CargoConnect magazine, June 2016

Page 1

www.surecommedia.in

VOL VII ISSUE VII june 2016 `20

Postal Registration No.: DL (S)-01/3372/2016-18 Postal at IPMBC on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

SPECIAL FEATURE

Let it PEB

Start-ups

A Refreshment Chapter

in the Supply Chain

E-commerce Boom Surges Warehouse Space Demand Dock Levelers Warehousing Rolls Up Sleeves for GST




Contents

Volume VII • Issue VII • june 2016

Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Roselin Kiro Special Correspondent Joydeep Banik Feature Writer Kiran Sabherwal

12

24 COVER STORY

Start-Ups: A Refreshment Chapter in the Supply Chain

SPECIAL FEATURE Let it PEB

Space Demand ..........................46

Director Marketing Ajeet Kumar Manager Marketing Niti Chauhan

INTERVIEW

Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad

Keki Patel, Cargo Manager, India & NepalEmirates SkyCargo ..............................76

Marketing Support Sheetal Singh

Eric Hartmann, Vice President, Cargo Alliance, SkyTeam Cargo .........................78

Administration Vipin Marwah Lavish Thakur

FEATURE

• E-commerce Surges Warehouse

Reporter Sana Husain

Balaji V, COO, Contract and E-Commerce Logistics, Allcargo Logistics Ltd ............80 G Balaraju, MD, Sindhu Cargo Services Private Limited ...........................................82 PC Selvaraj, Sr Vice President, Indev Logistics Pvt Ltd .....................................................83 Bhavik Chinai, CEO, Vamaship ...................84

• Warehousing Rolls Up Sleeves

Designer & Visualiser Shaique Ahmad 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.

for GST ......................................60

Technical Read

NEWS .....................6-10 & 88-96 Focus .....................................68 trail blazers ......................72 GUEST COLUMN ......................85

• Dock Levelers: Integrated System in Modern Warehouses ............54

supply change ....................86 Highlight ............................100 EVENTS ..........................101-105

TOTAL PAGES: 108 (inclusive of covers)

PEOPLE CONNECT ................106

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. Editor–Smiti Suri

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news

Narendra Modi in Tehran: India, Iran joint statement

PM Narendra Modi with Iranian President Hassan Rouhani

A ‘milestone’ pact on the strategic Chabahar port in southern Iran which will give India access to Afghanistan and Europe bypassing Pakistan was among the agreements recently signed by India and Iran which also agreed to cooperate on combating radicalism and terror. Besides the bilateral pact to develop the Chabahar port for which India will invest USD 500 million, a trilateral Agreement

on Transport and Transit Corridor was also signed by India, Afghanistan and Iran, which Prime Minister Narendra Modi said could “alter the course of the history of the region.” The bilateral agreements signed by India and Iran after detailed discussions between PM Modi and President Hassan Rouhani included one on setting up of an aluminum plant and another on laying a railway line to give India access to Afghanistan and Central Asia. The agreements, aimed at further deepening India-Iran ties in diverse fields, covered areas of economy, trade, transportation, port development, culture, science and academic cooperation. Another pact was signed to set up a 0.5 million ton aluminium smelter plant by state owned NALCO. Further, India would be involved in the creation of a railway line linking Chabahar with Zaranj in Afghanistan, which will give India easy access to four major cities of Afghanistan—Kandahar, Kabul, Mazar-e-Sharif and Herat. At present, majority of Iran’s sea-borne trade is handled by Bandar Abbas port. Chahbahar has much higher trading and shipping capacity than Bandar Abbas. The decision of the Indian government to invest in the Chahbahar port marks high trade prospects for both countries. Apart from creating an easy passage between India and Afghanistan circumventing Pakistan, the port would also eventually enable better trade relations with Europe as well and would cut down cost of trade with Europe by upto 50 per cent.

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news

MIA’s cargo handling off to steady start

AAI aims for 7,000 tons cargo for Tiruchi airport

Domestic air cargo operations that started at Mangaluru International Airport (MIA) recently have been increasing steadily. Ever since domestic air cargo operations started, the airport handled 1,650 metric tons in nine months up to March 31, 2016. It is further expected to handle 2,500 MT in 2016-17. The domestic cargo is being operated by Cargo Service Centre, Mumbai on behalf of Airports Authority of India at MIA. J T Radhakrishna, Airport Director, MIA said, “On an average, 200 metric tonnes of domestic cargo i e mainly postal articles is going through the airport. This hitherto was being done through KIA at Bengaluru,” he said adding the domestic cargo handled touched 220 metric tons in March. “We are anticipating an average of 100 MT incremental growth in domestic cargo each month during the current fiscal with stakeholders giving indications to this regard,” he continued. “On the other hand, international cargo handled at MIA is about 560 metric tonnes in 2015-16. This is mainly in the form of fruits and vegetables that are going to Dubai,” he further added.

The Airports Authority of India (AAI) has set cargo targets for eight international airports, including Tiruchi and Chennai for the current fiscal even as the export cargo here has witnessed a steady growth over the years. Tiruchi airport has been set a target of 7,081 tons for the 2016-17 financial year with the monthly cargo target fixed at 590 tonnes. AAI has asked airport officials to monitor the freight movements to achieve the target.

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Envirotainer adds New Delhi station Envirotainer has opened a new ULD station in Delhi to expand the number of facilities to a total of 57 and take advantage of India’s growing pharmaceutical industry. “With the more stringent regulatory landscape internationally, Envirotainer noticed Indian pharma manufacturers are continuously improving their cold chain quality management and strengthening the demand for cold chain solution,” said Suat Toh, Head of Sales, Asia Pacific Region.

Logistics parks to replace big warehouses in Delhi To reduce pollution and decongest roads, Road Transport minister Nitin Gadkari said that while the two peripheral expressways currently under construction will take nearly 50 per cent of vehicles off Delhi roads, there is a plan to set up logistics parks along these corridors so that warehouses and godowns located inside the city can move out. This way, the entry of thousands of heavily loaded polluting trucks into Delhi everyday could end in the next couple of years. “Road work involving around `30,000 crore is underway around Delhi. I have already discussed

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news

India-Myanmar-Thailand trilateral agreement

Ethiopian expands operations in India

The dream of a seamless travel in Southeast Asian countries will soon be reality with India all set to sign a strategic trilateral highway agreement connecting India-Myanmar-Thailand via road which is expected to give a big boost to trade and economy in ASEAN countries. According to the Ministry of Road, Transport and Highways (MoRTH), the India-Myanmar-Thailand (IMT) Motor Vehicle Agreement (MVA) is almost ready and will be signed soon. The agreement was to be signed last year but it was delayed due to elections in Myanmar. “Various rounds of negotiations were undertaken by India, Myanmar and Thailand on the text of MVA and protocols. After a meeting of focal points in Bangkok in September, 2015, the contracting parties of IMT MVA broadly agreed upon the text of framework agreement. Negotiations on the protocols to implement the MVA have been under way,” said a MoRTH official. Enhancing connectivity in southeast region is a key component in Prime Minister Narendra Modi’s ‘Look East’ policy. The IMT trial run under the aegis of proposed IMT MVA was held during December 9-14, 2015 from Imphal in India to Mandalay in Myanmar. Thereafter, Thailand proposed the Mae sot- Phitsanulok route for plying of vehicles while Myanmar suggested extending the route up to Bangkok.

Betting big on India’s booming aviation market in terms of domestic passengers traffic growth, Africa’s leading carrier Ethiopian Airlines plans to expand its operations in India with new flights and aircraft upgrade. The pan-African flag carrier currently operates a daily double service to New Delhi and Mumbai from capital city Addis Ababa. It also operates freighter services to Chennai, Bengaluru, New Delhi and Mumbai. The airline is currently in talks with the Indian civil aviation authorities including the Directorate General of Civil Aviation (DGCA) in this regard, Gebremariam Tewolde, CEO, Ethiopian Airline said.

Perishable hub at Indore The union cabinet recently approved a perishable cargo hub at Indore airport as a state-of-the-art facility to be managed in public-private partnership. Towards this end, the cabinet approved leasing out 1,500 sq metres of land from the Airports Authority of India to Madhya Pradesh Warehousing Logistics Corporation. The facility will serve as an exit point for perishables from transit airports and provide jobs for locals, an official statement said.

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SPECIAL feature

12 CargoConnect - june 2016


SPECIAL feature

The usage of Pre-Engineered Buildings (PEB) is growing steadily in the Indian construction market, aiding both commercial and non-commercial segments. PEBs offer arguably the best solution for all those who look forward to provide an attractive, functional, flexible and sustainable warehousing facility. Joydeep Banik talks to experts about the advantages of PEB in warehousing, current market scenario and other relevant aspects

T

echnological improvements over the years have contributed to the enhancement of the quality of products and services. One such revolutionary concept in the construction sector was the advent of PEBs. In case of a PEB, the fabrication is completed in a controlled environment with the help of latest technology, and subsequently, erection is carried out. Though its origin can be traced back to 1960s, the potential of PEBs has been realised in our country only during recent years, or to be more precise, around late 90s. PEBs are pre-designed into standard sizes, spans and heights, and use standard details for fixing cladding, roofing, gutters, doors, windows, etc. Although PEB systems are extensively in use in industrial and non-residential constructions worldwide, it is a relatively new concept in India. 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, and PEB can be said to be a major contributor to the industry landscape. The manufacturing and industrial hubs of India have specified requirements in the warehousing sector; Pre-Engineered Buildings can undoubtedly provide a standardised solution for warehouses. From a normal warehouse to complex multi-storey structures, PEB has shown immense potential. Owing to its advantages in terms of structural integrity and durability, several non-conventional segments are nowadays getting attracted towards PEBs.

Growth Story of Steel Manufacturing The concept of Pre-Engineered steel buildings, well-established in North American and European countries, is presently making inroads into the commercial, industrial and residential segments in India. It is 30 to 40 per cent faster than masonry construction, provides good insulation and is suitable for construction in remote areas. The rise of this concept has also given a boost to steel manufacturing. Due to their high strength, light weight and durability, steel is recognised as the most preferred and versatile material of construction across the world. Currently, the total steel production in our country is about 45mn ton as against 1280 mn ton of the total world’s production. While about 10 per cent of India’s steel goes to the construction

june 2016 - CargoConnect 13


SPECIAL feature Warehousing companies look for PEB as an ideal solution for their building requirement as design, cost, quality, delivery, etc. are some of the major factors which play a very important role in their overall project execution. All the Kirby buildings are customised as per the client’s requirements.” D Raju MD, Kirby Building Systems India Pvt Ltd

Approximate saving in steel with Preengineered Steel Building as compared to conventionally designed site fabricated steel Saving on account of use of custom made Built up sections.

2.5%

Saving on account of use of High strength steel and reference to international design.

2.5%

Savings on account of minimum wastage of steel by production under controlled factory environment.

1.5%

Savings on account of use of latest design software for estimation of quantities.

1.5%

No quality rejection / damage at site

0.5%

Total Saving in Quantity of steel consumption.

8 to 10%

source: Interarch Building Products Pvt Ltd

industry, PEB accounts only for about 0.5 mn ton of the total consumption. However, experts predict that steel production for PEBs will increase upto great extent in the coming years. Vikas Kaushal, Sr. Vice President-Sales & Marketing, Interarch Building Products Pvt Ltd explains the advantage of steel PEB buildings, “Off-site fabrication possibility of manufacturing buildings/structural components using steel and its recyclable characteristics makes steel more sustainable, clean and green, as against cement, concrete, brick, wood or any other material of construction available to the mankind till date.” He also informs, “Traditionally, to design a steel frame, it was required to refer steel tables to select available Indian standard channels and beam sections as per the design requirements. Due to limited availability of Indian standard sections with steel mills and traders, design engineers used to specify the next

14 CargoConnect - june 2016

In case of a PEB, the fabrication is completed in a controlled environment with the help of latest technology. available similar section, which was usually heavy as compared to the actual design requirement. This resulted in use of excessive steel usage, making steel construction an unviable option in older times.” However, the scenario is changing. As a matter of fact, Pre-Engineered steel building manufacturers have no dependency on

the availability of standard sections from steel mills and can build and fabricate exact design sections themselves, eliminating any scope for over-design or wastage. Kaushal also tells, “These built-up sections are manufactured in PEB plants equipped with high-quality beam welding machines. High strength steel plates are purchased from steel mills and these plates are cut to customised sizes and welded together on state-of-the-art machines to manufacture the most optimum and structurally strong built-up sections to suit individual project requirements.” Clearly, the steel frames in PEB industrial warehouses are made as per specified design, and thereby reduce the overall cost of steel structure. Experts predict that we are fairly close to a day when steel buildings will become the rule, rather than being an exception. D Raju, MD, Kirby Building Systems India Pvt Ltd tells, “Warehousing companies look for PEB as an ideal solution



SPECIAL feature PEBs were adopted in warehousing segment very early and continue to rule the roost. Logistics companies have realised the potential and have continued to use PEBs to its fullest.” Manish Garg President & Chief Executive-Steel Building Business, Everest Industries Limited

Applications of Pre Engineered Buildings (PEB) WAREHOUSES

FACTORIES

WORKSHOPS

OFFICES

GAS STATIONS

VEHICLE PARKING SHEDS

SHOWROOMS

AIRCRAFT HANGARS

METRO STATIONS

SCHOOLS

RECREATIONAL

INDOOR STADIUM ROOFS

OUTDOOR STADIUM CANOPIES

BRIDGES

RAILWAY PLATFORM SHELTERS

for their building requirement as design, cost, quality, delivery, etc. are some of the major factors which play a very important role in their overall project execution. All the Kirby buildings are customised as per the client’s requirement and are optimised to provide the customer with the most optimal cost.” He also feels that PEB technology has already become the preferred mode for the construction of warehouses being setting up across India, as he says, “This erstwhile concept has now become a widely accepted solution with proven benefits for construction in the Indian environment. With eco-friendly construction fast catching up the growth curve in the Indian market, PEB is the most viable construction solution as it is a green product with little impact on the environment. PEB

