CARGOCONNECT July 2017

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Warehousing at the Advent of

Robotics Era

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Contents

Volume VIII • Issue VIII • july 2017

Editor and Publisher Smiti Suri Assistant Editor Archana Verma Feature Writers Tariq Ahmed Gaurav Dubey Sheena Sachdeva Deepashree Banerjee

08

18 COVER STORY

Warehousing at the Advent of Robotics Era focus

Vizag: Future Metropolis of the Country ..40

FEATURES

SPECIAL FEATURE

Pre-Engineered Buildings Paving the Way for Future

INTERVIEW

Skill Development Initiatives in the Logistics Sector ...............................62

Asst Manager Marketing Asad Mohammad Marketing Executive Mehuli Choudhury Administration Vipin Marwah

K U Thankachen, Managing Director, Central Railside Warehouse Company Ltd .............76

Accounts and Administration Poonam Gupta

Sanjay Gupta, MD, AVG Logistics Pvt Ltd .......77

Sr Designer & Visualiser Shaique Ahmad

Rajiv Agarwal, MD and CEO of Essar Ports ....78 Abhishek Chakraborty, Executive Director, DTDC Express Limited ...................................80 Ivo Seehann, Lufthansa Cargo Director Sales & Handling, North and East India, Tamil Nadu, Karnataka and Bangladesh ..............................83 Samir Gandhi, Director, Gandhi Automations Pvt Ltd ...........................................................84 Yashpal Sharma, MD of Skyways Group ........85

GST: A Real Game Changer for the Warehousing Sector .......................52

Marketing Manager Niti Chauhan

Gautam Suri, Founder Director and CTO, Interarch Building Products Pvt Ltd .............74

Prof G Raghuram, Director of IIM Bangalore ..82

Air Cargo Industry in a Dire need to Reduce Dwell Time .........................44

Director Ajeet Kumar

UPFRONT .........................................6 shippers speak ....................86,88

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.

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.

NEWS .......................................91-97

Editor–Smiti Suri

INTERNATIONAL CONNECT..........98 APPOINTMENT ................................102

SURECOM MEDIA

EVENTS .................................103-105 PEOPLE CONNECT .......................106

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

Upfront The 12 major ports put together have nearly doubled their operational profit of close to `2,500 crore in 201314 to `5,070 crore in the last financial year. According to shipping ministry data, the net profit of these ports has more than doubled in the past three years - from `1,219 crore in 2013-14 to `2,871 crore in last fiscal year.

Ole Lund Hansen

Chief, Business of Tomorrow, UN Global Compact

John Holland-Kaye

CEO,

Heathrow Airport

“Progress on supply chain sustainability can be made when priority is set on the top of the organisation. It is also important to create a broader understanding within the organisation of how decisions made beyond procurement have impacts on the supply chain.”

“Britain’s exports outside the EU are thriving and with Heathrow expansion opening up to 40 new long-haul trading links, the scale of the opportunity across the globe is tremendous. We’re working round-the-clock to deliver Britain’s new runway and secure the country’s future as a global trading powerhouse.”

Simon Bennett

Director of Policy, International Chamber of Shipping (ICS)

“Shipping, because of its great size, is currently responsible for about 2.2 percent of annual anthropogenic CO 2 emissions. The shipping industry is committed to the delivery of further environmental improvements in the interests of sustainable development. But sustainable development requires a global shipping industry that is economically sustainable too.”

Sultan Ahmed bin Sulayem

Vincent Favier CEO, Ecoslops

6

“The demand to improve sustainability within shipping is seen as imperative to secure a viable and profitable future for the industry. Ports could increase in-port efficiencies and improve their environmental profile and reputation, while ship owners could have a channel to sustainably dispose off their waste at the right cost.”

CargoConnect - july 2017

DP World Group Chairman and CEO

“Sustainability is a fundamental aspect of being a responsible business and we believe doing the right thing today is the best way to thrive in the future. By strategically investing in issues that affect our society, we are creating a legacy for future generations and their involvement is key.”

SPECIAL feature

Pre-Engineered Buildings Paving the Way for Future In today’s era of automation across the world, warehouses have been in immense demand. But still, their proper construction in pre-engineered way is a concern. Sheena Sachdeva brings an extensive piece on the effect of pre-engineered building in logistics sector.

8

CargoConnect - july 2017

SPECIAL feature

A

pre-engineered building is a metal building that consists of light gauge metal standing seam roof panels on steel purling spanning between rigid frames with light gauge metal wall cladding.

In other words, it has a much greater vertical and horizontal deflection. Preengineered buildings are generally low-rise buildings, which are ideal for offices, houses, showrooms, shop fronts etc. Time being the most important aspect, pre-fabricated steel structures are built in very short periods of time. Pre-engineered buildings are nothing but steel buildings in which excess steel is avoided by tapering the sections as per the bending moment’s requirement.

In pre-engineered buildings, the total design is done in the factory and as per the design, members are pre-fabricated and then transported to the site where they are erected. Steel structures also have much better strength-to-weight ratios than RCC and they also can be easily dismantled. Pre-engineered buildings have bolted joints and hence, can also be reused after dismantling. Thus, preengineered buildings can be shifted and/or expanded as per the requirements in future.

Foundation and anchor bolts are cast parallel with finished, ready for the site bolting. PEB can reduce total construction time of a project by at least 50 per cent. This also allows faster occupancy and earlier realisation of revenue.

The secondary members and cladding nest together reduces transportation cost. Steel buildings that are properly insulated save natural resources, energy and money.

Dominance of PEBs Dr Sandeep Gupta, MD, Richa Industries Ltd says, “PEB owns great durability and in comparison to other materials, needs relatively low amounts of energy to produce.

Hence, steel is the most preferable material in construction and nowadays widely used in industrial and commercial sectors and gradually picking up the residential sectors as well.”

He said, “The Indian market has witnessed a major shift from asbestos to galvanised and galvalume steel sheets. The use of galvanised steel and galvalume roofing make these buildings rust resistant which, as a matter

of fact, minimises the maintenance cost and very soon residential sectors also will create great demand for steel. Government of India has already started focusing and exploring

PEBs are also lighter than conventional steel structures. Hence, the foundations are of simpler design, are easy to construct and are of lighter weights.

Warehouses constructed with PEBs are supplied with high quality paint systems for cladding and steel to suit ambient conditions at site. on steel construction methods for residential projects. Apart from complete PEB, roofing and cladding systems will also see great demand from the public facilities. The PEBs are extensively used in the commercial and industrial segment and gradually exploring and entering in residential sectors as well. Out of the total steel produced in India, two-thirds is utilised in construction segment. Apart from these properties steel buildings have many green characteristics.”

As pre-engineered buildings have been considered the pioneer material, Gautam Suri, Founder Director and CTO, Interarch Building Products Pvt Ltd said, “Pre-

engineered steel buildings have now become the most favourable method for construction of factories and warehouse buildings in India.

The penetration of pre-engineered building have increased substantially to an extent that more than 90 per cent of the construction of new factories and warehouses is being done using this technology.” Further, there are certain functional advantages of preengineered buildings over RCC building due to which more architects, consultants and customers are inclined toward pre-engineered buildings; like earthquake resistant and compliant buildings etc for faster delivery and minimum 40 per cent of the time saving over RCC construction; and possibility of future expansion without disturbing the existing set-up. Also, as only the erection of the building is done at site using nuts and bolt assembly by skilled workforce, lesser resources are used and there is not much dependency on labours. Even the chances of delay in project timelines due to various external factors are reduced by almost 80-90 per cent.

N Ramakrishna, General Manager, Marketing, Kribhco Infrastructure Ltd opines, “Pre-engineered steel buildings are those which are fully fabricated premises after designing, shipped to site in completely knocked down condition; and all components are assembled and erected at site with nutbolts, thereby reducing the time of completion.

The concept is designed to provide a complete building which is air tight, water-tight,

july 2017 - CargoConnect

9

feature Dr Sandeep Gupta, MD, Richa Industries Ltd

PEB owns great durability and in comparison to other materials, needs relatively low amounts of energy to produce. Hence, steel is the most preferable material in construction and nowadays widely used in industrial and commercial sectors and gradually picking up the residential sectors as well.”

optimum in weight and cost and designed to fit user requirement like a well fitted glove.” Steel is a preferred material for construction, due to its various advantages like quality, aesthetics, economy and environmental conditions. This concept has a lot of scope in India and can actually fill up the critical shortage of housing, educational and healthcare institutions, airports, railway stations, industrial buildings and cold storages etc. In this era of competition, it is increasingly important to build more economical structures, which provide good integrated system performance.

Diagram of a peb

PEB: effective for warehouses?

With the upsurge in warehousing sector, pre-engineered buildings setup is used mostly by all the companies for less time and cost. Dr. Gupta informed, “Warehousing is an essential part of any supply chain and logistics industry. The demand of warehouses is huge. In a country like India, the logistics and warehousing industry is one of the predominant industries of the nation. Currently, the government initiative of implementing ‘Make in India’ concept and rise in domestic consumption is generating mammoth requirement for additional warehouses all across the country. This initiative of government emphasises on local manufacturing and it is generating a need for increasing storage capacities in the country.

The huge demand of warehouse can be seen to fulfil the requirement of E-Commerce industry as well. To avoid the damage and to ensure proper storage of perishable food products and other commodities, quicker, advanced and economical warehouses are required and this is boosting the growth of logistics and warehousing industry in the country.”

Additionally, as the concept of trading is expanded significantly in everyday life, distribution centres and warehouses turn out to be considerably more essential. In

10 CargoConnect - july 2017

store network and co-ordinations part, stock keeping units are at sites as indicated by their accessibility and request of the items that are

Steel is a preferred material for construction, due to its various advantages like quality, aesthetics, economy and environmental conditions. In this era of competition, it is increasingly important to build more economical structures, which provide good integrated system performance. fabricated. Today, logistics and supply chain are the most important part of warehousing industry. Earlier problems of warehouses or distribution centres, which confronted various issues are gone now due to this

effective PEB technology. Various properties like economical, fast delivery, time saving, more life span, variable sizes and many others make PEB the widely accepted technology among logistics warehousing industry.

Ramakrishna asserted, “Warehousing’s demand is growing rapidly with immense focus on innovation, cost, speed of delivery and versatility. With changing needs of the industry, it becomes imperative that the construction, management and maintenance of warehouses should be both cost effective and speedy. PEB over the last few years has emerged as the best possible solution for the sector.”

PEB structures can play an important role in creating new warehousing infrastructure because of the following advantages: Specialised computer analysis and design programs optimise material requirement and computerised drafting minimises project custom details. There is hence, a significant saving in the design and manufacturing cost. Apart from costs, there is an assurance of quality and uniformity in design and fabrication. The frames of PEB are highly flexible and thus, they offer higher resistance

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feature Gautam Suri, founder director and cto, Interarch Building Products Pvt Ltd

Pre-engineered steel buildings have now become the most favourable method for construction of factories and warehouse buildings in India.”

to seismic forces. And for the same reason, the warehouses can easily be expanded in length, width and height. They can also be easily double-stacked.

PEBs are also lighter than conventional steel structures. Hence, the foundations are of simpler design, are easy to construct and are of lighter weights. Warehouses constructed with PEBs are supplied with high quality paint systems for cladding and steel to suit ambient conditions at site, which results in long durability and low maintenance costs. They are also energy efficient and incorporate watertight roofing systems. They are hassle free and result in cleaner and unencumbered sites. As we are moving towards GST era, we would require huge warehouses in some locations and this concept may work as a savior for warehouse operators in terms of cost and infrastructure mobility.

Gautam Suri added, “Interarch pre-

engineered warehouses have not only proved to be beneficial due to functional advantages, but they are the most appropriate and efficient for warehousing industry. Pre-engineered solutions used in warehousing and cargo buildings offer limitless opportunities to the end user. The pre-engineered building

design philosophy takes maximum advantage when used in warehousing and cargo space.

Interarch’s efficient warehouses adapt to any kind of storage requirements and are virtually maintenance free. Interarch warehouses can be customised to any shape or size, be it a clear span of upto 100 metres or clear height of upto 40 metres. Our warehouses are equipped to maximise storage space, economical to build, well ventilated and convenient to expand in future.”

PEBs - favourable for goods Pre-engineered buildings are considered favourable for the goods and warehousing construction as the process used to construct such building is highly safe and viable. Dr Gupta said, “Pre-engineered buildings are considered eco-friendly and promotes green construction. PEB manufacturing is 100 per cent in-house, under controlled environment with strict quality specifications and hence, these buildings do not pollute environment and manufactured with high quality grade which prevent the damage of goods kept inside the buildings. PEB innovation has turned into the focal point of fascination crosswise over India particularly in the agro, food and beverages businesses because of

12 CargoConnect - july 2017

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feature N Ramakrishna, GENERAL MANAGER, Marketing, Kribhco Infrastructure Ltd

The PEB concept is designed to provide a complete building which is air tight, water-tight, optimum in weight and cost and designed to fit user requirement like a well fitted glove.”

difficult areas. PEBs are cleaner sites for storage of goods.”

GST overtaking the economy

arrangement of measures reported by the administration to give legitimate warehousing and cool storerooms for organic products and vegetables, nourishment grains and so on. Absence of temperature-controlled distribution centres near ranches and transportation of the food products in temperature-controlled vehicles has turned into a noteworthy worry as they save the quality, respectability and life-span of the item. This has given colossal chance to strategic players to set up temperaturecontrolled stockrooms or cool stockpiles as the business is evaluated to develop quickly at 26 per cent aggravated yearly till 2017.

This will give additional lift to the PEB innovation, as building some portion of these frosty stockpiles should be possible by this innovation. Other industry sections which are significant drivers behind the development of warehousing industry incorporate FMCG, Pharmaceuticals and so forth.”

Also, these buildings are constructed with 70 per cent recyclable material and various components of PEBs utilise the natural sunlight and natural wind for functioning. Additionally, the painting done on structure member is

14 CargoConnect - july 2017

with standard DFT and galvanised cold form and galvalume sheets make these buildings weather and rust resistant which reduces the maintenance cost. Moreover, these buildings are more earthquake resistance as compared to RCC buildings and designed as per IS or MBMA code, depending on the criticality of seismic zone and terrain category.”

Further, Gautam Suri said, “Pre-engineered buildings, when designed and erected properly, offer features like fire resistance, termite and mold proof, water tight environment and earthquake-resistant. So, even if products are stored for a longer time period, these buildings provide safe storage space for the products in all weather conditions.”

Ramakrishna stated, “As the construction of PEBs is air-tight and water-tight, chances of corrosion and material damage are highly reduced. The quality and shape of PEBs is ensured and it does not allow over-heating of the storage area. PEBs are better resistant to earthquake and wind pressure and hence, protect the goods stored inside. They have enhanced durability and seismic reliability.

It is safer and more secure to store goods in PEBs in hilly regions and other geographically

During the realm of economy’s metamorphosis into a uniform tax based country, GST is round the corner and is taking over all the sectors. In the same context, pre-engineered buildings in warehousing will surely have a significant impact. Gautam Suri added, “Yes, we believe that the implementation of GST will be a game changer for the warehousing industry across India and in the next three years the demand for new warehouses across the country will rise exponentially.

This market will be a huge potential for preengineered buildings players.”

Dr Gupta said, “The implementation of GST shall significantly increase the competitiveness in PEB sector. Current supply and transportation models are variable in nature and they depend on location and state. Moving to GST is ought to ideally bring about such choices being taken to streamline business proficiency. The advent of GST will streamline the warehouse and logistics charges throughout country, which helps to minimise the variable cost of PEB supply.”

Ramakrishna suggested, “After the implementation of GST, role of warehousing in total supply chain of a company will be holding a share of approximately 20 per cent which will impact supply chain cost immensely. We would require cost effective multi-story big warehouses which is possible only with PEBs. PEBs will provide mega warehousing solutions with modernised handling equipment and earthquake resistant buildings with a cost saving of 30 per cent in comparison of traditional warehousing system. So, I believe that after roll out of GST, everyone will look towards PEB constructions, whether it is for storage or small office buildings.”

feature R Shankar, CEO, India at TVS Logistics Services Ltd

Pre-engineered building increases safety. It reduces the construction time upto 30 per cent along with flexibility.”

Foreseeing the future In the upcoming days, the pre-engineered buildings will not only be a cost-effective but the most viable way of constructing warehouses as well as residential buildings.

Adding to this, Dr Gupta said, “The PEB market in India is still in the growth phase and we have seen lots of transformation since last many decades. PEB was earlier restricted to industrial and warehousing sector, and then picked up commercial sectors and now

PEB will reduce total construction time of the project by at least 50 per cent. This also allows faster occupancy and earlier realisation of revenue. is gradually entering into residential sectors.

This is a phase where the concept of going vertical rather than horizontal are widely accepted in India. The change in the mindset is observed among the people. Steel is always the preferred choice of construction but people hesitate to opt steel construction in case of residential projects as this sector is still not completely explored. But the advantages associated with steel construction such as faster completion, better aesthetics, cost effective and more earthquake resistance will surely make PEB as the preferred mode of residential construction in near future.

Government of India is also focusing and exploring steel construction in India and the graph is moving in upward direction and is expected to continue for a long term.”

Gautam Suri added, “Across the country, there are investments happening in sectors like retail, urban development, industrial, aviation, hospitality. We also witness a shift in perception towards adopting new technology as cost-efficiency, time-saving, durability

16 CargoConnect - july 2017

and sustainability become the need of the hour. There are lots of opportunities ahead that would be our focus in the coming year and so. For instance, thanks to the speedy progress of the Metro rail system, the scope of pre-engineered buildings is immense. Also, the increasing emphasis on green building construction seems to be adding to the growth of pre-engineered buildings in India. Overall, the commercial construction market has witnessed the use of pre-engineered buildings in India, but the residential section is yet to further explore this massive constructional shift by adopting PEB as the viable solution.

We aim at exploring these new avenues and possibilities to further strengthen and increase the role of pre-engineered buildings in Indian infrastructure.”

Ramakrishna said, “As per market research analysis, PEB market in India will witness growth and will post an impressive CAGR of more than 60 per cent till 2020. Frost and Sullivan’s analysis of Indian PEB market finds that the market earned revenue of `5297 crores in 2012 and it reached `13000 crores in 2016 at a compounded annual growth rate of 26.6 per cent. Currently, India is the fastest growing market in PEB construction segment

at the rate of 9.5 per cent and is quite ahead of China (growth rate 8.5 per cent). The industry size of PEB in India is $0.38 Bn. In the Indian construction industry, 33 per cent is based on PEBs, which means the scope of growth in the segment is vast i.e., up to 67 per cent.”

The metro rail is the next trending transport in the country, which will also speed up in the next ten years. This will add to the scope of PEB growth, which is already approximately 17 per cent of the sector itself.

R Shankar, CEO, India at TVS Logistics Services Ltd said, “Pre-engineered building increases safety. It reduces the construction time upto 30 per cent along with flexibility, as it is extremely versatile and can be made modular, so that expansion can be on the basis of need. The only disadvantage could be durability in terms of very long life, which normally is what real estate and infra developers in India would look out for.”

As the country is moving towards automation and development of the economy at the galloping pace, from buildings to people, PEBs will develop every sector of the country. The wave of development will benefit everyone, but a proper usage of resources is the need of the hour along with cost reduction.

cover story

18 CargoConnect - july 2017

cover story

Warehousing at the Advent of Robotics Era Warehousing in the future will be a completely different game altogether. The sight of robots, drones and other machines working in synergy with humans will become a common phenomenon in the modern warehouses.Automated warehouses of the future will be smarter, more agile and is expected to adapt to the changing needs of the customers. Gaurav Dubey delves into the subject and takes a view of industry leaders to provide a better understanding to the readers.

july 2017 - CargoConnect 19

cover story

inside Look of the Warehouses of Future Role of Warehouse Automation in Business Growth Type of Technology to be used in Future Warehouses Role of Warehouse Automation in Value Creation for End Users

T

he warehousing industry has been undergoi ng a period of transition across the globe. Several evolutions and innovations are taking place every day in the industry. The scene of a traditional warehouse staffed with workers manually stocking shelves, running from aisle to aisle and performing paperwork with pen and paper has started waning away. The future of warehouses will be driven by technology: drones whizzing around, picking up items from their receptacles and delivering them to droids, waiting at sorting station will soon become common scenes.

Several studies are being conducted on warehouse automation and one of the studies reveals that at least 74 per cent of warehouse managers have been planning to equip their staff with more and better technology that increases visibility of operations and automation of the tasks which were previously being performed manually. For example, bar coding and RFID tagging items that are traversing across the warehouse accurately help staff in tracking their location and remaining stock, which in turn allows longer lead time before they have to be replenished.

With ergonomic wearable and handheld computers built for the enterprise environment, workers are enabled to scan and track items

More than 45,000 robots have been working in the warehouses of Amazon across the globe

20 CargoConnect - july 2017

with faster speed, less effort and better accuracy. The use of mobi le 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 among workers, to faster delivery time, creating value for end-customers.

For providing better understanding of the future of the warehousing industry to its readers, the subject has been divided under four heads and we have taken the perspective of industry leaders along these lines – • Look of the Warehouses of Future • Role of Warehouse Automation in Business Growth • Type of Technology to be used in Future Warehouses • Role of Warehouse Automation in Value Creation for End Users Jahnavi Gokulakrishnan, Senior Research Analyst, Transportation and Logistics, Frost and Sullivan says that warehousing sector is moving towards automated structures called dark warehouses. The human intervention in such a warehouse will be negligible to none.

Following are her responses about our four categories explored –

cover story

Automation is a boon for warehousing industry as it will considerably cut down the order fulfillment cycles and allow businesses to deliver products on time and at much faster rate.

Mukul Chaudhary, Consulting and Solutions Lead, Holisol Logistics Pvt Ltd

Look of the Warehouses of Future The processes routinely undertaken within the warehouses such as picking-packing, palletisation-depalletisation, kittingassembling and few others are automated among LSPs in the developed markets. The dark warehouses will include automated machines and robotic systems performing these tasks with centralised control systems that can be controlled via remote systems, located away from the warehouses. This will be achieved through a combination of automation and digital technology tools.

Material handling systems manufacturers are the key industry participants in providing

automation are quantifiable in terms of cost savings, there are qualitative value- additions to the logistics value chain as well.

Type of Technology to be used in Future Warehouses

of such tasks leads to bottom-line savings, increase in speed of the tasks performed and fewer accidents and hence, less damages. All these advantages lead directly and indirectly

The dark warehouses will include automated machines and robotic systems performing these tasks with centralized control systems that can be controlled via remote systems, which will be located away from the warehouses. This will be achieved through a combination of automation and digital technology tools.

Jahnavi Gok ul ak rishnan, S enior Re s earch A naly s t , Transportation and Logistics, Frost and Sullivan automation tools to the warehousing sector.

Automated Guided Veh icles (AGVs), Automatic Identification and Data Collection (AIDC) devices, Warehouse Management Systems (WMS) and few others will be adopted in the warehouses in the future to render the warehouse free of human intervention.

Role of Warehouse Automation in Business Growth The tasks in the warehouses are repetitive, routine and rigorous in nature. Automation

22 CargoConnect - july 2017

to higher savings and value delivered.

Automation of such tasks will reduce the dependency on human labour, thereby substantially reducing the impact of the seasonal labour shortages. Additionally, the automation of tracking processes improves the planning and forecasting capabilities considerably, since accurate data of the shipment location leads to better planning.

Also, the abundant data captured on day-today basis with little or no human effort leads to better forecasting at no additional cost.

