The nature of the threat has not changed over the past few years. The worldwide situation, when it comes to security for air cargo is still very tense. Vulnerable to terror attacks, there is an increased need for air cargo security and screening systems. Terrorist attacks have increased manifold worldwide. Therefore, air cargo requires efficient and advanced cargo screening systems to handle the increasing volume, and provide enhanced security measures. According to Sanchit Jain, CEO, DreamOrbit, “The Aviation Industry not only in India but globally has been battling many challenges. Foremost concerns are security, safety and modernisation. However, the security framework of air travel and transport in India is designed based two major threats – terrorism and narcotics. The airports are defined as hyper-sensitive, sensitive and normal based on these two factors only. Bureau of Civil Aviation Security (BCAS) manages the overall security reforms, facilitation and management of security around aviation in India. Another independent team, Central Industrial Security Force (CISF), is responsible for managing the hyper-sensitive and sensitive airports around in India. Apart from this, the state governments and local police also contributes to the security measures for aviation. Apart from these urgent threats, the cargo security and safety issues like thefts, poor handling of hazardous material and unregulated cargo transportation in passenger airbus are further degrading the value proposition of aviation industry.” To get the goods at the right place at the right time is a crucial aspect of supply chain across the globe. The safety remains air cargo industry’s top priority. Commenting on the

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Feature security breach in air cargo, Abhijeet Verma, MD and CEO, Abhijeet Logistics Pvt Ltd says, “The authorities responsible for the issues should do timely checks and raise voice to higher ups for the implementation of necessary machines and CCTVs for maintaining proper security at the terminal.” Adding more to the issues of security, Jain says, “These challenges are not just complex to address but expensive too. The organisations around the world are tightening their policies, methodologies and technology for securing the cargos. The recent annual meet of IATA (The International Air Transport Association) that was held in Dublin, further pressed upon ensuring a proportional security framework to the global threat perception. The security framework has to upgrade at many fronts, manifold. Various airports are independently implementing different technologies to enhance their general security around airport. For example, The Delhi Airport (Indira

Radharamanan Panicker Director, Dangerous Goods Management India Pvt Ltd

the airports to screen fully loaded ULD, not built or loaded at cargo terminal but coming from shipper/forwarder’s location. However, it is mandated that where shipper/forwarder are preparing the ULD and bringing it to the airport for onward transportation by air, the former will have to X-ray examine the cargo and follow other requirements at their premise and transport such ULD in a secured manner through sealed trucks and security escort. Due to this, cargo in India is 100 per cent examined at package level through dual energy X-ray machine. For heavy odd- sized

We don’t have such high level of security awareness in our country unfortunately therefore CSD alone is not enough to ensure safety and security. There is a greater need to clamp down hard on illegal practices through greater regulatory oversight. That is what is missing in the aviation policy as well as to how well the sector is going to be regulated in various fields of aviation.

Gandhi International Airport) has embedded detectors on the approach road that scans the car for potential explosives even before it has entered the premise. The Cochin International Airport has equipped itself with latest detection and disposal technology and is also considering biometric access control to enhance the safety, while handling cargo. However, these security measures are not uniformly implemented across airports and are not specifically tailored for handling air cargo. Moreover, these regulations are not driven by a central body.” On the other hand, Panicker expresses further concerns over the security and says, “There is no arrangement at

54 CargoConnect - january 2017

cargo, the practice is to allow it to cool off for more than 24 hours before being palletised. Further, there is the option of using explosive trace detection or trained dog to sniff out any explosive than can be hidden inside such cargo.”

Technological Assistance These days, many countries around the globe use various technologies such as Explosive Trace Detection (ETD), Non Computed Tomography Transmission X-ray (Non – CT X-ray), Explosive Detection Systems (EDS) in order to maintain security level in air cargo. Jain points out, “The aviation industry

around the globe is looking for various strong measures for the safety and security of passengers and aircraft as the bigger part of air cargo moves by passenger flights. India has adopted 100 per cent X-ray cargo screening since 2001. However, at the same time this is met with more challenges as the existing warehouses are under- equipped and 100 per cent screening is time intensive against the incoming volume. Moreover, X-ray machines are unable to detect small objects in large shipment. The technologies that can really benefit are following: 1. RFID Tagging and Tracking – RFID (radio frequency identification) based microchips can be attached to the shipments that transmit data and scanners can start picking up information electronically, like origin, consigner etc. all. This will create a trail of movement of a shipment throughout the supply chain 2. There is new UV-based technology that works with X-ray for screening and is able to scan 100 per cent of the luggage for explosives without the extra step of removing them for further inspection. The explosive material has UV signatures as it absorbs particular frequency. The results are tallied with the exiting explosive database. This technology is considered 95 per cent accurate. 3. Sensors and IoT – The sensors that detect the state, chemical composition or temperature of sensitive and sometimes hazardous material can also be used for monitoring and regulating the safety of the shipment being handled. 4. Drones and Robotics – Computer controlled drones and robots can be used to move shipments faster, safely and in times of a dangerous situation like confronting a bomb diffusing situation, these can be of great assistance.” While Panicker adds, “India is already deploying most of these world class technologies to maintain high level of security in air cargo. India was the first country to insist on 100 per cent security check of cargo by X-ray examination more than a decade ago. Maybe, these delay the process,but given the environment we operate in India, this system was considered necessary. There were reasons for that. Unlike other countries, we didn’t have large forwarders, where the cargo would be

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Feature secured and then brought to the airport. Further, our transportation system itself was not secured. Third we had and continue to have loose cargo rather than palletised cargo. In some cases, especially in the case of perishables, consolidation of cargo happens at the airport.”

Policies and programmes The Consignment Security Declaration (CSD) set up by IATA provides an audit trail of how, when and by whom the cargo has been secured along the supply chain. This move ensures safety and security in air cargo. Chew expresses, “The air transport industry plays a major role in global economic activity and development. Despite enhancements to existing security, anti-social elements continue to develop new ways and means to dodge those security measures to exploit vulnerable air cargo. As a consequence, there is an increased need for better developed security systems to govern air cargo. For a secure supply chain, it

Sanchit Jain

specified by the BCAS, is signed by the authorised signatory of the cargo agents and is handed over to the airlines/cargo acceptance staff at the time of delivery of the cargo. As information is transmitted to each party involved in the secure supply chain, each party then applies appropriate measures to the consignment and protects it from unauthorised access. No cargo consignment is uplifted without this CSD. Further, upon acceptance of a consignment, a Rregulated Agent refers to this CSD in order to determine the way to handle, prepare, store and screen the cargo. The CSD should be completed at each step along the secure supply chain, to indicate that authorised entity acting within the secure supply chain is taking responsibility for the security status of the cargo. Only Regulated Agents are entitled to issue or complete such a declaration, and their unique identification number is record-

One of the main components is Safety-Security Architecture but Civil Aviation Policy still has many aspects where it doesn’t take the aviation global regulations by the horns. The work has started but we have a lot of ground to cover.

CEO, DreamOrbit

is crucial to share the security status of cargo at every stage. To achieve this, IATA has developed CSD and e-CSD standards, to provide the industry and regulators with information on which consignments have been secured, how the consignment was secured (methods of screening) and by whom (secure consignor) along the supply chain. The objective of these standards is to ensure that each consignment received by an aircraft operator is properly screened and secured, and that such consignments come with full documentation, either on the air waybill or on a separate declaration. As per AVSEC Order 06/2005 issued by the BCAS, it is mandatory that a Consignment Security Declaration is procured, in a format

56 CargoConnect - january 2017

ed, thereby activating their responsibility and administrative accreditation. Further, regulated agents need to give a written declaration to the airline certifying that the air cargo dealt and delivered by them has been subjected to the security controls as specified by the BCAS.” On the other hand, Panicker mentions, “CSD works in the same way as in the passenger check in, when the airlines ask you to click the security declaration when you make an online web check in. Before IATA introduced this, in India it was mandatory to submit security declaration by the cargo agent. This declaration was on similar lines as required by the IATA. Thus, it is mandatory to submit security declaration. At the same

time you must note that in most of the countries, the forwarders and logistics service providers need to have their warehouses secured. The transportation is better organised and secured. People who are comprising the largest area of security weakness are checked for their background while working in such areas. We don’t have such high level of security awareness in our country unfortunately therefore CSD alone is not enough to ensure safety and security. Since you mentioned safety and security in the same breath, we would like to point out that despite the presence of CSD; there are large number of cases of misdeclaration and at times non declaration of dangerous goods shipment. Currently, X-ray

checking system doesn’t involve checking for DG cargo means that there is a greater need to clamp down hard on such practices through greater regulatory oversight. That is what is missing in the aviation policy as well as how well the sector is going to be regulated in various fields of aviation. I suggest that, like the Indian Railways Regulations where mis-declaration and false declaration are a punishable offence, similar regulations must be made for civil aviation and cargo to deter people from making false declaration affecting the safety and security of aviation.” While Jain positively asserts, “Security measures have been completely revamped in the past decade to ensure utmost safety of air cargo. In November 2015, IATA took a step forward in this direction when e-CSD/CSD Resolution 651 was implemented worldwide to meet the safety requirements set by ICAO. CSD entails that every cargo

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Feature consignment is duly declared by the owner party to the airport operator. CSD is a standard declaration which avoids the confusion that arises due to multiple declarations and hence can be referred as the final audit trail to know the details of the cargo. CSD contains specific details about the cargo such as how, when and where the cargo has been secured along with the details of its care takers till it reaches the airport operator for shipping. The information given in CSD form is electronically saved and can be accessed through any of the airport operators which are going to handle the cargo during its complete shipping trail. On an average, there are seven to eight touch points for any air cargo. It is imperative to ensure that no harmful substance or security threat can penetrate through the cargo during these transit points. CSD, which is accessible in six languages electronically, acts as a reference guide to look out for any potential security breach during the cargo journey. Several countries which are crucial for the intermodal transportation due to their

(DGR) guide developed in accordance with ICAO provides operators with information regarding the marking, packaging, labelling and documents required for dangerous goods shipments. Verma says, “IATA DG Regulations provides packing instructions for all dangerous goods acceptable for air transport with a wide range of options for packaging. It provides the information for mandatory markings and labelling on packages to ensure transport of dangerous goods safely and efficiently. It also details the requirement for proper documentation which

BCAS has been a wonderful step towards maintaining security. This will ensure that the companies, agents and their staff will take proper care while handling dangerous goods cargo else they will know the Abhijeet Verma

consequences.

MD and CEO, Abhijeet Logistics Pvt Ltd

strategic positions have supported the implementation of e-CSD. German Federal Aviation Office (LBA), South African Civil Aviation Authority (SACAA) and Swiss Civil Aviation Authority (FOCA) are the major names which have agreed to implement e-CSD. Today, we are increasingly searching for ways to optimise our cargo capacity and cargo pooling, shipment consolidation and aggregation is coming up as a viable option. To ensure that the final shipment is free from any single cargo which can be a safety concern, evaluation of CSD proves to be very beneficial.” IATA’s Dangerous Goods Regulations

58 CargoConnect - january 2017

must be followed to know what dangerous goods are being transported, how to load and handle them, what to do if an incident or an accident occurs either in flight or on the ground.”

Government’s Control Bureau of Civil Aviation Security of India (BCAS) has initiated effective measures such as registering air cargo handling companies and service providers as regulated agents with the BCAS. This move has certainly beefed up the security in air cargo. While expressing his views on the same, Jain says, “The latest initiatives taken by BCAS to regis-

ter air cargo handling companies and service providers as regulated agents is to streamline the implementation of existing and future security policies. After the 9/11 terror attacks and Yemen (2010) incident which blew up the consequences of breached security on airports, various regulatory bodies are trying to implement stricter rules to stop such security breaches. In India, the airport regulatory bodies and defence authorities differ for different airports. To provide a common framework for the safety procedures and compliances to follow, the air cargo handling companies and service providers are apt as the common links to initiate the implementation. Getting them onboard by registering them as regulated agents will speed up the process by working on ground level. The latest initiatives taken by BCAS are to make the domestic carriers compliant to the international norms for security and safety. The ACC3 compliance will ensure that the air carriers are able to adhere to the safety norms of EU nations. BCAS is trying to collaborate the different entities involved in air cargo supply chain to make the security practices more transparent and streamline at all levels. It is trying to know the loopholes in the existing shipment journey of air cargos to implement 100 per cent screening of the large cargo where detection of smaller objects becomes difficult and can cause security threats.” According to Chew, “Air cargo, being more susceptible to unlawful interference from unknown entities, needs a secure supply chain to ensure a high degree of security. A regulated agent is considered as an important link of that process, which provides adequate security controls required by the appropriate authority with respect to cargo. According to the general principles of Cargo Security (Ref: Recommended Practice 1630 of IATA) all cargo intended to be carried on a passenger or all-cargo aircraft should be subjected to security controls before being uplifted on the aircraft and a regulated agent should fulfill the following pre-requisites: Each regulated agent should have a security program approved by the appropriate authority in respect of the acceptance, storage and forwarding of cargo. • The regulated agent should also register with the appropriate authority and establish with the air carriers, that it conducts business with, its identity and address as

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Feature

well as the agents authorised to carry out deliveries on its behalf. • The appropriate authority should conduct periodic inspections of the facilities to ensure that the security program has been implemented and is maintained. As per the BCAS requirements, a detailed security program of the regulated agent system needs to have secure premises with effective access controls using equipment like Multi Zone Door Framed Metal Detectors (MZDFMD) and Hand Held Metal Detectors (HHMD) and an effective Visitor Management System, which includes a pass system for identity checks allowing only authorised personnel/vehicles into the premises. Allocating CISF staff at the Terminal Entry Gate to provide armed support to the premises is also a part of their security program. AISATS as a Regulated Agent follows the security norms and standards laid down by this authority for civil aviation security in India i.e. the Director General, BCAS. Furthermore, the cargo goes through a thorough process of checking before it is loaded into the aircraft. X-ray, physical checks of cargo, Explosive Detection Systems (EDS)/ Canine teams are the methods for cargo screening. Cargo consignments are subject to 100 per cent X-ray screening. Cargo which cannot be X-rayed is subjected to physical checks. In addition, 15 per cent of the X-Rayed cargo (through a random selection) is also put through physical checks. If neither X-ray nor physical check is possible, the cargo