16 CargoConnect - june 2016

is also a perfect fit for developing warehousing sites because of the recyclable nature of steel used in the buildings which has a re-sale value when sold as scrap (which is not possible in RCC buildings).” As mentioned earlier, pre-engineering of metal buildings can be optimised to meet specific design criteria. Brijesh Lohia, Managing Director, Global Ocean Group renders a detailed outlook, “We at PEBs aim to offer cost-effective, reliable and scalable solutions for our clients. This flexibility allows us to deliver more to our clients spread across industries, which is the very basic nature of the logistics delivery mechanism. Considering these factors, our objective is to design prefabricated, specially designed PEB buildings, which also assist in the savings involved. The

economies here work for us on set principles such as—the fact that the structure is built to measure and to reduce wastage. Technically, the initial costs are low due to the use of tapered, built-up, structural members such as columns and rafters and Z-shaped secondary members (called purlins and girts) that allow overlapping. Foundations are fewer (for multiple structures) and much lighter than those used in conventional buildings.” He continues, “In addition, reputed companies offer superior product quality as the steel and materials are ordered as per recognised industry standards. The delivery and assembling is quick and easy, allowing faster project construction. PEBs are easily expandable on all sides allowing for future expansion if required. Low maintenance and operational costs are a hallmark of PEBs. Water-tight and energy efficient roofing and wall systems built through the use of insulation offer safety for goods and the comfort of personnel. Our current solutions are built on high-tech, functional and expandable warehousing facilities offering clients not just robust solutions for their products, but also a scalable one. In addition, we also provide custom-made design for our different client requirements. This may include specialist companies and manufacturers, to which we offer prototype module solutions” Manish Garg, President & Chief Executive-Steel Building Business, Everest Industries Limited discusses, “The building structure in a warehouse is a fixed asset unlike industries or facto-


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SPECIAL feature Off-site fabrication possibility of manufacturing buildings/structural components using steel and its recyclable characteristics makes steel more sustainable, clean and green, as against cement, concrete, brick, wood or any other material of construction available to the mankind till date.” Vikas Kaushal Sr Vice President-Sales & Marketing, Interarch Building Products Pvt Ltd

PeB systems provide real value to warehouse five-year plan (2012-2017). The ries wherein the machines constructors PEB market, which is generdo the job. PEBs provide ally associated with investment the most attractive, funcand growth in the industrial and tional and expandable facility. commercial sector, is thus ready to gain The design methodology and system is apt to integrate large bay spacing, clear momentum. At the primary stage, in India, spans and heights providing unhindered pre-engineered building systems used to movement for forklifts, etc. and making it far find application primarily in the construcmore attractive functionally.” On the flip side, tion of warehouses and industrial sheds. Sushil Gupta, Chairman Richa Industries Today, PEBs are being used extensively in Limited figures out the most important fac- all spheres of building construction, and tors-“Quality, Finish, Time and Cost” which also finds its application in newer areas are “making all the difference and convinc- like power plant structures, bridge girders, ing warehouse makers to prefer PEBs over shipyard structures, etc. A recent analysis by Frost & Sullivan on Indian PEB market conventional construction.” pointed out that the market earned revenues of `5,297 crore in 2012 and estimates to reach Current Market Scenario The Indian Government has recently planned `13,612 crore by 2016, at a compounded an$1 trillion investment in infrastructure seg- nual growth rate of 26.6 per cent. From warehouses to commercial spaces, ments like power, roads, etc., in its twelfth

18 CargoConnect - june 2016

and even residential villas and apartments, PEBs have used design and functionality to make a mark in urban and rural spaces and it would not be an exaggeration to say that the PEB industry has acted as a catalyst in the infrastructuraldevelopment of the country. According to Lohia, “The steel market is facing a general slowdown at the moment; however, the manufacturing sector is doing well despite certain setbacks in terms of government regulations. PEBs with their low cost, scalable, customisable and expandable models are the best choice for many consumers. As such, the sector is expected to grow exponentially in the coming fiscal quarter.” Raju asserts, “PEB is slowly and steadily gaining momentum in the commercial/residential sector, but is still in the nascent stages when compared to developed economies and will take more time to make an impact. Kirby introduced this completely new segment in India, thereby creating a roadmap for many such companies to enter the PEB segment. It also provided the countrywith a new, sustainable and advanced steel construction technology. Warehousing sector was one of the first sectors which adapted PEB technology in early 21st century as the buildings were very simple box type structures. Over the last 16+ years PEBs are the preferred choice for anyone setting up a warehouse in any part of India.” More than 50 per cent warehouses are made using PEB technology at this time. On an optimistic note, Garg says, “PEBs were adopted in warehousing segment very early and continue to rule the roost. Logistics companies have realised the potential and have continue to use PEBs to its fullest.” Gupta also shares his outlook, “Indian warehousing industry is transforming itself,



SPECIAL feature Indian warehousing industry is transforming itself, focusing on adopting quick, smart and cost-effective technologies, in order to enhance quality, integrity and longevity of the products stored or preserved. Nowadays, PEB warehouses have a huge demand.” Sushil Gupta Chairman, Richa Industries Limited

focusing on adopting quick, smart and cost-effective technologies, in order to enhance the quality, integrity and longevity of the products stored or preserved. From normal RCC to smart pre-engineered building warehouses, the industry has shown remarkable changes. Nowadays, PEB warehouses have a huge demand. Due to enormous advantages like stability, durability, low maintenance, economic, rapid construction and easy future expansion, PEB technique is widely gaining acceptance and being preferred over conventional mode of construction.”

Ensuring High-Tech Security in Warehouses The evolution of the application of steel in civil engineering gives rise to

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many issues. PEB designs are based on the synergy existing between various elements, and every element is assumed to brace the other element, thereby providing an overall stiffness. As the entire PEB system components are getting fabricated in pre-controlled conditions, it is possible to deliver quality tested materials on time and in erectable sequence to the project location. On the other hand, PEBs also ensure high-tech security for the products and services in the warehouses. Security has gained precedence over the years in the logistics business. More scalable the requirement, it is of bigger priority for the clients who stock many items at a central base for dispensation across a region or a city. It is easily possible to make all kind of security arrangements in PEB warehouses. Lohia says, “We offer pre-engineered buildings that are built using high-quality raw materials such as steel and polycarbonate. In addition, walls can be fortified with masonry and/or concrete additions making for added security and strength, and CCTVs, steel partitions, mezzanine additions for observation/monitoring, perimeter/boundary walls, apex watch towers, and electronicallycontrolled gates can enhance security for PEBs. Any security system that can be installed in a conventional masonry/concrete structure can be easily installed in a PEB, with no difference in performance or functionality.” Gupta speaks on similar lines, “The steel used in PEB warehouses is highly tensile and strong enough to ensure safe storage of goods. The clean finishes of rooftop and smooth walls provide better clarity for CCTV coverage.” Speaking on security concerns, Raju shares, “All the Kirby warehouse buildings are secure and are 100 per cent leaf-proof with high-quality material fabricated in the facility and transported to the site.” Garg enlightens on another aspect, “PEBs are designed using latest state-of-the-art simulating software like flight simulators, wherein effects of wind, earthquake and other loads are applied realistically and security against these elements is ensured 100 per cent. This helps in lowering insurance premiums and providing safe and sound buildings.”

Are PEBs Resistant to Natural Calamities? “More than any other building, actually”, answers Garg. According to him, this is “due to the ductile behaviour of steel, bolted connections and overall integrated design.”It is a known fact now that pre-engineered buildings have hit the construction market in a major way, and the key factors that are acting as the



SPECIAL feature We at PEBs aim to offer cost-effective, reliable and scalable solutions for our clients. This flexibility allows us to deliver more to our clients spread across industries, which is the very basic nature of the logistics delivery mechanism.” Brijesh Lohia Managing Director, Global Ocean Group

catalyst to its remarkable growth are quick construction, aesthetic excellence and architectural versatility. Moreover, the inherent characteristics of steel make pre-engineered buildings an ultimate solution to stand still against any natural calamity. Gupta mentions, “Pre-engineered buildings, due to abbreviated mass, downplay the impact of earthquakes. These buildings have the potential to resist lateral loads stimulated by wind or earthquake. Apparently, steel buildings offer low cost, high strength, excellent durability, design flexibility, adaptability and recyclability, along with the smartness and confidence to protect from natural catastrophes.” According to Kaushal, “Pre-engineered steel buildings are designed in accordance with local codes for earthquake designing and load capacity. PEBs perform better and is proven to be more durable than concrete under such conditions. The light weight of PEB steel structures makes it a preferred choice for frame construction as against a

heavy concrete section, which causes potential damage during earthquake due to its heavy self-weight.The life cycle cost of PEB steel building with advanced roofing system is far less as compared to any RCC roof in a given rain intensity area. PEB roofs S

22 CargoConnect - june 2016

The rise of the PEB’s concept has also given a boost to steel manufacturing. do not require periodic water-proofing or maintenance unlike conventional buildings.” Raju highlights, “Kirby buildings are always designed by taking into consideration all the local environmental things such as wind speed, seismic zone, rainfall intensity, etc. which enables them to withstand all natural calamities without any damage to the structure. Some of the buildings constructed by Kirby in Ind ia have even w ithstood wind speed of twice the average speed recorded over many years of occurrence and the structure stood tall without any damage.” Finally, Lohia discusses, “We understand that insurance against natural disaster has gained prime importance for our clients. It

is now a key requirement for any building being constructed to be earthquake-proof, and there are materials and construction technologies available in the market to support this. Properly tested and standardised PEBs hold up to natural disasters. Due to spaciousness afforded by their large structures, water-tight roofing systems, and strong steel components PEBs are often used as shelters during natural calamities such as floods, earthquakes and storms.”

Conclusion The capital cost for building a warehouse has a direct impact on the ROI and payback calculations for a warehousing company. PreEngineered Building systems can provide real value to warehouse constructors without sacrificing durability, resistance, or aesthetic appearance. Cost savings in case of a PEB begin right at the preparation stage. Systems engineering and fabrication methods help reduce interim financing costs. An added benefit is the earlier occupancy of the facility and a head start on day-to-day operational basis. PEBs, higher in strength, lighter in weight and most efficient and flexible in comparison to traditional construction methods, can thus offer the most effective (read costeffective) solution for the warehousing sector. PEB warehouses offer a unique blend of stability, value-engineering, economy and unmatched speed of construction. These are also considered as eco-friendly due to the recyclable nature of steel used in the buildings. At present, the crusade on green buildings has begun with much vigour, and this will push the market expansion for PEBs. Following the footsteps of advanced countries, the logistics and warehousing industry in India hopes to see a wider application of PEBs in near future.



cover story

Start-ups

A Refreshment in a h C y l p p u S e h t in Chapter On demand logistics space is burgeoning with several start-ups, which are coming up with innovative approaches to revolutionise logistics solutions. India is changing to get better and smarter with every passing day. At present, there are various start-ups which are working tirelessly to address various pain points in the supply chain in India. Joydeep Banik discusses the changing business dynamics and opportunities coming up in the logistics space with the emergence of start-ups and scrutinises the out-of-the-box ideas

24 CargoConnect - june 2016


cover story

E

-commerce has seen an unprecedented rise in business in the past few years and logistics domain is believed to be the next big thing for the growth of this segment. It would not be an exaggeration to say that 2015 was the year of logistics for e-commerce in India, with many start-ups coming up in the space, and investments flowing on in a never-ending manner. In the e-commerce segment in India, or to be frank in any part of the world, speedy delivery is as important as the product quality; therefore, logistics has obviously become the defining factor for success of e-com companies in retaining their customers.

june 2016 - CargoConnect 25


cover story

Sanjeev Saxena, Co-Founder and Director, Ecom Express Pvt Ltd In a country like India, logistics is an indefinite process in itself and one keeps inventing every moment. The logistics start-ups, especially on B2C side, are evolving, solving and managing distribution with their innovative and fresh ideas.

Big online marketplaces such as Snapdeal, Flipkart and Paytm recently came up with innovative strategies in logistics and supply chain management. At present, Snapdeal is fulfilling sixty per cent of its orders from its own fulfilment centres, as compared to the seven per cent at the start of 2015. Flipkart has tied up with partner stores to introduce alternative delivery channels, so that customers can pick up their shipments at their convenience. Amazon, which claims to have

capabilities of Internet of Things (IoT), devices, data assessment and automation, moving and tracking of cargo have been easier than never before and warehouse management has also become smoother. In the past one year, over 200 start-ups in the logistics arena in our country have come up to solve infrastructure and last-mile problems and help ecommerce (as well as other businesses) perfect their overall distribution network and process focusing on their core competencies.

Logistics is

Phenomenal Jump in Investments

predicted to be

According to data given by capital intelligence firm Tracxn, funding towards logistics start-ups jumped from US$ 69.3 million to US$ 617.7 million between 2014 and 2015. The scenario was no different in our country. What has led to this huge jump in investments? Pushkar Singh, Founder, LetsTransport answers, “A market comprising of 14 per cent of GDP being operated extremely fragmented, and inefficiency which even the present leading service providers are not able to structure.� In the opinion of Deep Malhotra, Co-Founder, BECK, “The reason is simple. There have been some innovative start-ups in this space lately. The e-commerce industry saw a surge in the last few years. Suddenly, everything is being done online from buying clothes to groceries to ordering food. But all of this fails if the logistics behind it is not geared to deal with the demand. And hence came players who introduced technology or a completely new way of managing logistics. VCs also understand the significance and need for this sector to grow. Firms like Tiger Global Management that have the highest stakes in companies like Flipkart and have funded Shopclues. com and OLA, have also funded start-ups like Delhivery. So much money has gone into ecommerce. But despite that, logistics cannot

the next engine of growth for the economy and is presently generating a lot of interest amongst the investor community. the largest storage capacity and warehouse infrastructure, has added eight new fulfilment centres in 2015, increasing their storage capacity to nearly five million cubic feet across the country. Investing in better data analytics to fcustomer demand forecasting has become the need of the hour. By bringing together core

26 CargoConnect - june 2016

inside Phenomenal Jump in Investments Benefits with Start-Ups: (Hyper) Local to Global The Next Chapter in Supply Chain One-Stop Logisolution: Yay or Nay? Final Words


june 2016 - CargoConnect 27


cover story

Sandeep Padoshi, Co-Founder & Director, Wow Express Most of inventions/disruptions have been with the use of technology. But my firm belief is that technology will be the enabler but companies will have to reinvent/revisit their execution strategy to be able to efficiently utilise technology.