While most of the results of warehousing

It is not a single technology that is disrupting the warehousing sector, but the combination of existing technologies that will lead to efficient and effectively managed warehouses. Material Handling Systems providers are providing customised solutions for the logistics sector – automatic storage and retrieval systems; automated guided vehicles; augmented reality tools, warehouse management systems that are integrated with the automation tools, data capture tools, report generation and others.

AIDC devices will play a key role in the effective usage of other technology tools.

Until the industry achieves dark warehouses, augmented reality (AR) will be utilised to render warehouses paperless. AR tools will assist warehouse employees to locate shipments and fasten the overall process of storage and retrieval without depending on hard copies of shipment location information.

Few other tools that are going to change the warehousing sector include cloud computing for warehouse management systems, distributed order management systems, big data and analytics for inventory and demand forecasting etc. Some of the software products and service providers are focusing solely on the logistics sector to provide the participants with requisite tools with sophisticated capabilities at lower costs.

Role of Warehouse Automation in Value Creation for End Users Retail commerce is becoming increasingly

cover story

The future warehouses will be better aesthetically designed.

There would be ample height so that vertical space could be used more efficiently, smoother flooring to enable greater load bearing capacity, grid structures to comply with international storage/binning requirements and wider setbacks for better traffic movement.

Jasmine Singh, Head, Industrial and Logistics Services, India, CBRE South Asia Pvt Ltd.

Growth of warehousing in India

1,440

745

warehouse automation will lead to lower pr ices and improved service quality.

Jasmine Singh, Head, Industrial and Logistics Services, India, CBRE South Asia Private Limited says the warehouses of the future are likely to be better in terms of quality and several other aspects.

Some improvements that will be a natural progression in the future are:

Look of the Warehouses of Future

FY 2013 (E)

FY 2017 (E)

Source: ValueNotes Research

omnichannel in nature. Speed, agility, visibility into the supply chain etc. are increasingly becoming the distinguishing factors and the source of competitive edge. Adopting automation in warehouse operations will enable companies to achieve this competitive edge. From the perspective of warehouse users,

automation will help in achieving productivity gains by reducing the process cycle times and reducing the number of shift operations and errors in manual operations, improved inventory accuracy and visibility, lower damages due to pilferage/manual errors/expiry issues etc. all of which directly impact the bottom line. From the end-consumer perspective,

24 CargoConnect - july 2017

Fut ure wa rehouses fol low the str uct ure of bui lt-to-suit warehouses, distribution centres, transportation hubs l ikely to be t a i lor-m ad e to t he c l ie nt requirements. The infrastructure of warehouses will also undergo vast changes. The future warehouses will be better aesthetically designed.

There would be ample height so that vertical space could be used more efficiently, smoother flooring to enable greater load bearing capacity, grid structures to comply with international storage/binning requirements and wider setbacks for better traffic movement. a) Warehouses to go green with o p t io n s o f c ap t i ve p o we r generation wherever the project feasibility and the economies of scale justify. b) Most of the larger parks will have STP/ETP. c) To pr ov id e a b et te r work environment including ambient temperature, better

air circulation, more amenities for workers.

Role of Warehouse Automation in Business Growth W i t h wa r e ho u s e s b e c o m i n g automated and technologically advanced, the overall supply chain will become more efficient as there will be a) Less pilferage and damage b) Less reliance on erratic work force and labour union related issues c) Less space requirement, reducing storage rentals per unit d) Better customer service and efficient and accurate order handling leading to reduced cost of returns and replacement

Role of Warehouse Automation in Value Creation for End Users With warehouses becoming more efficient and positively impacting the overall supply chain function, the end user is also expected to benefit, as there will be better customer service and improved efficiency in handling transactions.

Mukul Chaudhary, Consulting and Solutions Lead, Holisol Logistics, Pvt Ltd feels that warehouses of future would take shape as per the requirements of booming e-commerce business.

Besides, warehouse operators have to implement omnichannel solutions to cater to the increased needs of the future.

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Warehouse automation and use of robots in the warehouses have their own advantages which include potential improvements in productivity, order accuracy, reduced space requirements, more volume capacity, control of inventory and better customer service.

Vikram Mansukhani, Head 3PLs, DIESL

Warehousing and Logistics Robots Revenue and Shipments, World Markets: 2016-2021 $25,000

700 Revenue

Shipments 600

$20,000 500 $15,000

400

$10,000

Role of Warehouse Automation in Value Creation for End Users

200

Automation facilitates businesses and allows quicker product flow along with less chances of errors and help in real time information flow as well. It benefits end users to get their order in lesser time with zero discrepancy.

Automation also allows end-user to trace and track their order at any point of time.

Vikram Mansukhani, Head 3PLs, DIESL feels warehousing industry will transform to a great extent in seven to ten years from now. Change would come certainly when complexity of service will increase. Here are the highlights of what he shared:

100

Source: Tractica

2016

2017

2018

Look of the Warehouses of Future Slowly and steadily, warehouses in India are moving towards automation. More technologies like RFIDs, bar codes,

2019

2020

2021

conveyers and automated picking solutions etc. would be used more in warehouses of the future. With the rise in E-Commerce business, there will be a demand for omnichannel operations and warehouse operators have to revolutionise their workstyle in future to cater to the needs of E-Commerce business.

Role of Warehouse Automation in Business Growth Automation is a boon for warehousing industry as today’s warehouses have been facing challenges in fulfilling orders on time and losing sales due to long order fulfilment cycles. Warehouse automation will considerably cut down the order fulfilment cycles and allow businesses to deliver the product on time and at a much faster rate.

26 CargoConnect - july 2017

Future warehouses will be equipped with more advanced version of Warehouse Management System (WMS), self-picking or guide to pick technology, RFIDs for speedy GRN and cloud data based system for low cost, less maintenance as well as data security.

300

$5,000

$

Type of Technology to be used in Future Warehouses

Look of the Warehouses of Future Warehousing in India will change in a phased manner, i.e., from small and labourintensive to large, compliance-oriented, semiautomated and largely mechanised fulfilment centres catering to a diverse range of brands and end consumers. However, it’s a vision for seven to ten years from now, when the scale of operations and the complexity of service levels will mandate an extremely fast and accurate execution of dispatches.

The professional operators have to ensure in the short-term, that technology deployed within the warehouse should provide complete transparency of order execution, inventory

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The warehousing industry will witness immense change in the coming years. Implementation of technology will revolutionise the way we connect, customer experience and the need to react continually or rapidly. Warehouses of the future will act in the manner of DCs where supplies will come in and immediately move out.

Piyush Kumar Singh, CEO, Indus B2B Solutions

more in the manner of Distribution Centres, where supplies will come in and immediately move out. The warehouses of future will have to fulfil the needs of multiple channels including brick and mortar, wholesale, home deliveries and parcel shipments simultaneously.

Role of Warehouse Automation in Business Growth

levels, productivity standards and hygiene factors to the brands located there. As we move from small to large consumption centres, the man to SKU ratio will go down considerably and will be replaced through automation.

Role of Warehouse Automation in Business Growth Warehouse automation and use of robots in the warehouses have its own advantages which include potential improvements in productivity, order accuracy, reduced space requirements, more volume capacity, control of inventory and better customer service. However, these benefits and cost effectiveness are expected to be seen in bigger facilities with high volumes, where automation offsets the higher operating costs that result from the increased complexity of larger warehouses. Highly automated warehouses might not be cost effective due to high capital costs, high interest rates and low labour rates. But these facilities could be cost effective in the long run as many customers

28 CargoConnect - july 2017

may not be willing to look at the long term return on these investments in automation – they seek lower rates in the short term instead. To add to this, LSPs have to manage the costs of maintenance and operation which are also high.

According to Piyush Kumar Singh, CEO, Indus B2B Solutions, logistics cost in developed economies hovers around 7 per cent of GDP, whereas it is around 14 per cent of GDP in India. If logistics cost is brought down by 4-5 per cent, the benefit will be immense for the manufacturing industry and ultimately warehousing industry would be one of the significant beneficiaries among others. Here are the highlights of what he shared:

Look of the Warehouses of Future The warehousing industry will witness immense change in the coming years.

I mpleme ntat ion of tech nolog y w i l l revolutionise the way we connect, customer experience and the need to react continually or rapidly. Warehouses of the future will act

More use of robots in the field of warehouse management will be the next big disruption in the field. Amazon proved to be one of the earliest movers in the field, by the acquisition of the robot manufacturer, Kiva Systems, to revolutionise its warehousing functions. The E-Commerce giant then had 15,000 robots working in its facility, moving entire shelf units and now the number has grown to 30,000.

Type of Technology to be used in Future Warehouses In recent times, due to the technological advances in Automatic Identification and Data Capture (AIDC) technology, logistics and warehousing industry has gained a lot in terms of optimum utilisation of resources, tracking of consignment and seamless distribution of cargo.

Tech nolog y for the log istics and warehousing industry has come a long way since the bar code reader of 1950s. While bar code readers are still being widely used, newer inventions like Quick Response (QR) Code are becoming popular to encode data to computer-compatible digital data and accelerate the flow of a shipment among its beneficiaries. Technologies like Real Time Locating Systems and Radio-Frequency Identi fication (RFID) have become essential for a wide range of automated data

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Drones - the current buzz word will soon turn in to reality in India for small piece pick and delivery options. Robotic MHE, use of Conveyor belts and Applications based functionalities will slowly but surely find its way into becoming standard warehouse practices.

Ryan Oliver, Assistant Vice President, Contract Logistics, Agility

collection and identification applications that helps warehouse operators to keep a track of goods coming in or going out their perimeter.

Adoption of Warehouse Management System (WMS) and other IT-driven solutions are becoming effective in increasing the competitiveness of the warehousing industry.

WMS helps warehouse operators to track inventory, orders and provides data about the products stored and can also be transmitted back to the manufacturers.

Ryan Oliver, Assistant Vice President, Contract Logistics, Agility feels that investors and developers have begun to recognise the need to set up infrastructure that matches global standards. Ryan gives a detailed overview:

of E-Commerce business, the TAT for order to delivery has now been crunched down to number of hours, as against the earlier trend of day-based deferred delivery of products. Given a chance, customers would like to have product delivered at the click

Look of the Warehouses of Future Radical improvement in the infrastructure of warehouses is undergoing in India with the infusion of global best practices and ever increasing customer demands. From being mere godowns and storage blocks, warehouse facilities are evolving into sophisticated stockrooms, equipped with state-of-theart equipments. Investors and developers have begun to recognise the need to set up infrastructures that match global standards.

Future infrastructures will have a huge focus on ‘Health Safety Security and Environment’, robust flooring to manage MHE and material movement, adequate natural light etc. In their efforts to ‘go green’, warehouses would also be equipped with solar panels bringing down a chunk of the operating costs.

Role of Warehouse Automation in Business Growth With the emergence and rapid acceptance

30 CargoConnect - july 2017

“There is a need to develop Cobots – collaborative robots that are designed to work alongside human workers in the warehouse” of a button. In order to meet this need for speed, it is important that warehousing facilities become fully automated and are able to cater to this ever growing demand. It is only through automation that warehouse managers can churn out a higher output and help boost businesses in India.

Type of Technology to be used in Future Warehouse There is no denying that with the fast evolving market conditions and need for customised operations, technology driven warehouses will always stay ahead of the crowd in the future. Sturdy Warehouse Management System is considered as the backbone of a good warehouse. There are an array of relevant technologies available today and will certainly be implemented in the near future, some requiring low to medium investment, while others needing a higher investment budget.

Technologies like Real Time Locating Systems and Radio-Frequency Identification (RFID) provide warehouse managers complete visibility of products stored and is a boon for large warehousing facilities.

These technologies are essential for track and trace and can be widely used for transportation as well. Drones, the current buzz word, will soon turn into reality in India for small piece pick and delivery options. Robotic MHE, use of conveyor belts and applications based functionalities will slowly but surely find its way into becoming standard warehouse practices.

Role of Warehouse Automation in Value Creation for End Users Automation will lead to an on time, in full and no error environment. Getting it right the first time will obviously bring down the cost of operations drastically and will have a direct and positive impact on customer service. Warehouse service providers could pass on part of the cost benefit to customers and margins would increase.

Andrew Jillings, Chief Executive Officer and Group Managing Director,

CREATING VALUE AT EVERY POINT OF TRANSFER

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We have been facilitating modern warehouses by our efficient material handling equipment such as Dock Levellers, High Volume Low-Speed (HSLV) Fans, Vehicle Restraints, Dock Seals, Dock Shelters etc. which in turn enhances the efficiency of workers in a modern warehouse.

Piush Goyal, MD, Kelley Material Handling Equipment India

Tiger Group g ives the conclud i ng remarks and says that his company believes that there is a lot to be gained from automating physical processes, and also from the automating data processes.

Tigers’ main logistics business is in multiuser facilities, with many customers having vastly different and often highly customised processes.

While physical automation is limited in Tiger’s warehouses, process automation is becoming increasingly common. An example of this would be Tiger’s Scan Pack that allows packers to scan and check the contents of an outbound parcel and print out the required documentation, perform or assist in value added service (add a free gift for example), and also select and contact the courier based on rules or rates. The next parcel to be processed, can then follow a different pattern entirely.

32 CargoConnect - july 2017

Warehousing facility has evolved from mere godowns to sophisticated stockrooms equipped with state of the art equipment

Technology companies Akash Gupta, Co-founder and Chief Technology Officer, GreyOrange says that algorithm guided warehouses of future would touch a completely different level of efficiency. The warehouses of future will work on real time analytics and could even able to sense the entire external ecosystem.

Here are the highlights of what he shared:

Look of the Warehouses of Future Three to five years from now, warehouses would be more agile, dynamic and smart. The warehouses will be guided by algorithms which would be deeply influenced by artificial

intelligence and machine learning, thus reaching completely different levels of efficiency.

With less fixed infrastructure and processes, warehouses of the future will work on real time analytics and will be intelligent enough to understand the entire external ecosystem around them. For instance, if it rains heavily on a particular day causing delay in the movement of goods, the smart warehouses will have the intelligence to anticipate approximate delay in the arrival of goods into the warehouse and will allocate resources to other tasks in the meantime. Hence, we can look at more intelligent and flexible warehouses leading to higher efficiency.

Role of Warehouse Automation in Business Growth Businesses are striving to provide their best to the customers and the whole supply-demand cycle is undergoing a sea change. With the plethora of choices and increasing exposure, customers will soon define what is manufactured, rather than the other way round. Customers have got used to personalised services and we are soon approaching an era where customers’ he ig htened e x pectat ions w i l l force sellers to make a product with multiple customisations/personalisation available out of the box. To ensure and enable this, it is crucial to automate the warehouses to make them operate effectively and efficiently and communicate with each other. Warehouses will become customisation centres/hubs; and not just spaces that stack boxes.

Type of Technology to be used in Future Warehouses The warehouses of the future shall deploy

Logistics through innovation, dedication & technology...

Administration Building

Infrastructure & Advantages Customs notified area.

Customs bonded warehouse.

State of the art security & surveillance.

Covered warehouse facilities of over 4,50,000 sq. ft. under one roof with modern racking systems which can house more than 40,000 pallet spaces.

3PL facilities.

Flexi warehousing.

Robust fleet of company owned vehicles, monitored & tracked electronically.

24/7 operations with CCTV monitoring.

Automobile logistics services.

Spread over 40 acres of land.

Over 6000 TUEs per month, i.e. 72,000 TUEs per annum.

CFS owned equipment: 5 Top Lifter, 80 Trailers, 30 Forklift, 2 Empty Handles, 1 Crane.

Direct access to the National Highway 17, from Panvel to Goa. Distance from Panvel station: 6 Kms.

Warehouse

Covered Warehousing Facility

CFS & Logistic park at same location

JWC logistics Park Pvt Ltd, National highway 17, Panvel Goa Highway, Village Palaspe, Panvel, Maharashtra - 410206 2143- 661952 2143-661900 (100 lines) krutijobanputra@jwclogic.com jwccfs@jwclogic.com jignesh@jwclogic.com

3PL Admin Building

www.jwclogic.com

cover story

Three to five years from now, warehouses would be more agile, dynamic and smart. The warehouses will be guided by algorithms which would be deeply influenced by artificial intelligence and machine learning, thus reaching completely different levels of efficiency.

Akash Gupta, Co-founder and Chief Technology Officer, GreyOrange

products in real time, ensuring faster turnaround, thus enabling a better customer experience. Thus, automation (resulting in higher efficiency) is an integral part of delivering a good customer experience.

Kamal Jha, Vice President, Honeywell Safety and Productivity Solutions, India says that initially, companies used to set up very few large Distribution Centres (DC) in a region and used these DCs to provide goods to stores in the case of grocery/retail or ship goods in a B2B fashion in that region. But extreme growth in D2C business has forced companies to rethink about the large, regional Distribution Centre format. On the concept of future warehouses, he has certain points to make– a variety of communications, sensing and security technologies at the core. One crucial area where automation is being tested is quality check, with the aim of supplementing human effort. Intelligent systems are going to be deployed that will ensure the best quality products. Through these intelligent systems, even the minor flaws in a product would be detectable and reduce the chances of committing errors possible to be ignored by human eye during large scale manufacturing.

Newer ways of delivery – from selfdriven vehicles to drones are also being contemplated to bolster the delivery mechanism and make the warehousing and delivery function more efficient.

Role of Warehouse Automation in Value Creation for End Users Automation of warehouse processes helps in eliminating errors, reducing touch points, checking pilferage and auditing inventory real-time. Handling excessively high volumes of packages of different shapes,

34 CargoConnect - july 2017

“Technologies like Real Time Locating Systems and Radio-Frequency Identification (RFID) provide warehouse managers complete visibility of products stored and is a boon for large warehousing facilities” sizes, shipments to numerous locations and services including ‘same-day-delivery’ and ‘next-day-delivery’ are challenges that are tackled by automating inventory ma nagement a nd sor ti ng processes.

With fewer order-picking errors, better inventory management and increased levels of efficiency, a company is able to deliver

Look of the Warehouses of Future The warehouse of the future will certainly have a new look. The term “warehouse” in itself portrays an image of static products sitting on racks for a long period of time.

That is why most facilities use the term “Distribution Centre” or “Fulfilment Centre” for these facilities now, as products or goods flow through them today at a much higher pace.

In the future, companies will be locating smaller, more flexible Distribution Centres near large population hubs so that Direct-toConsumer orders can be fulfilled quicker and the delivery distance shortened – all to meet the growing demands of today’s consumers.

These DC hubs will have the fastest moving Stock Keeping Units by demographics and their stocks will be replenished directly from the vendor or from the larger regional DCs. Companies that have brick and mortar stores and are also into E-Commerce will most likely deploy both types of DCs to handle

UPCOMING  SQ FT ON NH-1 Site Features  Proposed covered area 2.5 Lac Sq ft.  Total site area of 11 Acre.  Future expansion potential of Up to 60 Acres Salient Features                        

Clear height up-to 30feet and high stack racking systems available Cold room solutions delivered and readily available Material Handling machines and pallets available on rent 24 Hour Water & Industrial Power Supply Power Backup on Request Guest house and Cafeteria Facility available on site Drivers Rest Room No Traffic Restrictions No Truck and Labour Union Octroi Free Zone States Coverd – Haryana, Himachal, J&K, Rajasthan Well Connected with Rail, Road and Air Service, (5km from Railway Station, 3km from Bus Stop, 15km from Ludhiana Airport and 90km from Chandigarh Airport.)

Easy Movement for 60 Export Containers and Multi Axle Trucks Minimum 40’ wide Road for Easy Movement of Trucks Broad Frontage Enabling Wide Entry / Exit Points High Dock Door Ratio for Provision for Dock Levellers Weather Proof PEB Built with Modern Materials and Construction Techniques 100% Leak & Dampness Proof Roofing Flat Heavy Duty Concrete Flooring with Loading Capacity to 5T/Sq m.

Clear Height of 30’ Customized to 40’ to 50’ Facility for Multiple Storage Levels Wide Column Grid 24X7 Secured Premises Boundary Wall Height 8’ + 3’ Barbed Wire BTS Model Can be Made Available

 SQ FT

Area Delivered in Ludhiana Upcoming  SQ Area in Ludhiana

   

FT

0.5 km from National Highway – 1 60 feet wide connecting road to the National Highway Close proximity to the railway station and bus terminal Ludhiana is centrally located in the state of Punjab and is well connected with the states of Haryana, Rajasthan, Himachal Pradesh and Jammu & Kashmir

Present clientele Mondelez | Mitsubishi Electric | Snapdeal | MRF Tyres | Pepsico | Adani Wilmar | Ruchi Soya

A one stop shop for all your storage and logistics needs Mr. Gurtej Garewal, Director, M: +91 9915000173 | Email: gurtejgarewal@obrologistics.com | Website: www.obrologistics.com Off: 173-F, Shaheed Bhagat Singh Nagar, Pakhowal Road, Ludhiana 141013 | W: NH-1 Village Kadian, Ludhiana 141008

cover story

The extreme growth of D2C has forced companies to rethink about the large, regional Distribution Center format. In the future, companies will be locating smaller, more flexible Distribution Centers so that D2 C orders can be fulfilled quickly to meet the growing demands of today’s consumers.

Kamal Jha, VP, Honeywell Safety and Productivity Solutions (India)

the very different business models and requirements of each.

Role of Warehouse Automation in Business Growth DCs will certainly deploy automation in the future. Many DCs have automated solutions now to support the movement of goods, such as conveyors, sorting equipment etc. However, volume is continuously rising and the labour pool is unable to keep pace. It has become difficult for DC operators to meet current demand and future needs will only compound the issue. Automation will speed the movement of goods through the DC and capture critical information needed to maintain accuracy and efficiency. In order to handle the increased future volumes, DCs would have to raise the labor force significantly and that is not always possible. Automation can support this expansion and allow companies to grow their business organically or through mergers/acquisitions, without increasing the DC size or the size of labour force.

Type of Technology to be used in Future Warehouses DCs of the future will deploy different types of technology.

Current technology, such as automated data capture, will continue to play a crucial role in DC success as the realtime capture of critical information to update supply chain execution systems (WMS, WCS etc.) will still be necessary. The use of hands-free technology and wearable solutions will continue to grow as they provide high level of accuracy and productivity and will be needed to support future demand spikes. Automated solutions and robotics will also continue to grow in DCs of the future as the labour pool will not be able to support or fulfil growing volumes. DCs will also operate within the supply network in a connected fashion through the use of sensor technology gathering information in an automated fashion and allowing smart systems to make automated decisions based upon business algorithms developed by the company. The DC will become part of a greater ecosystem within the company and within the supply chain allowing for more automated movement of goods, visibility and better operating efficiency of the building and all material handling equipment used within.

36 CargoConnect - july 2017

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Our company believes that there is a lot to be gained from automating physical processes, and also from automating data processes. Tiger’s main logistics business is in multi-user facilities, with many customers having vastly different and often highly customized processes.

Andrew Jillings, CEO and Group Managing Director, Tiger Group

Role of Warehouse Automation in Value Creation for End Users The value to end users of more automated DCs will be the meeting of their demands.

As consumers, we have created a ‘Get-It-Now’ society, where we demand immediate access to goods and services. Being able to supply that demand is becoming extremely difficult in the traditional DC operating models. It is a three-step approach. In the first step, the order to fulfil the request comes to the DC from a vendor. The DC then performs the second step of fulfilment and ensures that the product reaches in time and is received by the vendor. The third step relies on the delivery company to make the shipment within the expected time window. If any of the three steps fails, the whole process breaks down and the consumer gets dissatisfied. So, automation and visibility across the whole supply chain, not just in the DC, are critical to its success. The deployment of automated data capture solutions to gather information in real-time enables supply chain execution systems (WMS, WCS, TMS, etc.) to provide the efficiency and visibility to meet these ever increasing demands.