60 CargoConnect - january 2017

On an average, there are seven to eight touch points for any air cargo. It is imperative to ensure that no harmful substance or security threat can penetrate through the cargo during these transit points. consignment is put through 24 -hours cooling off and screening by the Explosive Detection Systems/Canine teams. Appropriate security stickers are affixed on the screened cargo indicating the mode of screening. Screened cargo is then palletised/unitised in the Sterile Holding Area (SHA) by authorised staff who has been issued with sterile area passes and is subjected to thorough access control procedures before gaining access into the SHA. The palletisation/unitisation is carried out under the supervision of security staff. This cargo is then transported to the aircraft from the regulated agent premises in a safe and secure manner in sealed containers, escorted by the

airline security staff. The regulated agent is also required to keep permanent records of security screening procedures such as X-ray, physical examination of cargo, 24-hour cooling and EDS/Canine team checks. These records are checked by the BCAS during its audits to verify compliance to security controls as specified by the BCAS. Only trained and BCAS-certified security employees undertake the handling and security of the cargo from the time of its receipt till its delivery to the air carrier. Security personnel are appointed after appropriate background checks and are trained as per training standards specified by the National Civil Aviation Security Training Program issued by the BCAS. The screeners are tested and certified by the BCAS after undergoing stringent on-job training and testing program, which includes both written and practical tests (The percentage required for passing the test is 80 per cent). The screeners are recertified every two years by the BCAS. The security staff also undergo refresher training and testing every two years. The other cargo handling staff including the loading staff is issued passes only after undergoing mandatory Aviation Security (AVSEC) Awareness Training Program every year. The BCAS also conducts regular audits and inspections to ensure that correct procedures and processes are followed to keep up the standards of air cargo security. All these measures by the BCAS have definitely improved the security of the air cargo transported through Regulated Agents.” On the other hand, Panicker rightfully says, “BCAS has for many years a policy where Terminal Operators are authorised to set up security system where they can X-ray and examine cargo, subject to their being approved and clearing security check. Then, in some cases airports have also set up security screening system where they carry out screening of cargo. Ideally, the agency which is managing the terminal should be involved in screening and securing of cargo and not any other third party. What is not understood is that screening and securing cargo is just not a one off activity, where, when the cargo is received, it is screened and moved into secured area. What about the security of cargo when inside the terminal and when being taken to the airport to be loaded? What about people who move in and out of secured

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VOL VII ISSUE XI OCTOBER 2016 `20

Feature area? How effectively are they screened and checked? Even if a third party is given the mandate either by BCAS or Terminal Operator, then such a third party must also be responsible for security in Secured Holding area and where all cargo needs to be secured, controlling the flow of people and material into and out of these areas. India has initiated very stringent guideline for security management. Some of these are as listed below:1. Before a new terminal is formally made operational, it is surveyed by a team constituted by the Commissioner (now designated as Director General) of Security (CA)/ BCAS. Based on the specific airport risk assessment, the team will look at requirements of physical security arrangements, availability of men and machines etc. Once the team provides a positive report, the Commissioner notifies the terminal as approved facility. Thereafter, the responsibility of the securing the cargo at the terminal and managing the security of the facility is that of the terminal operator. The access control to cargo terminal and perimeter security is handed over to the CISF/ Airport Security Police and implemented with the same standards as it is done in passenger terminals. Besides, the concept of the Security Holding Area is introduced for the screened cargo, before loading or taking it to the apron for loading in the aircrafts, in the same of screened passengers’ fashion. The security/access control of the cargo SHA is entrusted to the CISF who are also required to check the proof of subjecting the cargo screening at the airside gate while the same is taken for loading and only authorised persons , based on the AEP issued by BCAS have access into this security restricted area (SHA). 2. All export cargo is required to be screened by X-RAY Baggage Inspection System which meets the standards set by the BCAS and are examined at package level and then moved into the secured export area. (Cargo SHA) except the consignments which are of odd size or cannot be screened in the XBIS. 3. All the other areas of the terminal are secured by the terminal operator’s security team and covered with CCTV surveillance. 4. Employees working at the airports need

62 CargoConnect - january 2017

As per the BCAS

requirements, a detailed security program of the regulated agent system needs to have secure

premises with effective access controls using equipment like Multi

Zone Door Framed Metal Detectors (MZDFMD)

and Hand Held Metal

Detectors (HHMD) and an effective Visitor

Management System,

which includes a pass system for identity

checks allowing only

authorised personnel/ vehicles into the premises.

to get security check done before their employment. Such background security check is done through the state police department. Every two or three years reverification of background check has to be carried out. 5. Even the company working and providing service at the airport are security checked by various agencies of the government before they are cleared for carrying out their business activities at the airport.” Verma also positively asserts, “BCAS has been a wonderful step towards maintaining security. This will ensure that the companies, agents and their staff will take proper care while handling dangerous goods cargo or else they will know the consequences.”

Final Words Air cargo security has become one of the major global security concerns given its recognised vulnerabilities which make air cargo possibly the easiest target for terrorists. In recent years, several states have adopted measures aimed at enhancing air cargo security and such requirements are imposed on inbound carriers from other countries. Thus, the need for the security of air cargo transport becomes a reality for all countries involved in international commercial aviation. The Indian aviation industry is gradually arriving at effective solutions to combat security and safety issues.

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focus of the month

The Real Heroes In The Wake Of Demonetisation The sudden move of demonetisation taken by Prime Minister Narendra Modi on November 8, 2016 had taken the entire nation by surprise. This astonishing move suddenly increased the immense pressure on cash management companies, which carry the responsibility of ATM replenishment across the nation. Employees of these companies emerged as unsung heroes in the wake of demonetisation as they worked round the clock to stash ATMs with cash for the convenience of the common man. Gaurav Dubey presents a short report on the response of cash management companies on this big bang economic reform of demonetisation

64 CargoConnect - january 2017

focus of the month

he evening hours were about to end in India. Most of the service class people were on their way to home and markets were half closed in the country. At a quarter past eight, an unscheduled televised address of Prime Minister Narendra Modi was aired which took the entire nation by surprise. PM Modi, in an hour-long address to the nation, announced demonetisation of `500 and `1000 currency notes with effect from midnight, i.e. 12 AM, November 9,

financers of the country. Within moments, illicit money earned in the form of `500 and `1000 currency notes by corrupt politicos, bureaucrats and stalwart businessmen of the country turned into pieces of paper. The news of demonetisation spread like conflagration and people started lining up before ATMs to withdraw their money and chaotic situation prevailed across the country. After PM’s announcement, 86 per cent of the Indian currency in the form of `500 and `1000 which amounts to `14.18 lakh crore became obsolete. An immediate

JOURNEY OF CURRENCY NOTE FROM PRESS TO ATM Cash management companies deal with the consignment of cash only after receiving it from the currency chest of banks, spread across 4,000 different locations in the country. After the completion of printing process, currency notes have to travel long distance before reaching peoples’ pockets. Let’s have a look at the journey of an INR 2000 note from the press to the ATM – Step 1: Location of printing presses

One of the two printing presses responsible for churning out new INR 2000 notes is located in Mysuru district of Karnataka. The other one is in Salboni district of West Bengal. Two more presses — one in Dewas district of Madhya Pradesh, and other one in Nashik district of Maharashtra — are printing INR 500 notes to replace the old ones. Step 2: From press to RBI issue offices

Once printed, the notes are transported to the 19 issue offices of the Reserve Bank of India which are located in major cities across the country, such as one in Chennai, Tamil Nadu. Step 3: Issue offices to Currency Chests

From the issue offices, the money is transported in high-security vans to more than four thousand currency chests across the country. Currency chests are operated by various banks. The State Bank of India, the country’s largest bank, operates a currency chest, in Cuddalore, 175 kilometres down the coast from Chennai. The journey will take about four hours by road. Step 4: Issue offices to bank branches

Once a bank has the money in its currency chest, it can restock its bank branches in the surrounding area. The bank branch in the small town of Nellikuppam, some 13 kilometres west of SBI’s currency chest in Cuddalore, could receive new notes from the Cuddalore currency chest. Step 5: Bank branches to ATM

From the bank branches, money is taken to nearby ATMs. The SBI branch in Nellikuppam has an ATM right nearby. 2016. In his first televised address to the nation, PM Modi said people holding notes of `500 and `1000 can deposit them in their bank and post office accounts from November 10 till December 30. This move of the Prime Minister came like a bolt from the blue on black money hoarders, corrupt fat cats, fake currency racketeers and terror

high-level meeting of senior bank officials was called by the Reserve Bank of India (RBI) on the evening of November 8 and an hour later PM Modi announced the move of demonetisation. A senior state-owned bank official on the condition of anonymity said, “We were called at Reserve Bank of India for a meeting on 7’O clock in evening.

For an hour, we chatted about this and that including S4A (Scheme for Sustainable Structuring of Stressed Assets), till at 8 PM they switched on the TV and told us to listen to the PM’s speech.” Post demonetisation, around 6.3 billion pieces of `1000 notes and 15.7 billion pieces of `500 notes became obsolete which were to be called back to banks. This was a mammoth task for the cash management companies. Another big challenge was to quickly release all `100 notes and circulate new notes in the economy. On Wednesday afternoon, nearly 20 hours after Prime Minister Narendra Modi announced that the government had decided to scrap `500 and `1000 currency notes in a bid to fight black money and terrorism funding, senior officials from RBI and the National Payments Council of India (NPCI) met with members of the ATM and cash logistics industry. The meeting was convened to discuss a strategy to ensure the process of cash replenishment happens smoothly across the country and the machines don’t end up dispensing old high denomination notes. Tasks of replenishing ATMs with the new currency and siphoning out obsolete currency notes had to be accomplished within a short span of 48 hours by cash logistics companies, as ATMs across the country had been closed by the RBI from the midnight of November 8 until the midnight of November 10. The magnitude of the operation can be estimated from the fact that there are over 2 lakh ATMs spread across the country. The average transaction size per day is `4,000 and the average number of transactions is 125 per ATM. It means that the ATMs located across the country handle over `10,000 crore in currency every day. It was literally a logistics nightmare for cash-in-transit service provider companies. Undoubtedly, this was a daunting task for cash logistics industry which carries the responsibility of

january 2017 - CargoConnect 65

focus of the month transporting cash between the treasury and bank branches, banks and ATMs, banks and the large outlets that needs currency notes. Cash management logistic companies had to accomplish three duties in a specific order - The first was to ensure that enough `100 currency notes were being filled at ATMs across India. The second task was to ensure that the old high denomination notes were brought back to bank branches so that they could be removed from circulation. The last duty was to push the new `500 and `2,000 currency notes in ATMs. Ensuring the movement of cash in high crime zones was another big challenge for the companies as police typically stops patrolling in night in such places. It’s worth noting here that the cash logistics industry—with its nearly 9,000 cash vans and 30,000 employees—touches about 25,000 ATMs in a day. As of now, India has 2.2 lakh ATMs and the time these companies got to replenish ATMs was less than 48 hours. To accomplish this intimidating task, the Cash Logistics Association of India (CLAI), which is the industry body for these companies, made a control room to monitor all of the cash carrier vehicles and to receive hourly updates on the movement of cash. Instructions of coming up with a toothbrush and an extra pair of clothes were issued by CLAI to its employees. All the cash management companies cancelled leaves of their employees and worked 24x7 to ensure that cash management happens swiftly across multiple locations. As employees were facing the intense work pressure, CLAI erected a special pandal with padded mattresses inside the compound for employees so that they could take a quick nap. A cook served piping hot aloo parathas and tea to the staff members who had been moving continuously to stuff machines with cash. In such circumstances, employees of cash management companies couldn’t even waste a second as hundreds of cash-strapped people were continuously lining up outside their nearby ATMs. The network of 40,000 trained men and women had been working round the clock to replenish cash in ATMs across the nation, and were still unable to meet the needs of common men standing in long serpentine lines. Employees worked tirelessly for more

66 CargoConnect - january 2017

Vipin Jain CEO, LogiCash

“Our employees have been working tirelessly roundthe-clock despite facing several hiccups in receiving cash from the banks. And we are encouraging our employees to give their best shot as in the present circumstances we all are working by keeping nation’s interest on top priority.”

than 72 hours to cater to the increased needs of people. However, despite putting 100 per cent efforts in replenishing ATMs, companies were unable to stuff every ATM completely due to several technical problems and unavoidable loopholes in the supply chain. Several technical reasons caused the initial delays in the supply chain of cash management. The procedure of making changes in back-end to ensure that the high old denomination notes are not dispensed and capping the withdrawal limit at `2,000 took around 36 hours to get fixed. Another hitch was that ATM cassettes which stock the currency cannot take a full capacity of INR 100 notes until recalibrated. This means that each ATM was able to disburse only 25 per cent of the number of notes of its previous capacity and was running technically out of cash after 100 withdrawals. Crippling delays in supply chain also created a lot of trouble for cash management companies. Officials had to wait at bank branches along with customers to get the cash for loading into ATMs which unreasonably killed two to three hours of their valuable time. Rajiv Kaul, CEO, CMS Info Systems said that priority should have been given to ensure smooth operation of one lakh ATMs round the clock instead of focusing on all two lakh ATMs simultaneously. Now, RBI should focus on the centralisation of the system of currency issuance which would facilitate cash officials to collect cash from several branches of each bank in each city. Presently, there are only few currency chests in each city from where cash officials collect cash to replenish ATMs. The only state where this system worked smoothly is Jammu and Kashmir, where the nodal currency chest belongs to the J&K Bank and they ensured the availability of money daily in wee hours of the day. Cash management logistics companies had to face intense pressure from banks as they were demanding to deposit the notes of high denominations in banks with priority. This demand of banks was in total contradiction from the decision which had been taken in the meeting with the RBI officials. In the meeting, it was decided to replenish ATMs with the currency of lower denominations with top priority; still banks had acquired

focus of the month the adamant stance on their demand of depositing scrapped currency notes first. This unreasonable demand of banks forced cash officials of the cash management companies to wait in long serpentine queues of banks which further worsened the situation outside ATMs across the country. The demonetisation move turned the entire cash management industry upside down, in the wake of such circumstances major players of the industry offered these suggestions to RBI for fixing issues faster:1) The RBI needs to ensure that there should be enough supply of lower denomination notes in the economy. 2) Staff members of banks and their branches to work in a streamlined manner to tackle the situation. 3) Cash management companies need to get the currency velocity to reach its highest. Harshavardhan Neotia, President of the apex business organisation of the country, Federation of Indian Chambers of Commerce and Industry (FICCI) hailed the decision of demonetisation and said, “The demonetisation move of the Government is an extremely progressive step and will yield several benefits for the economy in the medium to long term. The decision to replace the existing currency notes of `500 and `1000 with new notes will ensure that the perpetrators of terror financing, drug financing and other antinationa l activ ities w i l l be severely restricted in their activities. Additionally, this will help in bringing a major transition towards a cashless economy that has its ow n merits. FICCI whole heartedly welcomes this move of the government and urges all its constituents to proliferate the positives of this measure taken by the government.” Apart from hailing the decision, FICCI also gave some suggestions to ease the pain of businessmen in this period of transition and have shared it with the Prime Minister Office. Vipin Jain, CEO, LogiCash said, “When we came to know about demonetisation, we had understood that this would be