Growth in number of Logistics Tech Start-ups in India 50 45 40 Number of Startups

35 30 25 20 15 10 5 0

Year Founded Number of Startups

2009

2010

2011

2009

2010

1

2

2012

2013

2014

2011

2012

2013

2014

2015

6

9

30

47

4

Year Founded

2015

source: Tracxn

grow as it is the backbone of e-commerce.” On the other hand, Rhitiman Majumder, Co-founder and CEO, Pickrr specifies, “The prime reason of influx of funding towards logistics sector is the recent disruption in the traditional logistics space through technology. In spite of huge names present in India in traditional logistics sector, the sector still has a huge scope of going through that technological Renaissance,” says Majumder. Amit Mishra, CEO and Co-Founder, Quifers has a similar tale to tell, “Indian logistics sector still lags the technological interventions that are required and are essential for bringing down the logistics costs in long term. There is a huge scope for improvement through innovative technology infusion both in intra-city as well as inter-city logistics. That is why many start-ups are coming up with innovative ideas and hence funding towards logistics start-ups has seen such a great increase in last one year.” According to Rajesh Kuma r, CoFounder, CNB, “One of the reasons behind the lot of investments is that during 2014-15, e-commerce was one of the most prominent

28 CargoConnect - june 2016

and growing industry. Major funding was going in the pool of that industry only. But it was gradually realised that approximately 28-30 per cent of the income of e-commerce industries are spent on logistics. So, need of reviving of the logistics industry was felt, which was already suffering from poor in-

frastructure, lack of technology and innovation. This funding has worked as a tool for betterment of technology, more competency and innovation to minimise the cost, keeping a close eye on faster and effective delivery. Apart from this, new inventions like mobile DGPS, RFID, etc., have helped the industry in minimising the major issue of identification and location of the product. It helps in

better execution of planning and process and eventually leads to better margins.” L R Sridhar, Founder and CEO, Connect India elaborates, “The jump in funding is mainly because of the critical role that logistics plays in helping e-commerce, manufacturing, FMCG and retail industries to overcome issues related to infrastructure and last-mile delivery. The Indian e-commerce industry is expected to grow from $17 billion to $100 billion by 2019. With this growth, the dependence on logistics is bound to grow multifold, calling for effective management of supply chain, logistics and last-mile delivery. He continues, “E-commerce industries, bound by time definite deliveries face several logistics problems: lack of proper roads, improper fleet management, and unavailability of workforce to meet the overwhelming demand volumes. Infrastructure has always been a pain point for the e-commerce industry, for which these logistics start-ups have a solution. With India moving towards a digital economy, rural India, where 70 per cent of the population lives, will contribute majorly to the e-commerce industry. This trend will be a motivating factor for the Private Equity players to be high on this industry. The investment in logistics start-ups will ultimately help streamline the ecommerce, manufacturing and logistics industry and reach every corner of India.” The size of the Indian logistics industry is $320 billion and it is presently growing at the rate of 15 per cent per annum. However, a large chunk of the industry is still unorganised, fragmented and has not changed for years. Logistics is predicted to be the next engine of growth for the economy and is presently generating a lot of interest amongst investor community. After its initial round of US$ 16.5 million in September 2014, Ecom Express received US$ 133 million pri-


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cover story

L R Sridhar, Founder and CEO, Connect India The year 2015 was the year of hyperlocal delivery services and truck aggregators, which saw a growth rate of over 41 per cent growth rate as compared to 2014. Thanks to the progression in technology, better connectivity and performance, the sector has attracted huge investments.

vate equity funding from Warburg Pincus in June 2015. Sanjeev Saxena, Co-Founder and Director, Ecom Express Pvt Ltd informs, “Investments into the sector in the last few years were driven predominantly on B2C side with the advent e-commerce growth and the opportunity was rightfully captured by few of the specialist logistics players catering to the ecosystem. In a consumption driven economy, there lies definite need for an efficient and reliable logistics solutions connecting every household for inclusive deliverables. The players who attracted investments are

rightly positioned in capturing the opportunity notwithstanding to the infrastructure hurdles in movement of goods. The investment into our company Ecom Express by Warburg Pincus, which is the biggest ever PE funding in India in the logistics sector, is one such example.� In fact, logistics space has been emerging as one of the VC favourite avenues recently. Sandeep Padoshi, Co-Founder & Director, Wow Express gives his perspective, “Investors are finally realising that logistics is more important than or as important

as product marketing and it is the logistics companies that will ensure products and services are delivered to the end consumer. India is undoubtedly on its way to being the largest consumer driven economy and investors have shown their confidence in the Indian market by investing in an industry which has so far been only verbally acknowledged as the backbone of business but lacked the financial backing. E-commerce has grown phenomenally over the past few years and investors who have invested billions of dollars in e-commerce companies



cover story

Xitij Kothi, Founder and CEO, Parcelled Logistics start-ups that provided powerful back-end technology, hyperlocal delivery services, and truck aggregators were highlighted in the past year. Most logistics start-ups provide a coordinated system that helps to keep track of the shipments as they move, providing customers end-to-end services.

There seems to be a plethora of in India have realised that is ripe for transformaopportunities as logistics tion. The start-ups in without a robust logistics network the e-commerce start-ups begin to reinvent logistics space are growth story would not be taking advantage of the supply chain with possible. Technology has consumer adoption fresh ideas and been a major disruptor in to technology and are the Indian logistics space off coming up with prodresources. late and this has also triggered a host of investments in this space.” Jayaram Raju, Director, Lobb avows, “Industry efficiency is very less due to lack of transparency and low technology usage. In India, 13 per cent of the GDP is spent on transportation, as compared to six to seven per cent in developed countries. Recent ecommerce and technology wave has changed the way we shop everyday needs like consumer goods, booking bus, movies and hotels. The transportation industry is slow to react to this technology revolution and time

32 CargoConnect - june 2016

ucts to disrupt and redefine logistics working model. There is huge scope and tremendous business opportunity in this space and VCs are eyeing on to make it big.” When it became clear that e-commerce firms could not become profitable in India until the country solved its infrastructure woes, the logistics sector rejoiced. Sanchit Jain, CEO, DreamOrbit somewhat agrees that e-commerce has been the prime reason behind the rise in investments. He also adds on an analytical note, “E-commerce, if you

think, is mostly logistics. Digital logistics providers want to gain better competitive advantage in emerging markets, thereby creating customisable logistics applications that facilitate quicker customer adoption. Transportation & Logistics’ CEOs are now clear about the disruptive impact of connected logistics related technologies in reshaping their industry landscape.” On a whole, the logistics industry has had a great year by attracting a large amount of funding. Xitij Kothi, Founder and CEO, Parcelled gives a ringside view of how things are changing alongside sharing some relevant facts and figures, “Well, initially, the logistics sector was haphazard, particularly the intracity model. In recent times, this has largely been aided by start-ups which have brought in some clarity. The influx of several startups has facilitated in removing the middlemen, making it a lot more feasible. With the uninterrupted rise of the e-commerce sector, it would be alright to say that the logistics sector has been vital in allowing e-commerce players to retain consumers. According to the recent data findings, one can observe that 2015 has been a rather defining year for India’s start-ups with the total funding amounting to $542 million (roughly `3,595 crore). The investment trend in the industry reiterates the fact that logistics plays a vital role in the development of other sectors like e-commerce and hyperlocal. The e-commerce sector is estimated to be worth $ 220 billion in India by 2025. The growth of the nation is a sign for one to speculate the need for industries to demand better technology and efficiency in logistics. The global average of logistics costs accounts to roughly 4-5 per cent in comparison to 6-10 per cent of average logistics cost of India, which means there is a gigantic scope of improving the margins by three to five per cent by improving the supply chain and logistics processes.”


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cover story

Amit Mishra, CEO and Co-Founder, Quifers Indian logistics sector still lags the technological interventions. There is huge scope for improvement through innovative technology infusion both in intra-city as well as inter-city logistics and that is why many start-ups are coming up with innovative ideas.

Logistics

Benefit s with Star t-Ups: (Hyper) Local to Global Start-ups that provided powerful back-end technology, hyperlocal delivery services, and truck aggregators were in the news lately. Kothi completely agrees and adds, “Most logistics start-ups provide a coordinated system that helps keep track of the shipments as they move, providing customers end-to-end services. There is an imminent need to disrupt the industry and solve the problems by using innovation and technology. Logistics firms are implementing the CPSL (Courier Partner Selection Logic)

34 CargoConnect - june 2016

which is an in-house algorithm that intelligently checks real-time for the performance by various delivery partners. This is based on factors like time, price, fragile/non-fragile items, etc. to a particular pin-code or route and suggests the best partner for a seamless, shortest, safest delivery experience. Startups like Parcelled have disrupted the logistics industry using technology as an enabler and by creating new milestones.” With several start-ups flourishing, demand for consumer logistics is increasing day by day. This demand is bound to escalate the logistics frontier. It would not be an exaggeration to say that 2015 was the year

of hyperlocal delivery services and truck aggregators, which saw a growth rate of over 41 per cent as compared to 2014. At present, there are numerous local and last-mile delivery players serving e-commerce companies and few aggregators for intra and inter-cities. Each one of these entities are working on different models and trying to provide high-end technology solutions. Sridhar notes, “Thanks to the progression in technology, better connectivity and performance, the sector has attracted huge investments in 2015. The huge funding that the logistics sector has attracted in the past one year has helped companies in the field experiment and come up with unique and innovative solutions. For instance, grocery and other FMCG products can be delivered at the doorstep in less than two hours.” Speaking about the kind of start-ups that flourished in the recent past, Mishra opines, “Existing traditional logistics service providers are more operationally driven rather than working on breakthrough technology. They neither have competency to fulfil the requirement of e-commerce players nor the capability to provide the required customer service in the last-mile delivery sector to end consumers. Logistics start-ups which provide powerful back-end technology along with truck aggregators and hyperlocal delivery start-ups have become need of the hour as they are essential to help e-commerce sector grow at a fast pace. Both customers and investors see value in such start-ups as the future of logistics landscape in India is to be formed by these start-ups only.” Padoshi also tells, “Technology has been a major disruptor in this space in the past year or so. There have been a number of tech-enabled logistics platforms launched in the past year. They have been mostly in the areas of hyperlocal and trucking and on-demand logistics space.”


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cover story

Rhitiman Majumder, Co-founder and CEO, Pickrr The prime reason of influx of funding towards logistics sector is the recent disruption in the traditional logistics space through technology. In spite of huge names present in India in traditional logistics sector, the sector still has a huge scope of going through that technological Renaissance.

Saxena feels, “It is important to understand that logistics is about pickup-delivery and providing value-based solutions across the chain that address reach, speed and reliability. Technology is to be seen in the context of optimising key deliverables in this direction. Undoubtedly, logistics solutions are to be enabled by people through use of technology in building scale and size. I am not sure whether any player was in news only for back-end technology without offering differentiated deliverables that are reliable and sustainable.” However, Majumder has an entirely different take, “The only reason according to me that a new logistics startup should survive is due to the presence of a powerful back-end technology. Without powerful back-end technology, mere number orders will make you yet another courier/logistics player in the market. And this makes no sense.”

term business strategy and recent change in policies by government regarding inventory model will finish it very soon) upto a limited extent only. But for the long term, logistics is the major cost which majority is

source: www.yourstory.com

Kumar explains, “In current scenario, where the customer is getting everything delivered at home, be it LED TV or a cone of ice-cream, logistics is the vital part of every supply chain. One can control the price, availability or discount (although discount is in trend nowadays but it cannot be a long

36 CargoConnect - june 2016

focussing on. That’s why major e-commerce companies like Flipkart, Snapdeal, etc. are already investing in logistics. There are so many start-ups with a unique idea of reducing the cost and targeting only a very specified segment (like Roadrunnr which is using electric scooters to minimise the cost or

Rivigo which has introduced unique model of relay driving which facilitates a driver to return back to his home almost every day against minimum 20 days of outstation job earlier). In today’s market scenario of fierce competition, it is the demand of situation to be effective and innovative in technology and delivery.” Since the logistics market has been highly unorganised in India over the years, underutilisation of resources is not surprising. Jain looks at things from a global perspective and says, “The global connected logistics market is expected to grow at 30 per cent CAGR to $20.46 billion by 2020. The logistics industry is focusing on adopting digital technologies to create value in new ways and developing diverse and dynamic partnerships. The rapid growth of e-commerce has also created specialised needs for logistics, most notably hyperlocal and last-mile. Declining costs of sensors and RFID devices, need for constant connectivity, access to advanced network connection and growing use of smartphones and cloud-based services has put logistics start-ups in the headlines.” Hyperlocal has now become a ‘buzzword’; be it picking up any item from your doorstep and delivering it to some other place or bringing daily essentials and food on demand, delivery within minutes has become an essential business with the entry of hyperlocal players. In an optimistic tone, Malhotra tells, “There are new concepts and it’s good to see people thinking out-of-thebox in logistics. Till very recently, we were living in the world of couriers and Indian Post. Times have changed real quick and for the good. Food outlets earlier employed several delivery boys to deliver their food without knowing what the demand would be. That’s a cost. Hyperlocal is taking care of that. At the end of the day, every business wants to keep the cost low.”


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cover story

Pushkar Singh, Founder, LetsTransport A fresh perspective is needed to disrupt the traditional way of doing business. Technology has the capability of overcoming disadvantages of the infrastructure in the short run while providing cutting-edge competitiveness in the long term.

Singh analyses and sums up briefly, “There is a huge role play of technology in optimisation which would lead to reduced costs for clients, increased earnings for suppliers and a neat margin for aggregators, thus providing a win-win situation for all stakeholders.”