Stuart Scott, Director, Enter prise Mobility and Solutions Marketing APAC, Zebra Technologies presents a bigger picture of the industry. He said that 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 came the additions to the warehouses – bar code printers, scanners, handheld computers and vehicle mounted computers, RFID scanners and printers, robots and automated shelves.

Some warehouses are now even using drones

38 CargoConnect - july 2017

“Technology improves productivity, order accuracies, reduces space requirements, provides more volume capacity and help in better management of inventory in warehouses” 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

of the warehouse. E-Commerce is booming in Asia, led by two super-spending powers – China and India. A consumer in the Asia Pacific region that is home to 60 per cent of the world’s population is twice more likely to purchase online than in brick-and-mortar stores. The region is on track to become the largest E-Commerce market globally, in the next five years, as predicted by MasterCard.

Hence, automation is going to be the next big disruption in the warehousing sector.

Use of robots, drones and technologies like RFIDs, bar codes, conveyors and automated picking solutions etc. would be used more and more in the warehouses of future.

Implementation of technology will definitely have some impact on the employment, but smart companies have started taking in itiatives to impart more sk i l ls to employees so that automation doesn’t affect employment negatively.

FOCUS

Vizag: Future Metropolis of the Country Visakhapatnam as a modern growing industrial city needs a new international airport and therefore, the Centre has taken up the project at Bhogapuram in Vizianagaram district.

Work on the project will begin once the land acquisition process is completed, Civil Aviation Minister P. Ashok Gajapati Raju said recently.

With various researchers predicting Visakhapatnam as a modern growing industrial city, Deepashree Banerjee presents a brief report on the opportunities, developments and challenges for this future metropolis.

40 CargoConnect - july 2017

focus

A

ccording to P Ashok Gajapati Raju, the Civil Aviation Ministry was spend i ng more tha n `1,500 crore on improving the Rajahmundry, Vijayawada and Tirupati airports in the state.

The ministry is extending the runways at Gannavaram (Vijayawada) and at Madhurapudi (Rajahmundry) airports. They are creating other facilities and improving the Tirupati airport as well. Night landing facilities are being created at these airports to improve connectivity. Raju said recently, “The Collector of Vizianagaram district has told me that most of the lands have been acquired for the project”. The project falls in Vizianagaram Lok Sabha constituency, represented by the minister himself.

Air cargo from Visakhapatnam O Naresh Kumar, the CEO of a local software company and several others raised the issue of setting up an air cargo complex at the Visakhapatnam airport to meet the needs of the local industry. They wanted a specific assurance from the minister on the issue.

The minister said that there were some procedural problems, which were being sorted out. He pointed out that, on the cargo front, Indian airports were way behind and except at Chennai airport, they are not handling much cargo. “The Government and the industry and trade should work together on the issue. You should tell us what kind of policy intervention you require,” he opined.

A representative from Brandix India Apparel Ltd sought a direct f light to Colombo from Visakhapatnam and the minister said he would look into the demand.

Local Member of Parliament, K Haribabu said that 30 major projects were coming up in and around Visakhapatnam city, after the bifurcation of the state, tremendously increasing the importance of the city and correspondingly air connectivity was also being improved.

In line with its ambitious plans, the government is bringing the CEOs of 50 top global financial services companies, including Franklin Templeton, Visa and HSBC to showcase the city at the launch of the new initiative.

Absence of international air cargo terminal affects Visakhapatnam airport Ne a rly e ig ht mont h s a f te r it we nt international, the Visakhapatnam airport is not yet ready for international cargo exports.

Red-tape is said to be coming in the way of airport development and unless something is done on a war-footing the development of the region will remain a cry in the wild.

Accord i ng to A i r Travellers’ Association (I nd ia) P resident D Va r a d a R e d d y, t h e Customs have already given their consent for posting their personnel at Vi zag a i r port for clearing international consignments. He also said that the Vizag cargo termina l can hand le nearly 10 tonnes at a time, but needs to have a larger storage facility along with temperature cont rol led faci l it y to c ate r to ph a r m a products.

W h i le t he Vi z a g

airport handled nearly 1,107 tonnes of domestic air cargo in 2010-11, it increased to around 1,823 tonnes during 2013-14.

However, it dropped to 1,244 tonnes in 2014-15, which airport sources attribute largely to the disruptions caused by cyclone Hudhud. Airport sources said that though a chunk of the domestic cargo comprises of shrimp and frozen seafood, the last couple of years have also seen a spurt in merchandise from E-tailers being flown in through airlines.

“Nearly 65-70 per cent of the domestic air cargo is routed to places such as Chennai, Hyderabad, Bengaluru and comprises of shrimp and frozen seafood. But, merchandise from E-tailers is also looking up on the Vizag route,” said an airline source. Three airlines AirAsia, SilkAir and Malindo Air are already there to connect Vizag with Singapore and Kuala Lumpur. There is certainly a demand in the pharma and seafood sectors at present, which can be handled by these airlines. As of now, a majority of the cargo is shipped either to Chennai or Hyderabad from where it is flown to international destinations.

“A direct connection from Vizag will also result in a drop in costs for customers,” the source added.

According to a study conducted by students of Gitam University for the Confederation of Indian Industry a couple of years ago, Vizag airport had the potential of handling nearly 9,500 tonnes of cargo per year just on the back of the existing demand from as many as 76 industrial units in the district.

Nepal team visits Vizag port, seeks concessions for its trading A Nepal delegation consisting of Under Secretaries Buddhi Prasad Upadhyaya, Dinesh Sagar Bhusal, Ram Prasad Subedi and Devi Prasad Sharma visited Visakhapatnam Port in the month of February and held discussions with VPT deputy chairman PL Haranadh and other heads of departments.

The visiting team wanted to know the facilities and operational logistics for movement of their cargo more effectively and efficiently through the Visakhapatnam Port when compared to Kolkata Port and informed that they have found the Visakhapatnam Port to be better and transparent and they wanted concessions and offers to inform the

july 2017 - CargoConnect 41

FOCUS Authority (VUDA) and the Software Technology Park of India (STPI) at a total cost of `62.70 crore spread over 12 acres. The IT Incubation Centre is expected to be ready

by April 2018 and is projected to provide jobs to more than 2,500 people.

The Technology Research and Innovation Park – Sunrise Start-up

Nepal traders and attract more business from them. The team also stated that, if necessary, an office accommodation at the port would be opened for all business documentation and transactions, instead of handling the transactions from Embassy of Nepal in New Delhi, depending on the volume of cargo.

Andhra CM signs multiple MoUs to develop Vizag as a FinTech Hub Recently, Andhra Pradesh Government unvei led its plans to develop Vishakhapatnam as FinTech hub of the country and signed M0Us with Visa and Thomson Reuters. Visa, the leading global payments network will help transform Vishakhapatnam into India’s first “less cash” city. This initiative is designed to provide the foundation for the city to emerge as India’s FinTech Valley, in keeping with the vision of Chief Minister N Chandrababu Naidu, the company said. Naidu announced the Fintech Valley initiative at the Microsoft Future Decoded conference in Mumbai.

Naidu said the government will collaborate with various organisations to create perfect FinTech ecosystem in Vishakhapatnam.

Six companies including Paytm are already working at FinTech Tower in the port city.

Visa will work with key city agencies in Vishakhapatnam like the Greater Vishakhapatnam Municipal Corporation (GVMC), Common Service Centres, Andhra Pradesh State Road Transport Corporation and key merchant segments like auto rickshaw drivers and the agricultural markets, to help digitise payments. The Government of Andhra Pradesh has come up with several initiatives to achieve this ambitious target. Visakhapatnam seems to

42 CargoConnect - july 2017

be the destination for these initiatives. This is in line with its new Innovation and Startup Policy Agenda for 2014-2020, which aims to make Andhra a world-class technology start-up ecosystem.

UK based HyperCat launches operations in Vizag In a big boost to efforts to improve the startup ecosystem, the UK based consortium, HyperCat, had launched its operations in

The Technology Research and Innovation Park – Sunrise Start-up, which is powered by the AP Government and the Start-up Village aims to encourage creative minds and create a start-up eco-system. In the first phase, 17,000 square feet is going to be thrown open for industries at the Sunrise Start-up on Hill III in Rushikonda IT Park. As of now, four companies have been allocated space in the incubation area and another ten companies have been allocated space in the Incubation Centre which include Trigeo Technologies Pvt Ltd, Tessolve, Avvas Infotech Pvt Ltd, Sinofic, Logic Planet, Lampex Electronics Ltd, Naina Power Pvt Ltd, Inspired IT Solutions Ltd, Epace Tecnologies and Objectone Information System.

A study conducted two years ago by

Other initiatives

students of Gitam University for the

Stating that the Sagarmala Project is an ambitious plan approved by the government, Shipping Secretary recently stated that the Ministry of Shipping has undertaken a lot of initiatives in last two years for the sector.

Additionally, the Shipping Ministry plans to undertake 199 projects worth `3.31 lakh crore under Sagarmala, which include developing multi-modal hubs in Vizag. In line with its ambitious plans, the government is bringing the CEOs of 50 top global financial services companies, including Franklin Templeton, Visa and HSBC to showcase the city at the launch of the new initiative.

A workshop on ‘Visakhapatnam Urban Observatory’, conducted by the ‘UK-India Joint Network on Sustainable Cities’, along with the Greater Visakhapatnam Municipal Corporation (GVMC) and Visakhapatnam Urban Development Authority (VUDA) officials, focused on functioning of urban observatories, its advantages and feasibility of having it in Vizag. If everything goes well, Visakhapatnam will have its own Urban Observatory to deal with the civic issues and monitor its urban dynamics at the local level.

Confederation of Indian Industry Vizag airport had the potential of handling nearly 9,500 tonnes of cargo per year just on the back of the existing demand from as many as 76 industrial units in the district.

Visakhapatnam. HyperCat entered into an agreement with Silicon Coast Foundation, a registered not-for-profit organisation managing Startup Moksha at Rushikonda IT SEZ, to manage HyperCat incubator in India, with offices in Hyderabad and Visakhapatnam.

IT Incubation Centre Andhra Government has decided to create an ecosystem for FinTech and other emerging technologies including digital banking, financial analytics, cyber security and block chain technologies. An MoU was signed in February 2016 for setting up an IT Incubation Centre at Siripuram Junction in Vizag jointly by the Visakhapatnam Urban Development

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Air Cargo Industry in a Dire need to Reduce Dwell Time Air cargo industry players are optimistic about the bright future of the industry.

In a recent report by FICCI, it is predicted that India would become world’s third largest aviation market by the year 2020. But still, there are a few issues that needs to be looked upon which includes high dwell time, long processing time and serpentine queues at the cargo terminals.

The government has acknowledged these loopholes and started working towards filling these gaps. Gaurav Dubey delves into the matter and presents an informative piece.

44 CargoConnect - july 2017

Temperature Control Handling Area

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Room no. C.E. – 05, First Floor, Import 2 Building, International Cargo Terminal, IGI Airport, New Delhi – 110037 Phone: +91 11 2560 1310 | Fax : +91 11 2560 1320

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D

evelopment of infrastructure along with addressing key issues of the air cargo industry is presently among the top priorities of the aviation ministry. A study by the industry body FICCI and consultancy firm KPMG has predicted that India is all set to become the world’s third largest aviation market by 2020 after the US and China.

Previously, International Air Transport Association had predicted that India would be the third largest market by 2026. The latest study is a testament of booming air cargo industry in India.

These figures of conducted studies could turn into reality only when infrastructure of aviation sector is ready to cater air cargo industry’s future growth. The logistics industry has always been confronted with multitude of problems on account of inordinate dwell times, damaged or missing cargo, long processing times and queues at the cargo terminals etc. This has led to huge transaction cost and operating expense for the air cargo industry players. Therefore, the government’s main focus initially is to reduce dwell time to match with international standards through automation, E-governance, air freight stations (AFS) and simplified processes.

As per the recent statistics furnished by the Airport Authority of India (AAI), total passenger traffic (both domestic and international) at all Indian airports during 2016-17 (April 2016-February 2017) witnessed a growth rate of 18.9 per cent, while total air cargo at all Indian airports during 201617 (April 2016-February 2017) witnessed a

Ramesh Mamidala CEO, Çelebi Delhi Cargo Terminal Management India Pvt Ltd

“The Ministry of Civil Aviation (MoCA) has taken several steps to reduce the dwell time of cargo at Indian airports on the lines of global standards. For the reduction of dwell time of cargo, MoCA conducted studies at various airports across the country and has taken measures accordingly.” growth rate of 9.3 per cent.

Some of the essential steps taken by the government for growth of air cargo are as follows (a) The Ministry of Civil Aviation (MoCA) has got the dwell-time study conducted

Projected deliveries of aircraft on order from OEMs to Indian carriers 2015-2025

Source: CAPA Fleet Database

46 CargoConnect - july 2017

at six major airports in the recent past to identify the reasons for higher dwell time on the Indian airports and corrective action(s) required. The free period for air cargo has been reduced from 72 hours to 48 hours. (b) The concept of 24×7 Customs clearance of import/export cargo has been initiated at 13 airports. (c) The concept of ‘Single Window’ has been launched by Customs from April 1, 2016 in phased manner which interalia ensures online clearance from various regulatory agencies. (d) For handling international cargo at its airports, AAI has provided Automatic Storage and Retrieval System (AS&RS) as well as Elevated Transfer Vehicle (ETV) facilities for handling both import and export cargo respectively at Chennai and Kolkata airports. (e) All the international air cargo terminals managed by AAI are well equipped with sufficient storage space, cargo handling equipment, cold rooms for perishable cargo and other basic facilities. (f) The Common User Domestic Cargo Terminal (CUDCT) concept has been introduced for maximum utilisation of facilities. (g) AAI has prepared a road map to create cargo infrastructure and facilities at 24 AAI airports to initially provide impetus to economic growth and development on pan-India basis and to ensure harmonious growth of all regions in India.

Ramesh Mamidala, CEO, Çelebi Delhi Cargo Terminal Management India Pvt Ltd is very optimistic about the future of Indian air cargo industry and says, “The Ministry of Civil Aviation (MoCA) has taken several steps to reduce the dwell time of cargo at Indian airports on the lines of global standards. For the reduction of dwell time of cargo, MoCA conducted studies at various airports across the country and took measures accordingly.

Reduction of demurrage free period of air cargo from 72 hours to 48 hours is one of its prime developments. This has been done with an aim to speed up the cargo processing time in warehouses and to restrict the use of cargo terminals as a storage depot at the place of processing facility. Less cargo processing time will augment the capacity of warehouses and it would eventually lead to overall growth in air cargo throughput.”

feature Regulatory authorities have been taking various steps to reduce dwell time of cargo apart from the above mentioned initiative related to the reduction in demurrage free period from 72 hours to 48 hours. On the import side, Customs has issued a notice for advance filing of bills of entry in the Indian Customs EDI system by the importers, which if followed by all the traders, can expedite the clearance process and it will eventually impact the dwell time. Similarly in exports, optimum utilisation of 24X7 presence of custom operations by the trade such as bringing cargo to the warehouse in the nonpeak hours i.e. morning hours and night hours can also support in reduction of dwell time through faster and uniform processing of cargo. From the point of view of Airport

In Import side, custom has issued a notice for advance filing of bills of entry in the Indian Customs EDI system by the Importers, which if 100 per cent followed by trader, can expedite the clearance process and it will eventually put impact on the dwell time.

Operators, there are significant contributions required in terms of infrastructure which will put considerable impact on processing times. Çelebi Delhi Cargo Terminal has made significant investments for lifting terminal’s infrastructure as per global standards.

Various initiatives have been taken such as introduction of six-level racking systems, state-of-the-art equipments such as TLX with automated weight and volumetric scanners, ETVs, Dual View X-ray machines

48 CargoConnect - july 2017

Mike Chew CEO, Air India SATS Airport Services Pvt Ltd

“In order to maintain the upward trajectory, the practices and procedures of the Indian air cargo industry need to be at par with global standards through regular technological upgrades, a highlytrained workforce and adherence to the strictest security standards is required.” supported by an automated handheld driven Barcode based environment which has streamlined the processes and reduced dwell times considerably. In addition, Çelebi Delhi Cargo Terminal has become 100 per cent E-freight compliant as well way back in 2013, one of the first in the country. They are also implementing 100 per cent EDI based flight check which has eliminated the paperwork for flight check operations. All the above measures are the need of the hour, and all terminals in the country should be geared up to upgrade the terminal facilities to improve the cargo processing times and procedural efficiencies.

High dwell time certainly puts huge pressure on the infrastructural facilities such as warehouse space and the handling equipments. If cargo stays for long hours in a warehouse, it leads to congestion at airports thereby occupying the warehouse space and the handling equipments which results in slow processing of the cargo thereby increasing dwell time and reducing efficiency.

High dwell time directly hampers the growth in the cargo throughput of an airport. High

storage cost of cargo which has to be borne by the Freight Forwarders and Customs House Agents is another consequence associated with it. This has a chain effect; any kind of delay at one airport has adverse effects on the movement of cargo at other airports, thus affecting on time delivery of cargo. And, these delays put an adverse effect on the overall economic growth.

Mike Chew, CEO, Air India SATS Airport Services Pvt Ltd feels that there is an urgent need for Indian air cargo industry to match its operations with the global standards and says, “The Indian air freight industry has been experiencing an exponential growth and this growth has taken India on a track to become one of the ten largest international freight markets by 2018. In order to maintain this upward trajectory, the practices and procedures of the Indian air cargo industry need to be at par with global standards through regular technological upgrades, a highly-trained workforce and adherence to the strictest security standards.”

Air India SATS (AISATS) always embraces the latest technology for improving processing efficiency of the supply chain. AISATS has also developed structured training processes to train its workforce as per modern technology, to impart the requisite know-how and skill sets in order to keep pace with the newest technological advancements.

As an experienced player in the industry, AISATS understands that security and safety of air cargo is of paramount importance within the terminal and during the movement of cargo as well. AISATS has a Security Management System (SMS) in place which comprises various checks such as identification checks, background checks on the credentials of potential employees, frisking of personnel and their belongings, restricting access to sterile operations, etc. to ensure that the cargo is protected from unauthorised contact across the whole supply chain.

AISATS’ Air Freight Terminal at Kempegowda International Airport, Bengaluru has received the Regulated Agent (RA) status from the Bureau of Civil Aviation Security (BCAS). An RA certificate signifies that AISATS has secure premises with effective access controls, an efficient visitor management system and BCAS certified security employees handle and provide security to cargo from the moment of its entry

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feature to delivery of cargo to the air carrier.

AISATS’ Air Freight Terminal is also the first Indian air cargo terminal to have Class A certificate of FSR 2014 provided

by Transported Asset Protection Academy (TAPA). A TAPA certified facility ensures security of the cargo in the warehouse by way of following stringent access controls, secure handling of high-value products which uses high-tech equipment for cargo handling, and installing vital surveillance and alarm systems to match up to the standards set by TAPA. For an added level of cargo security, AISATS has secured the facility perimeter as per International Civil Aviation Organisation (ICAO) standards, deployed trained security personnel at strategic points and has installed 215 cameras covering every part of the facility.

AISATS has always been open to embrace novel technological developments that expedite the cargo movement. AISATS is an IATA E-Freight complaint entity and has adopted paperless and hassle free cargo procedures to increase its efficiency. It is worth noting here that AISATS Air Freight Terminal located in Bengaluru is India’s first E-Freight compliant terminal. AISATS in its endeavour to expedite cargo movement, has considerably reduced custom delays and duplication of physical Air Way Bills (AWBs).

Other technological practices in place at the AISATS Air Freight Terminal, Bengaluru are the Automated Storage Retrieval System (ASRS) and Very Narrow Aisle (VNA) equipment. The ASRS equipment is fully automated and has the capacity to store 1,000 bins of cargo. The equipment works at very high speed which enables quick delivery or acceptance of cargo and secure handling of the cargo at all times. The storing and retrieval time per bin for ASRS is 45 seconds. ASRS is linked to AISATS’ Cargo Management System, COSYS, which is a software that enables AISATS to track cargo within its facility and retrieve the cargo through an automated process.

The Very Narrow Aisle (VNA), on the other hand, is the first in India to deploy a 17 metre high VNA storage system. The VNA equipment moves vertically, up to a height of 17 meters to store cargo in high-rise racks, thereby optimising space and increasing operational efficiencies. Even the AISATS COOLPORT located at Kempegowda International Airport, the country’s first integrated on-airport

50 CargoConnect - july 2017

Tushar Jani Chairman, Cargo Service Centre Private Ltd

“The customs notification in the financial bill emerged as a real game changer. It said that if Bill of Entry is not filed within 24 hours of the landing of plane or arrival of freight at the terminal then the penalty will be levied by customs on shippers.” perishable cargo handling centre, follows technologically advanced practices such as use of envirotainers to monitor and control temperatures in the warehouse. AISATS COOLPORT uses cold chain technology to ensure optimum temperature maintenance throughout the cargo’s journey – from the belly of the aircraft to the warehouse and vice versa.

Three factors - speed, efficiency and accuracy - are important for cargo handling services for a quick aircraft turnaround time.

The activities undertaken during loading and offloading of cargo are aplenty, which

have to be completed within a stipulated period of time, while keeping the quality of service in mind. This is achieved consistently with detailed planning, communication and team work.

As an organisation, AISATS believes in building a strong foundation for its employees. This is instrumented through various training sessions and mock drills that AISATS employees undergo to sharpen and hone the skill to operate ground support equipment. This ensures zero damage to the aircraft and to the cargo. Their employees also undergo specialized training for loading and offloading of various types of cargo that helps in the smooth handling of goods.

To direct this, AISATS has an organised management in place. For every flight, they have a dedicated ramp supervisor who coordinates and streamlines the handling of overall ramp services. A team lead also contributes to this task by specifically focusing on the loading and unloading operations.

Delay in filing of documents on time by shippers is one of the reasons of high dwell time of cargo at airports. Shippers delay timely filing of documents so that they could use airport’s cargo terminal as a warehouse.

Tushar Jani, Chairman, Cargo Service Centre Private Ltd says, “The Customs notification in the financial bill emerged as a real game changer says that if Bill of Entry is not filed within 24 hours of the landing of plane or arrival of freight at the terminal, then the penalty will be levied by customs on shippers.”

It is high time that the industry should now push for the Risk Management System (RMS). On registration on the RMS, cargo could be cleared on the arrival itself. As per the present procedure, cargo operators take nine hours after filing of document and Customs take maximum 24 hours. If the Bill of Entry is filed before the arrival then the Customs would take 12 hours and cargo would get cleared in 21 hours. But, companies are not taking the advantage despite the fact that the system is working 24x7. Several companies are not taking delivery in night despite opening of terminal. Hence, industry should get ready to shift its operations from the day cycle to the hourly cycle. This shift would make cargo handling efficient; contribute in the success of Make in India initiative and in sustainable GDP growth.

feature

GST: A Real Game Changer for the Warehousing Sector The removal of various federal tax barriers and creation of a common market will improve supply chain efficiency and attract more FDI. Deepashree Banerjee with the help of the industry experts and research professionals, tries to figure out if the reform, on the whole, will be in the larger good of the sector resulting in the emergence of better quality, investment worthy assets.

52 CargoConnect - july 2017

feature

I

n India, there has not been a uniform and easy to implement taxation policy in place across various supply chains for years. Therefore, the distribution and warehousing strategies are very much tax oriented, which restricts effective utilisation of available resources.