Harshavardhan Neotia President, FICCI

“The demonetisation move of the government is an extremely progressive step and will yield several benefits for the economy in the medium to long term. This will help in bringing a major transition towards a cashless economy that has its own merits.”

a big task to accomplish. So we quickly cascaded this information across all the hierarchy levels of our company. We strategically allocated the tasks to all the

employees and cautioned them to pull up their socks to deal with this massive task. We divided our staff in three different teams and assigned them different tasks to accomplish. Tasks included siphoning out the old currency notes from the ATMs, replenishing machines and recalibration of cassettes with valid tenders. Our teams are still working diligently round the clock to cater the increased need of cash.” Throwing light on the extra efforts being put by employees of the company, Jain said, “Most of our employees have been working tirelessly to cope with the situation since the government suspended high value notes. Delay in receiving cash from banks has been creating hurdles in our working cycle; it is forcing our ground staff to wait for hours outside the banks. But we are encouraging them to give their best as we are working for our nation’s interest. “This move of demonetisation has left us only with hundred rupee currency notes which doubled the frequency of ATM replenishment than the ordinary days. Siphoning out cash is indeed a new task for us which is killing a lot of valuable time. The activity of clearing old currency notes is followed by cash counting, processing and reconciliation. Then shifting this withdrawn currency back to banks is further increasing pressure on our staff. However, we have been working by keeping nation’s interest on top priority and will work round-theclock till the situation doesn’t get back to normal.” Cash logistics experts hold the view that in the present circumstances banks should focus more on cash replenishment instead of deposits. It appears like banks have forgotten that there is a 50-day window for deposits and they have involved themselves in a rat race of chasing headlines on higher cash collection of each day. If banks shift their focus completely on cash replenishment then it would definitely ease the pain of a common man, who has been struggling in long serpentine ATM queues since the announcement of the demonetisation move.

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Interview

Our Success Is Ensuring Your Success

Being named as the Air Cargo Carrier of the year at the 20th edition of Global Freight Awards ceremony held in London, Emirates SkyCargo has proved its excellence once again. From the handling of perishables to sensitive cargo, odd-sized shipments and supercars, Emirates identifies quality as the key to success. Keki Patel, Cargo Manager - India and Nepal, Emirates SkyCargo talks to Nicin Varghese about their journey of overcoming challenges and the newly built Emirates SkyPharma

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Emirates Skycargo, during the Onam season, transpor ted 288 tons of perishables to Gulf. How challenging was this for your company? Also tell us what kind of special arrangements did you make to achieve this? Onam is a very important celebration for the more than two million strong Keralite community in the Middle East and Emirates SkyCargo helped transport fruits and vegetables from Kerala especially for this occasion. In order to transport vegetables and fruits from Kerala to the Middle East, especially for the festival, Emirates SkyCargo made special arrangements to operate freighter aircrafts from Thiruvananthapuram and Kochi airports in early September. Normally, these airports are not equipped to handle freighter aircrafts. Despite the challenges, the cargo carrier deployed three dedicated freighter flights, two from Thiruvananthapuram and one from Kochi. This was possible due to efforts of our local Emirates SkyCargo team who were working successfully with the stakeholders.

Pharmaceuticals are one of the most important products transported via air ways because of its impact on peopleâ&#x20AC;&#x2122;s lives. On similar lines, how do you foresee the future of the newly built Emirates Skypharma? Emirates SkyCargo has two state of the art SkyPharma cargo facilities in Dubaiour freighter hub at Dubai World Central and our hub for cargo coming in passenger flights at Dubai International Airport. We recently launched our purpose-built state of the art Emirates SkyPharma facility at Dubai International Airport. It is exclusively dedicated to the timely and secure transport of pharmaceuticals. With certification of EU Good Distribution Practices (GDP) from Bureau Veritas Germany, we adhere to the most stringent guidelines and best practices for the transportation of pharmaceuticals in our service, offering to a high level of product integrity throughout the journey. We offer combined handling space of almost 8,600 square metres (between the cargo terminals at Dubai International Airport and Dubai World Central) dedicated for handling pharmaceutical products. The facilities are connected by a bonded and secured temperature controlled road feeder service. In total, this is the largest facility anywhere in the world that has been certified for Good Distribution Practices. In addition to our state of the art facilities at our hub, we have a modern fleet of over 245

wide body aircrafts and a global network of over 150 destinations across 82 countries in six continents. It provides an unparalleled reach into markets across the world for our pharma customers.

What changes do you foresee in the air cargo industry for the next five years in terms of infrastructure and security? The cargo industry is moving away from general cargo and moving towards more specialised offerings for various business verticals including pharma and retail. This is a global development and this has an immediate impact on the kind of infrastructure and security arrangements that need to be in place. The launch of Emirates SkyPharma facility in Dubai was in response to the need to offer a specialised transportation solution to pharmaceuticals. Our GDP certified infrastructure in Dubai is completely temperature controlled, including the acceptance and delivery docks. Transportation of specialised products require complex processes and system support to ensure that goods are transferred from origin to destination in a timely and secure manner.

At Emirates SkyCargo, we will continue to invest in technology and developing processes that will allow us to transport cargo effectively and efficiently with minimum impact on the environment. What kind of challenges do your company often face while transporting dangerous goods? Transportation of goods categorised as Dangerous Goods under IATA DG Regulations needs specialised and trained IATA DG certified staff at all points of the supply chain. This includes the shippers/ manufacturers, their forwarding partner, the carrier, ground handling and all other supply chain stakeholders, both at the transit (if applicable) and destination airports. Airport custodians also need to have dedicated handling and storage for Dangerous Goods which is segregated from other types of cargo. It is extremely important that the shipment documentation prepared by

the shipper and the forwarding agent is complete and accurate. This ensures that the shipment acceptance and carriage on the aircraft complies with all the regulations for transportation. Emirates SkyCargo has staff that are trained for handling of Dangerous Goods across our network and with our extensive freighter network, we are well positioned to accept all Cargo Aircraft Only (CAO) type of dangerous goods.

Can you please explain about the customised ser vices provided by Emirates Skycargo, especially on pet care and equine care? Emirates SkyCargo has designed a transportation environment to ensure animal welfare, while complying with all the codes of practice set by national and international authorities, including IATA live animals regulations and requirements. For horses, Emirates SkyCargo offers trained and experienced expert personnel to ensure proper handling and welfare of the horses, custom-designed horse stalls, controlled temperature zones set up in the aircraft to ensure maximum comfort and minimal stress for the horses with a provision for professional grooms and certified vets to travel with horses. Every year, we transport horses to a number of major sporting events across the world. We also provide a comfortable and safe transportation solution for pets with a dedicated team of animal experts at our hub and with robust and animal welfare oriented processes at all locations.

What is Emirates Skycargoâ&#x20AC;&#x2122;s mantra for sustainable development? The environmental impact of our operations is an important concern to us at Emirates SkyCargo and the Emirates Group. Our modern fleet of wide body aircraft delivers environmental benefits with lower emissions as compared to older aircraft. Across the Emirates group we constantly undertake initiatives to improve energy efficiency including the installation of a one megawatt array of solar photovoltaic panels at the state of the art Emirates Engine Maintenance Centre which is expected to generate over 1,800 megawatt-hours of electricity every year, helping save around 800 tonnes in carbon dioxide emissions. At Emirates SkyCargo we will continue to invest in technology and developing processes that will allow us to transport cargo effectively and efficiently with minimum impact on the environment.

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Interview

Customs brokers to play crucial role in achieving export target: Shah The apex body of freight forwarders, Federation of Freight Forwardersâ&#x20AC;&#x2122; Associations in India (FFFAI) of the country is going to organise its three days biennial convention from January 19 to January 21 in Kochi. Samir J Shah, Chairman of FFFAI and the Partner in JBS Group of Companies in an interview with Gaurav Dubey talks about the vision of FFFAI and the federationâ&#x20AC;&#x2122;s role in the promotion of Customs brokerage business of the country

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Theme of the 23rd FFFAI convention is based on the services of Indian custom brokers. In which ways do such conventions contribute to the growth of the logistics industry? The 23rd Bie n n i a l Conve nt ion of Federation of Freight For warders’ Associations in India (FFFAI) is scheduled to be organised in Kochi from January 19 to January 21. The convention is being held at such a time when the country is witnessing several landmark and unprecedented decisions in terms of trade and commerce in its economy. At the same time, the world trade scenario is under severe stress. The rapidly changing global trade landscape in respect of compliances, tremendous pressure on yield and cost management, and increasing importance of safety and security aspects have positioned Customs clearing / freight forwarding business at a critical juncture. On the other hand, the Central Government is constantly endeavoring to establish the “Brand India” image across the globe through its campaigns called “Ease of Doing Business”, “Digital India”, “Make in India”, etc. Accord i ng ly, the role of f reight for wa rders i n Ind ia would be the crucial one to script the success of those campaigns like “Make in India” and to reach the set target of exports from India. The theme of the convention “Indian Customs Broker - Trusted Single Entity Logistician - Capable and Dynamic” is the most apt illustration to focus on the vital role.

With great changes in the way, Customs works in India, namely RMS in assessment, PCA, sweeping changes in warehouse processes; and the resultant reduced importance of field working and shifting process of Customs clearance to the offices of the Customs brokers, what kind of an impact will it have on the domestic and international logistics players? We are all presently witnessing great changes in the way Customs works in India. Introduction of RMS in assessment, self-assessment, single window in imports, PCA, differed payment in import duty, RMS in examination, sweeping changes in warehousing process and large number of facilitating measures to name a few. We are also aware that many other changes are in the offing. All these changes will have a big impact on the Customs brokers

and freight forwarders’ day to day function and business. We are very optimistic about positive decisions from Customs pertaining to ‘CBLR 2013’, simplification of refund process under Section 27, settlement of drawback, refunds, implementation of EPCG, project import, Nationa l Bond with Customs, communication of shipping bills and bills of entry, penalty under Section 8, administrative issues at new Customs stations and ICDs, EDI, availability of officers, capacity building, 24X7 Customs clearance, ICEGATE help desk, unauthorised entry in Customs area; following uniform practice, charges imposed by consolidators, etc.

The role of freight forwarders would be crucial to script success of government’s ‘Make in India’ campaign What’s the ideal way for a logistics firm to continually realign it with the multiple changes that’ll become the norm, while also concentrating on the dynamism of Customs segment? Smart way out is to embrace the challenges with the skill of domain knowledge supported by the structural back up of IT. The stress on technology coupled with high domain knowledge and the ability to continual upgrade oneself to remain relevant will be most essential. As a result, there would be domino effects: technology and domain knowledge will involve continual investments of time and money. It will also result in reducing importance of field working and shifting process of Customs clearance to the offices of the Customs brokers.

Gover nment is eyeing to make Customs procedures paperless. Do you perceive a positive impact of its working on the Customs brokerage service industry? Government’s initiative on going paperless is a positive move and it shows that the government is prepared to walk the talk. It is necessary that the issues like RMS, Ex-bond, etc. manual out of charge may be replaced by system out of charge. The endeavor should be paperless with minimum human intervention. The

processing procedures have not been changed at the front end of receiving the paper from the department and it should be done away with. It is important that the process is revamped to achieve true facilitation.

Have you worked around a way to grapple the perception of your clients about being relationship managers and not domain experts? Traditionally, the role of the freight forwarders is to deal with the cargo of the exporter/importer, process it through Customs, make it ready for carriage by sea and air; interact with the carriers, custodians, ports, transporters, etc. In fact, they play the pivotal role for way forwarding towards the goal of increasing share in global trade. In addition, at present, exporters and importers need a multitude of services including packaging; i nte ract i ng w it h ot he r suppl ie rs/ stakeholders; documentation and other services like fumigation and palletisation, etc. The freight forwarders alone provide all these services to the EXIM Community. The Indian freight forwarder takes on responsibility to fulfill each and every requirement of the EXIM Community. Hence, the freight forwarder is the crucial link who interacts with all the different players in the cargo movement. Each stakeholder is directly connected to the freight forwarders. In addition, today security, safety and compliance are the main concerns. The Indian freight forwarders recognise the importance of these parameters and execute their job functions with the same responsibility. Freight forwarders today are not confining to single job function but offering complete, end to end services. However, freight forwarders have to grapple with the perception of their clients that the freight forwarders remain relationship managers and not domain experts. Their expectation from us pushes us in a position to solve every issue without compensation or without recognising our ability. We will have to change the perception and position ourselves as a domain expert to claim dividend. With this goal, we have already started massive skill development and image building initiatives through our own institute IIFF (Indian Institute of Freight Forwarders). We will further discuss the issue in our Kochi convention for the greater interest of the logistics industry as a whole.

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Interview

“GST will be the mother of all reforms”

Indev Logistics has emerged as a leader in the world of logistics yet again after becoming the first ever logistics operator in India to have been awarded the AEO certification which is one of the best statuses today. Xavier Britto, Chairman, Indev Logistics Pvt Ltd, in a candid interview with Tariq Ahmed, talks about demonetisation, GST and why it is important for logistics operators to be comprehensive in nature What has been the impact of demonetisation on the overall supply chain system? How are you trying to overcome the impediments? Demonetisation, since it was a sudden step taken by the government, there has been certain hiccups, particularly in the areas of supply chain activities, transportation and labour operations, wherein most of the transactions are in cash. A considerable amount of the workforce doesn’t transact

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in cheques or other modes of payments, especially when it is for lesser amounts. But now, slowly things are falling into the right places. No doubt the logistics industry has suffered. But I believe we will be able to overcome it in the coming months. I am hoping the economic equilibrium of the country will return by March, as it is not an easy exercise. It’s about 1.25 billion people. So we need to give it time.

What unique strategy do you adopt in order to maintain optimum security of cargo, especially air cargo? Recently, we have received the AEO certification mainly because of the level of security that we provide. What is AEO, you ask? It means that you have to maintain the highest level of security for your cargo and for your nation. For that, a team of Central Government officials visited all our facilities to examine whether we are well

equipped and only after assessing that, they provided us with this certification. This is a huge advantage and I think the country has to move towards it and more and more manufacturers and logistics operators have to come under the purview of AEO status, because it gives them a lot of benefits and the government gives lot of freedom. It also reduces dwell time as you have to keep on updating your technology and other areas of operations.