The Next Chapter in Supply Chain There seems to be a plethora of opportunities as logistics start-ups begin to reinvent the supply chain with fresh ideas and resources. Majumder confirms, “Yes, there are a lot of ideas coming up which is using powerful in-house technology to connect all the losing dots in logistics industry. So, I guess this trend will continue for the coming years.” Mishra discusses in detail, “Supply chain for all the companies in India, be it e-commerce, retail or FMCG, is driven largely through operational resources rather than technology. This results in boundations in terms of rapid expansion, especially for e-commerce sector players, as existing logistics companies are not able to scale themselves because of the lack of innovative back-end technology. This is where start-ups are coming in with fresh ideas and resources to remove the manual interventions and make products which are easily scalable and replicable while expanding to multiple cities.” Raju stresses on the ‘uniqueness’ of startups as he figures out, “Each start-up business model is different; some start-ups are working as a transporter with value-added services to the customers while some are adding fleet to provide superior service. Few others are creating platforms and are playing like true technology players to improve overall supply chain delivery process.” Hereafter, Sridhar again feels that technology and algorithm will revolutionise the supply chain and logistics industry and adds, “Nowadays, we have start-ups coming

38 CargoConnect - june 2016

According to data given by capital intelligence firm Tracxn, funding towards logistics startups jumped from US$ 69.3 million to US$ 617.7 million between 2014 and 2015.

up with solutions for even the smallest demands of the consumers and industries. To quote an example, the concept of same day delivery, which was unimaginable until a few months back, is a reality now. Unlike before, we now have individual companies focusing on reverse commerce, last-mile delivery and warehouse management among others. They are also able to come up innovative technologies and strategies to cut costs and increase efficiency. Complete automation of warehouses will be something to look out for in the coming months.” Saxena quotes the age old saying“Necessity is the mother of invention” and points out, “In a country like India, logistics is an indefinite process in itself and one keeps inventing every moment. The logistics start-ups, especially on B2C side are evolving, solving and managing distribution with their innovative and fresh ideas under unstructured (B2B suited) distribution regime.” Singh feels, “A fresh perspective is needed to disrupt the traditional way of doing business. Technology has the capability of overcoming the disadvantages of the infrastructure in the short run while providing cutting-edge competitiveness in the long term.” Whereas Padoshi notes, “A bunch of start-ups are indeed reinventing supply chain mostly with the use of technology and also with new ideas. Most of inventions/disruptions have been with the use of technology. My firm belief is that technology will be the enabler but companies will have to reinvent/ revisit their execution strategy to be able to efficiently utilise technology.” Jain indulges in another thought, “Any start-up must focus on solving newer problems that their customers face, due to the changing business environment. For example, Indian logistics market is up for huge change as a number of macro trends are going to shape this industry in the com-


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cover story

Jayaram Raju, Director, Lobb Industry efficiency is very less, due to lack of transparency and low in technology use. In India, 13 per cent of the GDP is spent on transportation, compared to 6-7 per cent in developed countries.

ing years. Suppliers today are connected to their consumers through ecommerce marketplaces. Many of the tier 2 and tier 3 cities are evolving as consumers. E-commerce businesses would need automation, leaner distribution process and highly cooperative 3PL/4PL strategic partners.� He continues, “Also, global markets are focused on Indian

Startup Founded Name In Moovo

2014

Location

Delhi

market for both its manufacturing capability and consumption capacity. The challenge for the local and hyperlocal players would be to deliver services with international standards. This has led to technology innovation in smart logistics solutions, SCM and advanced predictive analytics. Just for example, we helped a billion dollar e-commerce

Funding Raised (In $ Mn) NA

enterprise in US decide what inventory to keep in which warehouse across the country, and how to move this inventory around warehouses at different times of the year, so that the delivery to the consumer could be from the nearest location thus reducing cost and shipping faster. Logistics start-ups would come up with more such ideas to

Funding Stage

Investors

Mobile App

Operational In

Seed

YouWeCan Ventures, Vikram Chachra, Pratyush Prasanna, Others

Android

Delhi NCR

Android

Gurgaon

Shipsy

2015

Gurgaon

NA

Angel

Dheeraj Jain (Redcliffe Capital), Udaan Angel Partners, Nittin Passi, Others

Instavans

2014

Bengaluru

NA

NA

Dell Services President Suresh Vaswani

Android & iOS

Bengaluru

Turant Delivery

2015

Delhi

NA

Bootstrapped

NA

No

Delhi, Mumbai

Android

Bengaluru, Chennai, Hyderabad

Blowhorn

2013

Bengaluru

NA

Seed

Unitus Seed Fund, Tim Draper, Founder and Managing Partner of Draper Associates

TheKarrier

2014

Bengaluru

0.23

Seed

Sol Primero, Outbox Ventures, Frankly.me Founder Nikunj Jain

Android

Bengaluru

Shippr

2014

Bengaluru

0.5

Seed

i2india Pvt Ltd.

Android

Bengaluru, Chennai

Sequoia Capital, Kae Capital, Others

Android

Mumbai, Delhi/ NCR, Chennai, Hyderabad, Bengaluru

Traxcn labs, Delhivery

Android

Bengaluru, Delhi, Pune, Jaipur, Mumbai

ThePorter

2014

Mumbai

6

Seed, Series A

Parcelled

2014

Bengaluru

5

Series A

source: www.yourstory.com

40 CargoConnect - june 2016


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cover story

Deep Malhotra, Co-Founder, BECK Suddenly everything is being done online, from buying clothes to groceries to ordering food. But, all of this fails if the logistics behind it is not geared to deal with the demand.

much importance because coherent technology is the only way to handle a sector so vast. I think different start-ups have their creative take on reinventing their supply chains ranging from some that deliver on electric scooters to minimise costs, to packaging directly at one’s doorstep, using robots to store and organise their products, having a relay system for truckers for long distances; these are just to name a few. An example of a possible area of innovation which can bring business advantage within the logistics industry is using dynamic routing of pick-ups and having delivery boys enabling the operations team to track them in real-time and take quick decisions, and this is something that the team at Parcelled follows.”

One-Stop Logisolution: Yay or Nay?

There is a huge role play of technology in optimisation which would lead to reduced costs for clients, increased earnings for suppliers and a neat margin for aggregators. 42 CargoConnect - june 2016

optimise shipping.” Malhotra cheerfully shares, “The way the sector is growing is very promising. And just instils our faith that we are at the right place at the right time. Look at us; with BECK Friends, we are enabling people to send anything anywhere in the world through a peerto-peer network currently and growing it to involve the other mediums too. It offers convenience and simplifies the entire process by using technology. The idea is to be the onestop-shop for sending anything anywhere. Technology in communication shrunk the world and we are going to shrink it further with technology in logistics.” Finally, Kothi also throws light on some important aspects, “There is always a scope to recreate your supply chain. Many logistics start-ups are capitalising on this fact, considering it can provide both last-mile and backend technology services. This is given so

Logistics is such a big and ever expanding sector and obviously, there is plenty of room for coexistence of many and different kind of start ups. However, some firms continue to believe that they can do it all. The acceptability of ‘one-stop’ solution providers in the logistics start-up space is, till date, a not-sosure thing. However, Majumder is sure that “the next big landscape in logistics will be the one-stop solution providers for customers. Technology has a huge potential of connecting all the loose dots of logistics industry thereby giving a seamless and efficient experience to the customer.” Mishra is of the view that a vast market always gives every start-up a lot of different opportunities for getting business and believes “every start-up, at least in the initial phases of its expansion should have a very focused target market, and needs to draw a line beyond which it should not waste its resources and time. However, building in-house technology is one of the main differentiating factors for any start-up. All the successful


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cover story

Rajesh Kumar, Co-Founder, CNB In current scenario, where customer is getting everything delivered at home, be it LED TV or a cone of ice-cream, logistics is the vital part of every supply chain. That’s why major e-commerce companies like Flipkart, Snapdeal are already investing in logistics companies.

source: www.xeler8.com

logistics companies across the globe have inhouse tech as this provides with a comfort in terms of ability to scale with minimum operational resources, hence saving costs big time. So, obviously there is a possibility of being a ‘one-stop’ solution till the point you have clear focus of your target market.” Sridhar suggests, “Every start-up should focus on the core strength rather than trying to be an all-rounder. This will help them strengthen their capabilities and increase their market share. For example, a few e-commerce start-ups are taking on too much–apart from online commerce and supply chain management, they are also venturing into logistics and LMD. Ideally, they should outsource it to niche players to bring in economies of scale. This will improve efficiency and cost rationalisation. Transforming the distribution cost structure from fixed to variable will help e-commerce companies spend in accordance to demand fluctuations and eradicate the need to transfer costs to consumers. Thus, these e-commerce companies can reap profits and see exponential volume growth.” Saxena views from an alternate angle,

44 CargoConnect - june 2016

“It is important for any industry to have coexistence of players in support of growth in a healthy and competitive environment as it is difficult for any single player to solve industry problems and offer sustainable solutions. There is a possibility of players moving towards offering multiple solutions across the logistics value chain in a phased manner; however, that may not pose any hurdle as

cal o l r Hype become now ord’ has zzw a ‘bu

some players will continue to be successful in their area of specialisation.” More or less agreeing with Saxena’s viewpoint, Padoshi tells, “I believe that some or-

ganisations can build capability to do all but for an industry or for a segment. One cannot do it all for all. You can either be an industry expert or a functional expert. For example, you can specialise in warehousing for all sectors or you can provide all services to e-commerce industry or pharmaceutical industry.” Kumar illustrates, “One stop solution is the most convenient tool for any business to deal with. But it comes with a package of technology, resource and detailed planning to a great extent. India is a very complex market which offers a wide range of products and services, and every product needs specific planning. In today’s scenario, it looks very difficult for one firm to compete for each and every service. Having the expertise on every related technology to change the game by a single company is difficult because every technology in itself can be a sizeable business unit given the size of market. Only possibility in future may be someone who starts from solving each grassroot problem and finally combines all the data smoothly and presents as a single application to logistics companies. But this looks little far-fetched because of the speed


cover story

Sanchit Jain, CEO, DreamOrbit The global connected logistics market is expected to grow at 30 per cent CAGR to $20.46 billion by 2020. The logistics industry is focusing on adopting digital technologies to create value in new ways and developing diverse and dynamic partnerships.

of innovation happening in every direction. So, if someone wants to be a one-stop solution provider, they need to be very fast and should be cash rich at the same time to experiment in different verticals. At the same time, this is also true that if someone does that, they will be a long lasting enterprise with good and stable profit margins.” According to Raju, “All the start-ups in logistics space are in a very nascent stage and are evolving right now. Again, as this is a huge market, it would be difficult to see one-stop solution provider for all the problems. It may happen over a period of time through consolidation or mergers in some lines of business.” However, in Kothi’s opinion, the emergence of one-stop providers seems impossible in near future. He says, “Today’s challenges in the stratus of logistics industry include last-mile pick up, as customers are bound to expect immediate pick up, but as delivery people don’t have a fixed route, it’s a bit of a hassle. These are issues that one has to consider when aiming to build a seamless delivery path. In the current situation, there isn’t a chance of building a ‘onestop’ solution in the logistics start-up space, as each one has their own creative take on how the process works, and how best to be efficient. Going by the current scenario, e-commerce will continue to grow, ensuring there will be a lot of activity in the logistics end too. So to sum it up, there will definitely be the scope for several start-ups to co-exist, as there is a lot more to look forward to.” Jain views the larger picture as he says, “The canvas is quite big. There will be many more start-ups that solve just one problem and do it really well. Let’s say provide route optimisation for last mile. We’ll see more start-ups providing API based services for say freight rates, dispatch and tracking. A

Key pointers from #Start-up India Plan: • `10,000 Crore funds for innovation-driven enterprises • Credit guarantee mechanism • Exemption from Capital Gains Tax • Tax exemption for start-ups for first three years • Easing in compliance and self-certification • Simplification of process for filing/registration • Fast tracking of patents • Relaxed norms in public procurement • Setting up of Research Parks

consulting company that specialises in endto-end logistics solutions would use the solutions of various such start-ups to provide the best possible solution to their customers. As long as you know what you’re good at, and build upon your strengths, it’ll help build your business.” Malhotra begs to disagree with the above mentioned standpoints and confidently says, “We are going to be that onestop-shop the place that will enable a person to send anything anywhere in the world! The more the options for anything, the more is the need to find them all at one place. This implies for everything and logistics in no exception!” Singh concludes the debate tactfully by saying, “If you add value to the supply chain you will always exist. If the value you bring spans across all nodes of the chain, you become an integral to the ecosystem.”

Final Words Because the logistics related issues in India are so complicated, start-ups have plenty to focus on. The increased competition within the logistics industry means that logistics companies will have to build unique competitive advantages. This is where start-ups can become a game changer for the industry by connecting the country’s fragmented logistics ecosystem and adding a new dimension to the e-commerce delivery models. Efficiency improvement on information gathering and orchestration will be the basic agenda of multinationals in near future. With the proliferation of smartphones and call for ‘Digital India’, the logistics and supply chain sector does not want to remain constrained. With the success stories of several logistics start-ups to be seen over the horizon, it would be safe to say that the supply chain sector has re-invented itself, but still has immense scope ahead.

june 2016 - CargoConnect 45


feature

Surges Warehouse Space Demand 46 CargoConnect - june 2016


feature

Demand for warehousing and office space picked up in 2014 on the back of growth in e-commerce segment, which also led to increased

I

ndia’s warehousing and logistics-related real estate segment has benefited immensely from the expansion in e-commerce over the last two years. The emerging retail segment took up about 1.7 million square feet of warehousing space across Mumbai, Chennai, Bangalore and Delhi-NCR region in 2014, according to a report by CBRE (a leading commercial real estate services and investment firm). “Almost 25 per cent of the total warehousing/logistics space uptake across the country in 2014 were by e-retail players, while the uptake of logistics space rose by more than seven times over that of 2013,” reads the CBRE report. In India, e-commerce warehouses currently serve tier 1 cities

mercial real estate industry by picking up giant warehouses and also super-sized corporate offices which house their large teams comprising customer support, tech, analytics and marketing. The warehouse industry in India is estimated to be at `560 billion and is growing to be at 10 per cent every year. The growth in Indian warehouse industry is primarily driven by growing manufacturing activity, rise in domestic consumption, increasing international trade, growing organised retail in the country and increasing private and foreign investments in infrastructure. According to Dhruv Agarwal, Chief Strategy Officer, GATI-KWE, “While the growing e-commerce market poses such challenges to logistics companies, it also provides opportunities for developing smarter supply chain solutions to

and to some extent tier 2 cities. The increase in e-commerce business has put additional pressure on warehouses, as they are expected to fulfill customer orders directly, in addition to replenishing stores. These developments have added complexity to the warehouses and call for more advanced Warehouse Management System (WMS) to sustain the new omnichannel paradigm.

keep pace with the consumer demand. E-commerce fulfilment demands flexibility and efficiency. We strive to go beyond conventional boundaries in terms of space utilisation, technology tools and material handling methods, to address these opportunities.” Adding more to it, Brijesh Lohia, Managing Director, Global Ocean Group says, “The e-commerce segment has now opened gates to increase the number of warehouses in close proximity. The increased demand in this segment will now result in many hyper-efficient and data-driven warehouses, also increasing the need for an ideal location to be able to deliver the products faster.” Neelam Singh, Senior Analyst, ARC

leasing by e-tailers. With various consultancies and researchers predicting a high growth for the warehousing sector in India as a result of proliferation in the e-commerce space, Roselin Kiro delves into the matter and digs in more information

with

inputs

from industry experts

Rise in Demand for Warehousing Space The boom in the e-commerce segment has undoubtedly resulted in an increase in demand for warehouse space. The ecommerce industry may not need retail space, but it definitely drives the com-

june 2016 - CargoConnect 47


feature Advisory Group highlights the possible consequences of increase in demand for warehouse space. She mentions: • “More opportunities for third-party logistics (3PL) warehousing service providers. • Efficient use of the currently available warehousing space which is possible with the use of WMS software. • More real estate investments in warehouse which in turn give more opportunities to warehouse automation and control and material handling.”