Usually, we have seen companies build warehouses in each state to avoid taxes. However, it is not a good practice as far as logistics efficiency is concerned. Even the existing warehousing infrastructure is yet to be organised. Additionally, a substantial amount of time is spent in transporting goods due to multiple tax rates at the state and city level. But with Goods and Services Tax (GST) being implemented and because of its simplified and uniform approach, there is likely to be a more positive impact of it on warehousing in India.

In Asia, countries such as Indonesia, Thailand, Singapore and the Philippines have already adopted a GST during the 1980s and 1990s, creating an effective tax system with a comparatively lower cost of administration and collection.

Approximately 65% of respondents believe that they will need a minimum of 3 to 12 months to align their existing business strategies with the new tax structure.

The GST will make doing business in India tax neutral, irrespective of the location. For a warehousing operator, investment decisions will no longer be dictated by the comparative tax advantages of various states, thereby enabling them to make decisions based on supply chain dynamics. To better understand the impact of the GST on the warehousing sector in India, CBRE Research conducted a survey of leading warehousing space occupiers to gauge their views on the new taxation regime; understand their strategies in the post GST era; and ascertain the impact of the GST on their overall business and operating costs.

Survey respondents included leading corporate organisations in sectors such as third party logistics (3PLs), e-commerce, engineering and manufacturing, fast moving consumer durables and non-durables, pharmaceuticals and retail. Approximately, 63 per cent of respondents were domestic corporates, while the remainder were headquartered abroad.

According to a recent CBRE South Asia report, unlike most reforms that tend to meet a lot of resistance within the sector, most warehousing players view the implementation of GST as a positive

july 2017 - CargoConnect 53

feature

“We expect that lower GST rates alongside elimination of tax cascading impact and seamless credit shall all contribute to decline in inflation,” Sanjay Gupta, Managing Director, AVG Logistics Private Limited

move. While some may argue that the reform may prove to be detrimental for the smaller players, in our opinion it is likely to allow these smaller players to develop better quality assets or enter into joint ventures with larger players.

STATE LEVEL PRESENCE OF RESPONDENTS

Andhra Pradesh West Bengal

Delhi

57%

Uttar pradesh

58%

61%

53% Telangana

Goa

39% 57%

57%

54%

Tamil Nadu 71%

52% Rajasthan

76%

51%

Haryana

87%

44%

Maharashtra

Gujarat

“In line with our expectations, approximately 65 per cent of respondents felt that the implementation of the GST will be positive for their overall business operations in India,” says the report. They anticipate operating costs to decrease in the post-GST era, which will enable them to consolidate their smaller facilities into larger ones and expand their footprint around major consumption centres. The report examines how these companies have been operating in India to date, their preferred locations for warehousing operations and their likely strategies after the implementation of the GST. “We expect that lower GST rates alongside elimination of tax cascading impact and seamless credit shall all contribute to decline in the inflation,” says Sanjay Gupta, Managing Director, AVG Logistics Pvt Ltd. The exponential growth of the E-Commerce sector and strong demand from 3PL companies has resulted in large

Karnataka Kerala

Madhya Pradesh CITY LEVEL PRESENCE OF RESPONDENTS

Bangalore Mumbai Chennai

space take-ups by these players across cities. The survey found that approximately 58 per cent of respondents had a warehousing space portfolio of more than 500,000 square feet, spread across various states in India. Approximately, 42 per cent of 3PL operators covered in the survey had a portfolio of more than 1 million square feet across the country.

Delhi Hyderabad Pune Ahmedabad Gurgaon

Direct impact on the number of warehouses in a supply chain

Kolkata Noida 0%

20%

40%

Source: CBRE Research, Q1 2017.

54 CargoConnect - july 2017

60%

80%

100%

Historically, all the warehouses in India were designed on the basis of tax structure and not on supply chain synergies, Sandeep Chatterjee, Associate Director, KPMG Advisory Services Pvt Ltd explains. Chatterjee cites an example in this regard: if a company wanted to do business in 29 states, it

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feature “Service tax payers were very happy with the existing structure as it was paid at one single source. Hence, Service Tax as a collection grew fastest due to the ease of payment. Now, GST has completely complicated and has lost its way on simplified and ease of doing business for Service Industry,” Cyrus Katgara, Managing Director, Jeena and Company

went ahead and opened one warehouse in each state to save on taxes. Consequently, there were smaller and sub-optimal warehouses. “With GST (one tax across the country), companies do not get advantage by maintaining so many warehouses. There will be bigger, multiple commodity warehouses to achieve economies of scale. But, the point still remains that if there is consolidation of warehouses, what can be done with the existing warehouses,” Chatterjee RESPONDENTS’ PREFERRED MODES OF OPERATIONS IN INDIA

5%

4% 3%

better organised if warehouse service providers come together in the form of logistics parks. Such parks would serve as aggregation centres, where larger and more organised warehouses could come about and serve as a node for efficient transportation both for the primary and the secondary movement,” says the veteran academician. This may however take time to evolve and stabilise after introduction of GST.

states offered rebates if one produces and sells in the same state. GST being a destination driven tax, the focus will now be more on optimising the supply chain network from a profit and cost optimisation perspective. Further, a trend which is likely to come is that of warehouse-on-demand, whereby there will be specialised players who will be able to trade on warehouse space.

This works well for the E-Commerce, where the demand is highly variable

Cost Benefits

and we cannot predict the warehouse space needed each day. With supply chain costs going down, the cost of distribution will come down, some of which will be passed on to the customer. This is an exciting time for supply chain professionals in India.

Cyrus Katgara, Managing Director at Jeena & Company holds a slightly different opinion. “GST is great for manufacturing industry and a disaster for service industry,” he says. According to him, the GST should have been only implemented

16% 54%

18% Lease space Built-to-suite Both leasing space and build warehouse Involve a 3PL player Both Lease a space and involve a 3PL player Both involving a 3PL player and Building a warehouse Source: CBRE Research, Q1 2017.

raises a potent question.

Prof. G. Raghuram, Director, IIM Bangalore agrees that GST will have a direct impact on total count of warehouses across the country. “The secondary distribution from a warehouse will be governed more by logistical considerations than state boundaries. This will take away the need to build warehouses in each state, leading to better logistical efficiency. It is possible that warehouses could be

56 CargoConnect - july 2017

According to Prof. Raghuram, due to an efficiency-oriented approach rather than the tax saving approach, there would be savings in logistics costs. In a competitive environment, these benefits would be passed on to the customers. Chatterjee echoes Raghuram on this aspect and says that now that the tax angle is gone with GST, there will be consolidation of warehouses based on cost savings and supply chain synergies. “Another fundamental shift is that earlier, the

People. Partnership. Performance...

Infrastructure & Advantages Infrastructure Advantages 1) Storage of& 7000 pallet,15 identical chambers of 432 Custom bonded Pallets eachwarehouse.

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4) VAS Facility of Processing, Repacking, Labeling & Storage area 28,000 sq. m.

Sorting Direct access to the National Highway 4B leading to the JNPT port.

5) Customs Bonded Ample space for parkingArea of 10000 cargo trucks.

6) Operated reach trucks,forklifts & hand pallet movers 24X7 CCTV monitoring.

CFS owned equipment: 4 Top Lifters, 80 Trailers, 30 Forklifts, 7) 2 Empty Handles, 1 Crane.

8) Inflatable Dock Shelters with Dock Levelers.

Distance from JNCH: 11 Kms. 9) 100% Power back-up with multi generators Distance from Belapur station: 7 Kms. 10) Fire- fighting & fire prevention systems Zero toll, congestion & carting charges in the CFS. 11) LED eco-friendly lighting Zero congestion on the approach road.

12) ISO&22000:2005 HACCP Carting stuffing dine in coveredCertified area.

13) Reafer Vans & Support SecondaryForwarders.

Distribution Ideal location for Exporters/CHA's/Freight Prompt carting of cargo.

Wi-Fi enabled CFS.

Entrance

Covered Carting & Stuffing Area

Total Protection from Rains: Carting Custom & Stuffing area: Completely BondedCovered.

Area

15-23, National Highway 4B, Panvel-JNPT Highway Village Padeghar, Panvel-410206, Maharashtra +91 22 66280700-98 +91 22 66280781 jwrcfs@jwllogic.com raaj@jwllogic.com hema@jwllogic.com mgrops@jwllogic.com

Covered Warehousing Facility

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feature “Another fundamental shift is that states offered rebates if one produces and sells in the same state. GST being a destination driven tax, the focus will now be more on optimizing the supply chain network from a profit and cost optimization perspective. Another trend which is likely to come is Warehouse on demand whereby there will be specialized players who will be able to trade on warehouse space.”

Sandeep Chatterjee, Associate Director, KPMG Advisory Services Pvt Ltd

CRITICAL FACTORS DRIVING LEASING STRATEGIES

8% 9%

21%

25% Location/Access of the facility Cost/Rent Quality of Warehouse Size of the Warehouse Additional specification Source: CBRE Research, Q1 2017.

for manufacturing of goods.

“Service tax payers were very happy with the existing structure as it was paid at one single source. Hence, Service Tax as a collection grew fastest due to the ease of payment. Now, GST has completely complicated and has lost its way on simplified and ease of doing business for service industry,” he adds.

The government has proposed to implement the Goods and Services Tax (GST), which promises to integrate India’s multi-layered indirect tax system into a single unified one, unshackling India from its bureaucratic web and improving the ease of doing business.

Too many slabs, too many registrations and too many filings per month can definitely not be part of doing business “with ease”, says

58 CargoConnect - july 2017

Katgara. The government may still segregate manufacturing industry from service industry for the purpose of GST, he reveals. The new tax regime will force many companies to restructure their operations. The companies will now insist vendors and suppliers 37% to furnish invoices as GST will make it impossible for firms to evade taxes.

With the introduction of GST, India will become a seamless market without any difference between inter-state or intrastate sales, hopes Gupta of AVG Logistics. It is estimated that after GST, logistics time will be saved to a great extent due to the abolition of multiple trade barriers such as octroi, local body taxes, entry taxes and other hurdles.

Various tax barriers such as check posts and toll plazas lead to a lot of wastage for perishable items being transported, a loss that translated into major costs through higher need of buffer stocks and warehousing costs as well. A single taxation system could eliminate this roadblock for them and will reduce overall turnaround time of the vehicles. The changes in the proposed indirect tax system could reduce transportation cycle times, enhance supply chain decisions, lead to consolidation of warehouses etc. As a corollary, the overall transport cost will get reduced; and eventually it will reduce the cost of goods and services.

Modes of operation and leasing strategy of the existing companies The Delhi-National Capital Region (DelhiNCR) has substantial warehousing operations, witnessing an average annual

take-up of 2.5 million square feet of space for the past three years. Bangalore in the South and Mumbai in the West are other key markets for warehousing operations.

In recent years, leasing activity in Bangalore has been driven by 3PL and E-Commerce companies, which collectively accounted for close to 35 per cent share of the 1 million square feet of space leased in the city during 2016.

Elsewhere, Bhiwandi, in the Mumbai Metropolitan Region (MMR) has been favoured by occupiers owing to its proximity to the Jawaharlal Nehru Port and easy connectivity to residential hubs in Mumbai, Thane city and surrounding regions. State wise analysis revealed that survey respondents had a relatively larger

A sizeable number of economists in the country forecast inflation to come down as GST rates for most goods have been fixed at a lower rate. presence in Maharashtra, Karnataka, Tamil Nadu, Delhi and Andhra Pradesh, all of which are the country’s biggest manufacturing and consumption hubs and possess relatively developed infrastructure networks.

The first quarter of CBRE research survey threw up a number of interesting results. The trend of built-to-suit warehousing is still at a nascent stage in India. Most of the companies prefer to lease modern warehousing space to save costs and minimise exposure to regulatory issues. Utilising a 3PL player to manage non-core operations is the second most preferred mode of operation. The expertise and resources of a 3PL operator can help companies improve their flexibility and efficiency. Most 3PL services in India are currently provided by domestic companies.

feature “The secondary distribution from a warehouse will be governed more by logistical considerations than state boundaries. This will take away the need to build warehouses in each state, leading to better logistical efficiency.�

Prof. G. Raghuram, Director, IIM Bangalore

Consolidation Expansion Remain the same Not Sure Both expansion and consolidation Downsizing Expansion, relocation and consolidation Both downsizing and consolidation Relocation

0%

5%

10%

15%

20%

PRE GST 1%

1% 6% 3% 5% 4%

5%

25%

30%

35%

POST GST 5% 3% 11% 5%

8%

28%

3PL companies’ share of overall warehousing space take-up has increased from an average of 15 per cent during 2012 and 2013 to an average of 28 per cent during 2015 and 2016.

Approximately 45 per cent said that their cost of warehousing operations is likely to decline once the GST comes into play, while around 25 per cent were cautious and felt that it is too early to assess the actual impact. However, the majority of respondents said that they are already prepared for the introduction of the GST and would be able to align their business to the new regulations.

The survey found that approximately 65 per cent of respondents believe that they will need a minimum of three to twelve months to align their existing business strategies with the new tax structure. Among the respondents, the location of the warehouse currently is the most important factor for consideration when leasing warehousing space. This is followed by the real estate cost of leasing space in a particular state or city. While currently, the location decisions may also be influenced by tax-incidence, after the implementation of the GST, most warehousing occupiers are expected to take decisions purely on the basis of reach to market, quality and size requirements.

Monstrous growth potential and investments galore 30%

52%

33%

Mother Hub for a region, supplemented by spokes

Mother warehouse in the city/state with urban fulfillment centres

Multiple warehousing facilities in one state/city

Only one warehousing facility in one state/city

Both Multiple warehousing facilities in one state/city and Mother Hub for a region, supplemented by spokes Both Mother Hub for a region, supplemented by spokes and Only one warehousing facility in one state/city

Mix of all

Both Multiple warehousing facilities in one state/city and Only one warehousing facility in one state/city

Source: CBRE Research, Q1 2017.

There would be indirect impact of GST on warehousing in India, as IT costs of deploying Enterprise Resource Planning (ERP) systems at smaller warehousing locations would be eradicated. While cramped, ill-equipped storage units will make way for sprawling, high-tech and air conditioned facilities, the metamorphosis driven by the much-awaited roll out of the GST Act is set to augur a new order in the industry dynamics. Analysts also predict that it will ensure improved service levels at lower cost in overall supply chain.

Winding up According to the industry insiders, the reform-driven ecosystem would lay the genesis of a level playing field in the warehousing sector. The scope of healthy competition will see the foray of genuine performers in the business. But, as every perfect narrative demands a stunning climax, similarly, the success of the warehousing sector depends largely on the seamless implementation of the GST. Although some teething problems are expected, this strategic shift in policy is the beginning of a new dawn.

60 CargoConnect - july 2017

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feature Post GST logistics environment is expected to increase activities in large warehouses and transport categories. This would mean a tremendous boom for the employment opportunities in this sector. This translates into requirement of skilled manpower in logistics. To fill this skills gap, many initiatives have been taken by the government as well as private players. Tariq Ahmed, with the help of industry experts, delves into the subject.

Skill Development Initiatives in the Logistics Sector 62 CargoConnect - july 2017

The Highest Circulated / Read & Referred estic m o Logistics D Industry Magazine

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I JULY 201

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feature

I

n India it is estimated that nearly 12 million people join the workforce every year. As per the India Skills report 2015, only 37.22 per cent of surveyed people were found employable; 34.26 per cent among male and 37.88 per cent among female. Over 120 million incremental human resources will be required in India alone, across 24 key sectors by the year 2022. According to a global study, presently India is one of the largest labour-surplus countries in terms of its working age group (15-64 years) populations worldwide. In contrast to the western countries, where there is an increasing liability towards an ageing population, India has a rare 2-3 decades of window known as the ‘demographic dividend’. To leverage this demographic dividend, government started ‘Skill India’ mission along with ‘Make in India’, thereby we can balance the demand and supply of skilled manpower.

An NSDC Skill Gap Report on logistics sector projects an incremental manpower requirement to the tune of 300 million by 2022, while the National Skill Development policy had set a target of skilling 500 million youth by 2022. This will position India as the ‘Skill Capital of the World’.

The country has more than 70 odd programmes on skill development being run across 29 states through 21 different ministries. Each one had their own norms and outcomes and tracking mechanism. The multiplicity of these initiatives had diffused the impact that Skill Development could have had for the youth of India. There is limited emphasis on mapping of the skilled workforce that was required across sectors. While the effort for imparting skills is undertaken by

Sub-sectors

different agencies at different levels, Central Government has felt the need to create a separate Ministry for Skill Development and Entrepreneurship. Thus,the Ministry of Skill Development has the mandate to create an effective skill ecosystem and to coordinate the skill development initiatives across the country. The focus is also on convergence between Central Schemes and those conducted by State Government skill missions so that the benefit will reach to maximum and ensure standardisation in skilling and certification processes.

As regards the technical training in Industrial Training Institutes (ITI), Directorate General of Industrial Training under MSDE (Ministry of Skill Development and Entrepreneurship) is responsible for development and coordination of all the vocational training initiatives in the country pertaining to ITIs. The changing market structure, increasing capacities and voluntary adaption of standards in logistics operations need appropriately skilled human resources. With an agenda to support the growth of logistics sector in India, CII Institute of Logistics (CII IL) along with National Skill Development Corporation has set up a Logistics Skills Council (LSC) to address these issues through a structured skill development program. LSC through its Training Partners carries out training in the following 10 Logistics sub-sectors:• Warehousing including Tertiary Packaging • Land Transportation • Cold Chain Solutions • Port Terminals, ICDs and CFS • Air Cargo Operations

Key Job Roles

 Branch Sales Executive  Courier Claims Processor  Courier Delivery Executive  Courier Institutional Sales Executive  Courier Pick-up Executive Courier services  Courier Sorter  Delivery Management Cell Agent  Lead Courier

64 CargoConnect - july 2017

• • • • •

Freight Forwarding and Customs Courier and Express E-Commerce Supply Chain Solutions Marine Services Inland Waterways and Shipping At present, with its training partners LSC organises training in 56 approved job roles ranging from levels 2 to 5 in warehousing, transportation, express courier and freight forwarding sub sectors. Job roles for other sub sectors are progressively being developed.

These job role oriented training are delivered through flagship programs of the MSDE, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and through State Skill Mission administered training programs.

The Estimated Skill Gap It is estimated that demand for skilled logistics workforces is going to increase from 19 million to 32.5 million by 2022, indicating a 13.5 million skill gap.According to a report published by National Skill Development Corporation, the logistics sector presently employs over 16.74 million employees and is slated to employ more than 28.4 million employees by 2022 in the growing logistics, transportation, warehousing and packaging sector of India. Take an example of huge shortage of skilled heavy duty truck drivers.

It is estimated to be so severe that 3 in every 10 trucks in India are lying idle. At the same time no one is willing to join this crucial job role due to the harsh and odd working conditions. Let’s see the estimated skill gaps and expected manpower requirement in some of the leading sub-sectors in logistics.

Estimated skill gap  The express and courier service in India has been growing at a rapid pace and will outperform the other subsectors  There are large requirements for employable manpower in this sector throughout, all levels of the organisation  Lower levels do not pose any significant problems towards attracting the right skill sets  The mid-level and higher levels of typical organisations, on the other hand require immediate staffing of graduate students.

2013

Expected manpower requirement by 2022 2017 (In Millions)

0.23

0.30

Existing manpower (In Millions)

0.36

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feature Capt. Ramanujam Chief Executive Officer, Logistics Skills Council

"Logistics and transportation has been taken up as a priority sector and the Government is laying substantial thrust to skill, and up skill candidates with a view to ensure efficient service delivery which would ensure the ease of doing business. Logistics Skills Council is in the process of synthesising skill training and educational programs and link them to the job roles which would give a career progression pathway and provide for vertical and horizontal mobility."

 Strapping machine operator  Packer  Labeling operator  Packing equipment operator  Palletising operator  Packing supervisor

 Increase in retail and other allied services creating need to modernise the workforce through upgrading of skills  Training in technological changes is a critical skill requirement, which could help reduction of costs

Passenge railways

 Locomotive Pilot  Goods guard  Signal in-charge  Passenger chart in-charge  Track Inspector  Sr. Executive  Junior Engineer  Supervisor  Station Master

 Government is the largest employer in this sub-sector which has created a network of in-house training  Personnel policy allows employees to move to another role, if selected through internal assessments

Passenger transport Roadways

 Transport Executive  Driver  Conductor  Ticket Checker  Computer Operator  Mechanic  Welders  Washer  Depot In-charge  Customer Service Executive  Document Assistant

 Road transport segment has not traditionally seen significant investments in manpower development as compared to other segments, such as rail and air.  This has resulted in skill gaps among the existing set of personnel, particularly among the truck drivers.

Packaging

 Port operator/worker  Data entry operator  Container stacker Rail freight and  Loader/un-loader  Port material handling operator ICDs  Oder fulfillment supervisor  Operations Manager

 Inadequate knowledge of procedures, paper works for interstate movement, taxation related issues  Inadequate ability to ensure training of personnel employed  No incremental skill improvement and thus no motivation to perform better at the existing profile

 Consignment Booking Assistant  Delivery Executive  Operations Assistant  Loading Supervisor  Operations Manager  Documentation Executive  Floor Controller  Ramp Controller  Claims Executive

 Core driving skills, recognition of driving practices specific to cargo carried, tonnage of truck  Knowledge of routes, geography  Knowledge of road safety practices  Knowledge of traffic and permit rules, taxation rules relevant to border check posts (octroi, VAT)  Ability to coordinate with pickup/ delivery site representatives  Ability to interact with authorities

Road freight

66 CargoConnect - july 2017

0.22

0.26

0.30

0.83

1.11

1.35

9.10

12.59

15.60

0.13

0.18

0.22

5.79

7.99

9.88

Air Freight Forwarders & Consolidaters

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feature Anuj Alphonson Chief Operating Officer, Safeducate Learning

"We have established more than 150 state-of-the-art strategically located learning centres across the nation to promote learning and skill development primarily in the field of Supply Chain Management and Logistics. Within a short span of time, we have trained and upskilled more than 50,000 people through our multiple training solutions created for different target audience keeping in mind their need."

Warehousing

 Gate operator  Receiving-data entry operator  Store keeper  Picker  Packer  Inventory supervisor  Truck scheduler  Order fulfillment operator  Store supervisor

 Lower levels of the organisations face high attrition levels  Higher levels of operations require welltrained professionals in supply chain and logistics operations

Total

0.43

0.57

0.69

16.74

23.00

28.40

(Source: NSDC report on Human Resource and Skill Requirement in the Transportation, Logistics, Warehousing and Packaging Sector, 2017)

Skill Development in Logistics: Need of the Hour Logistics and transportation has been taken up as a priority sector and the Government is laying substantial thrust to skill and upgrade the skills of candidates with a view to ensure efficient service delivery which would ensure the ease of doing business.

In India, currently, there are few training and educational programs which address the needs of the industry. Large companies carry out customised training to meet their requirement in the form of ‘On the Job Training’. LSC is in the process of synthesising skill training and educational programs and link them to the job roles which would give a career progression pathway and provide for vertical and horizontal mobility.

The PMKVY has three components namely: a) Short term training ranging from 300 to 500 hours in specific job roles b) Recognition of Prior Learning (RPL) which is to certify the existing work force and bring them from the unorganised to the organised sector c) Special Projects which are linked to substantial placement

68 CargoConnect - july 2017

The Minister of MSDE, R P Rudy has been laying a lot of thrust on Sector Skill Councils becoming demand aggregators which would then lead on to placement. The Ministry of Rural Development is also running logisticsoriented training programs through the Deen Dayal Upadhyay Grameen Kaushal Yojana as a part of the Sagarmala Project of the Ministry of Shipping in Coastal Community Districts.