In today’s world, where we see an evident shift towards multimodal tr anspor t ation, do you believe consolidation services can be a boon for both the parties? Yes, definitely. Today, each logistics operator will have to offer a range of services to its clients under one roof. Unless you are a comprehensive operator, you will not be able to sustain in this cut-throat competitive market. Your operational efficiency will automatically come down. So, the order of the day is that we have to become complete, in the sense that, we have to provide end to end solutions to our customers. This will help the customer to source his requirements from one particular vendor, which will not only give him better control, but also significantly reduce the lead time. Most of the manufacturing companies nowadays work on almost zero level inventories, which is why they try to outsource all the logistics activities to their respective logistics operators. And when you want to work on zero level inventories, the entire supply chain system has to be absolutely efficient. In that connection, we need to gear up to reduce their overall lead time (which surmounts to cost saving) and thus have a significant impact on the final product pricing. So yes, it is a boon for both the parties.

As we step into another calendar year, what trends can we expect to see in the coming days in the logistics sector? The proposed roll out of GST will be the mother of all reforms. The standardisation of taxes will certainly reduce the time consumptions, as well as most of the checkpoint problems. Transportation will be quicker. Moreover large scale warehousing can be established. But most importantly, economies of scale will work out. Previously, fragmentation was really costly. But now, we will be grouping our activities at the important centres and from there ultimate distribution will take

place. In the shipping sector, many mergers are already taking place and I have a feeling that in the coming years, there will be only around eight to ten shipping lines. These lines want to work with the economies of scale, in the sense that each of these lines are efficient in their core competency, and along their desired routes. Shipping companies, in the wake of mergers, are consolidating their ships, their routes and their equipments; thereby trying to regularise their freight levels. Shipping lines need to comply to these trends quickly to sustain in the long run. Hanjin failed because of mounting debts, overcapacity, idling, etc. These mergers are going to be huge in 2017, and more are in the pipeline. This will definitely help the overall shipping industry.

INDEV believes in taking the front seat when it comes to updating a technology or adopting a new technology, keeping in mind the present scenario. Since Indev logistics is known for excellent handling of sea freight, do you believe government initiatives like the Sagarmala Project will have a significant impact on the share of sea freight in India? We have 7,517 km of coastal line, which is one of the longest in the world. So, the Sagarmala Project will ensure development of many smaller ports, and along the coastline, SEZs can be created. And once the Waterway Bill is passed, there will be relaxation on the cabotage rules and coastal shipping will start to flourish. This would probably reduce the overall costing of transportation. Generally, when we transport by road, it costs around `1.50/km. By rail, it’s 75 paise to `1/km. But when it comes to coastal shipping, it’s less than 50 paise. Therefore, the Sagarmala Project will certainly help in establishing ports and many more industries

along the coastal lines, thus encouraging coastal shipping. Coastal shipping of cars has already started in Chennai and it has been really successful. They have figured out it’s less than half the cost they used to incur by road transport.

What innovative and technological measures have you adopted at Indev Logistics in order to achieve the dream of a seamless supply chain network? We have already adopted ERP systems, RFIDs in most of our transport vehicles and are also in the process of developing the latest WMS (Warehouse Management System) so that there is transparency. We are doing a lot of value additions presently by improving the technology. For example, for the automotive industry, we are trying to include semi assembly. So, INDEV believes in taking the front seat when it comes to updating a technology or adopting a new technology, keeping in mind the present scenario.

Do you offer premium services to your clients for time sensitive cargo and temperature sensitive cargo? Yes, of course. For air cargo, we try our best to ensure that we reduce the dwell time. Also sometimes, we send our own people with the consignments so that it reaches its destination safely and securely. That is why INDEV is in the process of buying out a courier company to ensure last mile connectivity. Because when we are talking about e-commerce or distribution, it ultimately requires last mile connectivity, for which courier companies are important. That’s why we are in the process of negotiating. We are also moving towards express cargo delivery – both intercity and intracity. So in 2017, we will be concentrating on that.

Project cargo is another sector that’s flourishing in India at the moment. Does INDEV have any specifics plans for this sector in the near future? We have done several big projects in the immediate past. In 2017 also, we have formed a separate department to concentrate only on project cargo. We are also planning to invest in equipments and other specialised vehicles. We need low-bed and long trailers, which we are currently subcontracting. In 2017, we will also be creating a separate equipment division, wherein we will concentrate in owning our own equipments to handle multi-tonnage cargo.

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Interview

Technology to accelerate the growth of Customs brokers Customs brokers and freight forwarders undoubtedly play a vital role in the business of export import of the country. Shankar Shinde, MD, Global Express Multilogistics Pvt Ltd has the experience of more than two decades in the field of custom brokerage and international freight forwarding. He holds several key positions in different associations related to the business. Shinde, who is also the Vice Chairman of Federation of Freight Forwarders’ Associations in India, talks about the present scenario, current trends and challenges of the business in an interview with Gaurav Dubey. Here are the excerpts: whereas the role would become important as we would change from manual to technology based system. This will require efficiency, intelligence and right decision making to increase the trade to benefit our industry at large. It is obvious that the technology will not only make our business easy but it will surely result in increase in volume through reduction in cost and dwell time which will enhance the volume. However, we are looking forward for the bright future for our industry.

What are the future challenges and opportunities before the Customs brokers/ freight forwarders? What is your opinion about the present scenario of Customs Broker/Freight Forwarding business, especially in your region and in India at large? Customs brokers serve as a vital link between trade and Government who balances seamless movement of EXIM trade. Country’s trade will become handicap without the support of Customs brokers and freight forwarders. The global business scenario continues to be in a sluggish mode and several organisations are focusing on rationalising business and enhancing efficiency. This makes supply chain a paramount function; it has become more than a link. We at FFFAI are totally committed to create an ambience of nurturing competitiveness, innovation, creativity and service excellence. Customs initiatives with a single window systems, there has been paradigm shift, the players should welcome and appreciate the move and change as per the situation. They have to face the present challenges for the betterment of future. It is the only apprehension that our industry carries that due to technological development the role of Customs brokers will diminish,

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Customers demand more services at lower rates and it has become a prime concern for the sustainability of Customs brokers and freight forwarders. If this scenario persists, Customs brokers may soon become irrelevant. Even from regulatory standpoint, key changes such as prevalence of EDI, self declaration and RMS facilitation, AEO Policy Single Window systems, stringent KYC’s norms adoptation, 24x7 Customs clearance and many more initiatives of advance filing of B/E. Deferred duty payment will require Customs brokers to radically re-think their models. With these changes, customers may eventually be technologically enabled to handle their own Customs procedures. It is therefore important for CHAs to view themselves as a higher level logistics service provider. Here is the SWOT analysis for the Customs brokers / freight forwarders S: Strength- Domain expertise knowledge, regular government updates. W: Weakness- Lack of training institutes, financial constraints, and fear of loss of business to other competitors leads to credit financing at risk, huge recovery losses, limited remedies for security for Customs brokers / freight forwarders; high risk due to unforeseen surprises as busi-

ness depends on licensing rules framed by government departments and Ministry of Finance. O: Opportunities- Global exposure, the Customs brokers can divert their business in various aspect and expand business with their core knowledge base, forward and backward integration, verticals can be added to the business. T: Threats- MNCs’ presence, multinational companies and international forwarders commencing business in India have very low interest rates of finances to capture market as compared to Indian forwarders.

Would you like to highlight any specific challenges/issues in your region? What would be your suggestions to address those issues for the growth of cargo/logistics industry? GOVERNMENT POLICIES- More transference with the implementation model in true spirit is required. TAXATION- Simpler tax regime than complex taxation will lower fear and increase the compliances which curtail the corruption. INFRASTRUCTURE- At various level need to be commenced from Information Technology, community systems, road, rail transport, real time on line status.

What would be your expectations from the government, respective authorities and other stakeholders for the development of cargo and logistics industry in India? The government has taken various initiatives for the development of logistics sector. However, the implementation part needs to be viewed from different perspective. All the stake holders should realise that there has to be complete transparency in the business model to achieve common goals and trade. Cost increase results in the loss of customers order which in turn impacts the whole supply chain business.

Interview

EMPHASISING ON GROWTH AND DEVELOPMENT Being the flag carrier airline of India, Air India is the choicest option with lakhs of corporates and international enterprises every year. Air India’s cargo operations have a combined network capacity which acquires 58 domestic and 29 international stations. Abhay Pathak, Executive Director - Cargo, Air India in a candid conversation with Nicin Varghese speaks about how they assure an error free cargo management system and emphasises on the need for growth, especially in the domestic sector systematic management system. With the help of our hub and control system, we are able to manage things timely and successfully.

Please share with us your view about modernising air cargo, especially on making the industry a paperless one and offering transparency to the air cargo customers?

How does Air India continues to be a logical choice of people who think of transporting goods in and out of India? As far as the end user is concerned, their materials or goods must travel under safe custody and should reach the destination on time. And Air India has proved their excellence in doing this time and again.

How does the Logistic Management System support Air India to offer better and error-free cargo solutions to its customers? The airline’s job is to transport goods from point A to point B. In addition to this, we have support services like the warehouse management. We also have a ground handling department. These three elements along with the cargo agents play a very important role in cargo business. Put together, we can call these four components as logistics management system. The primary function of an airline is to ensure that the goods are safe and they reach the destination on time. There we have an advantage; we have a direct product to almost all over the world and this makes us independent. We also have successful hubs in Delhi and Mumbai. It works very dynamically and systematically. The total transaction is a seamless process because we maintain a

The industry is already a paperless one. It is the mindset of our people which need to be changed. We have given instruction to everyone, not to print. From the booking of cargo till the delivery, there is no need for printing. But, the Customs department still requires some amount of paper works. They are also working hard to make it a completely paperless industry. Apart from the Customs, the air cargo industry doesn’t need paper at all. Modernisation is a process. The concept itself is dependable and subjective. Its definition changes with time. What we consider today as ‘modern’ can be outdated tomorrow. India is already a modernised country. It is no more outdated since we have all those technologies and infrastructure developments which is available in all other countries. So we cannot say that we have to modernise. Rather I would say that we have to grow in terms of infrastructure. I believe the growth is happening all over India. But, domestic cargo sector is still in need of upgradation especially from the airport operator’s side. As far as Air India is concerned, we have our own warehouses and we are also working towards expansion of the current ones. We are going to have at least eight docking stations, may be in a month’s time. We hope that will ease out all the delays and help us to work more efficiently. We believe it is always an advantage to have a faster system.

Sentimental cargo shipments need utmost care and concern. Can you please tell us how Air India handles this special category of cargo? Being a Public Sector Undertaking, we believe that it is our duty and we do it with utmost

respect and sincerity. It is our commitment towards the society. Most of the cargo shipments under this category travel with Air India. We do not usually add a commercial angle to it. In fact, we carry the armed forces free of cost.

Being a completely government owned and operated company, what kind of challenges do you face from your private competitors? Challenges are multifaceted. Being a PSU, the human resource policies and procedures are way more stringent when it comes to evaluation of the standards of performance of employers and decisions regarding replacement or recruitment. This stringency makes it apparent to invest relentless efforts in captivating the productive contribution from them. Apart from this, we are mandated to be transparent about our service policies, offers or strategies to the trade and target audience which becomes a demerit vis-à-vis our private competitors. As such the system in PSUs should have the flexibility of choice.

Do you think the new Civil Aviation Policy will stimulate the growth and development of tier II and tier III cities? Of course I believe that any policy which is formulated by the government is for the goodwill of its citizens. India is a vibrant country in terms of economics. We have a growth rate of seven per cent in each year. The mindset of the people has changed and people have begun to spend money. Now, the industry has to be customer savvy. It should be able to serve the customers in terms of demand. The only question that remains is, should we first develop our infrastructure and wait for demand to arise or should we develop according to the increase in demand? It cannot go simultaneous. Creating infrastructure requires huge amount of money and if the demand decreases, the developments will turn to loss. As a developing country, India will not be able to handle this loss. Finally, you have to gain profit out of each investment you make.

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Interview

Innovation is in our blood ~Martijn Being recognised as the â&#x20AC;&#x153;Most innovative trendsetter in logisticsâ&#x20AC;? for the third time in the last five years, Geodis has currently reached the pinnacle of its success. Martijn Tasma, National Sales Director, Geodis India, at the launch event of Geodis Extra Mile service and a new state-ofthe-art warehouse, talks about innovation, demonetisation and much more in a candid interview with Ajeet Kumar

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How do you think this sudden move of demonetisation will impact the industry, in the short term as well as in the long term? In the short run, there seems to be an impact in the GDP and the growth of the economy which was booming. But in the long run, I am sure this will have a very positive impact. What’s important for us is, other countries and big international companies will see it as something very positive for doing business in India. The government is doing a great job by making the Indian economy a cashless one. PM Modi is travelling across the world to bring business in the country and he is really changing the game for India.

Please tell us briefly about the EXTRA MILE service that Geodis has to offer? And how will it impact the distribution and supply chain processes of your prospective clients? In today’s business practice, we have seen that customers have to pay for full truck load even when they do not require a full truck load. We want to combine cargo by a cross dock to ensure that on the one side we reduce the cost for our customers for this load and they would only pay for what they move. Secondly, it will have very good impact on environment. By reducing truck loads, we would be able to contribute for the betterment of environment to some extent. This is the first step we want to do here in Delhi. Then we will move towards Mumbai, Chennai, Bangalore and other places. We have this experience as we are doing it in Shanghai where we are doing it by using electric trucks. As we have the CNG vehicle available in India, we can do it by using CNG in present situation. There are seven golden rules of our company and one of them is ‘Be a good citizen’. We as a company are totally committed to these seven golden rules.

The newly launched state of the art warehouse by GEODIS is going to be a milestone for the entire industry. What are the unique features implemented in the warehouse? In the warehousing sector itself, we wanted to have a different kind of warehouse. Something that stands apart from what others are doing. We are currently in the process of developing a specific solution. We have several things in the offing. We are offering Value Added Services, incorporating technologies like RFID, etc. We are constantly investing in RandD to come up with such technological solutions in India as

they are still in their nascent stages in India. Today, most of the operations that goes on inside the warehouses are manually done, which leaves a huge scope for error. Plus, you do not have full control over the stock in the warehouse. These are the gaps that we want to fill. Of course there are companies working in the same lines as us. We are a young company, with about eighteen years of market experience in India, but we have a very strong growth curve and are really ambitious. We have a stronghold in fashion and lifestyle and are also into handling e-commerce globally. We have recently acquired the company OHL in the US, which help us in specific operations like order fulfillment for e-commerce companies. These knowledge and expertise that we have, we will implement them here in India as we expect a big boom of e-commerce. And that I believe is a USP which not many of other companies are offering today. We are also looking at automotive, hotel logistics and industrial projects to increase our customer base in India.