Expectations of E-com Clients Apart from traditional storing services, warehouses now provide additional services such as merging and breaking up of cargo, packaging, classifying, bar coding, reverse logistics, etc., therefore adding value to the customers. This has in a way increased the expectations of ecommerce clients for the warehousing of their

for meeting the specific product-related requirements. Some industries with specific requirements of value-added services are: • Consumer electronics: Reverse logistics, date/lot code/serial number • CPG: Display builds, retailer compliance, lot capture/recall management • Food and beverage: Temperature-controlled facilities, ISO Quality Management System, lot control/recall management, third-party food distribution standards (AIB/ASI), GMP certification • Healthcare: FDA validated WMS, labelling and packaging registered with FDA, Verified-Accredited Wholesale Distributors’ (VAWD) accreditation, state device and drug licenses • Retail/apparel: Omni-channel WMS support, foreign trade zone operations, small parcel solutions/sortation 2. Consulting services: Strategic engagements

Moving Beyond the Traditional Approach For decades, consumer products have been distributed to retail stores in bulk, via pallet loads and cases. Now, online ordering is pushing brick-and-mortar

Brijesh Lohia, Managing Director, Global Ocean Group

With the boom of e-commerce segment, there is indeed an increase in the demand for warehouse space. It has now opened gates to increase the number of warehouses especially in close proximity." products. The most important factor to sustain as a warehouse for an e-commerce segment is to be quick, efficient and-cost effective because the customer always expects speedy delivery (between 24-48 hours). Here, the mandatory value addition that the e-commerce clients look forward to is the closest proximity of warehouses to their area of operations. However, warehouses in India now need to completely re-conceive how they operate to stay competitive. Singh shares information about a global survey done by ARC Advisory Group on warehouse performance. She says, “Only 63 per cent of the survey respondents indicated that they share inventory across channels. This means that customers are unable to get the product they want, when they want it, leading to decreased customer loyalty and customer retention. Therefore, some other value-added services should include: 1. Industry-specific facilities: Warehousing providers work directly with customers

48 CargoConnect - june 2016

for warehousing services always include consultative services to ensure that the warehousing service provider is optimising assets to support the shippers’ ideal scenarios for their supply chain. Many times it is a part of the service that is offered for larger opportunities, and the consultations in most cases are complementary.” E-com giants are making it big with innovative strategies in logistics and supply chain management backed by ample investments. The question is, will this factor be a hindrance for the start-ups coming up in the space? Agarwal answers, “We have always believed in customising our solutions to meet client needs. The flexibility within our pan-India hub-and-spoke network allows us to cater to a wide spectrum of customers, right from large e-tailers to SME-type e-commerce websites to niche products. In fact, SMEs/start-ups can leverage our supply chain capabilities to leapfrog ahead quicker.”

retailers beyond this traditional supply chain infrastructure. Traditional fulfillment encompassing receiving, putaway/ storage, picking, transport through the distribution center (DC), sortation, valueadded services, packing, and shipping is a poor option for handling the needs of e-commerce. To compete in this virtual arena, picking, packing, and shipping single items and small volume orders to consumers is the name of the game. Orders require delivery to customers—not weekly or bi-weekly as with retail stores, but typically within 24 to 48 hours. Lohia says, “E-commerce compared to traditional logistics need to be faster and cost effective. With the kind of competition ecommerce is facing today, there is no way that it can lag behind. Nowadays, e-retail has multi-echelon distribution centre model and ships the item directly from the warehouse to the customer without


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feature maintaining any of the facilities and having to bear overheads.” From the moment the online order is placed to when it is picked, packed, and shipped, every step in the process must be handled efficiently, consistently, and cost-effectively. In e-commerce, the distribution center provides much of the customer experience. Simply delivering the goods is no longer an adequate mission for the fulfillment center—customer satisfaction has to be a critical priority. The typical e-commerce consumer expects a wide selection of SKU offerings, mobile-site ordering capability, order accuracy, fast and free delivery, and free returns. Adding more information, Singh avows, “Retailers and brand manufacturers with e-commerce channels are making large investments to increase throughput and reduce fulfillment costs per order. WMS investments are being made to support more frequent and dynamic waves, increased piece

India’s warehousing and logistics real estate segment has benefited immensely from the expansion in e-commerce over the last two years.

Distribution centers can be put up in close proximity to the place of demand.” Production cost reduction will make exporters more competitive. It will add about two per cent to India’s GDP growth. Manufacturing companies can now strategise about changing their current business plan and look for better opportunities to cut down costs, such as placing BOO (build-own-operate) or leasing space in warehouse. Lohia adds, “With 100 per cent FDI, there is a scope of increasing market space and support services like warehousing, logistics, order fulfilment etc., which need to be on the edge. It is going to significantly drive demand and investment for warehouses. The demand of warehousing business has been slowly picking up in India, as companies expect a surge in business in the logistics space with the roll-out of

Dhruv Agarwal, Chief Strategy Officer, GATI – KWE

While this growing e-Commerce market poses challenges to logistics companies, it also provides opportunities for developing smarter supply chain solutions to keep pace with the consumer demand."

picking, and modified processes, such as put walls and packing stations. Retailers are also purchasing in-store WMS solutions to improve store-level inventory accuracy and support instore fulfillment of e-commerce orders.”

How Will GST and 100 Per Cent FDI Be Beneficial? GST will simplify India’s tax structure by broadening the tax base, and transform India into a uniform tax market. This will lead to increase in India’s Tax-to-GDP ratio. Also, as per the National Council of Applied Economic

50 CargoConnect - june 2016

Research report, it is expected to increase economic growth by 0.9 to 1.7 per cent. Also, there will be rise in exports by 3.2 to 6.3 per cent. The average tax burden on India Inc. will fall with the implementation of GST. Highlighting some of the factors, Singh tells, “Many foreign retailers that already had presence in retail (cash and carry business) in India before the announcement of 100 per cent FDI in e-commerce have started investing in various activities working with the Indian government, in areas such as: • Training and development, so that skilled labour is available when needed • Building the back-end infrastructure by setting up warehouses by making land available at reasonable rates • Engaging in private-public partnerships Multiple tax structure has encouraged de-centralised warehouse networks spread across smaller facilities in the outskirts of the city. With the introduction of GST, these arrangements are likely to undergo change.

GST, as it will help in removing many indirect taxes and replace them with a single tax at national level. There will be more simplified work and efficient integration. Definitely, warehousing business has got a way to pop out of a nutshell and grow fruitfully.” Again, speaking about how GST will simplify the building of warehouses for e-commerce companies, Agarwal shares, “The network of e-commerce fulfilment centers is not about tax-efficiency, but the ability to respond to end-customer expectation of quicker turnaround times. Multiple centers could be set up to maintain service levels rather than looking at storage costs.”

Role of Technology Increasing adoption of technology in operations is essential to keep up customers’ satisfaction. Technology solutions can range from robotic stock picking


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feature

The great Indian e-commerce and real estate Ecom Company

Corporate office(sq ft)

Warehouse (sq ft)

Proposed Warehouse space (sq ft)

Amazon

3,50,000

5,00,000

6,00,000

400

Flipkart

5,00,000

9,50,000

5,00,000

410

Myntra

2,40,000

4,00,000

2,00,000

70

Jabong

2,00,000

3,50,000

1,00,000

60

Snapdea

3,00,000

4,25,000

5,00,000

350

Proposed spend on warehouse (Rs cr)

Data is for 2010-14: Proposed spend is for 2014-16. Source: Industry estimates

Neelam Singh, Senior Analyst, ARC Advisory Group

The increase in e-commerce business has put additional pressure on warehouses, as they are expected to fulfill customer orders directly in addition to replenishing stores."

to software which enables workers to maximise space availability through narrower aisle widths as well as more effective staff deployment. Costly warehouse automation will continue to improve popularity in order to achieve maximum efficiency. Explaining about the adoption of technology for best results, Agarwal says, “In terms of technology, we have chosen best-in-class warehouse management platform to help our customers meet the rising demand for efficient delivery of products. With our current tools, we can alert stakeholders to an increased inventory requirement to meet market demands without delays. This ensures effective use of inventory and visibility into order cycle times, giving their customers the best buying experience possible while meeting their higher delivery expectations.” A report by Deloitte Global Powers of Retailing 2014 highlights how technology will be the building blocks for the future of the retail industry. The research highlights

52 CargoConnect - june 2016

technologies that will offer competitive advantage and a greater awareness of products both in a retail and supply context. One such application is the use of RFID (radio frequency identification), storing the collecting data which can be attached to individual objects. Not only can this be useful in keeping track of stock through the supply chain, but it can also be used as a potential resource for consumers, allowing them to access information about purchasing, instructions and recycling etc.

Conclusion Knight Frank, a real estate consultancy, estimates that demand for warehousing in India will rise to 132.8 million square meters by 2019, at a compound annual growth rate of 9 per cent from 2014. The last few years saw the segment becoming a new addition to the mix of major office space demand drivers in India, as online retailers increased their footprints for front-end as well as back-end require-

ments. India’s online retail sector saw exponential growth as a number of local market-specific services such as cash on delivery (COD), multiple payment options, and EMI options–assisted in developing the growth curve of e-commerce in the country. Online retail as a sector is still at a nascent stage in India, as leading players try to establish a strong foothold, and consumers get accustomed to this new medium of shopping. With e-commerce showing no signs of slowing down, experts believe that the future looks buoyant as this sector emerges as one of the strongest demand drivers for the real estate space. The sector will also play a major role in the evolution of existing logistics providers and development of logistics infrastructure in the country. How quickly this happens, is a matter to see.



Technical Read

k c o D lers: e n v i m e e L Syst

d e t a s r e g s e u t In ho e r a W n r e Mod

54 CargoConnect - june 2016



Technical Read

Dock levelers are an important part of your dock equipment and material handling system. They are

I

n simple terms, a dock leveler acts as a bridge between the warehouse and truck (container). Dock levelers are used in loading dock or loading bay which is an area of a building where goods vehicles (usually road or rail) are loaded and unloaded. They are commonly found on commercial and industrial buildings and warehouses in particular. According to Rajesh Sikka, Managing Director, Metaflex Doors India Pvt Ltd, “In warehouses, dock levelers are used to facilitate the safe and efficient loading and unloading of materials. Dock leveler makes sure that vehicle height should reach to the height of plat-

Gandhi, Director, Gandhi Automations Pvt Ltd informs, “There are many types of dock levelers like radius lip dock levelers, telescopic lip dock levelers, hydraulic dock leveler, etc. Hydraulic dock leveler is very useful in maximising efficiency of warehouse. The manual loading and unloading of goods becomes limited with the help of dock leveler.” An organisation can reduce waiting time for container, increase efficiency and achieve safety by using dock levelers, thus resulting in the smooth functioning of warehouses. Adding information on the usage of dock levelers, Sikka avows, “Metaflex offers majorly two types of

an essential element in

In warehouses, dock

the modern warehouses.

levelers are used

It is an actual bridge be-

to facilitate the safe

tween the loading area and the vehicle, so as to bal-

and efficient load-

ance out all the difference

ing and unloading Rajesh Sikka

in height and distance. Roselin Kiro finds out how dock

levelers

enhance

safety and productivity by avoiding multiple handling of the loads in warehouses

Managing Director, Metaflex Doors India Pvt Ltd

form and then its lip rest on the platform. This enables smooth and quick unloading/loading of material.”

The manual loading and unloading of goods becomes limited with the help of dock leveler.

Significance of Dock Levelers Different kind of dock levelers are available for different purposes for the smooth functioning of the warehouses. Kartik

56 CargoConnect - june 2016

of materials. dock levelers: swing lip and telescopic lip. Both are hydraulic levelers. The swing lip dock leveler is operated with only one push button. By keeping the push button pressed, the platform will go up from its rest position; when the highest position is reached, the lip will move out. When the push button is released, the platform and lip will descend automatically to the level of the vehicle bed. During loading and unloading, the suspension of the vehicle is automatically followed by the leveler.” He continues, “Another type of leveler is telescopic lip, which is less prevalent in India in comparison to European markets. The telescopic lip is powered by a separate, double acting cylinder. The hydraulic system is completely


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Technical read Safety is a major concern for warehouses in India and dock leveler ensures safety of the employees in the warehouse. closed and cannot be affected by dust or dirt, even in most extreme conditions.”

loading of material from dock leveler can be done quickly. Lot of pharma companies and manufacturing units have understood the usefulness of dock levelers. Indian manufacturing companies also have understood the importance of dock leveler and the efficiency it can provide for warehouse operations.” Adding more information on the Indian market scenario of dock levelers, Sikka avows, “The large chunk of demand comes from the organised market; there are a lot of logistics centers and infrastructural facilities coming up, which is further adding up to the market for complete dock solutions. Another fuelling of

Depending on the width, the platform is reinforced with 8-10 profiles. These profiles allow the platform top to twist and compensate for vehicle tilt caused by offset loads within the vehicle. The lip will always remain in contact with the vehicle bed. The compact hydraulic power pack is positioned under the platform to prevent it from any possible damages. All these characteristics ensure a safe hydraulic system with a long life span and a minimum of maintenance. In our nine years of operations in the market, no accident has been reported so far.” Gandhi also shares his tale. He says, “Dock leveler acts as bridge between the

Key Features of Dock Levelers • The Dock leveler is placed at the exterior of the building in a loading bay. • It is a bridge between the loading area and the vehicle, so as to balance out all the difference in height and distance. • Dock levelers correct height differences between loading docks, loading platforms and truck or trailer beds. • Dock levelers are available in a comprehensive range of dimensions, loading capacities, as well as a range of construction interface possibilities. • Enhance safety and productivity by avoiding multiple handling of the loads. • Possess various load carrying capacities.

How Prevalent in Indian Market? Many multinational companies have started setting up plants and warehouses in India. They understand the necessity of automation in manufacturing unit and warehouses. Gandhi pinpoints

Indian manufacturing companies have understood the importance of dock leveler and the efficiency it can proKartik Gandhi Director, Gandhi Automations Pvt Ltd

demand is coming from mega food parks and SEZs. This trend is still to be seen in unorganised market but we are hopeful that the demand will rise for dock levelers, keeping in mind the rate at which market is growing and evolving.”

Ensuring Safety

the relevance of dock levelers and it’s prevalent in different sectors today. He says, “Loading and un-

58 CargoConnect - june 2016

Safety is a major concern for warehouses in India and dock levelers ensure safety of the employees in the warehouse. Sikka shares on the kind of safety maintained by them. He says, “Metaflex Dock Levelers are designed in such a way that we keep safety as the no. 1 design feature. The platforms and lips of our dock levelers are made of high quality tear plates.

vide for warehouse operations.

loading bay area and container, if you are loading and unloading in traditional way or without a rigid support (which our dock levelers provide), there is always a danger of mishap. Gandhi Automations’ dock levelers are easy to operate and we follow international standards while manufacturing and installation of the same. Since it has firm base, goods can be loaded and unloaded easily and operation is so simple that even an unskilled labor can perform it easily.” Therefore, dock levelers add value in the warehousing system. It helps in the better, faster and smoother operations with effective results without compromising on the safety, stability and efficiency.