Similarly, Ministry of Road Transport and Highways along with MSDE is leading the initiative to set up Driver Training Institutes for training Commercial Vehicle Drivers.

Ministry of Railways along with MSDE has taken up a systematic RPL program for Sahayaks at the Railway Stations. All these initiatives would promote a customer friendly efficient work force in the logistics sector.

The growth in containerised cargo and development of logistics parks would mean focused logistic activity at the point of aggregation and distribution. Institutes such as CIRT, Pune and IAHE, Noida can work with Logistics Skill Council and its partners to impart training with focus on improving container cargo handling and safety.

It is time that State Governments through respective Sector Skill Councils become more

active in pursuing this initiative. Awareness campaigns and focused training missions by individual State Governments would provide better impetus to fill skill gap in logistics.

Moving Forward in the Right Direction Major push has been given by the Government in establishing Sector Skill Councils under the National Skill Development Council as autonomous industry led bodies. They are being set up with six major objectives: influence how training is delivered in our country, create Occupational Standards and Qualification bodies, develop competency framework, conduct Train the Trainer Programs, conduct skill gap studies and Assess and Certify trainees on the curriculum aligned to National Occupational Standards developed by SSCs. As on date, NSDC has set up 38 sector skill councils which have approximately 450 corporate representatives in their general councils.

Another initiative is the Recognition of Prior Learning (RPL) scheme under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) project. The objective of this scheme is to assess and certify individuals who are already working with prior learning

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feature Prof (Dr) Dewakar Goel Director, Indian Aviation Academy

"Skill gap in the aviation sector is diminishing in the Tier I cities due to digitisation and multiskilling. A lot of emphasis has been laid on training of the unskilled and semi-skilled workforce in the country.

But still a lot needs to be done in the smaller and non-metro cities.

With Regional Connectivity Scheme knocking at our doorstep, we need to lay more emphasis on Tier II and Tier III cities."

Logistics Skill Pyramid Common Job Roles Common Skill Gaps Warehouse manager, operations manager, purchasing manager, supply chain manager, inventory analyst, contract manager, import/export manager

 IT skills, data and analytic skills for systems and solutions that are both digital and physical  Ability to work with both the mechanical and digital aspects of complex integrated products and services — both in the servicing them and in the development of new solutions  Lack of leadership

Middle Level

Inventory controller, transport scheduler, import / export officer, shift supervisor, logistic supervisor, warehouse supervisor, IT Office

 Gaps in leadership/supervision skills leading to efficiency and monitoring issues  Gaps in good basic management practices not attractive for professionals; basic inhouse experience-driven skills with no formal infrastructure to impart skills; lack of specialised knowledge of best warehousing practices

Entry Level

Truck/bus drivers, fork lift operators, commercial vehicle drivers, warehouse supervisor, logistics administrator, invoicing clerk, courier sorter and warehouse picker

 Gaps in core technical skills  Knowledge of associated issues VAT, loading supervisory skills etc.  Sanitation and hygienic issues due to inadequate knowledge about the health issues

Top Level

experience or skills. RPL aims to align the competencies of the unregulated workforce of the country to the NSQF. RPL also shows them a path to bridge their current knowledge and skill levels to reach a competency level or go for higher skills for professional growth.

To enumerate a few of the significant initiatives of the Government: • Under the Pradhan Mantri Kaushal Kendra (PMKK), Government will set up a model skill training centre in each district of the country.

• Taking a big step forward to training skilled drivers, government with the help of private sector is planning to set up state-of-art driver training schools in 500 districts.

• Implementation of National Apprenticeship

70 CargoConnect - july 2017

Promotion Scheme (NAPS) is a great step to ensure a skilled work force by providing real work environment. Moreover, government will fund the training expenditure during apprenticeship.

• Government is conducting deliberations to formulate a new ‘Skill Act’ by the Parliament to give recognition to skill development through training. The Government envisions through its National Skill Mission to incorporate at least 12 weeks of skill training on any particular job role in the secondary education system.

The GST Impact A much awaited indirect tax reform, Goods

and Services Tax is an important milestone for the industry. It will make India a single market by subsuming multiple indirect taxes and bring in efficiency in movement of goods and storage, lower cost, consolidation among industry players, emergence of new logistics hubs, trucks with larger carrying capacities will replace smaller trucks. Let’s take an example, on an average the truck drivers in India covers 250-280 kms per day whereas the world average is 400 kms per day and 700 kms in USA. This is the result of outdated laws and multi-layered tax systems in addition to poor infrastructure.

The logistics sector is largely fragmented and comprises many unorganised players. The

feature Swapnil Khetan Senior Consultant, Michael Page India

"A majority of logistics and supply chain firms are adopting the tech disruptions that are resulting in the digitisation of the entire sector.

Therefore, companies need skilled professionals who can adapt to the changes quickly and individuals who are able to be a part of the set up and can deliver results from an early stage." players who are agile and those who will adapt to the changes faster will survive and grow.

It will result in a great deal of consolidation within the sector and some locations which have become industrial areas as a result of tax benefits may become irrelevant and smaller warehouses will open the gates for bigger and larger warehouses in strategic positions.

As far as GST’s impact on skill/job scenarios in logistics sector is concerned, with increasing share of organised logistics setups, the need for technically qualified and optimally skilled workforce across the supply chain is likely to become more evident. According to a report

by TeamLease, GST will improve the ease of doing business and encourage corporates to enlarge their operations which will help boost job opportunities. As per the study, adoption of GST will lead to an 11 per cent growth in hiring across sectors. The industries that will spur job creation immediately are consumer goods/ FMCG, media, auto industries, cement and logistics. We are hopeful that the Government will take necessary steps to help the informal sector which accounts for six times as many jobs as the former sector. Skilling the unorganised work force will improve their efficiency, scale up their operations, enable them to adopt new technologies, access funds easily and develop their staff’s skills to adapt to changes.

Visible effort by LSC and Safeducate Logistics Sector Skill Council (LSC) was established to ensure entry level skilling and up skilling of the work force in the logistics sector and implement sustainable skill development solutions and to act as a collective and authoritative voice on skill development for logistics sector. LSC has an eminent Governing Council representing the Captains of Industry from the 10 sub sectors that it represents. As on date, with the industry

72 CargoConnect - july 2017

inputs and deliberations, it has identified 64 job roles to be developed in logistics sector.

As an apex body for logistics sector skill development, LSC is engaged in labour market analysis, skill gap study, occupational mapping and development of job roles in demand. LSC is structuring the intake Education and Training Programs and mapping it to the Job Roles.

Safeducate was launched by the house of Safexpress in 2007, with an aim to provide the growing demand for skilled manpower in the supply chain and logistics industry at all levels, from the shop floor workers, warehouse operators, drivers, to MBAs who can join the industry at an entry level position to existing professionals wanting to hone their skills. Their training period ranges from one to three month certifications to year along integrated MBA programs. They are the training partner of National Skill Development Corporation and is also associated with All India Management Association (AIMA), Ministry of Rural Development, Ministry of Home Affairs, Rajasthan Skills Livelihood Development Corporation, Logistics Sector Skill Council, Retailers Associations Skill Council of India, Automotive Skill Development Council and NASSCOM, etc.

In strategic alliances with over 500 companies, Safeducate has established more than 150 state-of-the-art learning centres located across the nation to promote learning and skill development primarily in the field of Supply Chain Management and Logistics.

Within a short span of time, they have trained and upskilled more than 50,000 people through their multiple training solutions created for different target audience keeping in mind their need: Corporate connect solutions, Academia connect solutions, professional certification solutions, Vocational Education and Training Solutions, Digital learning solutions and Research and consulting solutions.

• •

• • •

• • • • •

• • •

Recommendations

Skill Development University in each state to promote the advance studies for skill certified personnel.

Enact Skill Act by parliament to give constitutional recognition to skill development and thereby dignity for skill certified individuals Introduce skill courses in senior secondary and college syllabus.

Benchmarking of quality standards for skill training and assessment Implement National Skill Qualification Framework and make it mandatory to hire skill certified individuals according to NSQF level for jobs.

Increase in CSR spends by Industry players towards skilling.

Increased pay structure for skill certified individuals.

More industry interactions with academia about career opportunities for young graduates and post graduates.

Encourage corporates to spend more for training through policy changes.

Competency mapping of all the personnel in all the job roles across all the sub-sectors to identify the gaps and promote more lateral mobility for personnel in the logistics sector.

Promote use of mobile and online learning to upgrade the knowledge and skills of the employees.

More hands-on practical training for the students and create further apprenticeship opportunities.

Logistics as a subject to be taught from the school level.

We need to create a workforce which is able to solve issues and bring in logistics efficiency and this will happen only if they are skilled at all levels. Logistics Sector Skill Council with their Training Partners are aiming to do just that.

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Interview

We are focusing on providing international quality buildings to our customers Having a clientele of several major names in the corporate world, Interarch has a turnover of over `500 Crore annually.

Gautam Suri, Founder Director and CTO, Interarch Building Products Pvt Ltd speaks about the advantages of PEB over conventional construction methodology and also about the company’s advanced capabilities in innovative light building design, in an exclusive interview with Deepashree Banerjee. Excerpts follow:

Tell us about the genesis of your operations. How has been the journey so far?

Interarch was founded by my friend, Arvind Nanda and me in 1984. Today, it has stateof-the-art manufacturing facilities for pre-engineered metal building systems, engineered metal roofing and cladding systems in Pantnagar, Kicha (Uttrakhand) and Chennai. These three plants enable Interarch with a combined capacity of over 120,000 Metric Tonnes per annum of steel

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building structures and over 40,000 Metric Tonnes per annum for its tracdek roof and wall systems. The company has a turnover of over `500 crore and has over 1500 employees.

Interarch’s capabilities extend all over India with nationwide sales and project support offices spread over 20 locations.

The company’s steel building construction over the years has received wide acceptance including from industry stalwarts like Reliance, TATA Motors, Asian Paints, BHEL and the most recent Delhi T3 Airport

terminal. In many ways, Interarch has changed the face of metal construction in India. It introduced, as a pioneer, in India for the first time: i) Coated aluminium false ceilings in 1984, ii) Designer window coverings in 1986, iii) Coated metal roofing systems for the first time in 1991, which are a construction standard today, iv) Preengineered steel buildings in 1996. Interarch introduced pre-engineered steel buildings in India in 1996, another first in the construction industry. This form of construction is today

the preferred method for almost any kind of industrial/commercial construction. A key feature was that Interarch has had no foreign collaboration during its existence.

Kindly brief us about your ongoing projects.

Interarch have provided innovative solutions to Indian market right from its inception in 1984; and even today, many large and complex buildings have been completed by Interarch. Currently we are working on many prestigious projects. To name a few, we are in the process of delivering first G+7 multistorey hospital building for Fortis Healthcare in Bangalore, Greenfield tyre manufacturing facility for Maxxis Rubber in Gujarat worth around `90 Crore, Greenfield facility for Asian Paints Ltd in Karnataka with a project value of `40 Crore, 19 buildings for HUL in Assam with a project value of `42 crore and Rohit Surfactants Pvt Ltd in Gujarat worth around `75 Crore and many more.

With manufacturing activity increasing in the country in the last few years, logistics has gained equal importance in order to deliver better goods at less cost. How do you think Interarch Building Products Pvt Ltd can be a major contributor to the logistics and cargo industry?

Interarch pre-engineered steel buildings are suitable for industrial, residential and commercial applications, be it warehouses, factories, aircraft hangars, cold storages, workshops, stadiums, supermarkets, schools and colleges or any tall building.

Interarch pre-engineered warehouses have not only proved to be beneficial due to functional advantages, but they are the most appropriate and effective for the warehouse Industry. Pre-engineered solutions used in warehouse and logistics and cargo buildings offer limitless opportunities for the enduser. The pre-engineered building design philosophy takes maximum advantage when used in warehouse and cargo spaces.

Interarch’s efficient warehouses adapt to any kind of storage requirements and are virtually maintenance-free. Interarch warehouses can be customised to any shape or size, be it a clear span of upto 110 metres or clear height of up to 40 metres.

Interarch warehouse buildings are equipped to maximise storage space, economical to build, well ventilated and convenient to

expand in future. Interarch has the expertise of delivering over 6500 buildings across India in the last 18 years.

An average size of a PEB project is approximately 5000 sq metre and can be easily completed within 100 days from the date of finalisation of drawings. Considering the short time frame of your projects, how do you ensure quality control for your products and services?

Interarch, an ISO 9001:2008 certified company since 1999 by Underwriters Laboratories Inc. USA believes in continuous improvement of quality in every aspect of its business. The company has in place, an exhaustive Quality Management System and all products meet national and international standard requirements to deliver consistent quality to its customer.

“Interarch warehouse buildings are equipped to maximise storage space, economical to build, well ventilated and convenient to expand in future.”

Quality practices carried out at different stages of material production are as follows: • Raw material inspection in plant and supplier end • In process and final inspection at worker’s end • Random testing of steel on regular basis • Independent lab testing of critical material • Detailed inspection of bought out inspection • In-process inspection of various manufacturing process • Final inspection of all items • Packing condition inspection • Identification and traceability of material Interarch Quality department organises different tests on built-up items to ensure high standards of quality.

How do you believe the Union Budget 2017 will make an impact in the PEB scenario in India?

We feel the budget was good for the overall Indian economy. Capital expenditure in

FY18 is calculated to increase 10.7 per cent.

The total budgetary spending of `3,96,135 crores on infrastructure will have a trickledown effect on our industry as well.

Moreover, even the implementation of GST later this year will be a game changer for the industry.

What is sustainable designing and are there any unique or innovative strategies that you have recently adopted for the betterment of your company?

We at Interarch have been supporting this cause. Today ‘Green’ or ‘Eco-friendly’ has become the add-on for all kinds of activities surrounding us. The word ‘green’ does not only tangibly revolve around the environment, but also around the intangible causes that affect it. Green buildings are steadily increasing their footprint in India.

Interarch pre-engineered steel construction uses inherently green products and has a comparatively smaller impact on the environment in comparison to conventional brick and mortar construction. The energyefficient methods used in producing the steel used for these structures; and the high recycled content help in substantially reducing greenhouse gas emission.

Interestingly, even after the demolition, these buildings don’t accumulate wastage like asphalt, concrete, brink and dust. Moreover, steel building’s roof is supplied with high solar reflective index, hence it reduces heat transfer to the surface.

All buildings are designed and engineered in such a manner that natural ventilation occurs, and inside, environment is comfortable for the occupants and buildings are equipped with daylight panels to provide natural light during the day, which further reduces the energy consumption once the buildings starts operation.

What are your future plans for expanding your arms in the pre engineered building sector?

We are focusing on providing international quality buildings to our customers. We have enjoyed a good market share in the industry and are placed amongst the top two PEB manufacturers in India. The last few years have been exceptionally good for Interarch and we have grown year on year in terms of topline. For the next few months, we will be focusing on automotive, warehousing and power industry.

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Interview

CRWC: Putting Railside Warehousing at the Helm of Affairs Central Railside Warehouse Company Ltd (CRWC) was incorporated in the year 2007 by the Central Warehousing Corporation to bring all the railside warehousing complexes under administrative control of this new company. The primary objective of CRWC is to plan, develop, promote, acquire and operate railside warehousing complexes across the country. K U Thankachen, Managing Director, Central Railside Warehouse Company Ltd, in an exclusive interaction with Tariq Ahmed, talks about its operations and diversification projects. Here are the excerpts: for the Railways, as well as the higher level of comfort and satisfaction for the end users. These CRWC Warehouses are being used to augment the utilisation of railway transportation system and facilitate costeffective and efficient operation of freight, avoiding multiple handling of goods, curtailing handling cost and offering hassle free efficient operation. The customers derive benefits in terms of reduction in damages and pilferages, savings in demurrage and wharfage charges as well as integrated logistics services.

CRWC has come a long way since it s inception in 20 07, fulfilling its mandate to develop railside warehousing facilities across the country. What is your perception about its achievements so far?

R a i lside wa rehousi ng concept was initiated in the year 2003 with the signing of a MoU between Central Warehousing Corporation and the Railways to promote transit warehousing of bagged commodities.

Subsequently, Central Railside Warehouse Company Ltd (CRWC) was created as a separate company in the year 2007 to give special focus on creation of Railside warehousing facilities. CRWC has till date completed 19 terminals across major metros in India, where we handle bagged commodities like cement, fertilisers, foodgrains and white goods which are generally transported in rake loads by rail.

What is the value proposition you give to the Railways and the customers?

CRWC provides transit warehousing at the goods-sheds across the country which is useful for fast turnaround of the wagons

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In terms of network and capacity expansion, where do you stand now?

CRWC is currently operating 19 RWCs with a total capacity of 3.3 lakh Metric Tonnes.

Recently, we have commissioned additional warehousing capacity of 3000 Metric Tonnes at Jogeshwari, Mumbai. We have taken up work at Pahleja Terminal for construction of warehouse of 13,800 Metric Tonnes capacity at an estimated project cost of `nine crores, which is expected to be completed in the current financial year. We have also recently floated a tender for construction of 20,400 Metric Tonnes transit warehouse at Fatuha, Bihar at an estimated cost of `21 crores which will be taken up in the current year.

This will be a crucial facility catering to the trade in Eastern Region. Other terminals are being planned at New Jalpaiguri, Bhiwandi Road and other locations.

What are your diversification projects on the anvil?

CRWC along with IFFCO KISAN SEZ Ltd and Indian Potash Limited (IPL) has entered into a joint venture and formed a company named ‘IFFCO CRWC Logistics Limited’ (ICLL). The project involves construction

a nd development of a Wa rehousi ng Complex with general warehouse of 5000 Metric Tonnes and 2000 Metric Tonnes cold storage capacity at IFFCO KISAN SEZ, Nellore, which will cater to the requirement of the agricultural and consumer products generated from the region. The construction of this project at an estimated cost of `20 Crores is likely to be taken up shortly.

CRWC is also considering various other verticals for expansion and diversification.

Recently, at the India Integrated Transport and Logistics Summit 2017 held at Vigyan Bhavan, New Delhi, CRWC entered into an MoU with NHAI (National Highway Authority of India) for development of a Multi Modal Logistics Park (MMLP) at Guwahati.

CRWC has recently signed a MoU with MSTC, a Mini Ratna PSU and E-Commerce service provider under Ministry of Steel for providing logistics support for the last mile connectivity to the buyers on the auction platform. As a MoU partner, CRWC participated in its first E-Auction venture for ginger products from Nagaland and executed transportation of the products to the buyer’s premises.

CRWC is also a marketing and logistics partner with MSTC for development of Agri Portal for auctioning of agri based products, which benefits the farmers in fetching fair prices. It is actively involved in developing an all-India platform for procurement and sale of farm products in collaboration with major agri product companies and FPOs. CRWC is a member of the consultative committee along with NTPC to facilitate fly ash movement in bulk wagons. A successful trail run for assessing operational feasibility in this regard has been done in April 2017 from NTPC Rihand Plant to Prism Cement, Satna in BTAP wagons.

Interview

GST will Streamline Warehousing in the Country over. The Eco system is going to emerge which will reward better collaboration and synergy.

What are the value added services that are offered under your w arehousing s er v ice s acros s different cities in India?

AVG Logistics, one of the pioneers in the logistics industry, has been working extensively in warehousing, road and rail transport. Sanjay Gupta, MD, AVG Logistics Pvt Ltd, a veteran logistics professional armed with more than 25 years of solid and varied experience, in an exclusive interview with Sheena Sachdeva, talks about the expected transformations and its impact in the industry.

What impact will the GST have on the warehouses of the future?

GST w i l l stream l ine the mater ia l and information flow in supply chain. It will drive value chain level efficiencies and will change the way we do business in the country. Yes, fundamentally there will be consolidation of warehouses driven by simplification of tax structure and demand clusters. The route to market will be governed by efficiencies and there will be seamless replenishment. The warehousing industry will see an upgradation of infrastructure and skill sets. We will upgrade the movement from godown to warehouse.

These warehouses are going to be built with an eye on the future. With consolidation the demand aggregation will happen and the throughput driven efficiencies will take

Currently, we offer the following value added services • Multi User facility • E2E solutions • 3PL management • Route to market optimization • Next generation people capabilities We will be taking a sector focused approach and will build on existing PAN India presence. We will use this strong domain expertise to anchor on growth and expansion strategies. We have anchored clients in our existing facilities and are working with reputed FMCG companies and E-Commerce organisations.

You have a dedicated fleet of several thousand trucks plying everyday with various facilities provided. What are the major anticipated changes in the trucking segment?

We are having a long term strategy for the market. We believe that there is enough play for asset levy players like us. We bring efficiencies and reliability on the table which is an important attribute considering the current infrastructure hurdles.

We will grow organically by fleet expansion and by expanding the vendor base of our attached fleet. We are also enabling a technology platform to leverage the benefits of a market place model.

Give us an outline of your vision about your work across various verticals in logistics sector.

We want to be the preferred partners to our clients and want to engage on E2E

solution platform. We have a strong sectoral knowledge and have built the business on principles of transparency, reliability and ethical business practices.

We have had a humble beginning but built the business clocking geometric growth by addressing the core business needs for our clients. We are not selling a product, we are selling solutions to our clients and that is the approach that we will take for any business opportunity that comes our way.

Ministr y of Transport has been pushing to boost the infrastructure in ter ms of w arehousing and multimodal hubs. According to you how will it benefit the industry?

This Government is thinking long term and they have a vision to streamline the way we do business in this country.

The transportation and infrastructure created around it will be a great enabler to bring convergence of demand and supply. The DFC, highway connectors and augmentation of state and national highways will ensure fast, reliable and safe transit of material across the country.

Warehousing has an enor mous potential to benefit from automation.

With Amazon using its Robotics division to help with picking orders, restocking and shelving, there’s a lot of buzz about robots replacing employees. What is your comment on it?

Automation is a function of the maturity of the journey. While there is a merit of automation, it has to be driven by the need of industry. We are not riding on a product levy solution. We customise the solution basis of value chain requirement.

What Amazon is doing is a need for their complex value chain and it is a great achievement as it sets a high benchmark.

This is inspirational for us and we hope that we will also have clients coming to us and ask for these solutions in near future.

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Interview

Essar Ports: A Vital Link in Sea Cargo Traffic…

Essar Ports is one of the largest private port companies in India with world class assets at strategic locations.Currently, it has a capacity of 140 metric tonnes per annum in India. Essar Ports has five operational port terminals, each at Hazira, Vadinar, Paradip, Salaya and Visakhapatnam. Rajiv Agarwal, MD and CEO of Essar Ports, a qualified Chartered Accountant and Company Secretary, has over 25 years of rich and varied experience in industries like Retail, BPO, Telecom, Man-made fibres, Shipping and Logistics. In an interview with Sheena Sachdeva, Rajiv Agarwal shares insights about the port’s trade and forthcoming reformation in the industry. increasing employment and improving port infrastructure, but also provides port authorities an opportunity to improve their operational efficiency. I believe the country’s port sector is poised to grow and it is important to develop an ecosystem and regulatory environment which is conducive for inviting large scale investment jointly from the government and industry. Partnership between all stakeholders holds the key to success of the ports sector.

A rising need for a robust port infrastructure has been the need of the hour. What are the upcoming projects that can further improve the shipping scenario in the country?

Government’s initiative is the first step towards a new era of port-led development in India by involving all key stakeholders and focusing on projects relating to the following: • Port development and modernisation • Shipbuilding and repair • Inland waterways transportation and coastal shipping • Hinterland connectivity and multimodal logistics • Tourism and capability development.