Today’s generation is going digital rapidly. Hence, we have been working in the direction of digitalisation. Tell us about the Geodis Drone. It’s a revolutionar y concept and will surely increase operational efficiency in w arehouses. Is this how the warehouses of the future will look like? We don’t have a Geodis drone in India as of yet. This concept is of France where we started to develop. We have different kinds of warehouse positions, different levels in warehousing. And instead of going by a truck and moving it throughout the warehouse, we will use drone to pick a product from one location and to bring it at another location. This would be much faster and efficient. We are working on this concept at present.

Geodis has alw ay s believed in implementing revolutionar y technologies and innovation to make this industry more customer friendly. What technological advancements can we expect to see being implemented in the immediate future?

In last five years, we have been nominated three times in a category of ‘Most innovative trendsetter in logistics’. So innovation is in our blood. Inside Geodis, we have a programme to develop new things continuously. One thing which we developed recently is an app for your phone to find all the information about shipments. It is called IRIS (Intelligent Real Time Information System) where one can track its shipments close to real time with an update every five minutes. And we keep on developing these kinds of things to offer value to our customers.

How are you looking forward to educate the trade about these new innovations? We are very happy with the growing digitalisation and we are looking forward to pitch in. Today’s generation is going digital rapidly, for e.g., nowadays we all book tickets online unlike before when we have to take services of a travel agent. They use the services of different websites as per their needs. These people will do things more via internet and smart phones. Hence, we have been working in the direction of digitalisation. Development of RFID is also a step taken in the same direction. We have a fair idea of the subject and we are looking forward to bring all the technological developments in India too.

The concept of centralised warehousing is going to be the next big thing in the coming years. How are you preparing yourself for this shift? As a company, we can use our expertise in the Indian market which we have in other countries like in China, France, US. For e.g. – Point of Gravity analysis by which we could actually decide where we could place warehouses to help our customers to do these kind of things, it will help them to evaluate locations for placing warehouses. Hubs may be developed one in central India, one in north, east, west and south. We have to see on the basis of these kinds of analysis.

What are the megatrends that you foresee in the coming years? E-commerce would be the next big thing which is going to happen. Lot of things would be going to come up in the sector, GST will have its huge impact on e-commerce and I do hope with this boom economy would come back on the track again. Geodis will continue to innovate to serve existing and attract new customers on a daily basis. The sky is the limit.

january 2017 - CargoConnect 79

Shippers Speak

Logistics has become the backbone of the Retail business: Anil Chinnabhandar How important is logistics for the overall scheme of your business?

Landmark Group has been a dominant name in the retail sector from last several decades. The organisation which was founded in Bahrain in the year 1973 has witnessed a phenomenal growth, and over the years the orgnaisation has expanded itself in the Middle East, Africa and Indian Subcontinent. Dr Anil Chinnabhandar, Senior Vice President – SCM and Planning Landmark Group – Max Retail Division, who is spearheading one of the important retail divisions of the group, in an interview with Gaurav Dubey, discusses the growing importance of logistics in the retail business. Here are the excerpts of the interview

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Logistics has become the backbone of the retail business. As per the current scenario, the Indian consumers have started moving towards Omni channel and logistic activities have come on forefront. Logistics hitherto was mainly B2B centric but now it needs to be reoriented towards B2C. Omni channel customers are expected to see the business offerings anywhere (Social, Print, Online, Kiosks and Brick and Mortar), wish to place orders/buy anytime and expect Retailers to deliver either at a store or undertake door delivery, totally as per the convenience of the customer. B2C requirements are highly sensitive and customers do not tolerate any delays or misses on the delivery commitments or on quality at all. Such delivery lapses may lead to higher product returns and it could even deprive the company from any future business opportunity too. Pressure also increases several folds on the cost of logistics as the B2C deliverables demand smaller parcels, more frequent and across larger geographies, limiting the logistics optimisation which was taken for granted so far. Therefore, logistics has now become the ‘lifeline’ of the modern retail sector in India.

How the company ensures smooth coordination between suppliers, transporters and other departments in the supply chain? At Landmark group India, we have a seamless connection among our partners, be it at the inbound or on the outbound. All suppliers stay connected in real-time with orders, timelines, stock movements and payments etc. All outbound transactions are also online with transporters, warehouses, franchisee stores etc including a smart app on the delivery confirmation. There is a common data flow or triggers available for partners and the internal departments which make the decision process very smooth. This excellent coordination helps us to deliver the optimal performance.

How do you manage back-end supply? We manage back-end supplies with an absolute transparency among various internal stakeholders along with supply partners and transporters. Supplies are aligned to the frontend retail dynamics.

What percentage of your logistics work is outsourced? What functions are performed by your logistics partners and what are controlled internally? Majority of our logistics activities such as warehousing, Value Added Services (VAS), transportation, factory-gate pickups etc are all outsourced. Our own team of skeleton staff resides with the logistics partners to ensure optimal usage of resources and required levels of services and quality.

Tell us about the most common problem faced by the company during its supply chain process. What steps do you take to overcome these? Unreliability of the ‘Turn-Around-Times (TAT)’ is the single largest challenge that we have been facing on an ongoing basis. Transport partners struggle to provide consistent, country-wide deliveries within the agreed timelines. DeliverIn-Full-On-Time (DIFOT) is a farfetched deliverable currently, which adversely affects the Retail business especially around season launches and festivities. We have been trying to work with some of the aggregators and constantly looking forward to work with geo-based, local experts who can deliver to us consistently and accurately.

Who are your Logistic Ser vice Providers (LSP) and what qualities you seek in them before choosing their services? Presently, we are using a couple of domestic LSPs, one in South and rest with another player. Geo based expertise is the main criteria for their selection. However, the search for a credible and strategic partner is an ongoing journey.

guest column

Anatomy Of The Future Warehouse By Stuart Scott

ow do you imagine the future warehouse to look like? It’s probably one that’s fully robotised, with never a person in sight. For the more imaginative ones amidst us, we may think of drones whizzing around – barely missing one another – picking up items from their receptacles and delivering them to droids, waiting at sorting stations. That picture doesn’t seem too far away from reality – and we are starting to see the warehouse of the future taking shape right now. What’s driving the evolution?

The growing importance of warehouses Several evolutions have happened in the warehouse industry. A traditional warehouse is staffed with workers manually stocking shelves, running from aisle to aisle, and filling out paperwork with pen and paper. Then we are starting to see additions to the warehouse – barcode printers and scanners, handheld computers, vehicle mounted computers, RFID scanners and printers, robots, and automated shelves. Some warehouses are even talking about using drones for asset location and cycle counting. To further understand the trends that are taking place in the warehouse, we first need to know what is happening outside

the warehouse. E-commerce is booming in Asia, led by two super-spending powers – China and India. Consumers in Asia Pacific –a region, that is home to 60 per cent of the world’s population – is twice as likely to purchase online than in brickand-mortar stores. The region is on track to become the largest e-commerce market globally, in the next five years, as predicted by MasterCard. Such tremendous growth is predicted based on several drivers. Firstly, the middle class population, with greater disposable income, in Asia, is expanding rapidly. Secondly, the soaring mobile and internet penetration in the region is introducing more users to the pleasures of shopping online. Thirdly, a cluster of e-commerce sites have emerged in Asia, from international players like Taobao and Rakuten, to smaller blogshops and monobrand sites, offering numerous options to consumers. Last but not the least, the e-commerce industry is now backed by maturing logistics; reliable infrastructure coupled with ample use of technology, allowing the logistics industry to buttress the diversifying e-commerce requirements, be it same-day delivery or predicting supply and demand of a given item. Warehouses of the future are embodiments of technology The study shows that at least 74 per cent of warehouse managers have plans to outfit their staff with more and better technology that increases visibility of operations, and automates tasks that were previously manually performed. For example, barcoding and RFID-tagging items that are

traversing across the warehouse accurately helps staff in tracking their location and remaining stock, which in turn allows longer lead time before they have to be replenished. According to our survey, the top five technologies warehouse managers are most interested in include Internet of Things (IoT), barcoding, tablet computers, big data/analytics, and automation. Wearable and RFID are also the two sought after technologies in the warehouse. Compared with results for the 2015 vision study, only 40 per cent of warehouses surveyed were planning to adopt RFID then, but the figure has grown two-fold in the latest survey. With ergonomic wearables and handheld computers built for the enterprise environment, workers are enabled to scan and track items with faster speed, less effort, and better accuracy. The use of mobile handheld computers and tablets with real-time access to warehouse management systems will double from 40 per cent in 2015 to 86 per cent in 2020. In the meantime, the use of pen and paper is expected to drop to 24 per cent in the next four years, down from 95 per cent just a few years ago. These technologies bring in numerous benefits: from increased productivity amongst workers, to faster delivery time, creating value for end-customers. A better way to work According to the same Zebra study, warehouse managers estimate that 50 hours are spent on training for new staff to reach maximum productivity, and they expressed hope to slash that to 36 hours – a 20 per cent productivity increase. To achieve that, the industry is adopting voice-and-screen

directed inventory picking and replenishment in the next five years. In this scenario, operators are equipped with a mobile device or voice-dedicated terminal, and a headset with microphone. They receive voice prompts and perform the tasks. Voice-and-screen picking is designed to free up an operator’s hands and eyes so that he can focus on the task at hand. Picking technology, featuring voice commands, is expected to be huge in the warehouse, with 62 per cent of respondents planning to deploy both voice and screen picking by 2020. Using a touch screen format for enterprise mobile devices and computers, loaded with a familiar operating system like Android, also eases the learning curve for workers, who are often hired on a casual basis to meet seasonal demands. Interleaving is being considered to boost worker efficiency too. In this scenario, employees’ picking activities are maximised by assigning them multiple tasks in one journey. This can increase productivity by 10-40 per cent, and is expected to grow by 20 per cent by 2020. By 2020, warehouses will also expand the use of cross-docking (according to 61 per cent of survey respondents), a practice of unloading materials from an incoming truck and loading those materials directly onto an outgoing truck, with little to no storage in between. From utilising technology to changing the ways of doing things in the warehouse, productivity could take a quantum leap in the years to come. (The author is Director, Enterprise Mobility and Solutions Marketing APAC at Zebra Technologies)

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news

Govt plans for integrated transport system

Air cargo connectivity and trade growth linked

Government plans to develop an integrated system of roads, railways, airports and water ports which would be a game changer, Union Minister Nitin Gadkari said recently. While addressing the 89th Annual General Meeting of FICCI, Road Transport, Highways and Shipping Minister said that the development of integrated logistics and inland waterways would be a game changer. The government is planning to develop an integrated system of roads, railways, airports and water ports and is also working on port-led industrialisation, he said. The minister also said that the government has accorded the highest prominence to infrastructure and his ministry is committed to achieve this objective. The ministry’s target is to implement `25 lakh crore worth of projects in five years of which, `15 lakh crore will be in road sector and `10 lakh crore in shipping sector. Pushing the government’s ‘Make in India’ agenda, the Minister gave the mantra of ‘Be Indian, Buy Indian’ and invited Indian companies to join the initiative to drive the massive change in infrastructure sector.

An IATA-commissioned study has established a clear link between air cargo connectivity and trade growth. Research by Developing Trade Consultants found that a one per cent increase in air cargo connectivity is associated with a 6.3 per cent increase in trade. The study, sponsored by the international airlines lobby, has also developed measures of key quality parameters of Customs services through two indexes: the Air Trade Facilitation Index (ATFI) and the eFreight Facilitation Index (EFFI). Countries that performed better on these indexes also were more integrated into Global Value Chains (GVCs), stated the report. GVCs are the network of logistics connections that enable, for example, the various component parts of a mobile phone to be produced in several countries around the world before final assembly in another.

Surat all set to get the air cargo terminal

Investors rush as logistics sector set to touch $10 billion by 2020

The Airports Authority of India (AAI) has issued tender for its construction at Surat airport. It has invited proposals from the engineering firms across the country for setting up state-of-the-art cargo terminal. Earlier, in October, the AAI had given administrative approval for setting up modular cargo terminal with the sanctioned expenditure cost of `10.37 crore. Sources revealed that the cargo terminal is likely to be outsourced to some cargo handling company for operations and will be expanded in a phased manner with the growth of cargo potential at the airport. The modular cargo terminal will be a steelbased structure to be constructed on the land between the Air Traffic Control and the terminal building. The cargo terminal will have the cold storage facility for the export of perishable items. “The tender for cargo terminal has been issued. The construction work for cargo terminal will start as soon as the contract would be given after the tender process,” said Pramod Thakre, Director, Surat Airport.

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Venture capital firms scanning Indian markets for the next big investment opportunity after consumer internet would do well to have their eyes trained on technology-driven logistics startups. The market for logistics-technology businesses, which include delivery startups, truck aggregators and warehousing firms, is expected to surge to $9.6 billion by 2020 from $1.4 billion in 2015, according to a new report by investment bank Avendus Capital. Venture capital investors, including SAIF Partners, Sequoia Capital India and Accel India as well as growth equity investors Warburg Pincus and Tiger Global Management, have made multiple bets on the sector. Strategic investors, including China’s Alibaba Group and Amazon and global logistics firms, are also eyeing deals. “As the growth starts coming back in ecommerce, there will be increased deal activity in the logistics space. Venture capital investors have started thinking beyond normal categories, which is an evolution of the market,” said Aashish Bhinde, Executive Director, Avendus, adding that among the other emerging sectors were education technology and healthcare technology.

news

Kolkata witnessing rise in demand for warehouses

China launches cargo service linking Tibet with Nepal

Demand for warehouse space witnessed rise in Kolkata in the last two years as manufacturing and consumption majors like Shoppers Stop, Manyavar, Philips, Linc acquired close to ten lakh sq ft land for warehouses in the city. “We are seeing major impact of the Eastern Dedicated Freight Corridor project on the warehousing space in peripheral Kolkata area. The area around the project has got impetus due to large funding from international agencies and the Central Government. Many companies have expressed interest and the demand is only going to go up as the project takes a better shape,” said Samantak Das, Chief Economist and National Director, Research, Knight Frank India. “Demand in warehousing is emanating from two major drivers — manufacturing and the consumption (retail sector) — that are trying to tap the potential of the eastern market and making Bengal the nodal point,” Das added.