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feature

Warehousing

Rolls Up Sleeves for GST A complicated tax regime coupled with poor infrastructure has resulted in exorbitant logistics costs in India over the years. GST, one of the most vital tax reforms, is expected to simplify the taxation across the entire supply chain process from vendors to marketplace, and at the same time, bring in a major change in distribution and warehousing strategies which are at present tax-oriented. Joydeep Banik with inputs from experts dissects the opportunities coming up with GST for the warehousing and supply chain fraternity in India

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he growth trajectory of warehousing is experiencing an upward surge in our country, and demand for warehouses is expected to grow at a CAGR of 18 per cent in the next five years. Approximately, 10 million sq ft of industrial and warehousing space was taken up across India during 2015, and a healthy demand was noted from traditional as well as emerging sectors. However, warehousing industry still faces a huge gap between demand and supply. Estimates reveal that a deficit of 120 million sq ft exists in the sector, and even today, a large part of warehousing activity continues to be unorganised. Opportunities in warehousing are a gold mine waiting to be tapped. The implementation of the proposed Goods and Services Tax (GST) Bill, which is predicted to be; the biggest indirect tax reform in India since 1947,’ can act as a catalyst and a major growth

60 CargoConnect - june 2016


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G S Chawla Managing Director, Ocean King Shipping

GST is implemented to make India a single market, transiting from existing origin-based structure to destination-based tax structure. This will have a strong impact on manufacturing firm, supply chain and distribution channel.”

driver for the supply chain and warehousing segment in India. The GST Bill, officially known as The Constitution (One Hundred and Twenty Second Amendment) Bill, 2014 proposes a national value added tax to be implemented in India from June 2016, which would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, replacing the taxes levied by the Central and State governments. Around 15 Central and State taxes and tariffs will be subsumed by GST for a single tax levied at the point of sale. Goods and Services Tax (GST) would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. In today’s scenario, a firm incurs a huge cost in managing different warehouses across states. Their presence in the supply chain results in an additional administration, service utility and technology cost. Land is the primary resource in warehousing; the cost of land varies vastly between regions in India, leading to unequal development of this segment. On the other hand, ad hoc taxes levied at the state and central levels contribute to high costs of warehousing. This is the main reason why unorganised activity in the sector is flourishing and only way to curb such activity and bring down prices of warehousing is to unify the tax structure in the economy. India’s warehousing sector is reaching an inflection point and is expected to take a giant leap once GST is introduced which will remove the cost difference between states and lead to a homogenous growth of warehousing across the nation.

Significance in Warehousing Sector With the implementation of GST, taxable

62 CargoConnect - june 2016

goods and services will be taxed at a single rate in a supply chain till the goods or services reach the consumer, exports would be zero-rated and imports would be levied the same taxes as domestic goods and services adhering to the destination principle. G S Chawla, Managing Director, Ocean King Shipping explains, “GST is being implemented to make India a single market, transiting from an existing origin-based tax structure to a destination-based tax structure. This will have a strong impact on the manufacturing firm, supply chain and distribution channel. Because of the current complicated tax structure, the logistics decision and choice of setting up of inventory and distribution centres are taken on the basis of applicable CST and VAT rates, rather than operational efficiency. With GST implemented, there will no longer be the necessity of having a warehouse in every state, where a firm does business. The same decisions will be free from tax consideration prospective and will purely base on operational and logistics efficiency.” GST will simplify India’s tax structure, by broadening the tax base, and transform India into a uniform taxation market. With the rollout of GST, it is a good time for the players to restructure their ideas with an opportunity to increase profitability and make their supply chain leaner and efficient. K Vaitheeswaran, Advocate & Tax Consultant agrees, “When branches and depots are no longer tax-driven and is completely based on business needs, the supply chain is likely to become leaner and efficient. Further, the cutting down of costs through elimination of tax cascade and restructuring of business would improve profitability.” He even comments that GST would completely alter the supply chain landscape in India as companies will have the flexibility to source from anywhere. Warehouses would

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feature

Stages of Development of GST

Rajya Sabha to pass Constitution (Amendment) Bill

Release of draft GST legislation

Release of GSTN processes for compliance

K Vaitheeswaran Advocate & Tax Consultant

Finalisation of GST rates

“The current form of three GSTs (CGST/ SGST/IGST) is itself a dilution but also a reality given our federal structure. The original intent has been compromised by the new additional levy of 1 per cent which may ultimately be dropped.” 64 CargoConnect - june 2016

Passing of GST legislation by the central and state governments Development of IT platform

source: PwC

no longer be confined to a particular area and would be based on business needs. The scale and size of business will also go up.” Investments in warehousing business is slowly picking up in India as companies expect a surge in the logistics space once GST comes into play, which will facilitate efficient cross-state transportation and bring down logistics costs. Anshul Singhal, CEO, Embassy Industrial Parks says, “GST will simplify taxation across the entire supply chain from vendors to marketplaces, allowing for more efficient integration. Under the present tax regime, companies are forced to have individual warehouses in each state. GST will allow for greater consolidation into large fulfilment centres that enjoy economies of scale and drive efficiencies and cost saving across the supply chain.” Both GST and e-commerce are expected to

play a pivotal role in shaping the future megatrends of the warehousing sector over forthcoming months. The industrial and logistics sector in India faces significant growth potential, especially with the entry of several major global firms alongside domestic players in this arena and has been attracting considerable private equity investments in recent times. Along with the recently relaxed guidelines on Foreign Direct Investment (FDI), the likely passage of the GST Bill is supposed to prompt large scale foreign investment and sustainable growth of the country’s built environment, including warehousing and industrial space. Jasmine Singh, Head-Industrial and Logistics Services, CBRE South Asia Pvt Ltd elaborates, “Once the Goods and Services Tax Bill is finally passed and key infrastructure projects are delivered, it will spell an even better innings for the sector. For


101, 1st Floor, Parvati Estate Premises, Sun Mill Compound, Off Tulsi Pipe Road, Lower Parel ( West ), Mumbai - 400 013, Maharashtra, INDIA. Tel: +91 22 6716 6000 / 6716 6060 Fax: +91 22 6716 6001 Email: info@impactfloors.co.in Website: www.impactfloors.co.in


feature

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

“Once the Goods and Services Tax Bill is finally passed and key infrastructure projects are delivered, it will spell an even better innings for the sector. To this end, the passage of the pending GST Bill is of critical importance.” 66 CargoConnect - june 2016

achieving 10 per cent growth, India’s domestic economy needs to attract added investor interest, including that of overseas funds. To this end, the passage of the pending GST Bill is of critical importance. The bill aims to create a single tax regime by doing away with multiple central and state level taxes such as the Central Excise Duty, Value Added Tax (VAT), Octroi, and Luxury Tax, among others. Once implemented with a single taxation structure, GST will have positive effects on individual as well as industry taxation levels.” He continues, “On the individual front, it will make products and services cheaper, because the cascading effect of multiple taxes from the levels of manufacturers and wholesalers that is ultimately borne by endconsumers will be avoided. This move may incentivise more consumption in the market from consumers, injecting overall economic growth including in the retail and logistics sectors. From the point of view of the industrial and logistics real estate segment, a unified GST would allow industry players to surmount regulatory restrictions and focus on consolidation of industrial and warehousing space for maximum operational efficiencies. Under the current regime, wherein indirect taxes are levied by the Central as well as State Governments for the storage and transportation of goods, logistics and warehousing firms are forced to locate their facilities in regions to best accommodate multiple tax structures. Players often end up paying higher rentals because industrial/warehousing locations with lower rental rates also pose various regulatory hindrances. Once the bill is implemented on ground, such industry players are likely to move towards consolidating their facilities according to their specific business needs, instead of being driven by regulatory concerns.”

The Evolution of and with GST The recent Union Budget 2016, although had many positive provisions for the real estate sector in India, remained tight-lipped on the implementation of the GST Bill. The bill had been passed in Lok Sabha on May 6, 2015, but is still facing challenges to be passed in Rajya Sabha due to the concern of few states for losing out on revenue. Logistics players are keeping an eye on the roll-out of GST this year and at the same time are seeking clarity on different aspects of the bill. However, Vaiheeswaran feels, “The current form of three GSTs (CGST/ SGST/ IGST) is itself a dilution but also a reality given our federal

structure. The original intent has been compromised by the new additional levy of 1 per cent which may ultimately be dropped. An ideal GST should include stamp duty, registration, electricity as well as fuel.” Scaling up will become easier with GST as companies will be able optimise warehouses. This would translate into expansion of some of the existing warehouses. In the coming years, the smaller warehouses of 15,000 to 20,000 sq ft would be merged and larger ones of over 2 lakh sq feet would be set up. The amendments in the GST Bill are likely to help the logistics sector of India explore and evolve the alternative distribution models as well. Chawla discusses with the help of facts and figures, “The primary alternative distribution model most bigger companies are likely to adopt is direct distribution. This is the model Dell, Avon and many other successful companies use. It calls for the company to sell and deliver their products themselves, using own sales people and warehouses. Going direct can cut significant costs from the system because they don’t have to provide a profit for intermediaries such as wholesalers and retailers. The only major barrier hindering direct sales was presence of multiple taxation types from state-to-state; so, it was virtually difficult for bigger companies to adopt and register in all different taxes in all different states. But with GST in place, consumers are most likely to benefit from middlemen cost cuts and removal of cumbersome taxation structures. This would mean a big boost to logistics and warehousing, because a company manufacturing in any one Indian state can now have multiple own distribution models and warehouses across the country. At present, each of the 29 states in India taxes goods which move across their borders and at different rates, as of which, the goods is taxed multiple times. Also, there are long delays at the inter-state checkpoints as the authorities review and examine fright and put relevant taxes and other levies. These delays count to average five-to-seven hours in all checkpoints. As more than 65 per cent of the freights moves by road, it found very crucial to implement GST in India. As per World Bank estimates, delays caused by roadblocks , checkpoints and other stoppages could cut freight times by 20 to 30 per cent and logistics costs by 30 to 40 per cent. With proper GST implementation, this can boost India’s manufacturing sectors by almost three to four per cent of net sales.”


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Taxability of Transport & Logistics services

Outside India State A

International freight (Exemption or zero rating?) Terminal handling charges (THC) CGST + SGST Airline Delivery order charges

Shipping line

Port and terminals

THC and IHC (CGST + SGST) Composite transportation services (CGST + SGST)

Shipper

Freight forwarder

Manav Sachdeva Country Head, Everfast Freight Forwarders Pvt Ltd

Road freight (IGST) Reverse charge /abatement?

Rail freight (IGST) Abatement?

Goods transport agency

State B

Rail transport

Depot

“Once parameter of the trade becomes uniform for all locations, the movement of goods will definitely be better, cost-effective, and the quality will increase. But things are still on papers and therefore, it is too early to say what actual effect will be seen in the market.”

source: PwC

Conclusion Warehouses are an important part in the supply chain. A warehouse placed strategically not only improves the levels of customer service but also reduces the burden on other supply chain elements. Strategically placed warehouses closer to manufacturing locations or consumption markets are a need of the hour; more so, with GST knocking at the door. Successful implementation of GST would boost the demand for warehousing by 15-20 per cent over the next five years and the entire supply chain will need to be redesigned to reap the benefit of GST. This can be done in various ways--by designing a multi-tiered distribution network including specialisation in certain functions (storage, inventory management, etc.) and outsourcing certain functions (software services, packaging, labelling, etc.) or by partnering entirely with a 3PL logistics providers to ensure optimal utilisation of resources. Right now, India’s 29 states charge merchandise that move over their fringes at diverse rates. Therefore, cargo that moves the nation over is exhausted. Once the bill is implemented on ground, industry players are

likely to move towards consolidating their facilities according to their specific business needs, instead of being driven by regulatory concerns. GST is indeed a step in the right direction and is a silver lining for the warehousing and logistics sector as a whole. The supervisory reforms proposed in the GST presents a golden prospect to rationalise and re-engineer logistics networks in India and no wonder much has been deliberated about GST being a saviour. But, a paradigm shift in warehousing and distribution models means that the mindset also need to be aligned cohesively with changing times. Manav Sachdeva, Country Head, Everfast Freight Forwarders Pvt Ltd rightly concludes, “Once the parameter of the trade becomes uniform in India for all the locations, the movement of goods will definitely be better, cost-effective, and the quality will increase. But things are still on papers and therefore, it is too early to say what actual effect will be seen in the market and how it is actually going to boost the business. As far as my opinion is concerned, we have to wait for the right time, till things are in place and see how things are getting improved for the businesses.”

june 2016 - CargoConnect 67


focus

5/20

Outcry in

Indian Civil Aviation

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n 2015, India’s domestic traffic soared by more than 20 per cent, while international flights increased by over 7 per cent, mentions a KPMG study. Experts continue to reiterate that India will become the world’s third largest aviation market by 2020 (trailing only

68 CargoConnect - june 2016

behind US and China). Aviation has played a vital role in facilitating the growth of our country’s economy, and needless to say, the Indian Civil Aviation sector has been at the forefront of economic and regulatory transformation over the last decade. A slew of policy initiatives such as Open Skies Policy, promotion of FDI in civil aviation

and development of airport infrastructure have fuelled impressive growth of the sector. However, there are few issues that remain to be addressed yet—one such being the 5/20 rule. This rule entails that an Indian airline can fly to overseas destinations only if it has served within the country for five years and has a 20-aircraft fleet.


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Phee Teik Yeoh CEO, Vistara (a TATA SIA JV)

“We await the new Civil Aviation Policy which will fortify the Indian aviation industry’s global positioning and standing.”

Manoaj Kumar Jain MD, Sealair Freighters International Pvt Ltd

“Elimination of 5/20 rule will help Indian airports to make themselves a transit hub for countries like Bangladesh, Sri Lanka, Nepal, thus helping the cargo industry in growth.” 70 CargoConnect - june 2016

The draft policy rolled out by the Ministry of Civil Aviation in 2015, which rightly addressed most of the industry issues, surprisingly remained ambivalent on the 5/20 rule. The issue of 5/20 international flying norm has witnessed extensive debates in the passenger as well as cargo sector. At this point of time, the much anticipated Civil Aviation policy is assumed to be critical in the light of the government’s stance on the contentious 5/20 rule.Phee Teik Yeoh, CEO, Vistara (a TATA SIA JV) hopefully reflects, “We believe India needs to aspire to create a world-class and competitive airline industry that can hold competition with the best in the world. The incremental domestic and international traffic handled in the last ten years has seen multi-fold increase than in the previous 50 years, which clearly indicates that Indian aviation is yet to achieve its true potential. We await the new Civil Aviation Policy which will both fortify the Indian aviation industry’s global positioning and standing and also enable Indian carriers to fully utilise their bilateral agreements.”