The vision also takes forward the government’s core philosophy of cooperative federalism and bring all round development of the region. It will lay the foundation stone for sustainable development of the sector.

What are the key challenges that exist in the port sector?

What are your suggestions to overcome those challenges?

95 per cent of India’s trading by volume and 70 per cent by value is done through maritime transport. How do you see the role of ports in the economy?

Ports form a vital link in the overall trading/supply chain and, consequently, port efficiency is an important factor for a nation to achieve internationally competitive advantage. Increasing private sector participation in the ownership and operation of ports (terminals) not only helps by reducing financial burden of government,

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Projects in India are prone to higher implementation risk in terms of high financing cost, commodity risk, delay in securing various approvals, land acquisition issues and ensuring hinterland connectivity for evacuation of cargo. Additionally, the projects bid out under major ports are under Tariff Regime of TAMP which caps the revenue and further escalates the risk when the market sees a downward trend. This has led to reduced interest of private sector participation in recent years.

To spur the growth in port sector, boost investor confidence and private sector investor’s investment, it is important that the risks are equitably shared, modernisation of facilities are undertaken and decision making is expedited. The same can be achieved through:

Ensuring access to low cost long term funding solutions for infrastructure sector Tax exemption for import of capital equipment for development Tax exemptions for boosting LNG import traffic in India for both LNG and FSRU Flexibility with concessioning authority when dealing with various contracts under stress Remove tariff restrictions and allow market forces to determine tariff for services offered Bidding of projects after receipt of all approvals to avoid any delays Reservation of land for port and connectivity projects and simplifying land acquisition process

infrastructure catering to these exports can minimise the dwell times and boost export growth. The level of mechanisation at port infrastructure will be important to cater to this growth.

Please comment on the future potential of coastal movement of bulk cargo?

“Ports form a vital link in the overall trading/ supply chain and, consequently, port efficiency is an important factor for a nation to achieve internationally competitive advantage”.

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Through coastal movement, we will not have to rely on cumbersome and time-consuming transportation through roads, helping in easing congestion and reducing carbon footprint. Movement of larger quantities will lead to achieving economies of scale and operating more efficiently and at lower costs.

Essar has been moving cargo between east coast and west coast via coastal shipping for a very long time. The port terminal facilities developed by us in Hazira and Vadinar are outcomes of this and are integrated with oil refinery, manufacturing plants and power plants. These regions provide galore of opportunities and industries have already mushroomed in their close proximity. Expansion of these facilities will see boosting of Sagarmala initiative and execution of this vision.

Through expansion of these facilities and by participation in the upcoming projects, we believe Essar Ports will play a major role in the Sagarmala initiative as it already accounts for significant share in the Indian Port Sector.

In this year’s budget, we have seen that Trade Facilitation for Exports scheme (TIES) has been introduced.

How will it affect the trade and logistics industry in India?

While the scheme is moved towards boosting exports under Make in India, it will be important that various processes involved in ensuring the goods reaching the ports and the

How will the Sagarmala project effect the whole shipping and logistics industry in terms of dwell time and logistics cost?

The key underlying principle of projects under Sagarmala Initiative is to substantially reduce export-import and domestic trade costs with a minimal investment. The plan leverages on optimising multi-modal transport to reduce the cost of domestic cargo, minimising the time and cost of export-import cargo logistics, lowering costs for bulk industries by locating them closer to the coast and

improving export competitiveness by locating discrete manufacturing clusters near ports. It is important that strong focus is now laid on execution of the plan which will determine its success. The initiative will not only lead to increased expenditure in the sector and private sector participation but also pave the way for creation of facilities which can deliver world class parameters and compete with world’s best ports.

What challenges do you face while keeping up the pace of cargo traffic at the ports?

The potential for port-led development in the country has for long been constrained by high logistics cost, long lead-times and dwell times and poor linkages between industrial and logistics infrastructure.

However, Ports business of Essar specialises in development and operations of ports and terminals for handling liquid, dry bulk, break

bulk and general cargo. They are designed to deliver best in class industry standards.

(Higher parcel sizes, faster loading/unloading rates, lowest turnaround times, inventory management and environmentally friendly handling).

What security measures are taken at the ports to keep the cargo more secure and safe?

Essar is one of India’s largest private port operator with world class assets at strategic locations and is in the process of expanding its capacity from 140 MMTPA to more than 194 MMTPA over next few years. It’s state of the art mechanised facilities are all weather, deep draft and offer round the clock operations and are designed to deliver best in class industry standards.

It adheres to stringent health, safety and environment standards wherever they operate and has certifications like ISO and OHSAS and are ISPS compliant. The processes are of high standards and its facilities have received honors from The Royal Society for Prevention of Accidents (RoSPA), UK, British Safety Council and many more.

Recently, government has asked to use RFID (Radio Frequency Identification) technology in all the ports. How can technology further save the time and cost along with making the work at port more efficient?

Mechanisation and automation are central to our business which are reflected in our highly efficient operations. We operate at EBITDA margins in excess of 75 per cent which are the highest in the industry and substantiating how efficient our operations are.

We believe that modern ports, to be efficient, need to have certain features like deep draughts, high level of mechanisation and automation and sufficient storage space in order to render ability to handle bigger ships, achieve economies of scale and provide for faster turnaround of vessels. RFID is a step towards seamless cargo movement and reduction in dwell times.

Our facilities and customers are well connected through pipes and conveyors and are planned for multimodal evacuation solutions with minimum human intervention and maximising technology implementation.

We believe that these are the most important elements in improving efficiency and reducing the cost of operations.

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Interview

One size doesn’t fit all DTDC Express Limited has over the years emerged as one of the most prominent players in the express cargo segment. It has its presence in more than 500 district headquarters through its large network of more than 10,500+ franchisees and extends services to over 10,000+ Pin codes while handling more than 12 million shipments every month.

Abhishek Chakraborty, Executive Director, DTDC Express Limited, in an exclusive interview with Tariq Ahmed, shares insight about their journey and much more. Here are the excerpts:

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Starting out in the early 90s, DTDC has emerged as the most reliable partner for express courier and cargo in India over the years. How has been the journey so far? Tell us about some highlights of this journey?

It has been a fairly long journey for us. When we started, we were a really small player and probably a very late entrant into this industry.

But we were driven by our unique business model of not only working as a company by also working with channel partners to create services in logistics driven network – probably one of the first in the world, but definitely the first in India. We have grown because of this model and today we are recognised as one of the largest private networks in India, with more than 10,500 franchisee and 11,000 offices which covers the entire length of the country.

So, I believe this itself is a major highlight of our journey of success. Another thing that we can talk about is how consistently we have diversified our business. When we started off, we were basically a courier company, largely catering to the document segment.

Then in the early 2000s, we started growing our international business and ventured out of India. We have also set up two offices, one in USA and one in UK. Today, that is a very established vertical for us in terms of revenue.

Then in 2008-09, we also started expanding into the logistics segment, started creating our own ground network and focused on the warehousing side of the business. Today, we have a very thriving supply chain business, which also contributes significantly to the company’s turnover. Lastly, in 2012, we started diversifying our e-commerce segment as well.

So, amalgamating everything, we can say that we have really worked hard to be where we are today – from a traditional courier service to a full-fledged express cargo service provider.

In the year 2015, through your strategic partner DPD Group, you reintroduced yourself in the industr y as DTDC E xpress Limited. What was this rebranding aimed at?

We definitely wanted to diversify our express cargo segment. We have been very affluent in our segments of courier and cargo. But both of them are two generically defined term.

We wanted to go all out and tell our partners that we are a full-fledged express service provider, and not anymore a small enterprise.

We wanted to come across as one of the most trustworthy partners for all their express cargo needs.

DTDC has always been very proactive in terms of mergers and acquisitions during the course of its journey. Be it acquiring a majority stake in Eurostar Express or entering into partnership with Europe’s leading logistics player ‘Geopost’. What has been the prime motive behind such major collaborative ventures?

We have always believed that the potential of the express industry is not just limited to the Indian market, but has a global customer base. On one hand, you have large integrators who are market leaders in their own space.

At the same time, there was the need or the requirement of an Indian company that can provide services at par with global integrators and who can be easily relied upon. This inspired us to push our horizons outside India. As we went along, we identified several important markets like USA and UK that have serious

We are very hopeful that GST will be a gamechanger and will be of greater good to the economy. The winners will definitely be those who can make the most out of this compliance act, and keep the odds in their favour. trade relations with India. We always strive to keep our international segment as a strong forte so that we can establish ourselves as an Indian multinational company. And today, with our presence in 20 odd countries, where we have physical offices, we feel very confident of our success in the international segment.

Now that GST has been passed and will be rolled out in a couple of months, how do you plan to make the most of it in order to provide even better services and logistics solutions to your customers? What is your take on centralised warehousing?

When it comes to GST, there are two views that I have always talked about. GST, first and foremost, is a compliance act, and it requires a completely different set of norms to be followed.

The whole standard of the calculation of indirect taxes and its enforcement will go through a metamorphic change. So, it’s not just about the opportunities. It’s also about what the law entails. However, we do believe that once we settle down with the new guidelines and people are made aware of the practical implications of GST, then it would be a good time to talk about the opportunities, especially for the organised

players. Because in the post GST scenario, it will be difficult to work with unorganised players and it could turn out to be a loss making proposition. Therefore, we see a greater push for working with the organised players. We are very hopeful that GST will be a gamechanger and will be of greater good to the economy. The winners will definitely be those who can make the most out of this compliance act, and keep the odds in their favour.

About centralised warehousing, I would just like to say that when it comes to the Indian customers, you can never apply the concept of ‘One size fits all’. It will differ according to the customers, products and volumes.

Eventually, the number of Distribution Centres will come down. But it will mostly depend on providing better and more reliable services to the consumers.

In July last year, DTDC Express launched its e-fulfillment services with a mega plan to set up multiple centers all over the country. What are the key takeaways of the fulfillment services introduced by you?

We have been working on the warehousing side of the business since 2008-09 and trying to build our portfolio there. We have realised that the way people are looking at fulfillment, warehousing and inventory management have changed over the past few years. The biggest driver for us for launching the e-fulfillment services was the fact that the marketplace model of e-commerce is being fractioned. A lot of small traders sell their products on e-commerce websites and we further distribute their products in India. In fact, all of them will be needing not just warehousing solutions but end to end solutions as well, which includes inventory management, warehousing management, shipping, packaging, invoicing, last mile, cash management when it comes to COD etc. So that’s how we go about providing an end to end solutions to the smaller and niche players.

We have also bought our own warehousing facilities and all the space where customers can operate but it is so much more than that. We ensure that our clients don’t need to waste money and manage their backend operations by providing them innovative backend support. We encourage small players to go through new multi channel processes rather than earlier methods of traditional retail model. We also want to open up an online channel wherein we can provide solutions to the client’s entire portfolio.

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Interview

Supply Chain Management and Cargo Logistics: Where does India Stand?

Cargo Logistics sector is on a threshold of change. Prof. G. Raghuram, Director of IIM Bangalore is an expert of Supply Chain Management and Cargo Logistics; and a member of the Global Future Council on Mobility of the World Economic Forum. He has served on the various government policy making and advisory committees for the Ministry of Civil Aviation, Ministry of Consumer Affairs and Public Distribution, Ministry of Railways, Ministry of Road Transport and Highways, Ministry of Shipping, Cabinet Secretariat, Comptroller and Auditor General, the Planning Commission and various State Governments. He speaks to Archana Verma about various aspects of cargo logistics sector in this exclusive interview.

coming implementation of the GST regime. What are your views about it?

Please share your views about the public and private partnership in the Railways, which is envisaged by the government in terms of Dedicated Freight Corridors.

The Dedicated Freight Corridors (DFC) do not leverage Public Private Partnerships in the strict sense, except for one segment in the Eastern Corridor. The entire ownership of the DFC is with the Indian Railways, but for this one segment. Private players are used for contract based procurement.

The relationship between DFC and the Indian Railways is governed by track access charges. But then, it is like one hand paying the other, with no commercial incentive for DFC to perform. The entire customer interface and the revenue is controlled by the Indian Railways. In my view, it is a lost opportunity, wherein, the DFC could have been an independent commercial enterprise to directly address the market requirements and bring in best practices while doing so.

There is a general buoyancy in the cargo logistics sector about the

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The GST is a welcome move for the logistics sector. It would impact the sector on at least two dimensions: i) With the Central Sales Tax regime going away due to the GST, inter-state barriers for domestic trade will go away. This will directly result in reduced transit time.

More importantly, it will rationalise warehouse locations for various principals, who can consider secondary distribution from larger and fewer warehouses into a territory governed by logistical considerations rather than administrative consideration of state boundaries. ii) With uniform taxation for a product across the country, distortionary sourcing and sales in ‘tax haven’ states at the cost of logistical optimisation will reduce.

Of course, both of these depend on the robustness and population of the IT based GST Network, which would allow for online reconciliations.

While the Western cargo logistics companies are becoming more and more conscious about sustainable supply chain management, how do you view this situation in the Indian context in current times and in the near future?

Sustainable supply chains are equally important for India. There is a significant difference between India and the West in this regard, which needs to be highlighted: our sustainability may need to be driven by minimising product losses, while the Western countries’ sustainability may need to be driven by minimising excesses in terms of packaging, transport efficiency etc. For example, we need to improve our handling

and packaging without going over board, to reach the optimum levels of total costs. We also need to bring in more sustainable forms of transport like those which are water and pipeline based. Leveraging Information Technology with an attitude towards coordination can reduce supply chain inventory costs. Direct to Home supplies like in E-Commerce can reduce distribution costs.

How do you view the Indian g o v e r n m e n t ’s a n d t h e g l o b a l policy measures in the context of giving support to the Indian cargo companies to expand overseas in the multinational arena? Do you suggest any policy measures in this regard?

Fundamentally, Indian cargo companies need to scale and branding based on value added services, if they have to go overseas.

This can happen only if infrastructural and regulatory barriers within the domestic area are minimised for companies to grow. As of now, the only potential expertise is in our private port and airport developers who can think globally. Possibly, a few of our stevedores can also do so.

While India’s LPI index has enhanced from 54 to 35, International logistics companies continue to point at the infrastructure challenges that remain in India. What are your views about it?

As a l ready mentioned, domestic infrastructural challenges are a major barrier.

The LPI index draws more from customs, international logistics, track and trace related to international trade. Of course, it is good that we are improving on these dimensions. However, we need to do a lot more on the domestic side.

Interview

Lufthansa Cargo: Ecological Efficiency with State-of-the-Art Technology…

Lufthansa Cargo, one of the world’s leading air freight carriers, transported around 1.6 million tonnes of freight and mail and sold 8.4 billion revenue tonne-kilometres in the fiscal year 2016. Lufthansa Cargo flies their customers’ freight around 300 target destinations in 100 countries and therefore, offers one of the best networks in the field of air cargo. Ivo Seehann, Lufthansa Cargo Director Sales & Handling, North and East India, Tamil Nadu, Karnataka and Bangladesh in an exclusive interview with Archana Verma speaks about the dynamics of cargo logistics business of Lufthansa Cargo in India.

What are Lufthansa Cargo’s plans to operate its air freight related business in India in the next two to three years?

Are you expanding or restricting your operations in this area in India?

India has been an important strategic market for Lufthansa Cargo for many decades and will remain important in our network planning. One of the successes of Lufthansa Cargo in the past years was the flexible approach based on market demand even within the regular winter and summer flight plan periods. As of July 2017, Lufthansa Cargo will introduce additional freighter capacity from Mumbai (BOM). With the introduction of the Airbus A350 on the routes between Munich (MUC) and Delhi (DEL) / Mumbai (BOM) in February and May 2017, we have increased the belly cargo capacity tremendously.

What kind of challenges do you face in your air freight operations logistics in India? Would you suggest some solutions?

Infrastructure remains to be a big challenge due to the existing demand which could be tackled by incorporating changes which

would improve the entire supply chain.

Another issue has been the complexity of processes which is already being addressed by the current government policies.

We are in continuous dialogue with all appropriate authorities including airport operators, BCAS, customs, DGCA and ministries to have simplified procedure and must say that there is great support and focus by the authorities, particularly by Ministry of Civil Aviation.

The initiation of “Air Cargo Logistic Promotion Board” chaired by SecretaryMinistry of Civil Aviation with other Ministries has brought many changes at every level.

How do you view the Indian government’s policies in the field of air cargo logistics in 2016-17? Do you have any suggestions to make in this field?

Today, competition exists in every industry, including ours. The only way to successfully steer the business is to cater to our valuable customers’ demands and react flexible towards their expectations, keeping the security, quality and easy accessibility of our services at the top.

Our worldwide network and the longstanding expertise in airfreight special products is our main strength and we keep on looking for new innovation to meet with market demand.

The government policies seem quite promising as they aim to promote the growth of the Indian aviation sector, which has great impact on the economy of the country. It is not only focusing at an ecosystem for an overall harmonised growth

“The only way to successfully steer the business in this competitive world is to cater to our valuable customers’ demands and react flexibly towards their expectations.” of various aviation subsectors including skill development, but also at providing safe, secure, affordable and sustainable air transportation globally. Its concentration towards digitalisation, use of advanced technology and deregulations with simplified processes will improve monitoring and enhance ease of doing business.

As mentioned above, infrastructure has always remained to be a big challenge due to the existing demand. In the last few years, pro-active approaches by ministries and dialogue at highest level has brought the air cargo industry on a similarly high attention like the passenger segment.

Does Lufthansa have any Indian or International competition in the field of air freight cargo logistics business?

How do you plan your strategy to remain a major air cargo logistics business in India?

What kind of technological or modernisation measures are you introducing in your cargo logistics business?

The modernisation of Lufthansa Cargo’s fleet continues with ecological efficiency, state-ofthe-art technology with low noise and fuel emissions. We are also implementing our strategic “eCargo” project in India, which contributes to higher efficiency in our business and pushes modernisation.

What is Ivo Seeham’s role in his new job as Director in the South Asia region?

As “Director Sales and Handling, North & East India, Tamil Nadu, Karnataka and Bangladesh,” Ivo Seehann is responsible for managing all local activities of Lufthansa Cargo in these markets.

july 2017 - CargoConnect 83

Interview

Gandhi Automations: Manufacturing with Latest Software and Creative Engineering Gandhi Automations, one of the leading organisations since 1996 in entrance automation and loading bay equipments, is widely recognised as a leading manufacturer in the industry. Samir Gandhi, Director, Gandhi Automations Pvt Ltd, highlights the relevance of the equipments used across various sectors and their future growth in an exclusive interview with Sheena Sachdeva.

What specific technologies drive the whole system of manufacturing unequivocally to provide the best possible equipment?

What fail-safe mechanisms do you add to your equipments to ensure optimum safety?

Work related accidents within the logistics industry remain a major issue. The most common cause of a fatal injury to logistics employees is being struck by a moving vehicle whereas slips and trips accounted for two thirds of injuries. Although Gandhi Automations has no control over both these causes, we ensure our products have provision for utmost safety to the humans and material.

We have European collaboration for technology in manufacturing products, that results in compliance with strict safety norms. All our products, such as rolling shutters, high speed doors, motorised gates and loading bay equipment come with inbuilt emergency safety mechanism. For example, rolling shutters and high speed doors are integrated with sensors to sense any object passing through during its operation. It immediately retracts until the object is passed before sliding down to its stable position.

84 CargoConnect - july 2017

Modern technologies like 3D printing, Nanotechnology, The Internet of Things (IoT), Software, Cloud Computing and Algorithms based on data needs acceptance just not from organisations but also from employees. Without data a technology is just a framework. Gandhi Automations is an ISO 9001:2008 certified organisation.

We sucessfully matched latest technology with creative engineering to provide utmost safety and product at par with European Standards.

From product development and design to manufacture, installation and other services, what are the strategies that keep you at par with other competitors in the market?

Our guarantee on availability of the original spares for 10 years clearly differentiates us from our competitors. Although evolution is a continuous process in a product lifecycle, we also understand the importance of service for our old customers. Our presence at 23 locations across India and our dealers abroad makes us way ahead of our competition. Gandhi Automations also offers AMC that helps in preventive maintenance, thereby increasing the life span of our products.

What impact shall the GST affect your operations across the country?

The new GST regime promises to greatly benefit manufacturers that can meet the demands of the stricter compliance requirements. A high level of automation will

enable businesses to succeed. GST will result in lower costs of production, hassle-free state border checkpoints and stringent structure of audits. The small players may feel a burn due to compliances and irrelevancy of certain exemptions, but large organisations are welcoming the move. I agree that GST rates are on a higher side, but gradually, we all will get accustomed to it.

Recently, the government has signed various MOUs to set up new multimodal logistics parks to boost the trade of the country. In the light of this statement, what are your strategies to meet the evolving market needs?

The involvement of a private player will enable access to state-of-the-art technologies available in the market, thereby improving the quality operational and maintenance services. The investors would expect the government to handhold during such critical phase of development of logistics parks. We have infrastructure and manpower in place to support the surge in demand. Our teams are analysing the market requirements for next two or three years to commence planning on new products or upgrades.

What is the market potential for Gandhi Automations products in India?

How do you plan to position these products?

We are very optimistic about the Indian as well as international market. We are aiming for a CAGR of 15 per cent. We expect a surge in the growth of manufacturing and logistics sectors with Central Government initiatives l ike Make in Ind ia and Multimoda l Logistics Parks.

Interview

Constant technology upgradation is key to success Leading air freight and ocean freight organisation, Skyways is touching the skies with its dynamic people and progressive environment. Yashpal Sharma, MD, Skyways Group in a candid conversation with Sheena Sachdeva gives insights about the country’s transforming era foreseeing a drastic change in future. freight business in early 2000s. The real push though came after 2007. Over last five years our capabilities in Ocean freight have grown significantly and we have approached more of our air freight customers to offer ocean services to them too. Skyways had around 100 per cent growth last year in terms of volume in ocean freight vertical. We have been offering our customers efficient solutions and quicker response time. Reducing TAT for our customers has been giving us some sizable penetration in this segment.

National Civil Aviation Policy 2016 specifies the point of regional connectivity along with the announcement of various upcoming greenfield airports in the country, how will it create an upsurge in the cargo connectivity in the country?

The commencement of regional airports across the country is a great initiative. The benefit though will be for passenger movement as lot of these airports will be serviced by smaller aircrafts. However, to make the airport EXIM-trade ready, it requires various things and amenities to be in place like customs, security, other cargo infrastructure etc. Thus, this initiative will surely help in the domestic transportation of products especially in far flung areas such as the North East in the near future. Needless to say, any improvement in transportation whether by rail, road, sea or air will facilitate business growth.

Last year your ocean freight arm “Forin Container Line” received the award for “The best Ocean Freight Forwarding Company”. What led to this huge success and what services make you different from other organisations?

Skyways has been a major player in Indian Air Freight industry specially for the outbound segment. We started our ocean

After the roll out of GST, warehousing sector will witness various transformations with the introduction of centralised warehousing. How will these centralised warehouses differ from the traditional distribution centres? How are you preparing yourself for the shift?

Traditionally, India has been plagued by multiple taxation systems. With such complex direct and indirect tax system added with various check-points has been slowing down the process to move raw material and finished goods across the country. The storage of goods was being done keeping in mind the taxation system instead of it being stored to facilitate quicker and more efficient supply chain. Now, with the GST regime, people will look at centralising their warehousing needs and more efficiency will set in the movement of goods too.

Technology is taking the industry by storm and companies are focusing more on technological solutions to better serve the clients. How have you implemented technological transformations in your services?