China has launched a new cargo service linking Tibet and Nepal as dozens of trucks carrying goods worth $2.8 million left the Tibetan border port of Gyirong en route to Kathmandu. The new rail and road cargo service linking Guangdong, Tibet and Nepal, aims to boost trade with the South Asian neighbour as China pushes forward its Belt and Road (Silk Road) initiative, state-run ‘Xinhua’ news agency reported. A train carrying products, including shoes, clothes, hats, furniture, appliances, electronics and building materials, covered the 5,200-kilometer distance between Guangzhou, capital of Guangdong Province, and Xigaze in Tibet. The trucks are responsible for the remaining 870 kilometer of the journey, carrying goods to Gyirong and then to the final stop in Kathmandu. This is the first such consignment being sent to Nepal after new Prachanda government took over from his pro-China predecessor K P Sharma Oli, who had signed the transit trade deal with Beijing in a bid to reduce Nepal’s dependence on India despite it being expensive due to the mountainous terrain.

news

India double-digit growth market for cargo deliveries

World’s largest UID data centre moved successfully

India continues to be one of the main growth markets for DHL Express which opened a new USD 100 million South Asia Hub in Singapore today. India-led South Asian markets accounted for 30 per cent growth in express cargo deliveries for DHL between 2012-15, the company’s executives said, adding that India itself is a double-digit growth market. The company, which inaugurated the new 140 million Singapore dollar (USD 100 million) South Asia Hub here, serves India with two dedicated daily flights to Bangalore and Delhi as well as commercial flights for express cargo deliveries to Mumbai, the officials said. The two dedicated flights to Bangalore and Delhi offers 195 tonnes per flight six times a week. The 24-hour express hub facility located within Changi Airfreight Centre at Singapore Changi Airport, spread across 23,600 square metres, is outfitted with the industry’s first fully automated express parcel sorting and processing system in South Asia and is set to boost its operational capacity and efficiency at DHL Express. “India is a double-digit growth market for DHL Express,” said Sean Wall, Executive Vice President for Network, Operations and Aviation, Asia Pacific, DHL Express.

INTEREM Relocations completed the UID Data Centre movement from the private companies to the government. INTEREM Relocations was the exclusive logistics service provider of the world’s largest data centre movement for UIDAI (Unique Identification Authority of India), which everyone recognizes as AADHAAR CARD. The value of assets packed, moved and insured through Interem Relocations was over INR 5.3 billion, which is one of the biggest values handled by any relocation company. More than the physical value of the assets, the highly sensitive nature of the database and the risk of identity theft made the task even more challenging for Interem. Commenting on the successful execution of the project, Rahul Pillai, CEO, Interem Relocations said, “We take this opportunity to acknowledge the hard work and dedication of our team, in planning the seamless execution of this move and working round the clock to make this project a grand success. This achievement clearly cements our position as top leaders in the relocation business.”

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Schenker combines air, sea and land board divisions

Emirates SkyCargo expands US network to Fort Lauderdale

The management board of Schenker is being reorganised from the start of this year, with the air and ocean freight division being combined with its land transport division. The transport company said the new board division will be called freight and it hopes the combination will “improve integrated transport products and services and make better use of growth potential”. “By reducing the number of members on the management board from seven to six and reorganising the board divisions, we intend to satisfy market requirements for fast and consistent solutions for our customers and to serve as a role model for creating more efficient structures”, said Jochen Thewes, Chief Executive of Schenker. The new division will be headed by Ewald Kaiser, currently member of the management board for land transport. A new organisational unit named global land transport will also be created within this board division and will standardise and promote the development of land transport outside Europe. Also, a new division called commercial DB Schenker and contract logistics, headed by Tom Schmitt, will be created.

Emirates SkyCargo has added Fort Lauderdale, Florida, to its network of US destinations. The launch of a daily Boeing 777-200LR freighter service to Fort Lauderdale is the Dubai-based carrier’s seventh all-cargo destination in the US. Emirates SkyCargo also offers belly hold cargo capacity on its daily passenger service to Orlando, Florida, bringing the total cargo capacity offered to the state to over 330 tonnes per week. The Middle East airline said that the top exports from Fort Lauderdale are expected to include healthcare equipment including surgical and laboratory equipment, pharmaceuticals, electronics, aerospace components, aviation and shipping spares, perishables including cheese, seasonal fruits and vegetables and mail. Top imports into the region are likely to include pharmaceuticals, aerospace components, electronic and electrical goods. Emirates offers belly hold cargo capacity on passenger flights to Boston, Chicago, Dallas, Houston, Los Angeles, New York, Orlando, San Francisco, Seattle and Washington D.C.

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news

Age old ‘Major Port Trust Act, 1963’ to be replaced soon

Jet Airways opens service in Tiruchi-Abu Dhabi sector

The Union Cabinet, chaired by Prime Minister, Narendra Modi has approved the proposal of Ministry of Shipping to replace the ‘Major Port Trusts Act, 1963’ by the ‘Major Port Authorities Bill, 2016.’ This will empower the major ports to perform with greater efficiency on account of full autonomy in decision making and by modernising the institutional structure of major ports. With a view to promote the expansion of port infrastructure and facilitate trade and commerce, the proposed bill aims at decentralising decision making and to infuse professionalism in governance of ports. The new Major Ports Authority Bill, 2016 would help to impart faster and transparent decision making benefiting the stakeholders and better project execution capability. The Bill is aimed at reorienting the governance model in central Ports to landlord port model in line with the successful global practice. This will also help in bringing transparency in operations of major ports.

Tiruchi is poised to have direct flight connectivity to yet another West Asian destination which is expected to further perk up overseas passenger and international freight movements. The daily flight service in the early morning hours in the Tiruchi – Abu Dhabi sector would commence from February 2, 2017. The Jet Airways on its website recently announced its plans for further boosting its connectivity to the United Arab Emirates from India. As part of this initiative, the airline would introduce a daily flight service from Tiruchi to Abu Dhabi to capitalise on the strong traffic flow between southern India and the Gulf and beyond, the website further said. The travel industry in Tiruchi has publicised the introduction of the new service to Abu Dhabi along with the flight’s departure timing. Online bookings for the proposed new service are said to have begun, the sources said. Abu Dhabi would become the third major West Asian destination to be directly connected to Tiruchi after Dubai and Sharjah once the new service is launched. The State-owned Air India Express presently operates daily flight services to Dubai and Sharjah from Tiruchi.

Coastal Economic Zones to be developed by center

Iron ore transport costs may reduce by 14 per cent

The National Perspective plan of the Sagarmala Programme has identified two maritime clusters for development in Tamil Nadu and Gujarat. The government has identified fourteen CEZ along the coastline of the country in the National Perspective Plan of the Sagarmala Programme. These CEZs are aimed at promoting development of portproximate industrial clusters, reduction of logistics cost and time for movement of EXIM and domestic cargo and enhance the global competitiveness of Indian manufacturing sector.

Raha is the new secretary of ACAAI eastern region Eastern region of The Air Cargo Agents Association of India (ACAAI) organised its regional meeting on October 27, 2016. In the meeting Jaideep Raha, Managing Director, Jetex Oceanair Pvt Ltd was selected as the Secretary of ACAAI Eastern Region. T J Thomas, Executive Director, ACAAI and other office bearers of the association wished success for all the future endeavors to Raha on his new responsibility.

The cost for transportation of iron ore by the railways may come down by up to 14 per cent if the rail ministry pays heed to its steel counterpart’s persistent demand. The freight reduction would be a welcome move for the steel and iron ore industry, but might cause a strain to the revenues of the railways, often called the lifeline of the nation. Acting upon the repeated plea of the steel industry, the steel ministry has been urging the Suresh Prabhu-led ministry to change the freight class of iron ore and bracket it within the same class (145) as that of other raw material like coal, limestone, dolomite and manganese ore. Iron ore is presently classified as freight class 165, same as that of steel. The steel industry argued that since iron ore is a raw material, it should be brought under freight class 145 and not put in the same class as that of steel which is essentially a finished product. “If this demand of steel ministry is accepted by the railways, the benefit that would accrue is to the tune of 13.8 per cent less freight charge for transportation of iron ore by the railways,” said a steel ministry source. In 2015-16, India’s iron ore production stood at 135 MT. The difference in the cost of transportation between freight class 245 and freight class 265 hovers between `28 per tonne and `490 a tonne. If approved, this would be the second relief extended to the iron ore industry in the last seven months. In May, the railway ministry abolished the dual freight policy rates for iron ore. Earlier, it used to charge separately for transportation of iron ore meant for exports and domestic consumption.

january 2017 - CargoConnect 87

news

India, Afghanistan plan air cargo link over Pakistan

IATA unveils 2017 Profit Forecast on rising oil prices

India and Afghanistan are likely to announce an air cargo service to help increase trade that both say is stymied because of their tense political relations with Pakistan that lies between them. Prime Minister Narendra Modi and Afghan President Ashraf Ghani met in the city of Amritsar, a short distance from the Pakistan border, for the Heart of Asia conference aimed at stabilising Afghanistan. Officials say the focus of the air cargo service is to improve landlocked Afghanistan’s connectivity to key markets abroad and boost the growth prospects of its fruit and carpet industries while it battles a deadly Taliban insurgency. Khalid Payenda , Director General for macro fiscal policies , Afghan, said the potential for trade with India, the largest market in the region, was far greater than allowed by land and so the two countries had decided to use the air route. “That would be air cargo between Afghanistan and India. We have a lot of potential for trade on both sides.” A joint venture involving an Afghan and an Indian cargo firm would be set up and the two governments were working to set up infrastructure at Kabul and Delhi airports.

The International Air Transport Association (IATA) has provided a lackluster view for carriers with respect to the profitability level for 2017. The research firm predicts global net profit for the industry of $29.8 billion. This is much lower than the 2016 profitability forecast of $35.6 billion. The gloomy projection may be attributed to the anticipation of rising oil prices. In fact, IATA has not only issued a disappointing 2017 outlook, but the forecast for 2016 profitability has been trimmed as well. The organisation now expects the industry to end the current year with global net profit of $35.6 billion as against $39.4 billion predicted in June.

69 bridges to be constructed between India and South-East Asia India is funding construction of 69 bridges on the TamuKyigone-Kalewa road (149.70 kilometer) section and construction of 120.74 kilometer road between Kalewa and Yargi section of the India-MyanmarThailand (IMT) trilateral highway in Myanmar to improve connectivity with South East Asia by road. The trilateral highway starts from Moreh (Manipur) in India up to Mae Sot in Thailand through Myanmar. Construction of 130 kilometer length stretch of road connecting Moreh (India)/Tamu (Myanmar) to Kalewa in Myanmar has already been completed by Border Roads Organisation of India. For construction of 69 bridges including approach roads in the TamuKyigone-Kalewa road section and construction and upgradation of the Kalewa-Yargi road section of the IMT trilateral highway in Myanmar, appointment of Consultants to finalise tender documents and award of contracts has already been completed.

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Scientists building next-gen technology for logistics How can the principle of atoms arranging themselves to form stable metal help pack boxes inside larger containers? Turns out that the inherent chaos in nature and learnings from particle physics are helping in shaping new technology for the all-important logistics industry. Ecommerce-focused logistics firms and online marketplaces are hiring senior scientists previously engaged in top-end research to focus on their core requirement—the efficient delivery of goods. That involves a range of functions, from creating algorithms for identifying where warehouses should be located to geocoding and making last-mile delivery of products smoother.

Improved cargo movement to benefit farmers: AG Raju Aviation minister Ashok Gajapathi Raju said the government is mulling over increasing the number of cargo and freight carriers as improved cargo movement will benefit farmers. Raju said that Airport Authorities of India Cargo Logistics and Allied Services Company Ltd (AAICLAS), a wholly-owned subsidiary of AAI, has been drawing strategies focused on developing the segment that would take the local produce of farmer to international destinations. “There is a good demand for temperature-sensitive goods globally, our country has a plenty of local produce to offer. Air cargo will play an important role here...if farmers produce quality products, transport should not become a bottleneck,” Raju said.

Profile

Cover to Cover by DuPont Cargo covers, thermal blankets, thermal sleeves, thermal covers, thermal quilts, insulating blankets and pallet covers are just some of the names used to describe the flexible protective envelopes that are becoming increasingly synonymous with the temperature protection of controlled room temperature (CRT) pharmaceuticals. Although basic cargo covers for the protection of thermally sensitive pharmaceutical merchandise have been around for many years, the latest developments in specially designed covers have largely been driven by two key factors. First of all, the revised EU Good Distribution Practice (GDP) guidelines of November 2013 extended thermal protection requirements to cover those medicinal products that necessitate continuous CRT conditions during transportation and storage. The other factor, of particular significance in India, has been an intensification of FDA inspections of regulated manufacturing units and distribution chains in the pursuit of strict GDP compliance. India houses the largest number of FDA-approved pharma and API plants outside the U.S. The combination of this regulatory watershed in Europe and the FDA’s recent crackdown on GDP violations has created an immediate demand for effective CRT protection at an affordable cost. It is a need that has been further stimulated by a growing awareness of the shortcomings of many conventional thermal blanket and palletwrapping materials.

Giant Strides While giant strides have been taken in recent years to improve the integrity of the

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Shipment protection plays an important role in the pharmaceutical coldchain. Recent developments in cargo covers have not only brought a new product to market, but have also highlighted what specifiers need to consider when choosing an optimum solution

pharma cold chain, there remain a number of weak points in the logistical process. The most alarming of these is the time that a pharma shipment is potentially exposed to uncontrolled external environmental variables, such as solar radiation, rain and ambient temperature swings at airports during the loading, unloading and apron transfer stages. Often referred to as ‘tarmac time’, these uncontrolled handover stages account for nearly 60 per cent of transportation temperature excursions. As airports continue to grow in size, the distance from cool store to plane might be several kilometres, and the time on the apron tarmac can be several hours.

Different Approaches The ideal cargo cover for pharmaceutical applications is strong, light, compact, solar reflective, weather resistant, recyclable, breathable, particulate impassable, X-ray penetrable and easy to fit and remove. If low temperature protection is required, the cover will also need to display adequate thermal insulation properties. Together, these demands present a tall order for any membrane-type material. When it comes to thermal insulation, different blanketing materials vary widely in performance and it is not just a case of “the thicker the better”. In fact, with flexible covers, there is a law of diminishing thermal returns and, beyond a certain point, the economics swing towards passive rigid box solutions. At the other end of the scale, some cover materials are little more than rain-screens. In some cases, thick white

cardboard cartons can perform better than low-grade thermal blankets – with the white outer box surface providing a degree of solar shielding and the thick card providing a measure of thermal insulation.