War of Words The much talked-about issue of relaxing (or abolishing) the 5/20 norm, which had been passed by the then Union Cabinet in the year 2004, has now divided the Indian aviation industry into two orthodox camps—while incumbents like Jet Airways, IndiGo, SpiceJet and GoAir are fighting tooth-and-nail for the retention of 5/20, new entrants like Vistara and AirAsia India are rallying for its removal. Established carriers GoAir, SpiceJet, IndiGo and Jet Airways are voicing their collective opinions and dissent under the flag of Federation of Indian Airlines (FIA) and are in opposition to the abolition of the 5/20 norm. Demanding a ‘level playing field,’ FIA

authorities said in a statement, “The 5/20 rule cannot be thrown out arbitrarily. The rule has to be seen in conjunction with the Route Development Guidelines, which orders all nationally permitted airlines to have flights to unprofitable, remote sectors like the North-East of India.”A recent press release mentioned that FIA “sought Government’s intervention to incorporate some of their concerns while finalising the National Civil Aviation Policy being prepared by the civil aviation ministry” and also complained that “no other country in the world allows substantial ownership and effective control of its airlines to be taken over by foreign airlines.” On the other hand, Ratan Tata, Chairman, Tata Sons recently took a dig against Indian airlines lobbying to keep the 5/20 rule. Underlining that protectionism has no place in an open economy, Tata tweeted, “In the airline industry in India, it is sad to see the incumbent airlines lobbying for protection and preferential treatment for themselves against the new airlines which have been formed in full compliance with prevailing government policy and providing air transport to Indian citizens in line with the dream of ‘New India’ promoted by the new government under Narendra Modi’s leadership.” According to Yeoh, “Under an outdated and anti-competitive 5/20 rule, domestic carriers in India are precluded from flying overseas until they have been operating for five years and have 20 aircrafts. Apart from the fact that there are no global parallels to this archaic rule, it is discriminatory to Indian airlines as foreign airlines are not bound by the same rule to operate into India. The 5/20 rule has benefited only foreign operators, who have captured the international market taking Indian jobs and revenue with them. Currently, around 70 per cent of passengers travelling internationally to and from India are Indians. But, only 30 per cent of them travel on Indian carriers. Imagine the amount of loss to the Indian economy because of this ongoing trend. This has even resulted in poor utilisation of bilateral air traffic right by Indian operators at only 26 per cent vs. 40 per cent by international operators. Removal of the 5/20 rule is estimated to boost international traffic to 100 million(including 15million in-bound tourists) by FY2021 as


focus Annual (CY2014) Domestic and International Capacity Deployment of all Indian Carriers that Fly International Capacity in Billion ASK

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Dipen Lalsodagar GM, Global Aviation Services Pvt Ltd, Mumbai

“Indian aviation needs to expand, so, rules have to change. If a new player can bridge the gap of demand and supply, he should be given a chance to operate.”

compared to 43million in FY2014. This would result in additional capacity of aircrafts being inducted within India by all airlines including Vistara, in order to move this incoming traffic within the country.” The Indian aviation sector has grown tremendously in recent years and passenger traffic within and from India is showing an upward graph year-on-year. Manoaj Kumar Jain, Managing Director, Sealair Freighters International Pvt Ltd shares, “Aviation sector has rapidly grown in past few years, and unlike yesteryears, today we have increased capacities and more passengers flying by air. Elimination of this rule will make airlines more competitive, thus benefitting a large diaspora of consumers. This will also help in promoting tourism industry. India needs to be promoted as tourism hub and elimination will help in synergising the hotel and tourism sector which will stand to benefit.” Dipen Lalsodagar, General Manager, United Cargo, GSA: Global Aviation Services Pvt Ltd, Mumbai tells, “The 5/20 rule was introduced to cater emerging domestic market as we had only a handful of players to serve local market. Now, the domestic market is quite established, and

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lot of tier 2 and tier 3 cities are connected with each other. Even international passenger traffic is growing by leaps and bounds, and as Indian carriers are having dearth of capacity, the foreign carriers are at an advantage of carrying major passenger traffic.” Jain also clearly believes, “This rule was formed ages ago when there was only the national carrier Air India; the government was only experimenting the Open Sky Policy and thus had put in the restrictions then. Now, aviation industry has been another game changer for the economic reforms of India and thus it is high time this policy goes for a change and 5/20 is eliminated.”

Perspective Thoughts Jain believes that with the elimination of 5/20 rule can boost the total economy with exponential growth. “Also, this will help Indian airports to make themselves a transit hub for countries like Bangladesh, Sri Lanka, Nepal, etc. thus helping the cargo industry in growth.” He also adds that abolition of 5/20 will not give any unfair advantage to anyone as all existing airlines have been in service for more than 11-12 years now and have reached their pinnacle. It may cause some pain initially, but will make Indian carriers more efficient, quality conscious, passenger centric and global player.” In Yeoh’s opinion, “The 5/20 rule has outlived its time and has become an obstacle in the path of Indian aviation’s transformation. Removal of 5/20 rule will bring huge economic benefits to all–central and state governments, players in the industry, individual travellers to businesses. Its abolition will provide enhanced and seamless connectivity to business and leisure travellers traveling in and out of India, thus boosting both trade and tourism.” He goes on, “Relaxation in international flying norms will not only benefit new airlines like us but all Indian airlines. India has the large domestic demand to support direct operations

Indigo

2 SpiceJet

source: www.theflyingengineer.com

and has a prime geographical position on cross roads of North Asia-Africa /SAARC/Middle East and SWP/East Asia-Europe/East America to rightly become a global hub. It is important to allow Indian carriers to take traffic to and from hubs within India in order to strengthen both Indian aviation and Indian Airlines. This will create long-term and sustainable growth.” On an optimistic note, Lalsaodagar says, “Indian aviation needs to expand considerably, so, rules have to change. If any new player can bridge the gap of demand and supply, he should be given a chance to operate without any preconditions. However, as the operating cost is very high in India, government should ensure that every new applicant is with a sound financial background and long-term prospects.” On a whole, it is quite clear that a major chunk of the industry stakeholders feel the rule is discriminatory to Indian airlines, as foreign airlines which do not meet these criteria are allowed to operate in Indian skies whereas Indian airlines are not enjoying reciprocal rights. Dilution of this rule will pave the way for domestic carriers to deploy capacity on international routes, bring in cutthroat competition, and will surely provide some incentives for new players to enter the market due to advent of opportunity for enhancing revenues and yields. MoCA is mulling various options at present. Few sources said the revised Civil Aviation Policy, among other things, may do away with the existing conservative rule, while others believe that the mandatory fiveyear experience may be waived but the new rule may have a rider of minimum 20 per cent domestic seats and/or 20 fleets, whichever is higher. What happens remains to be seen, but one thing is for sure, the growth trajectory of sector will be outlined by the National Civil Aviation Policy 2016. And the surer thing, CARGOCONNECT will keep its readers posted on the latest updates on such timely issues!

june 2016 - CargoConnect 71


trail blazers

Women Don

the Logistician’s Cap Labelled as ‘Male Dominant,’ Logistics Industry is certainly no more a man dominated field. In fact, from the last few years, there has been an incredible increase in the number of women in this sector. Women today are essentially paving their way in doing tasks essentially carried out by men, in spite of hurdles that exist in their immediate socio-cultural environment. Today, women at top positions are seen in every sector - be it aviation, shipping, warehousing, logistics or railways. However, the logistics industry still needs a more diverse workforce as it suffers from poor perceptions about career opportunities. In conversation with Ritika Arora Bhola, business women share their experience of working in the industry 72 CargoConnect - june 2016



trail blazers

P Alli Rani Director, Finance, CONCOR Breaking Barriers: Women in Logistics The warehousing scenario in India is undergoing huge change with the advent of e-commerce. The supply chain requirements in warehousing are of high standard and also realise a lot of ICT (Information and Communication Technology). There is also a lot of mechanisation in the movement of goods within a warehouse. All this has made working in warehousing a more skilled job than the manual job. That is why you see more women in warehousing today.

Changing Scenario With the advent and proliferation of e-commerce in India, warehousing is going to become a preferred career option for women in India. I don’t think there are enough good educational institutions in India that offer courses in logistics and warehousing. More institutions have to be set up since logistics and warehousing is fast expanding as an important employment sector with changing requirements every day. Big players have to play a big role by creating adequate infrastructure to meet the demand in terms of quality and quantity. Upgradation in skills and equipment is the need of hour and basically supply has to be tailored to fit demand.

Vimala Britto Director, Indev Group Women in Logistics Thirty years ago, we started in a very humble way with minimum expense, less staff and capital. My husband S Xavier Britto, Chairman, Indev Group commenced the business and he wanted my support and that’s how I stepped in. Initially, we used to rent the cars for customs officers for their comfort as they used to come at our office for inspection. So, I realised we were spending a lot on car rentals; therefore, in order to cut this expense I started Vimala Travels and has been running it successfully since then. Earlier, women were not allowed to travel a lot and work till late night. And working in logistics was considered as a difficult job. But with my husband’s support, I started my travel company and handled all kinds of obligations. Now the scenario has changed and this sector has become more professional.

Changing Scenario Earlier anyone could join logistics industry without any education and experience but now it demands education. It’s a global world. One needs to have basic education, professional degree, background and experience (like doctors need MBBS and engineers need B.Tech). We run colleges back in Chennai which offer courses in logistics with comprehensive syllabus. I am promoting students from Chennai and deputing them to different parts of the country. We have plans to take AICTE approval for logistics program.

74 CargoConnect - june 2016


trail blazers

Sunila Yadav MD, Anil Mantra Logistix Pvt Ltd Women in Logistics Till a few years back, warehousing was perceived as a blue collar job. The image that sprang to mind was of a dilapidated four-walled structure with no major technical requirement. Concepts like inventory management or technology solutions were unheard of. As the Indian transportation and logistics market grew, technology came at the forefront resulting into improving warehousing. It is not difficult to analyse the reasons for rare participation of women in warehousing in light of the technological backwardness of the industry till a few years back. I see this trend as an ‘Evolution’ of women participation in a field traditionally dominated by males. Technology has not only led to manufacturing/service industry growth, it has simultaneously assimilated women in hitherto conservative fields like warehousing. Further, the freedom that women are getting from their respective families and immediate social circle has given the muchrequired push to this scenario and hence, ladies are successfully making their place in the warehouse and logistic sectors.

Changing Scenario

Indian society was and is still largely a conservative society as far as daughters are concerned. Women are considered to be the home managers in India and seeing them work in a sector like warehousing is still not easily understood and accepted. I think education will play a big role in making this a viable career option for women, because warehousing in still regarded as a blue collar job. I am confident that the misunderstanding about the nature of warehousing industry is equally spread in the minds of women as well. We need to educate them on the fact that this is one of the fields of logistics itself and is an organised industry which needs planning, risk management, funding and coordination like any other logistics division. Any change in breaking a barrier created out of a defined mindset requires education, parental guidance and proper training which can surely turn this into a revolution.

Reshma Zaheer COO, TT Aviation Women in Logistics There are a large number of women joining the logistics sector, a refreshing change from when I started in the early 1990s. I remember walking into industry events, and being the only woman there. Now we see a large number of women at the junior and middle management level. But it is disappointing that very few make it to leadership positions in their organisations. I also find it frustrating that women are mostly chosen in the softer, support functions of finance, HR, admin etc.

Changing Scenario The socio-cultural mindset that the logistics industry is for men is now changing. Earlier very few parents would support a girls decision to join cargo or warehousing or trucking industry. Now thanks to growing awareness and education, logistics and supply chain management is a viable career option for many women. What we now need is strong affirmative action from organizations & government aimed at ensuring gender parity in the industry. For all the women in logistics, I would urge them to invest in themselves by constantly upgrading their skill set whether it be learning the next version of Excel or then attending leadership training. Basically, as women we must leave no stone un-turned to demonstrate our competency for the next level in our organisation.

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Interview

“India-UAE among top trading nations in the world” Emirates SkyCargo, which started its operations in India in 1985, serves nine destinations at present. The international carrier believes in providing cargo solutions that meet the evolving needs of customers. Keki Patel, Cargo Manager, India & Nepal - Emirates SkyCargo, in an exclusive interview with Ritika Arora Bhola talks extensively about cargo operations in India, freighter services, cargo capacity and destinations covered. The veteran also talks about plans to introduce more freighters in the country

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Please tell us about the genesis of your cargo operations in India. How has the journey been so far? Emirates SkyCargo started operations in India in 1985 when the airline began offering flights to Delhi and Mumbai on October 25. Since then, SkyCargo has been uplifting cargo out of India for over 30 years. Over the years, we’ve added 10 points in India, servicing markets both for exports and imports. They include: Chennai in 2001-02, Hyderabad and Cochin in 200405, Trivandrum in 2005-06, Kolkata and Bangalore in 2006-07, Ahmadabad in 2007-08, and Calicut in 2008. At the moment, we are operating out of nine stations in India as the Calicut runway is temporarily suspended and under repair. As we added new stations, there was simultaneously an increase in the frequency of flights and upgrades from smaller to larger passenger aircraft. Currently, Emirates SkyCargo operates a total of 176 wide-bodied flights per week into India. The


journey has been very interesting so far. Our India operations have grown in tandem with the Emirates Group and we have been able to cater to both the inbound demand for importers and the outbound capacity for exporters in India. In terms of market share, we are one of the leading carriers with a strong market share out of India.

Please elaborate on Emirates’ freighter services, cargo capacity, frequency and destinations covered At present, Emirates SkyCargo has dedicated freighter flights serving Mumbai and Ahmadabad. Three freighters operate out of Mumbai weekly. Two of these come from Shanghai to Mumbai and then onto Dubai. They offer 50 tons of capacity on each aircraft for the Mumbai market. The third freighter flies on a circular route of DubaiMumbai-Ahmadabad-Dubai and also offers a capacity of 50 tons each to both Mumbai and Ahmadabad customers. In addition, in April, we introduced a weekly freighter service directly between Ahmadabad and

Emirates SkyCargo India offers the vast Emirates network, covering more than 150 destinations and key cities around the world. SkyCargo carries, include perishables, such as fruit and vegetables, meat, seafood, poultry, pharmaceuticals, ready-made garments, fabrics, machinery spares, all types of engineering spares, gems and jewellery as well as courier items.

With the new airlines entering the fray, you see foresee stiff competition for cargo space in the country? The industry dynamics are such that new players are bound to enter the fray. Since we are one of the leading players in this segment, we have our plans in place to face rising competition. The key is to continue being an effective partner to our customers and providing them with cargo solutions that meet their evolving needs.