Skyways has always put technology in the forefront of its growth plans at all times.

Effective use of technology can facilitate improved working within an organisation and also conducting seamless business with

customers and carriers. We have built an in-house ERP system over the last 18 years.

Recently, we have moved to a new platform that will further improve our internal as well as external working. Electronic exchange of data, quicker processing of information, efficiency measurement and visibility of business to our team and customers are the key areas that we are trying to improve upon with our software. The requisite hardware to back the software is procured at all times too.

With around 100 per cent FDI coming in the Indian market which will further lead to immense competition. What strategies have you adopted to face this competition? Any further ventures in pipeline?

We love competition. More the competition, the more you strive to improve. Over the last two decades we have seen all kinds of competition, Integrators, MNC and even solid local players. The advent of international players in our industry also bought in some very good practices for improvement in our industry in the 90’s. We were quick to pick up some of these practices and customise them according to the Indian market to gain an edge.

New players will always keep coming and challenging existing players. The ones who will constantly have the hunger to change will not just survive, but also thrive in the years ahead.

What are the main highlights of your automotive logistics services? How do you ensure the seamless movement of manufacturing raw materials?

Automotive is one of the largest industries across the world. Skyways handles some of the biggest names in automotive industry including auto parts. The assembly lines of automotive industry cannot stop and need to be refurbished at all times. Our teams working on this vertical always ensure movement of auto parts and finished vehicles are moved with utmost efficiency at all times.

july 2017 - CargoConnect 85

Shippers Speak

“Logistics is just like warfare” How important is logistics for the overall scheme of your business?

Greenlam is one of the prominent international brands, in the field of interior infrastructure, in the world. The company has the largest and widest distribution network across the country. Greenlam has a conspicuous presence in the international market and operates in around 100 countries.

Jitender Negi, Manager - Exports, Greenlam Industries Limited in an exclusive interview to Gaurav Dubey gives an insight about the efficient supply chain which helps the company to maintain the upper hand over its competitors.

86 CargoConnect - july 2017

Logistics is one of the integral parts of our business strategy. A business plan cannot survive unless logistics is treated as a key area. As far as the international business is concerned, it is important to ensure availability of product in the market at any given point of time. It’s essential to maintain competitive edge over local manufacturers and brands in terms of availability. We try to ensure that goods reach on time to international markets and stock always remains available.

Logistics not only supports business operation but also pins down competition, it is just like warfare. Efforts taken by the sales and marketing team to acquire business is sustained by the efficient logistics system. We have zero tolerance for any logistics failure and this message is made clear to Greenlam team & vendors. All these factors make our supply chain module a strong, fast and efficient one.

How do you ensure smooth coordination between suppliers, transporters and other departments of the supply chain?

Understanding of business and knowing SCM requirements and expectations are the key to ensure smooth coordination. Bringing business requirements on table, understanding possible challenges, assigning correct job to correct person/ division, sets all processes on track.

There are only two types of challenges exists in SCM – Procedural and Operational. We work on both of these challenges to maintain a flawless system.

It works like a relay where output of the 1st process acts as an input for the second process and similarly output of the second process is the input for the third process. We map the target timeline very closely with current movements and “recovery actions” are taken immediately as soon as any gap is identified in the process.

Are there any unique or innovative strategies that you have adopted for the better supply of your products?

Eagerness of excelling gives birth to innovation in the businesses. We have a disciplined online system which enables customers to keep track on their shipment status 24x7, operations are monitored online and even a minute pendency is immediately tracked by the online system. We

regularly introduce new E-tools in the system to enhance logistics performance and to have better control on the operations.

Tell us about the most common problem faced by your company during its supply chain process. What steps do you take to overcome these?

I reckon the most common problem is inland connectivity and other procedural delays. There is shortage of locomotives to run trains. Cargo trains are running on general tracks and a lot of other procedural delays of similar nature are faced by an every exporter. There is requirement of dedicated freight corridor for trains.

The existing scenario of logistics environment is studied meticulously before dispatchment of any shipment then all procedure and operations are performed according to it. The idea behind this procedure is the timely identification of possible hurdle so that recovery action could be planned according to it. In a serious situation we ensure the regular flow of provisions to tackle it. I take pride in saying that we have one of the most robust supply chain systems in the industry and we deliver the goods on time to customers.”

How Greenlam Industries Limited maintains an edge over its competitors in today’s dynamic business world?

Quality is something that Greenlam can never compromise upon, whether it’s product quality or quality of operation and customer services.

It is not easy to maintain this image. In Greenlam, we understand the importance of every single department and their role in achieving organisation goals. Maintaining synergy among all departments along with understanding business requirements and technicalities tops in our to-do list.

Our shipping department gives vitality to business by ensuring the delivery of goods within a targeted timeline, which helps customers in maintaining sufficient inventory of goods for effective distribution in local market.

Efficiency of our shipping department beats the local manufacturing companies in terms of delivery time. For instance, our subsidiary in Thailand delivers goods to customer faster than the local manufacturer. In this way we pin-down competition in the market.

Shippers Speak

Building Positive Customer Experiences through Logistics How important is logistics for the overall scheme of your business?

Since a large number of our customers come from tiers II, III and IV locations, it is essential that we have seamless first and last mile logistics to ensure timely fulfilment of orders that meets customer expectations and deliver a great experience. Logistics plays a vital role in delivering and meeting these expectations, thereby leading to a positive experience and customers returning back to shop more at ShopClues.

How do you ensure smooth coordination between suppliers, transporters and other departments in your supply chain?

ShopClues is India’s first and the largest managed marketplace, shrouding more than 100 million monthly visitors on its website. Founded in July 2011 in Silicon Valley, the company aims to provide the best shopping experience to its customers. While discussing about its most vital factor i.e. logistics, Vishal Sharma, VPOperations at ShopClues, talks to Sheena Sachdeva about how logistics is the most important pillar of their services.

88 CargoConnect - july 2017

Robust processes are defined and followed to ensure smooth operations and coordination between merchants, 3PLs and other functions in our supply chain. These processes are further supported by technology through a DSS (Decision Support System), algorithms etc. that ensure compliance, coordination and accuracy is maintained across all functions.

function. Our partners support us in first mile and last mile operations, packaging, quality check, warehousing, reverse logistics and any other additional operations we require. We have an internal team of experts that monitors and ensures seamless operations across all partners.

Tell us about the most common problem faced by your company during its supply chain process. What steps do you take to overcome these?

The most common problem today is finding adequate partners who are technologically enabled to increase reach in tier III, IV and rural locations. This is being resolved by working with small regional and state partners where we support them to build process and provide them technology to enable them to support our business by increasing reach.

“Robust processes are defined and followed to ensure smooth operations and coordination between merchants, 3PLs Are there any unique or innovative and other functions in our strategies that you have adopted for the supply chain.” better supply of your products?

Express on boarding of sellers (through simple process and efficient technology), especially the SMEs which leads to increase in selection or supply. Along with this, we work with third parties who have a big network or touchpoints with lots of SMEs.

How do you manage back-end supply?

We are a true marketplace - sellers list with us and we provide them logistics services through our logistics partners. There are different teams for managing top, medium and long tails sellers, who ensures that with regular interaction with sellers - selection keeps increasing.

What percentage of your logistics work is outsourced? What functions are performed by your logistics partners and what are controlled internally?

We outsource 100 per cent of our logistics

How important is warehousing for the overall scheme of your business?

ShopClues is a marketplace and a majority of our merchants manage their own inventory.

However, we do offer warehousing as a service if required by a merchant. We provide this service through our outsourced 3PL partners across the country. This is a small but important part of our business and is growing.

Do warehousing companies are account able for los s e s incur red during the storage of goods in their warehouses? Tell us about most common problems faced by your company in the storage of goods in a warehouse?

Yes they do. This is covered under the terms and conditions which are part of a 3PL’s contractual obligations. The most common problem faced is pilferage or damage of goods in warehouses.

Hi-tech Logistics Infrastructure Project Features Spread over 100 acres of land Total warehousing capacity- 14 lac sq. ft.

Built up facility- 7 lac sq. ft.

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Ample truck and car parking area Firefighting and fire prevention systems Direct access to National Highway Distance from Highway- 0.5 km Distance from Airport- 7 km Distance from MIHAN- 1 km 24 x 7 operational hours 24 x 7 CCTV monitoring 24 hrs common security 24 hr sufficient light and water with drainage.

High compound wall for safety.

Infrastructure of international standards.

80 feet primary cemented road.

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Site: Khasra No. 80, 81 & 82, Shivmandka, VillageGumgaon, Tahsil, Hingna, District, Nagpur (MS), India Office: Sheikh Fida Ali Sultan Ali, Lahaoli, Itwari, Nagpur (MS) - 440002 | Tel 0712- 2763079

Warehouse Specifications Modern PEB structure Insulation to reduce temperature Column spacing- 8.4 m @side walls and 16.8 m @ midspan High load bearing capacity- 12 ton/sq mtr Floor height- 1.2 mtrs from road level Building height- 12M @ gable and 17 m @ the centre Sky lights for minimum electricity consumption Turbo ventilators to maintain temperature Internal washroom for staff Sufficient office area on ground and mezzanine Dock levellers

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Suresh Prabhu directs auditors to detect anomalies within Indian Railways Minister of Railways Suresh Prabhu recently held a meeting to review the status of internal control systems and internal audit on Indian Railways. The meeting was attended by Financial Commissioner (Railways) BN Mohapatra, Advisor Vigilance, Advisor Finance and other officials. It was stressed by Prabhu that the need for a robust and effective internal audit system is especially required now due to more power being decentralised into the field level. He suggested that the internal audit teams should be set up in each zone to undertake internal audit studies. The minister also suggested that audit teams should identify the discrepancies in the system much before they are pointed out by the other people. The internal audit team should follow a system based approach wherein the stress would be to identify the problems in the system. The team should also suggest ways to rectify the problems and improve the system. He further said that the internal audit should focus on stopping revenue leakages and minimise overexpenditure by making processes and procedures more efficient to help in realigning processes and policies more streamlined.

5.5% cargo growth registered at major ports during April-May The total cargo handled at Major Ports was up by 5.5 per cent at 113.6 million tonnes (mt) during April-May 2017 as compared to the previous corresponding year. The Ministry of Shipping officials said that an array of measures adopted at the ports had resulted in positive results. The Kandla Port handled 18.8 mt cargo, followed

by Paradip and JNPT. Maximum business for the Kandla Port came from petroleum, oil and lubricants or POL. Other major goods that were handled included iron ore, other liquids, coking coal and thermal coal.

Though port-wise performance has been similar to last year, with Kandla Port traffic at 17.44 mt, Paradip at 14.03 mt and JNPT 10.74 mt for April-May 2016, the Ministry of Shipping had earlier said it had initiated measures to improve the performance of the ports.

For both ports and the railways, slowing down of the availability of coal volumes continue to be a concern because it impacts imports.

There was a decline of five per cent in coal volumes at the ports in May 2017.

news

Railways undertake 20 major projects in Northeast

1st Indo-Afghan Air Freight Corridor flight lands in Delhi

The Indian Railways has begun 20 major projects worth over INR 40,000 crore in the North east. A senior railway ministry official said that the railways has laid emphasis on improving its infrastructure in the North East. The projects will entail building 12 new railway tracks and doubling of four tracks at an estimated cost of INR 43,771 crore.

These projects will add 1,664 km tracks in the region.

Barring Sikkim, rail connectivity exists in all seven states. For Sikkim, a 44 km new track between Sevoke and Rangpo has been sanctioned. The entire metre gauge section in the region has also been fully converted into broad gauge line, according to a spokesperson.

The first cargo flight of the Afghanistan-India Air Freight Corridor carrying Afghan goods to India landed in New Delhi on June 19, 2017. The Kabul to Delhi flight carried 60 tonnes of cargo (mainly ‘hing’) from Afghanistan. A similar cargo flight from Delhi to Kabul had earlier carried 100 tonnes of cargo (mainly pharmaceuticals, water purifiers, medical equipment) on June 18, 2017. “The connectivity established through the Air Freight Corridor will provide Afghanistan, a landlocked country, greater access to markets in India and will allow Afghan businessmen to leverage India’s economic growth and trade networks for its benefit. It would enable Afghan farmers quick and direct access to the Indian markets for their perishable produce,” said Deepak Mittal, Joint Secretary, (PAI-Pakistan, Afghanistan, India), Ministry of External Affairs in Delhi.

Investment of 2-3 lakh crore required for new airports

Chhattisgarh to become Central India’s Logistics Hub

Union Minister Jayant Sinha has said that the country will require an investment of INR 2-3 lakh crore over the next 10-15 years for setting up new airports and adding capacity at the existing ones.

According to Jayant Sinha, aviation is a major department on which economy shall depend; and some 150-200 airports are required for 90 per cent of the population to be within 60-90 minutes away from an aerodrome. “We have to add more airport capacity as well as airspace capacity. Over the next 10-15 years, our estimation is that somewhere between INR 2-3 lakh will be required to have new airports and in adding capacity,” he said at an aviation event organised

by IMC chamber of commerce and industry. As many as 31 more airports have become operational in the last two years and currently the total number of airports stands at 106 from 75 aerodromes earlier, said Sinha.

The minister said that “We need 150 to 200 airports for 90 per cent of the population to be within 60-90 minutes away from an airport.”

Aviation sector is poised for substantial growth, he said, adding, “It is going to be one of the major sectors that will drive the economy.”

Chhattisgarh can become a ‘Logistics Hub’ for Central India with capacity of exports to Asian markets with Singapore, China, Korea and Japan through the Vizag port, approximately 500 km from Raipur. State Commerce and Industry Minister, Amar Agrawal said that next month, a team of investors shall be sent to Chhattisgarh, who will study the various aspects of industry and commerce here.

The Counsel General also sought support from Chhattisgarh Government for starting direct air service between China and Chhattisgarh. Agrawal assured them of coordinating with Central Government and extending every possible support in the direction. In the meeting, the Minister also discussed about the positive impacts of Goods and Service Tax(GST) on India’s economy and investment. Earlier, the Union Railway Minister Suresh Prabhu had suggested that a ‘Cargo Hub’ should be developed in Naya Raipur last year.

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JWL Cold Store Pvt Ltd Inaugurates New Cold Chain Solution

A young company, JWL Cold Store Pvt. Ltd., continues its growth story by inaugurating its brand new facility for world class cold chain solutions at Padeghar, Panvel on June 20, 2017. The new facility is called the JWL Food Hub. It’s a specially designed facility having 5500 pallets storage capacity and temperature ranges from -25oC to +25oC and is aimed at servicing the rapidly growing perishable food industry. JWL Cold Store has two existing divisions i.e. 1) FMCG Division with 7000 pallet capacity and 2) pharmaceutical division with 7500 pallet capacity.

The new Food Hub having a capacity of 5500 pallets is being commissioned keeping in mind the rise in demand of the sector. Taking its service commitment levels to newer heights, this facility has been designed to cater to specific needs of the perishable food industry.

Specialised material handling equipment, imported fire proof PUF

GEODIS moves its maiden inbound reefer container in India GEODIS Overseas Pvt Ltd, a part of SNCF Logistics, moved its maiden shipment of reefer containers within India from Mundra port to Inland Container Depot in the North of India.

This was the first of such consignment handled by GEODIS to use rail services as land bridge transportation.

The GEODIS India team worked with the private rail operator and the ocean carrier together, to arrive at a sustainable rail haulage solution with the delivery much closer to the plantation area – a value preposition that won the business for GEODIS India. GEODIS team helped the customer to move the reefer containers to ICD Garhi in North India via gateway port of Mundra, which was only 710 kms far from the plantation area.

Earlier, the customer was getting the cargo at the Nhava Sheva port, which was 2200 kms from the plantation area. GEODIS India has provided the customer with the solution with much economical transportation and shorter transit time.

panels and pollution free ammonia based cooling systems are some examples of quality standards followed by JWL. JWL’s Food Hub has a unique advantage in terms of its location.

Situated close to India’s largest port – JNPT, JWL becomes the most logical choice amongst the importers and exporters who are associated with JNPT Port. Also, the Food Hub has the facility of bonded cold storage within its premises, which makes it a value proposition for all EXIM related activities.

Raaj Jobanputra, Director of JWC Logistics Park said, “The newly inaugurated Food Hub has been conceptualised and commissioned to cater to the robust demand of cold storage facility for the rising vertical of perishable food industry. Specialised Material Handling Equipment, Imported Fire proof PUF panels and pollution free Ammonia Based Cooling systems are some examples of high standards followed by JWL.”

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DHL plans $100 mn investment ahead of GST in India Global logistics group DHL is working on creating new plans of investments of US $100 million in the near future, for India, especially keeping in view the GST that is going to be implemented next month. DHL will mostly make this investment in its supply chain operations in India in the coming three to four years to meet the rise in demand after the GST comes into place.

Scott Allison, President of Life Sciences and Healthcare sector, DHL Customer Solutions and Innovation said that they are working together on how to create new solutions for the Indian market especially focusing on GST for likely immediate challenges.

“We would like to see the customers take advantage of what the new legislations offers and we want to be there as a partner to help customers throughout that (GST) transition period,” said Allison.

Besides revamping existing infrastructure, DHL’s expansion plan shall include setting up national distribution centres in major metros cities such as Mumbai and focusing on strategic locations across India for managing their supply chain.

National Cyber Security Coordinator assesses the impact of cyber attack at JNPT The National Cyber Security Coordinator, Dr Gulshan Rai visited the Jawaharlal Nehru Port Trust (JNPT) to assess the impact of cyber attack on Container Terminals at JNPT. Along with the Chief Commissioner of Customs and Excise, the Chairman of JNPT and the Inspector General of Cyber Maharashtra, he held discussions with the officials of GTI Terminal, DPWorld and of JNPT. JNPT handles the container traffic through four of its terminals.

One of the Terminal (GTI) is operated by APM Moller Maersk.

The other two terminals are operated by DPWorld and the fourth terminal is directly operated by JNPT. The central IT infrastructure of AP Moller Maersk installed at Hague have been affected by a cyber attack on June 27/28, 2017. The other three Container Terminals at JNPT and the IT infrastructure of Customs and Excise authority are working with full efficiency and performance.

First freight village to be unveiled in Varanasi Varanasi will get the country’s first ‘freight village’ spread over around 100 acres.

The plan to set up this project close to the upcoming multi-mode terminal along the Ganga had attracted major stakeholders including Dubai Port World and IL&FS. A ‘Freight Village’ is a specialised industrial space set up with the investments of companies that require logistics services and can cluster to improve their competitiveness. This allows for the moving the establishments of retailers, warehouse operators and logistics service providers supplying the regional FMCG market. ‘Freight Village’ includes an inter-modal terminal, which facilitates integration between different modes of transport.

World Bank has taken the initiative to place the project which will provide connectivity to the Eastern Dedicated Freight Corridor, the country’s longest waterway, and the national highway as well, officials said.

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International news

India and UK to work closely in urban transport industry

New India-Qatar line delivers first cargo

India and UK agreed to sign a memorandum of understanding (MOU) on bilateral cooperation in urban transport policy planning, technology transfer and institutional organisation of transport.

The Minister of Road Transport and Highways and Shipping Nitin Gadkari visited Britain to sign on the MoU Britain.

Under the proposed MoU, the TFL (Transport for London) will assist with the Ministry of Road Transport and Highways with the mobility and efficiency of transport system to facilitate the planning and delivery of transport logistics including ticketing, passenger information, major project financing, infrastructure maintenance strategies and behavioural change and public transport promotion.

Gadkari later said the signing of the MOU will be done through diplomatic channels shortly. Scope of further cooperation on electric buses, bus innovation and capacity augmentation and water transport were also discussed during his interaction with the TFL authorities.

The first of the two vessels operating under the new India Qatar Express Service (IQX) has recently docked at Doha’s Hamad Port. The new IQX service links Hamad Port with the Mundra and Nhava Sheva ports in India. Its aim is to increase trade between Qatar and India; and meet the increasing EXIM demands from both countries. The Ministry of Transport and Communications had recently said the ships using the new line would reach Hamad Port every Friday and the first shipment would have 710 containers.

Further, the MoTC had said the new shipping line would involve weekly sailing, link Mundra, Nhava Sheva and Doha (Hamad Port) for local cargo and handle ICD (inland container depot) cargo via Mundra or Nhava Sheva. The IQX service will also receive coastal cargo from ports on the western and eastern coasts of India for transshipment at Mundra.

New express freighter service launched by MASkargo

Border Trade between Myanmar and India all set to get a boost

MAB Kargo Sdn Bhd (MASkargo) launched a new express freighter service from Kuala Lumpur to Kota Kinabalu and Kuching on June 6, 2017. The new service flies from its home base at Kuala Lumpur International Airport (KLIA) to the two cities using its A330200 freighter aircraft, five times weekly.

Besides carrying the general cargo, the new service is designed to cater to the growing e-commerce and courier business demand between East and West Malaysia. “As the Asian crossborder E-Commerce is booming, MASkargo is poised to tap into this market given the world class warehouse facilities we operate and our vast belly and freighter network,” said Ahmad Luqman Mohd Azmi, MASkargo CEO. “This express freighter service to East Malaysia is timely, as we intend to position KLIA to be a major E-Commerce hub in the region,” he added.

Myanmar has planned to engage in more trade with India by increasing items of tradable goods.

U Aung Htoo, Deputy Minister for Commerce, told a parliament session in Nay Pyi Taw recently that Myanmar had held a senior level talks with India on cross-border trade. For the purpose of promoting trade between the two countries, a series of joint committee meetings related to bilateral trade, border trade and border- market were held.

High-ranking officials from both countries had extensive discussions on opening a trade zone in Htantalan in Myanmar’s Western Chin State and a new trade zone in Pan Khwar, Mizoram state in India. Bilateral banking services, cooperation in agriculture, fishery, medicine and textile sectors had also been discussed.

The sixth Myanmar-India joint trade committee will meet in New Delhi, India in June 2017.

Corrigendum: With reference to the exclusive interview of Nihar Parida (Minerva Logistics) that was published on Page 68 in the CargoConnect June 2017 issue, it was mistakenly mentioned that the company was started by Nihar Parida and K Selvam. The correct statement should be: “Ragunandhan and family started Minerva Integrated Logistics and K Selvam and Nihar Parida joined the company later to strengthen the company and take it to the new heights.” Error is deeply regretted.

96 CargoConnect - july 2017

International News

Six Indian Cities in the Top APAC List

South Africa Launches Logistics Hub at Musina

Indian cities are among the top 10 markets targeted by investors. Most of the international investments for 2017 will be made in commercial office assets as markets in Bengaluru, Chennai, Delhi NCR, Hyderabad, Mumbai and Pune are ranked better than many other cities in Asia Pacific.

Hyderabad tops this list, as it has many growth prospects.

Top 10 Cities in Asia pacific’s Next Core Category are as follows in their respective order: Hyderabad, Bangkok, Manila, Ghanghzou, Schengzen, Bengaluru, Mumbai, Pune, Chennai, New Delhi.

Within APAC, India has to contribute towards fulfilling the demands for the office space. As a result, the global investors are increasing their capital investments in india as they are optimistic about the long-term growth prospects of the Indian economy in an environment of increasing transparency and accountability, backed by policy reforms as RERA, REITS, GST, Benami Transactions Act etc.