Bubbles Two media that have found favour as cargo cover materials are air bubble films and multi-foil membranes, both of which include ‘low-e’ radiant barrier sheets. The laminating of bubble foil packaging material to foil-faced film to impart a measure of conductive insulation was the first step and this was quickly followed by the appearance of multi-foil constructions comprising sheets of thin plastic foam or bubble sheet separated by foil layers. Such products initially found favour in the European and U.S. construction industries where they were hailed as a “miracle” insulation panacea, being fast to install and relatively lightweight and space-efficient compared to dense fibrous and foam solutions.

Real Life Performance Arguably a solution looking for a problem, these multi-foil membranes have more recently surfaced in the form of cargo covers for pharmaceuticals and perishables. In this application, the issue is not so much about whether a bubble based or multi-foil product can provide the necessary insulation; it is more about their consistency of performance under varying conditions. That is because, when it comes to ‘real life’ performance, there is a big difference between ‘steady state’ lab conditions and

the dynamic environments encountered in multimode transportation scenarios. Nonetheless, while falling short on a number of the ‘ideal’ criteria mentioned earlier, cargo covers using combinations of air bubble and foam with metallised foil are widely used, since they combine much-needed solar protection with some conventional thermal barrier properties.

New Generation Cargo Covers

However, the latest generation of thermal cargo covers avoids the use of bubble and foam insulations entirely. Designed to bridge the gap between single skin thermal covers and very bulky thermal quilts, the most recent cargo covers are in a class of their own. These new covers have been engineered to combine a highly solar-reflective outer surface with a low-emissivity inside coating and a high-efficiency fibrous while,cargo at the same time, uPont™ Tyvek®thermal range of layer lightweight covers provide vitalretaining full through-cover ermal protection to pharmaceutical shipments breathability. used in the ort-term storage distribution of both temperature-sensitive Theand covers perform as a radiant shield armaceutical products. These covers are designed to continuprovide and a conduction barrier; they can reliable and affordable means of protecting pharmaceutical ously evacuate water vapour to minimise pments that must be kept within common CRT (Controlled condensation yet or are15°C fullytoweathom Temperature) bands, such asrisks 15°Cand to 30°C 25°C, er-resistant for protection against rain, accordance with prevailing regulations. snow andSolar™ wind.W10 Cargo Cover to the new om the standard Tyvek®

store and unwieldy to handle. They are also liable to make a noticeable contribution to air-freight costs due to their volume adding to dimensional weight charges. This is where lightweight, low-bulk cargo covers come in. Instead of using a high bulk, easily damaged array of air bubbles for thermal insulation, low-bulk cargo covers employ a high thermal-efficiency fleece layer. This is not only much more thermally efficient than a bubble configuration of equivalent dimensions, but can also be unpacked and fitted in place in as little as 90 seconds. Storage and transportation are made very easy due to the fact that such covers come multi-packed for very low storage space requirements, and they are typically half the weight of a bubble foil equivalent. TM

ADVANCED PROTECTION OR PHARMACEUTICALS IN TRANSIT Breathing Space

gh-protection Tyvek® Xtreme™ W50 Cargo Cover you can rely the quality, performance and value you would expect from the Single-Use or Multi-Use? tinguished Tyvek® brand. Cargo covers can be either single- or multi-

Lightweight thermal fleece provides conductive insulation Reflective outer surface minimises solar heat gain

use. While reusable covers might seem at

itted with a proprietary insulative layer, Tyvek® Xtreme™ W50 first sight to be the most efficient solution, Cargo Cover retains the reflective and permeability characteristics things while are not as simple in hot practice. The f the Tyvek® product extending both its and cold long-distance logistics involved with emperature performance span. Itreturn has properties of heat reflection, eat insulation,reusable weather protection andquickly inherent wipe breathability covers can out any roviding dependable protection from rain, snow and wind. perceived environmental benefit, while the

possibility of cover damage and contamination increases significantly. I. DuPont India Pvt. Ltd. Multi-use covers need to be periodically h Floor, Tower C, DLF Phase - III inspected, cleaned, maintained, repaired ybergreens, Sector 25A and tested – and it can be very difficult urgaon - 122002 to maintain 100 per cent availability, even l : +91 124 4091818 with a continuous control regime in place. x: +91 124 2540889 By comparison, a single-use cargo cover ofww.cargocovers.dupont.com fers guaranteed performance with no maintenance, no complicated return logistics, no decontamination regimes and no re-testing. And if the cover is made from eco-friendly materials, or can be repurposed, then there is minimal environmental deficit.

The problem of cargo cover bulk is another very real issue. Covers based on voluminous bubble wrap and multi-bubble-foil constructions are always going to be difficult to

Breathable structure permits evacuation of excess moisture and condensation

The process of shipping can involve all kinds of atmospheric conditions and changes in temperature. Increased moisture can spoil or permanently damage many pharmaceutical products. Excess moisture is not just a threat to product integrity, but can also cause damage to product packaging, usage/ dosage directions and labelling. Any such damage will render the products concerned as ‘adulterated’, with potentially huge financial, legal, safety and reputational implications. Because it is impossible to control the weather or the dynamic environmental conditions on typical intercontinental shipping lanes, there is always a real risk of damaging condensation forming under a vapour-impermeable cargo cover. But cargo is not transported in ‘steady state’ conditions, and given the right combination of atmospheric factors, condensation will form without fail. Dew point temperatures can be reached as shipments are made across temperature zones. With bubble wraps, the condensed water is

Matters of Size

Damage Limitation

TRIPLE LAYER

Low-e metallic coating reduces thermal transfer to cargo

still trapped leading to failure of packaging and in rare cases, cause the pharmaceutical product lose stability due to water absorption. Since condensate formation is environment-specific and influenced by a large number of factors, it is clearly preferable to minimise the risk by using a cover that is inherently breathable.

Cargo covers are subject to a lot of physical abuse during transportation and must therefore be designed to withstand the rough and tumble of multi-modal, multileg, freight handling. Handling damage is never completely avoidable, however – so if it does occur, it is important that it is visible and that minor detriment does not materially reduce the protection being provided. Unfortunately, damage to bubble based materials is not always visible. Damage to the inner face of covers made with these materials is very difficult to spot, and yet can compromise the thermal performance. Such damage is easily caused when pulling covers over the pallet where the corners of boxes can abrade and penetrate the inner surface.

The Way Ahead Cargo covers have a very important role to play in the maintenance of stability for many environmentally sensitive medical products during transportation, and the new generation of breathable, high-performance covers represents a step-change in across-the-board performance. There are many factors to consider when selecting a suitable cargo cover, and with the incidence of avoidable temperature excursions during cargo handling procedures still a major issue, it is incumbent upon responsible shippers to consider the most recent advancements for the appropriate protection of drugs and medicines.

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ACAAI organises 43rd Annual Convention in Athens The 43rd annual convention of The Air Cargo Agents Association of India (ACAAI) was held at Hilton Hotel, Athens, Greece from November 16, 2016 to November 19, 2016. This was the first ever convention of ACAAI which was organised in Europe. The theme of the convention was “Resurgence of Air Logistics in India”. The inaugural session and lamp lighting ceremony took place on the first day of the convention. Sunil Arora, Chairman of the convention welcomed all the dignitaries present in the function and Hemant Bhatia, President, ACAAI delivered the presidential address. M Manimekalai, Ambassador of India to Greece was the chief guest for the inaugural function. “We are very keen to enhance the bilateral trade and commercial relations between the India and Greece,” M Manimekalai said during her special address. Keynote address was delivered by Dr Rakesh Sigh, Chairman, Institute of Supply Chain and

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Management Pvt Ltd while, T A Varghese, Vice President, ACAAI delivered the vote of thanks. The ACAAI convention provided an opportunity for serious deliberations on stimulating topics pertaining to the revitalization of air cargo in the context of global recession, the rules, regulations, processes, reforms, etc. which are essential for securing the air cargo supply chain, the importance of synergy between the airlines and the forwarders, the critical role of technology driven processes, the challenges and the vision required for managements vis a vis the service quality and the involved costs. The most important topics discussed were ‘Revitalising Air Crago - Global Recession’, ‘Securing the Air Cargo Supply Chain’, ‘Airline-Forwarder Synergy’, ‘Technology Driven Process’, etc. The convention which was orginsed on a large scale like every year promised to bring fruitful results for air cargo industry in the coming years.

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MEGA Holds Successful India Launch Party in New Delhi MEGA Maldives Airlines has held its much anticipated ‘India Launch Party’ in Shangri-La, New Delhi on Thursday, November 24, 2016. In attendance at event were over 350 Delhi-based travel agents, tour operators, and also members of the travel and lifestyle media. MEGA also hosted a number of very important special guests at the event including Zoravar Kalra, the celebrity Indian restaurateur and Masterchef Judge, and Ashima Leena, the famous fashion designer. Excellency Ahmed Mohamed, Ambassador of the Maldives to India and Abdulla Rasheed, Director of Air Transport at the Maldives Civil Aviation Authority also graced the occasion by their presence. A number of co-sponsors partnered with MEGA Maldives Airlines in hosting the event which includes Jumeirah Vittaveli, Shangri-La, Crown and Champ Resorts, Voyagers Maldives, Trans Maldivian Airways, Bird Travels, Group Concorde, Kandima Maldives, LUX South Ari Atoll Maldives, Soneva, Maldives Getaway and W Maldives.

Holisol wins Emerging Company award at CII SCALE Awards, 2016

KWE India introduces ‘Air Ride Truck’ service

Holisol Logistics Pvt Ltd has received the prestigious award of “Emerging Company in Logistics Service Industry” category at Confederation of Indian Industry (CII) SCALE Awards 2016 held at Le Meriden, Delhi on December 16, 2016. CII through its Institute of Logistics organised the third edition of Supply Chain and Logistics Excellence Awards (SCALE) to recognise the excellence among Logistics Service Players. The prestigious awards from CII endorses Holisol efforts to contribute knowledge and innovation to create better value for the ecosystem. “We feel very honoured and delighted to be recognized by a premier institution like CII”, as stated by Naveen Rawat, Director-Business Development. He also stated “We will ensure that we continue to innovate and develop knowledge based logistics solutions for our clients, enabling them to succeed in their business.” The award was received by Holisol team; Naveen Rawat, Director – Business Development, Ajay Kanwar and John Paul Joseph from Business Development team.

KWE India, the Indian subsidiary of Kintetsu World Express (KWE) and part of the Japanese global conglomerate Kintetsu Group, has introduced a unique service – ‘Air Ride Truck’ in the Indian market. This is a new concept in the transport industry which KWE has pioneered and introduced in the Japanese and Chinese market with huge success. This pioneering solution ensures a much higher shock absorbency ratio to provide a smoother ride to the truck and therefore the trailers cargo. In the air ride suspension system a bladder or bag of compressed air replaces the standard steel spring. Owing to this the trailers cargo actually floats on a cushion of air, which nearly eliminates both compression damage and telescoping. According to Mineo Suzuki, Managing Director, KWE India, “We at KWE constantly strive to offer contemporary services to our customers and in the process ensure we deliver value added services that addresses superior logistics and goods transport needs of our esteemed clients. In tune with this thinking Air Ride Truck service will be a game changer in Indian market.”

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events

‘WIN INDIA 2016’ held in Mumbai WIN INDIA 2016, an annual event organised on the same lines of HANNOVER MESSE, showcased new technology and products manufactured by Indian exhibitors and international exhibitors from December 1, 2016- December 3, 2016 in MMRDA Grounds, Bandra Kurla Complex, Mumbai. WIN INDIA hosted 200 exhibitors from 10 countries which showcased global technologies to the manufacturing industries of Western India region. Exhibitors from countries like China, Germany, India, Italy, Netherlands, South Korea, Spain, Taiwan, UAE and USA showcased the latest and new to the market products. WIN INDIA is the platform for global brands to connect for the latest developments in technology and provides a benchmark for networking. The event was inaugurated by Subhash Desai, Honourable Minister of Industries and Mining, Government of Maharashtra with Girish Shankar, Secretary, Department of Heavy Industry. Also present at the inauguration ceremony were Dr. Didar Singh, Secretary General - FICCI, Dattatreya Gaur, Vice President - Robert Bosch Engineering and Business Solutions Pvt Ltd, Marc Siemering, Vice President, Deutsche Messe AG, Mehul Shah, Managing Director, Hannover Milano Fairs India Pvt Ltd. WIN INDIA hosted three specialized and dedicated industrial fairs under one roof, which are designed to cluster particular kinds of manufacturers together. “MDA INDIA” focussed on Motion, Drive and Automation, Hydraulics and Pneumatics, Electro-Mechanical Transmission. “Industrial Automation INDIA” is dedicated to the Process and Factory Automation and Industrial Building Automation. “CeMAT INDIA” showcased Materials Handling / Intralogistics, Storage Systems, Warehousing and Logistic Services. IPF Industry Excellence awards successfully organised by ASAPP Info Global Group, distributed 21 awards for product excellence and best companies in MSME and SME segments. Automation Training Zone, a skill development program, jointly organised with Automation Industry Association trained 130 engineers and delegates. three day skill development program had eight training modules like Automation System

Engineering, Energy Management, Industrial Networking, Integrated Robotics, Machinery Safety, Precision Motion Control and Process Simulation. Masterclass for Supply Chain Professional by Arif Siddiqui, Founder, Coign Consulting, which was a closed door event, had attendance of 25 senior professionals.With over

6034 industrial key buyer’s representations at WIN INDIA, the impact was quite strong. Representation from companies like Reliance, Railways, Wipro Infrastructure, Godrej Natures Basket, Fareye, Mahindra and Mahindra, Johnson and Johnson, ZF India, Volkswagen India etc. joined the stream of other buyers

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Hellmann completes successful ten years in India Hellmann Worldwide Logistics celebrated its ten years’ anniversary on 6th December 2016 at Crown Plaza-Gurgaon in presence of Jost Hellmann, Managing Owner, Madhav Kurup, CEO- Middle East, North Africa and South Asia. Top Customers, Shipping line and Airline Management, Trade bodies and some VIP guests attended the celebration. “This is a duel celebration- ten years of successful business commitment to the trade by Hellmann Worldwide Logistics in India and successful integration of 200 new colleagues in Hellmann India FAMILY in the 2nd half of 2016. Today we have more than 900 logistic professional with five regional office and 18 branch/sales office

in all major business hubs. A new power house in the market” said Shubhendu Das, Managing Director, Hellmann India. The evening also recognized Customers and Business Partners for their long association with Hellmann India and were given the “Partnership award” by Jost Hellmann. “We would like to express our sincere thanks and appreciation to all of you here for believing in us and in our products and for having chosen Hellmann Worldwide Logistics as partners for your valued business” said Shubhendu Das during the award ceremony. The evening was well attended by CEOs, MD and top managements from the Industry and Trade.