South Africa recently launched a logistics hub at Musina to facilitate regional and international trade movements in South Africa and beyond. South Africa’s Minister of Industry and Trade, Dr Rob Davies, who was speaking during the launch of the MIT in Musina in Limpopo, said the MIT would contribute immensely to the regional economic integration that South Africa, the SADC region and the continent at large was working hard for. The hub, which caters to the containerised cargo market and the transportation of mineral ores such as coal, iron ore, chrome, copper and sulphur, was a stepping stone to bigger projects within and around the newly- designated Musina-Makhado SEZ. “The SEZ will significantly increase industrial production in the region. This will include steel and related inputs for producing steel and stainless steel, as well as increasing mining development and production. The SEZ will thus increase trade between South Africa and its neighbours. Regional integration will also be deepened,” added Davies.

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INTERNATIONAL CONNECT

Indo-Iranian Collaboration on Chabahar Project India and Iran are collaborating in developing the port of Chabahar, in which Afghanistan is also taking interest. This will open new venues for the international shipping industry. A report on this project: India going global in transport logistics Prime Minister Narendra Modi has expressed the hope that Kandla port in Gujarat’s Kutch district and Chabahar port in Iran will forge a new cooperation in the region.

executives of more than 50 companies that included AECOM, Adani Group, Allcargo Logistics, Caterpillar, CHEP, Coca-Cola Company, FedEx Express, Honeywell, IL&FS, Indospace, Procter and Gamble and Walmart.

Sanjay Mitra, Secretary, Ministry for

“Container transport capacity is of utmost importance in LPI listing, besides the presence of equipped rail facilities to load and discharge containers.”

Deputy Minister of roads and urban development, Iran, Amir Amini The Ministry of Road Transport and Highways (MoRTH) organised a roundtable discussion hosted by the USIndia Business Council (USIBC), on the sidelines of the India Integrated Transport and Logistics Summit 2017 held in New Delhi. The discussion was attended by senior officials from MoRTH, Ministry of Shipping, the National Highways Authority of India (NHAI) and senior

Road Transport and Highways highlighted the various initiatives being taken by the government in partnership with various countries to improve the transport infrastructure in the region such as development of Chabahar Port, multimodal logistics hub at Varanasi, Sahibganj and Haldia for easy transportation of goods into the North-Eastern states and Bangladesh. He said that there is a lot of

“Development of transportation infrastructures needs a $80 billion investment and there needs to be a shift of investment approach in organisations to international trade discourse.”

Minister of Road and Urban Development, Iran, Abbas Akhoundi

The Chabahar port project The Iranian government has been collaborating with investors inside the country and abroad to develop the strategic Chabahar Port in the southeastern SistanBaluchestan Province along the Sea of Oman. This project will create a massive container port establishing links with the whole region with India and China.

98 CargoConnect - july 2017

India, Afghanistan and Iran signed a trilateral agreement last year to expand the port, with India committing invest $500 million and an Indian company signing an agreement to build hundreds of kilometers of railroads from the harbour into Iran.

Chabahar is close to the Chinacontrolled Gwadar port in Balochistan of Pakistan. While Gwadar is a deep sea

scope for collaboration with the US in areas like logistics, alternate technology for road building, use of new machinery, trucking standards, fleet modernisation, safety features of vehicles and road safety standards. port, Chabahar needs to be developed to accommodate bigger ships.

Indian Ports Global, a joint venture between the Jawaharlal Nehru Port Trust and the Kandla Port is scheduled to develop two terminals and five multi-cargo berth in the first phase of the project. The port lacks last mile connectivity. India signed a deal to help develop a rail line from Chabahar to Zahedan, near the tri-point of Iran, Afghanistan and Pakistan, to connect Iranian railway.

Other ports, including those along the Persian Gulf and the Caspian Sea, have also seen an increase in the building activity to increase their capacity, following the signing of a landmark deal between Tehran and world powers a year earlier.

“India must leverage such opportunities - as investing in the Indo-Persian Chabahar port - and expand its presence in a competitive global market. Apart from giving us international strategic leverage, it will help improve the competence of various Indian players in the cargo sector.”

G Raghuram, Director, IIM Bangalore

Indo-Iranian collaboration and LPI indices Iran has a long-term plan to recapture its position in international transport and is indulging in policies to realise this dream.

This includes expansion of logistic parks and dry ports, development of harbours and inviting international airfreight forwarders to work inside the country. Iran aims to reach 75th position on the LPI by the end of the sixth five-year development plan 2017-

of international supply chain efficiency, called Logistics Performance Index, India’s ranking has jumped from 54 in 2014 to 35 in 2016. While Germany tops the 2016 rankings, India is ahead of countries such as Portugal and New Zealand, said the report titled Connecting to Compete: 2016 Trade Logistics in the Global Economy.

LPI is a World Bank’s benchmarking tool that identifies countries on an index of how many challenges and opportunities

“Maritime transportation accounts for about 87 per cent of global trade.

For Iran, the figure currently stands at 85 per cent.”

--CEO of Islamic Republic of Iran Shipping Lines Mohammad Saeedi 22, Deputy Minister of Roads and Urban Development, Amir Amini said.

By focusing on transportation development, Iran is planning to further improve its Logistics Performance Index ranking and continue the progress registered in 2016 when the World Bank listed the country at 96th place among 160 nations.

In the World Bank’s biennial measure

they face in their trade logistics fields and what they can do to improve their performance on this index.

It is based on a worldwide survey of players on the ground of global freight forwarders and express carriers, who give feedback on the logistics conveniences of their countries in which they operate and those with which they trade. It measures performance alongwith the logistics

supply chain within a country and measures in two contexts: international and domestic.

The Logistics Performance Index analyses countries across six components: efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments,

• Close to 145 million tons of oil and non-oil goods were loaded and unloaded in Iranian ports in the last Iranian year (ended March 20, 2017), registering a 4.3 per cent rise compared to March 2013-14 when President Hassan Rouhani first came to power.

• The ports handled 58.2 million TEU of containers last year, indicating a 162 per cent hike over March 2013-14 after a sharp fall to 1.2 million TEU registered in March 2014-15. competence and quality of logistics services, ability to track and trace consignments, and the frequency with which shipments reach consignees within scheduled or expected delivery times.

However, Logistics Performance Index does not measure how easy or difficult it is to move goods to the interiors. For that, World Bank has another index—a domestic LPI which analyses a country’s performance over four factors: infrastructure, services, border procedures and supply chain reliability.

While not all indices can be compared across countries, there are some which show that India still has to improve. For example, only 69 per cent of shipments from India meet the international quality criteria, compared to 72 per cent for China and 77 per cent for Kenya. Iran also has to improve a lot on these criteria. Thus, if both countries have to make Chabahar project a success, they need to look at their weaknesses as much as their improvements in this sector.

july 2017 - CargoConnect 99

PROFILE

AAICLAS: Cargo Logistics Vision of AAI

I

ndia has witnessed tremendous growth in air traffic in the last decade and we are the fastest growing aviation market today. Air cargo promotion of both domestic and international Air cargo and express delivery services is a key objective of the government, given its importance from ‘Make in India’, E-Commerce and exports perspective. Revenue from air cargo helps airlines subsidise the cost of passenger tickets and take flying to the masses. Air cargo, particularly domestic, has a high employment potential, especially for semi-skilled workers. Within the air cargo ecosystem, Express Delivery Services (EDS) has a distinct operational nature and is becoming pivotal especially in the light of double digit growth in E-Commerce.

Airports Authority of Indis (AAI) has always been in the fore-front for creating state-of-the-art infrastructure and facilities for improved cargo handling. Keeping in mind the current economic boom, the importance of air cargo and its impact on the overall economy of the country, a path breaking decision has been taken by AAI Board on the formation of a cent per cent owned but independent cargo subsidiary company by corporatisation of AAI’s Cargo Department in the name of “AAI Cargo Logistics and Allied Services Company Limited (AAICLAS)” in August, 2016. AAI has therefore, demerged and corporatised the cargo department into a functionally and administratively independent organisation which is a professionally driven and responsive service enterprise. The vision of the company is to become the foremost Integrated Logistics Network operator in India with primary focus on air cargo handling and allied services. This new subsidiary will be allowed to develop its own distinct culture, organisation structure and business model while at the same time, will draw upon the strength of its large parent organisation, Airports Authority of India.

The Company will focus on the following three verticals:a) Air cargo handling and allied services. b) Warehousing and contract logistics. c) Cargo road feeder and Air Freight Stations (AFS).

Creating Air Cargo Logistics and Allied Services Company Limited by AAI could

100 CargoConnect - july 2017

Team AAICLAS with Sr. Advisor (MOCA) in IITL Logistics Exhibition at Vigyan Bhawan, New Delhi

Team AAICLAS with ED (CARGO) in IITL Logistics Exhibition at Vigyan Bhawan, New Delhi

bring multiple advantages as there is a lot of activities on the cargo front from the AAI in the period ahead. AAI already has vast reservoir of human resources in cargo handling who possess the requisite expertise and experience in handling cargo operations which would be gainfully utilised for the organisational benefits. In addition, there is significant export and import potential in the Tier – II and Tier – III cities of the country.

With the formation of this cargo subsidiary, AAI would focus its attention on capturing the entire value chain in AAI Airports and provide ease of doing business to the importers and

exporters of the states. The prospects for the AAICLAS long boom will be decided by the way humanity responds to three momentous opportunities - specific forces driving the next long boom: global catalysts and constraints.

On all counts, the prospects for a long boom would fructify if inter-systems harmony and convergence were to reign.

It is hoped that the new company within AAI will work as a Multi Model Interface, linking air, surface and water transport and will be the largest network and fastest logistics solution provider company of India in the coming years.

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APPOINTMENT Keku Bomi Gazder is CEO, AAI Cargo Logistics and Allied Services Co Ltd

EFL strengthens international management team

Keku Bomi Gazder has been appointed as CEO of AAI Cargo Logistics and Allied Services Company Limited (AAICLAS), a subsidiary of Airports Authority of India (AAI). Keku Gazder has a rich experience of over 27 years in Aviation Industry spread out in West Asia, India and the other countries in South Asia.

Based at the corporate headquarters of AAI in New Delhi, his primary focus will be on Air Cargo Handling Services along with related activities such as Ground Handling Services and Security Services. Keku Gazder`s roles will also include entering strategic partnerships at airports within and outside the country.

EFL (Expofreight), a logistics provider in the Indian Subcontinent, announced the appointment of three new Independent Directors to its International Board as part of its ongoing efforts to add international expertise to its management team. Ram Menen, Stephen Dearnley and Mike Sherman joined as independent directors to the Board led by Founder and President Hanif Yusoof.

“I am extremely pleased to welcome Ram, Steve and Mike to the EFL team. Each of them comes from a different area of supply chain expertise and their collective insights and knowledge will drive EFL towards the next stage of our ambitious plans. Their appointments are in line with our efforts to keep raising the bar towards developing innovative solutions and becoming more technology enabled,” said Hanif Yusoof. S. Senthilnathan, CEO of EFL Group and Managing Director for India added, “Over the years, we have worked with Ram, Steve and Mike in their various roles and seen them transform companies and make them global brands. We are excited to have them on board and engage with them at this significant stage in our journey.”

Ram Menen is a stalwart of the modern air cargo industry.

Widely recognised and admired, he was the cornerstone of building Emirates as the world’s largest cargo carrier during three decades at the airline. He retired in 2013 with his last role as Divisional Senior Vice President - Cargo.

Emirates SkyCargo appoints new cargo manager for North India Emirates SkyCargo, the freight division of Emirates, has announced the appointment of Abdulla Alkhallafi as Cargo Manager, North India, effective June 2017.

A Business Administration professional from the University of Dubai, Alkhallafi has been with SkyCargo since 2014. Alkhallafi, who will now be based in New Delhi, will be looking after the North India markets covering Delhi, Uttar Pradesh, Punjab, Himachal Pradesh, and Uttarakhand.

Oh Choon Phong new IATA Chairman The International Air Transport Association (IATA) announced that Goh Choon Phong, CEO of Singapore Airlines, has assumed his duties as Chairman of the IATA Board of Governors (BoG) for a oneyear term, effective from the conclusion of the 73rd IATA Annual General Meeting (AGM) in Cancun, Mexico.

“It is an honour to serve as IATA’s Chairman for the coming year. Security is at the top of the agenda. Additionally, I will be paying special attention to progressing preparations for the Carbon Offset and Reduction Scheme for International Aviation (CORSIA), driving the modernisation of cargo processes, and increasing transaction volumes with the new distribution capability,” said Goh.

102 CargoConnect - july 2017

Jenette Ramos Boeing’s senior Vice President supply chain and operations Boeing has appointed Jenette Ramos as Senior Vice President, supply chain and operations, effective immediately. Ramos, 51, replaces Pat Shanahan, who has been nominated to serve as US deputy secretary of defense. She is a 29-year old Boeing veteran with executive leadership roles in fabrication, supplier management and environment, health and safety and will oversee the company’s manufacturing operations and supplier management functions, including implementation of advanced manufacturing technologies and global supply chain strategies.

Boeing chairperson, President and Chief Executive Dennis Muilenburg said, “Jenette brings to this role a tremendous set of leadership skills and aerospace experience that spans nearly three decades, including deep knowledge of the entire Boeing production system and great passion for our people, products and customers.

Jenette’s most recent work to transform our commercial airplanes fabrication operations will serve her well in this new assignment, which is critical to our long-term success and growth and productivity goals.”

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events

Commercial Vehicle Forum 2017 held in Pune Commercial Vehicle Forum (CVF), an independent CV industry platform that aims at bringing together all the stakeholders for focusing on issues related to the CV business, was held for the second time on May 18, 2017

at The Westin, Pune. CVF 2017 was chaired

by Nalin Mehta, MD and CEO, Mahindra

Truck and Bus, who set the context with a keynote address and by declaring the Forum proceedings open.

The event received an overwhelming response for this year’s edition in Pune, with a packed house that translated into a gathering of over 250 delegates, 35 industry leaders as speakers, over 10 sponsors and 10 media and association partners.

In his keynote speech, Nalin Mehta touched upon a variety of topics pertaining to the CV ecosystem. He began by reaffirming strong belief in the growth of CV industry by stating, “If you believe in the India Growth Story then you have to believe the CV Growth Story”.

Several prominent CV industry leaders participated at the Forum, including Erich

Nesselhauf, MD and CEO, Daimler India Commercial Vehicles Pvt Ltd, Shyam Maller,

Senior Vice President, Sales and Marketing, VE Commercial Vehicles, Keshab Chandra Sen, CEO and President, MLR Auto etc.

Agility India Awarded for Operational Excellence in Cold Chain: Pharmaceutical

time:matters receives Excellence Award from John Deere for a third time

Agility India has received the award for Operational Excellence in Cold Chain – Pharmaceutical at the ‘Cold Chain Industry Awards 2017’. The awards were hosted as part of the sixth Cold Chain Strategy Summit which was attended by the leading voices from the pharmaceutical and cold chain industry. The criteria for the nomination was innovative cold chain solutions being offered by a company to the pharmaceutical industry. Agility was selected as the winner, based on the various unique solutions being offered for the critical temperature controlled shipments.

This is the second recognition from the industry received by the Life Sciences Vertical of Agility India in the span of less than a year. It may be recalled that Agility had earlier received the ‘Best LSP for Pharmaceuticals’ at the LSP Awards in November 2016.

time:matters, the international spare parts logistics company, has now received its third Excellence Award in the area of spare parts logistics from John Deere, the world’s leading manufacturer of agricultural machinery. In a cooperation lasting ten years already, John Deere first classified time:matters as a partner three years ago, with the logistics expert having exceeded previous performance standards and continuously increased customer satisfaction. time:matters developed a supply chain strategy with a dedicated flight network for John Deere’s after-sales service. John Deere’s top priority during the harvest season in particular is to ensure that end customers can rely on the availability of their farm machinery. The current performance figure of 99.5 per cent is all the more impressive given the extra challenges posed by remote locations in this market in particular and underlines the reliability provided by time:matters to its long-standing partner John Deere.

july 2017 - CargoConnect 103

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ACCD organises annual general meeting Air Cargo Club of Delhi (ACCD) recently organised its Annual General Meeting at hotel Atrio, New Delhi. The event witnessed a gathering of delegates and professionals from the air cargo fraternity. Ravinder Katyal, President, ACCD, welcomed the newly elected Managing Committee.

The Managing Committee bid farewell to Yashpal Sharma, Former Vice President. The house made active discussion on tasks executed by the Managing Committee last year and put forward suggestions for the coming year. Members and past presidents appreciated the work done by the Managing Committee and also complimented newsletters and social media coverage by the sub-branding committee.

Çelebi launches bonded truck service from two tier-II cities to IGI Airport Çelebi Delhi Cargo Terminal Management India Pvt Ltd, in collaboration with their business partners OM Logistics Ltd, ICD Kanpur Logistics Park Pvt Ltd and ICD Overseas Warehousing Pvt Ltd Ludhiana, have commenced a dedicated bonded trucking from Ludhiana and Kanpur to Çelebi Terminal Delhi IGI Airport. Ludhiana service was launched on 1st Feb 2017, while Kanpur on 6th April 2017. “Çelebi is committed to green initiatives. We have begun a solar power plant on 24th Feb, 2017 with 2 MW capacity as an alternative source of power, which is a breakthrough for the industry. We aim to derive 20 per cent of our overall power consumption through solar power”, said Ramesh Mamidala. Çelebi’s airline customers can now offer services to a city to which they do not fly an aircraft. CHA freight forwarder community can now custom clear, handle duty drawback and post shipment documents at origin, while avoiding multiple handling and

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damage to cargo. Now cargo from Amritsar, Jalandhar, Phagwara and Ludhiana can be custom cleared at OWPL ICD facility in Ludhiana while Varanasi, Bhadoi, Gopiganj, Khamaria, Mirzapur, Patna, Allahabad, Kanpur and Lucknow cargo can be cleared at KLPL ICD facility in Kanpur.

Arvind Aggarwal, Senior Manager, Business Development, Çelebi Delhi Cargo Terminal Management India Pvt Ltd, emphasised on some of the highlights of this first of its kind service, which include: 1. Time bound deliveries 2. No Volume constraints. Now a small shipment can also be planned with same proportionate cost and time.

3. Assured daily departures.

4. Minimal handling to avoid damage to shipments.

5. Dedicated arrival truck dock at Çelebi warehouse.

6. GPS enabled app on mobile devices for live tracking of cargo.

Transparent shipment status at all levels of value chain.

7. Assured same day connection on the booked flights.

||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| Vigilance Workshop held by AAI at Bagdogra Airport

upcoming events 3rd Air Cargo Summit 2017 on July 19, 2017 at PHD House, New Delhi organised

by PHD Chamber of Commerce and Industry

Corporate Vigilance Department of the Airports Authority of India organised a two days workshop on the topic Vigilance as a Management Function at Bagdogra from May 25th to May 26th, 2017. Upma Srivastava, IAS, Principal Secretary to the Government of Sikkim inaugurated the workshop. The workshop covered various aspects of vigilance and disciplinary matters. MP Juneja, IEM, AAI, Ex CTE, CVC and Ex Additional Member, Railway Boardspoke, Keshav Rao, CVO, AAI were the key speakers in the workshop. Several Executives and Non-Executives from Bagdogra, Raipur, Behrampur, Durgapur, FSTC, Kolkata, Jharsuguda, Bhubaneswar, RHQ/ER and NSCBI Airport, Kolkata participated in the workshop.

7th India Warehousing Show 2017 on July 27-29, 2017 at Pragati Maidan, New Delhi organised by Reed Manch Exhibitions Pvt Ltd

Maritime Nation India 2017 on September 14-16, 2017 at International Convention Centre at Navi Mumbai organised by Maritime World Services

Lufthansa Cargo awarded for reliability and excellence DHL, the world’s leading logistics and shipping provider, has named Lufthansa Cargo together with Swiss WorldCargo and two other air cargo carriers as recipients of this year’s Carrier Award for Reliability and Excellence.

Inaugurated in 2016, the DHL CARE Awards acknowledge air freight providers whose services set the industry standard for the transport of temperature sensitive life sciences products.

“We are very pleased to receive this year’s DHL CARE Award.

Carrying sensitive pharmaceuticals fast and reliably to their destinations all over the world is a task that makes us proud. It is also a reason for us to expand our cool centre, so that all our customers can benefit from increased cool capacities at our hub in Frankfurt shortly. With valuable innovations like our Cool Control Tower and our long-term experience we will be a reliable partner also in the future,” said Dr Martin Schmitt, Lufthansa Cargo board member and CFO. The DHL CARE Awards were presented at the 17th DHL Global Life Sciences and Healthcare Conference in Singapore.

Food Logistics India on September 2729, 2017 at the Bombay Convention and Exhibition Centre, Mumbai organised by Koelnmesse YA Tradefair Pvt Ltd

INMEX SMM India 2017 on October 3-5, 2017 at Bombay Exhibition Centre, Mumbai organised by Informa Exhibitions

11th Express Logistics and Supply Chain Conclave on October 4 and 5, 2017 at Taj Lands End, Mumbai organised by Kamikaze B2B Media

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PEOPLE CONNECT

“Women Breaking Gender Barriers in Logistics Industry” Ravinder Katiyal has an experience of more than 20 years of working for top ranking logistics companies.

He has a strong background in air freight forwarding and building strong partners/airlines relationship.

Having worked with various multinational companies, he has been recently appointed by Cargo Partner.

Ravinder Katiyal, Director, Air Freight and Head Co-Load (Indian Subcontinent), Cargo Partner shares his personal account about the industry in an interview with Tariq Ahmed.

How has the industry changed from the time you stepped in?

Have there been any major transformations?

The industry has become more and more client-friendly over the years. It has become all the more flexible so as to facilitate ease of doing business. There is more transparency as compared to the earlier times. Today, if you look at clearance in terms of shipping, the dwell time has reduced drastically.

The stakeholders have become more and more professional and accountable and have learnt to look at things from a global perspective.

What is the biggest challenge that you have faced till date?

In the earlier days, we used to have regulatory issues. Also, we had to face a lot of compliance issues. There used to be a lot of challenges as the policies that were in place were archaic. I have witnessed the industry transforming with the advent of the new government and its proactive policies, be it Civil Aviation Policy or GST.

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Where do you see the graph of the logistics industry moving in the coming years?

I am a very optimistic person. I strongly believe that the logistics industry is poised for an unprecedented growth in the coming years. The way our shipments and volumes are growing globally, there is not an iota of doubt about the growth potential of the cargo industry. Further post-GST, more and more MNCs will be willing to invest in this sector and venture out into this territory.

What specific beliefs or values do you live by? How do you define success?

I live by the notion that “Client is King”. It is very important and crucial to stay connected with your clients and your partners. And, when you believe in this belief, the supply chain journey becomes very easy for you. One should always keep oneself as calm as possible.

Pressure is there in the industry, but you must ensure that you don’t crack under it.

Apart from work, what are your other interests?

Apart from work, I love to travel and I love to meet new people. Also, I always wear a smile on my face, no matter how dicey a situation I am in.

What message would you give to the aspirants who want to make a mark in the logistics industry?

Logistics is a very encouraging industry. So, I would definitely suggest youngsters to look at logistics and supply chain management as a career choice. The next generation logistics industry will be very a profitable one.

The youngsters will be the growth engine for the industry and for the economy as well. This industry can provide immense opportunities and exposure to the youngsters. At the same time, it has also been observed that more and more females have ventured into this industry which was earlier predominated by males.

This is something very positive for the society.

@TheJSWGroup

www.jsw.in

JSW Jaigarh Port India’s modernised greenfield multi cargo environment friendly deep water port regularly servicing capesize vessel

Creating world-class maritime infrastructure to 200 MTPA by 2020

JSW Jaigarh Port is poised to service:

400,000 tonnes

350,000 tonnes

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