MIAL opens heavy cargo terminal to check freight flight The Mumbai International Airport acting as India’s business hub and key gateway has consistently moved northwards on the growth graph. The recent noteworthy development at the Mumbai Airport led by GVK MIAL was the official launch of its new “Export Heavy and Bonded Cargo Terminal” that unfolded on 6th December 2016 to facilitate the air cargo trade. Chief Commissioner of Customs, Devendra Singh inaugurated the facility at a striking launch event that witnessed a huge gathering of officials from Customs, BCAS, CISF, ACAAI, BCHAA, airlines, freight forwarders, ground handlers, IMC, MACCIA, Mumbai Police, RFS providers and other stakeholders. The occasion was graced with the customary ritual of lighting a lamp that was done at the hands of Devendra Singh, Anil Kumar Gupta (Commissioner of Customs-Exports), Rajeev Jain (CEO-MIAL) along with other key regulators and stakeholders to mark the launch of the ‘first of its kind’ Export Terminal. Manoj that the new facility is part of the ongoing Cargo Master Plan and will further enhance the Singh, Senior Vice President, MIAL, addressed annual export capacity by an additional 300, 000 Metric Tons. He also added that the 7500 sq members present at the event and highlighted m facility provides exclusive handling for heavy, odd-sized and bonded cargo.

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BACC organises Bowling Tournament 2016 Air Cargo Club, Bangalore recently organised a Bowling Tournament on November 26, 2016, in the city. The event was attended by several members of the Air Cargo Club of Bangalore. The tournament that was held grabbed a lot of attention as teams from different logistics companies participated and tried their best to win the top spot. The tournament concluded with the announcement of the winners. The winning teams of the tournament were Force Logistics and Shri Freight. The first runner-up was Indev Logistics and the second runner-up was Uniworld Logistics. The ‘Star Striker’ of the tournament was Hemath from Tripath Logistics.

India Cold Chain Expo scripts another success story The eighth edition of India Cold Chain Expo was held at Indore from December 16 to December 17 last year. ICE 2016 was an amalgamation of exhibition, conference, awards and networking dinner. It focused on cold chain industry and brought together users and service providers from all over the globe. Pawanexh Kohli, CEO and Chief Advisor, National Centre for Cold-chain Development was the Chief Guest for the show. The conference agenda covered all the key subjects like ‘Focus Madhya Pradesh: Scope, Challenges, Opportunities, And Success Stories’, ‘Proven Technologies in Trend to enhance the value chain of perishables’ and ‘Best Practices for the development of Cold Chain Industry’. The exhibition, conference and award’ night provided an opportunity for the modern cold chain, logistics, retail and other related industries to identify new trends, discuss new ideas, witness latest innovations, view a wide range of products specific to the industry.

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JSW forays into port operation in UAE JSW Infrastructure (JSWIL) signed an agreement with Port of Fujairah for management of mechanised bulk cargo handling terminals on November 8, 2016. This is first foreign venture by JSW Infrastructure. Port of Fujairah has selected JSW Infrastructure to establish partnership for it’s expertise and experience in Port operation and management. Capt. Mousa Murad, Director General of Port of Fujairah along with other port officials visited JSW Head Quarters in Mumbai for signing of this agreement. Port of Fujairah is one of the largest port in UAE which handles more than 150 million MT per annum. It handles all types of cargo like dry and liquid bulk, crude, break bulk and containers. The port has minimum 15 meter draft and can handle bigger vessels. Container traffic of this port is managed by DP World and now JSWIL will be responsible for mechanised bulk cargo handling at its bulk terminals. Port of Fujairah started operation in 1983 and since then developed facilities for handling all types of cargo like dry and liquid bulk,

GVK MIAL wins ‘Air Cargo Terminal’ award GVK MIAL, the company that administers Chhatrapati Shivaji International Airport (CSIA), won the ‘Air Cargo Terminal’ award for the year 2015-16 at the second edition of the Asia Logistics Awards held recently at the Gujarat University Convention and Exhibition Centre, GMDC, Ahmedabad. The award was bestowed upon MIAL in recognition of its outstanding performance in handling and processing of air cargo volumes at CSIA airport. This is for the second consecutive year that MIAL won the ‘Air Cargo Terminal’ award, an honour given to companies for exceptional performance in the logistics and supply chain industry. The award was conferred to GVK MIAL at the Logistics Asia Expo 2016, a three-day exhibition that witnessed participation from chambers of commerce and industrial bodies from leading manufacturing states, besides corporations from India and abroad from the various sectors. MIAL also recently announced the launch of its first-of-akind cargo terminal in India for bonded and heavy export cargo.

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containers, bunkering operations. The port is having second largest bunkering facility in the world. The port is located in east UAE east coast which is nearest to the Indian west coast ports. The port is being used for limestone and aggregate imports by Indian steel and cement producers. JSWIL have developed greenfield multicargo port at Jaigarh in Ratnagiri district. It is also operating terminals at Mormugao Port, Goa and Dharamtar Port in Raigarh District in Maharashtra. Total present capacity at all the three port facilities is more than 45 million MT per annum. Last year JSWIL has won bid for development of Iron Ore export Terminal and Coal Export Terminal at Paradip Port. Total capacity of these terminals will be 40 million MT per annum. It is expected that these terminals will be operation in FY 2018-19. JSWIL plans to develop 200 million MT cargo handling capacity at its port facilities through greenfield and brownfield expansion by 2020.

Emirates SkyCargo launches Emirates SkyWheels Emirates SkyCargo, the freight division of Emirates airline, has launched Emirates SkyWheels - a specialised transportation product for high value automobiles. Through its latest offering Emirates SkyCargo will provide customers a complete transportation solution for vehicles such as classic, luxury and sports cars, across its network. Customers who would like to have their cars transported can choose between Emirates SkyWheels Premium and Emirates SkyWheels Advanced. The customisable Premium product package covers door-to-door transportation of the vehicle from select origins and destinations. It includes collection of the vehicle from its home and delivery overseas, in addition to export and import Customs clearance processes for the vehicle at both ends of the journey. Additional road and transport insurance is also available under the Premium option. Emirates SkyWheels Advanced will offer seamless airport-to-airport transportation for automobiles. Emirates SkyCargo offers complete round trip handling of vehicles under both Premium and Advanced products.

events

Pronk India MD awarded Bharat Udyog Ratan-2016

Celebi Cargo Terminal shines at CII SCALE Awards

Shailender Anand, Managing Director, Pronk Multiservice India, has been awarded Bharat Udyog Ratan-2016 by Indian Society for Industry and Intellectual Development for Outstanding Contribution made for National Progress at Constitution Club, New Delhi on December 8, 2016 The award ceremony was attended by dignitaries like Shakshi Ji Maharaj (Member of Parliament), Vijendra Garg (MLA Delhi), Mr Soni (MEA Govt. of india) and MS Bitta (Chairman of All India Anti Terrorist Front). Over 400 delegates had participated in this award ceremony and the award was being given to only 30 people. The award ceremony were attended by high dignitaries like politicians, bureaucrats, businessmen, educationist, celebrities, NRIs and economist.

Celebi Delhi Cargo Terminal Management India Pvt Ltd has been awarded “Excellent Position under T e r m i n a l Operators –Air Cargo Category” in SCALE (Supply Chain and Logistics Excellence) AWARDS organized by CII (Confederation of Indian Industry) held on December 15, 2016 and December 16, 2016 in Hotel Le Meridien, New Delhi. The prestigious event included participation from multiple industry verticals including logistics and supply chain, automotive, engineering, pharmaceutical, IT, freight forwarding, and express business etc. Celebi Delhi Cargo Terminal was conferred the award based on a thorough evaluation of the credentials which includes infrastructure, services provided and performance highlights. The evaluation was done by eminent jury members from different verticals supported by knowledge partner Ernst and Young.

Civil Air Terminal launched at Bathinda Airport

DTDC opens up new gateways in Bangladesh

The New Civil Air Terminal at Bathinda Airport has been dedicated to the Nation on December 11, 2016 by P Ashok Gajapathi Raju, Union Minister of Civil Aviation in the august presence of Harsimrat Kaur Badal, Union Minister of Food Processing Industries, Sardar Sukhbir Singh Badal, Deputy Chief Minister of Punjab, Jayant Sinha, Union Minister of State for Civil Aviation, Vijay Sampla, Union Minister of State for Social Justice and Empowerment, Dr Guruprasad Mohapatra, Chairman, AAI, Ashwani Lohani, CMD, Air India and other dignitaries. Gajapathi Raju took a walk through along with the other dignitaries and unveiled plaque in the Civil Air Terminal. Speaking on the occasion, he said that the new terminal and the flight connectivity will not only boost passenger travel but also be a multiplier for the overall economic growth of the region. These new facilities are a fitting tribute to the indomitable Punjabi spirit, he added.

DTDC Express Limited, India’s leading logistics solutions provider along with its strategic partner DPD Group, has further strengthened its presence globally by launching its operations in Bangladesh in collaboration with Galaxy Express. With this collaboration, DTDC will introduce international standards of delivery service in the region. According to a recent study, Bangladesh will record 72 per cent growth a year in e-commerce transactions in the coming days. To meet the growing demand of the country’s ecommerce trade, DTDC will also look at bringing its eCommerce Expertise such as ePortal, eParcel, eFulfiment and cross border eCommerce business to Bangladesh. Senior executives of DTDC and DPD, including Subhashish Chakraborty, CMD of DTDC, Pranab Shah Director at DTDC and Suresh Bansal, Director and Head of International Business at DTDC, were present at the official launching ceremony recently.

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ACCD hosts its biggest event of the year The Air Cargo Club of Delhi hosted yet another Annual Ball 2016-17 on December 17, 2016 at Kundan Farms, New Delhi. For this biggest event of the year, club wanted to focus on enhancing the branding of this event by giving it a new makeover. The event was hosted by the celebrity anchor Vandana Wadhera who is known for her great sensual, husky vocals and her spectacular singing skills. The event was further supported by an Iranian DJ Yasmine and some fabulous and energetic performances by Dynamites troop. It was indeed a pleasure

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to see industry giving a strong support throughout the exhilarating evening with over 700 people from the fraternity attending the event. The new facelift gave chance to all couples to get themselves clicked in three amazing photo studios and try their luck on plenty of hampers like I phones, LEDâ&#x20AC;&#x2122;s and various tickets sponsored by several airlines. The event was further complemented by multiple fully loaded bars and scrumptious food which was being served throughout.

events

3rd Edition of CII SCALE Awards organised in New Delhi Confederation of Indian Industry (CII) through its Institute of Logistics organised the third edition of Supply Chain and Logistics Excellence Awards (SCALE) awards on December 15 and 16, 2016 to recognise the industry players and to drive excellence in the field. The recognition conferred encompassed excellence among logistics service players and the supply chain

aspects of the user industry. Other sectors of the logistics industry that partnered with the event included freight forwarders, 3PL, road transportation, terminal operations for air cargo and sea port, ecom logistics, etc. The user industries that participated were paper, cement, chemical, consumer durables, pharmaceuticals, perishable, FMCG, etc.

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PEOPLE CONNECT

Success Is Putting The Family First “We are living in a period of great transition of our industry, and collaboration among all members of the air cargo community has never been more important,” said Doug Brittin, Former Secretary General of TIACA. In an interview with Sana Husain, he shares his fascination with global air cargo aspect and the accompanying challenging time spent in the regulatory environment

What motivated you to be a part of the logistics industry and how has your experience been so far? I actually joined the industry on the surface side, in both rail and trucking, after working my way through college in operations at a major railroad in the US. I became fascinated with the global aspect of air cargo and surrounding logistics in 1980, and haven’t found a better place to grow and learn! I’ve been fortunate to participate in operations, marketing, sales, and security areas, on a global basis, and I think it’s hard to find that experience elsewhere.

How has the industry changed from the time you stepped in? What major transformations have you observed in the industry in terms of technology, manpower, practices, government regulation, etc? Wit hout a doubt, we’ve ch a nged dramatically over the past 36 years. The express segment has blossomed. We’ve made a great deal of progress from manual billing and information sharing, but still have a long way to go. Employees, now a day, not only have to be physically capable, but a lso tech nolog ica l ly proficient (and of course, secure). The word “logistics” itself was rarely heard then, and forwarders were essentially consolidators. Now, they have to provide full service capabilities in order to

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compete. Regulations have increased dramatically of course, and now when we speak of security, it is not just to protect against product theft, but threats to aviation security itself. The cost of doing business is totally different now.

What was the biggest challenge that you have faced till date? My t i me spe nt i n t he reg u l ator y environment was the most challenging one. We all face the day-to-day business challenges inherent in our industry, and find creative ways to gain business or make it more profitable and efficient. But, working “within the system” to convince lawmakers and regulators to develop secure measures that would not in practice essentially destroy the industry was certainly a monumental task, and one which is ongoing.

Where do you see the graph of the logistics industry moving in the coming decade? We will see growth, but it won’t mirror the type of expansion we have seen in the past. Peak seasons will likely never return, and the logistics industry will need to evolve with the changing needs of consumers who now purchase via the internet. Reverse logistics, especially as we have seen with lithium battery challenges, will continue to play a key role as long as the sellers of products so readily enable easy returns.

What specific beliefs or value that you live and work by and how do you define success? Certainty, honesty, and integrity are essential, by which I have lived all my life and I won’t compromise there. But beyond that, I define success as a life where my family ranks first and foremost. I was once asked by an intense young consultant what I hoped my legacy would be, and when I stated that it was not business related, but one where I had the respect and warmth of my family, I knew that he was shocked!

Apart from work what are your other interests? I try to stay physically active with each season, so that entails as much downhill skiing as possible, tempered by golf, tennis, and hiking in the beautiful Rocky Mountains. There are 54 peaks in Colorado alone with a summit of over 14,000, and I’ve only topped six of them so far. I love to read, fiction as well as nonfiction, but now that I am retiring, I have plans to take up fly fishing as well.

Do you have any message for those who aspire to work in the logistics industry? If you are looking for a career where no two days are the same, and are willing to work hard to succeed, this is the place to be!