Tell us more about Emirates’ cargo services in the Indian market. How crucial and challenging is the market for your cargo operations?

Dubai and offer 85 tonnes of capacity on an MD11-F aircraft. Emirates SkyCargo currently connects customers to over 150 destinations in 80 countries with its combined freighter and belly hold capacity on passenger aircraft.

Please elaborate on the UAE-India cargo relations. What are the types of cargo that is imported and exported to and from UAE and India? India and the UAE are among the top trading nations in the world and they share strong trade relations with each other. Key exports from India to the UAE, which Emirates

In terms of cargo services, Emirates SkyCargo India offers the vast Emirates network, covering more than 150 destinations and key cities around the world. We offer access to 16 gateways in the Middle East, 21 in the Far East, 42 in Europe, 27 in Africa, 14 in North America, six in South America, five in Greater China and 19 in South Asia. In addition, the service we offer is one that our customers can depend on. It’s personal, professional and proactive. We operate a very modern fleet of freighter aircraft. We have over 15 freighters – 13 Boeing 777-Fs and two B747-400ERFs. The 777 freighters are the most efficient freighters available in the market. Each freighter can take up to 105 tonnes of capacity in terms of cargo payload. We also operate from two very efficient airport hubs in Dubai; one is DWC, which services all our freighter flights and the Dubai International

Airport, where all our passenger flights land at. Both these airports are phenomenally efficient and unmatched in terms of ground handling. Linking the two airport hubs is our fleet of trucks, which transfers cargo seamlessly 24/7 between the two airports. In terms of products, we offer a whole range of solutions for moving all kinds of cargo from India. These include cool chain solutions for temperature-sensitive items, like perishables and pharmaceuticals, big size items, like equipment and machinery which our freighters cater to. We are also able to provide charter freighter services for any special requirement of large tonnage movements.

Does Emirates have any plans to introduce more freighters in the country? We have the capability to increase freighter services to India as and when the demand necessitates this. To have more scheduled freighter operations, we need more consistent demand from the market. In the case of nonscheduled freighter operations, customers can opt for charter services for a specified period.

What are the projects in pipeline? Innovation is a key driving force at Emirates SkyCargo. We are working on a number of product solutions to cater to our customers. Most recently, we launched a cost-effective and environmentally-friendly covering to protect temperature-sensitive cargo, such as pharmaceutical products. It’s called White Cover Advanced and has been wellreceived by customers. At the same time, we continue to engage the end-customer and partner agents in India to understand their changing business requirements so that our developmental efforts are aligned correctly.

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Interview

“I foresee important growth in Indian air cargo market” Formed in the year 2000 and headquartered in Amsterdam, SkyTeam Cargo is currently the largest cargo alliance with 12 members. The global alliance operates out of 13 origin hubs and has network span in more than 175 countries, with a fleet of more than 3,100 aircrafts. Eric Hartmann, Vice President, Cargo Alliance, SkyTeam Cargo in an exclusive interview with Ritika Arora Bhola talks extensively about SkyTeam Cargo’s operations worldwide. The air cargo expert not only predicts significant growth in the Indian air cargo market but also expresses interest to be a part of this growth. Excerpts from an interview with him:

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SkyTeam Cargo is currently the largest cargo alliance which has 12 members. Please elaborate on the genesis of your cargo operations worldwide? As you mentioned, we are currently the largest air cargo alliance in the world moving more than 24 per cent of air cargo transported worldwide (source: IATA). Our members are the best cargo airlines in the world and we have a very strong position in Asia which is a very important region for our industry. Our alliance was formed in the year 2000 and has grown regularly to our

We operate 40 joint warehouse destinations in which three or more members share a single site enabling easy drop off and pickups from multiple origins and destinations on the member carriers. current size of 12 members. We have our headquarters in Amsterdam and operate out of 13 origin hubs. Our network spans more than 175 countries, with a fleet of more than 3,100 aircrafts operating 14,500 daily flights. As our constant focus is on brining value to our customers, we operate with common branded international products to assure quality of our service. At the same time, we operate 40 joint warehouse destinations in which three or more members share a single site, enabling easy drop off and pick up from multiple origins and destinations on the member carriers.


We are not actively looking forward to add new members but if the fit is right, we would welcome additional members.

How do you foresee Indian air cargo market? Please share your views as a global leader. Do you see any good opportunity for international freighters to come and invest?

What is your USP? Please tell wide bodies strong. We also use the underus about your products, servic- wing capacity of over three thousand aircraft. es and benefits that you offer to SkyTeam Cargo jointly shares more your members. Our unique selling proposition is that we than 40 terminals all over the world. are 12 airlines specialists working in our core How do you ensure efficient cargo markets serving the world with our four pillar handling, storage and cargo moveproducts. In our product portfolio, we have ment at the terminals? vast options for your transport needs. Our express product equation is capable of connecting our complete network, and at this time, we are developing IT solutions that will enhance this product. We have our Variation product solutions for cargo such as dangerous goods, perishables, oversized objects or even live animals. This product assures that specific cargo will be treated with the special handling care it requires. With the intention of working together with our customers and their customers, we have a product named ‘Cohesion’ that helps to bring a customisable air cargo solution between the shipper, forwarding agent and SkyTeam Cargo. Cohesion provides a personalised solution with handling guidelines tailored specifically to your needs. Rounding out the four products is our ‘Dimension,’ i.e. our proven, reliable general cargo service. Almost all types of air cargo that do not require special handing can use this service tendered to us in bulk or already built unit load devices.

Please elaborate on the types of cargo transported to over 100 destinations worldwide by SkyTeam Cargo. Does that include priority cargo, odd-dimensional cargo and dense cargo also? We transport all types of cargos from salmon that flies from Chile to China to pharmaceuticals that fly from India to Argentina. The freighter fleet of SkyTeam Cargo is over 80

It starts with our common quality product line wherein we have Standard Operating Procedures in place. We work with warehouse suppliers that are dedicated to high quality standards. By working together under one roof, our customers are able to drop off and pick up from various airlines at one time not having to position and wait to be attended at different warehouses. By sharing the same warehouse, we are able to carry out seamless connections from one airline to another.

We transport all types of cargos from salmon that flies from Chile to China to pharmaceuticals that fly from India to Argentina. The freighter fleet of SkyTeam Cargo is over 80 widebodies strong plus we use the underwing capacity of over three thousand aircraft. Any plans to add more members? At this time, we are focusing on bringing together the world’s largest air cargo network.

I foresee important growth in the Indian air cargo market, not just due to the pure size of it but because of the push of the Indian private and government sectors. ‘Make in India’ along with a strong push from the private sector will boost Indian air cargo movements in the short term. Indian products are quality products. SkyTeam Cargo members expect to be part of this growth by providing air cargo services to the market and growing together with the demand. When demand exists, capacity will follow and we are in a position to support growth out of India.

Please throw light on the destinations covered in India and cargo movement to and from India by the international airlines which comes under SkyTeam Cargo? Once you are in a SkyTeam Cargos members network you can reach the world. Aeroflot Cargo has a strong presence in India, along with AFKLM Cargo. Flying to Asia, you have China Southern Cargo, China Airlines Cargo and Korean Cargo operating.

Technology is going to bring a revolution in the air cargo industry. Do you agree with the statement? What are the green initiatives taken by the SkyTeam for efficient and smoother cargo operations? I completely agree with that statement. Technology is going to play a very important role in the future of our business. Not just with e-AWB, e-freight or e-commerce, but also how our industry moves forward in keeping up with our customers. All of our members are committed to the environment and towards reducing air cargo’s carbon footprint.

What are the projects in pipeline? We will continue to look for ways to serve our customers better and offer seamless connections through our vast cargo networks.

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Interview

“Supply chain execution

requires right synchronisation of supply and demand” Allcargo Logistics, a part of the Avvashya Group, boasts of a diversified presence across different logistics verticals. Allcargo’s e-commerce logistics solutions come with an edge of speed, accuracy and scalability; whereas, its contract logistics solutions are user-friendly and innovative. Balaji V, COO, Contract and E-Commerce Logistics, Allcargo Logistics Ltd in an interview with Joydeep Banik discusses their strengths, significant segments which they cater to and the changing dynamics of the business with the proliferation of e-commerce in India

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You had a wide range of experience in strategic planning, sales and channel management before joining Allcargo in 2014. How has the journey been so far? Logistics has been my area of specialisation, with 22 plus years of experience in contract logistics (3PL) business. My exposure encompasses technology-enabled solution development, implementation, strategic engagement and customer engagement alongside transformation of performance measures in strategic and tactical KPIs for diverse industries like consumer durable, chemicals, retail and e-commerce. I had established greenfield start-ups for various logistics companies. My objective/vision with Allcargo is to make this organisation a market leader in the area of chemical logistics, and make it a leading player to provide end-to-end supply chain services for e-commerce and auto aftermarket.

How is Allcargo successfully implementing features like automation, WMS, Put-to-Light and Pick-to-Light operating models and advanced stock management systems to meet customer’s demands in the e-commerce sector? Allcargo works with the best-in-class WMS & TMS applications. This application enables us to provide customers with complete visibility of stocks at any given point of time. Apart from that, the application is also enabled with automated messaging services. The application can also interface with any ERP. We have a very strong IT team which facilitates effective solutions to our valued customers. We continuously develop newer technologies which are implemented at our warehousing sites. Considering the high seasonality in e-commerce sector, we are currently exploring technology options which will reduce dependency in manpower, shorter induction time on process, increasing pick efficiency and accuracy.


Tell us about the nature of your services and value-added services. We offer our customers end-to-end supply chain services and we call it Integrated Logistics Services (ILS). This product offers our customers a complete range of services like: PO management, pickup coordination with customers’ suppliers, pick and consolidation at the country of origin, international freight forwarding (FCL/LCL), CFS (Container Freight Station) services at port of arrival, customs clearance, and transportation, warehousing and feeding to line. For Auto Aftermarket, we provide import services, freight forwarding, CFS. Pre-production (Supply: Import Services, Freight Forwarding, CFS, Customs House Agent, Primary Transportation & Milk Run operations) We also manage raw material warehousing along with WMS systems and vendor managed inventory management. Services include in-plant logistics, line feeding and QC. Post Production line packing and valueadded services. Aftermarket spare parts logistics centre– starting from designing, process mapping, roll-out and implementation.

Retail and Fashion Logistics We have a unique understanding of the needs of fashion retailers, marketplace model, mail order catalogues and e-com businesses. We also appreciate the difficulties associated with moving and storing fashion apparel, shoes, fashion accessories and clothing, and have invested in the people, skills, technology and infrastructure to meet these challenges. Just some of the ways we’ve adapted to meet the demands of this sector include the introduction of cost-efficient semi-automated warehousing, use of WMS application, introduction of Put-to-light and Pick-toLight operating models supported for conveyors and sorters, advanced stock management systems etc which allow the seamless coordination of retailers, retail outlets and e-com platform providers. We’ve the ability to scale up and provide end-to-end logistics solutions to many high street fashion brands, other small e-com platforms and marketplace operators; thanks to our highlytrained and dedicated team who ensure your garments arrive in full and on time. We can even provide a shared-user fine distribution network, which offers company coverage, as and when you need it. Our specialist garment fashion logistics services include:

• Fully and semi-automated warehouse solutions • Dedicated and shared user warehouse and transport solutions • E-fulfilment • Product pre-retailing and processing • Milk run pick ups • Cross Dock management • Return Management – RTV , RTI & RTO services • Quality Check at Inbound , Outbound & Returns • Vendor wise and destination wise sorting

Value-added services include: • Attachment of security tags • Labelling and relabelling • Placing on hangers • Packing

Allcargo’s Supply Chain Management systems are capable of constantly evolving to adapt and align business goals towards leaner thinking. Please elaborate. We are experts in auto engineering, ecommerce/fashion retail. Both sectors are different from each other and poised for huge growth. As partners in these sectors, we have full capabilities in terms of technology and manpower to adapt and align to their business goals. We have setup state-of-the-art facilities to cater to the emerging markets and also have capabilities to support endto-end supply chain needs of all the sectors. Allcargo works with best of supply chain IT applications and is constantly exploring and adapting newer trends in market to improve efficiency & service levels.

Which are the key segments you cater to while doing contract logistics? How do you ensure seamless visi• Auto Aftermarket bility in an end-to-end supply chain? • E-Commerce & Retail • Chemical & Pharma

Speed, accuracy and scalability are the key pillars to retail e-commerce logistics. Please share your views on this aspect. India’s e-commerce market is likely to touch $38 billion mark in 2016; a massive jump over the $23 billion revenues clocked by the industry in 2015.M-commerce will contribute to 70 per cent of their total revenue. Mumbai ranks first in online shopping, followed by Delhi, Ahmadabad, Bangalore and Kolkata. With increasing penetration of internet and mobile commerce, this is expected to penetrate into tier 2 and tier 3 markets. This growing demand will put significant pressure on the back-end to ensure that right product is delivered at the shortest time with lowest possible cost. This will mean significant investments in technology, quality of people, delivery network to manage small infrastructure (good quality warehouses) and more importantly, scale up and scale down models. Logistics companies need to create operating models and infrastructure which can scale up during seasons and scale down during non seasons. Logistics companies need to work on compatible complementing industries which will enable them leverage, thereby providing economies of scale to the user.

Supply chain execution and responsiveness require the right synchronisation of supply and demand, as well as the planning for the movement of goods, information and funds across increasing number of logistics and trading partners located in wide geographic areas. We, as leaders in the market, provide seamless visibility defined as the awareness of and control over specific information related to product orders and physical shipments, including transport and logistics activities, and the statuses of events and milestones that occurs prior to and in-transit. Allcargo with all its technology advancement has helped customer to automate work process, collaborate with suppliers and manage data within four walls (material, manufacturing and shipping) and at supplier sites across globe. We operate on best of WMS, TMS and tracking applications.

Allcargo has a huge network of warehouses at key cargo generating regions in India. Are you planning to expand to tier 2 and tier 3 cities? We are expanding our capabilities in this area by creating logistics parks such as the recently announced launch of a logistics park in Jhajjar district of Haryana. Our extensive land banks in strategic locations and port locations across the country will enable us grow.

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Interview

“Govt should speed up actions, policies to improve infrastructure� Indian air freight market is expected to witness an upward trend owing to the introduction of additional freighters,� believes G Balaraju, Managing Director, Sindhu Cargo Services Private Limited. He also avows that cargo demand in India is expected to boost the air freight market to 2.8 million tons by 2018. In an interview with Ritika Arora Bhola, the veteran discusses megatrends and opportunities in the air freight market scenario, challenges and solutions. Excerpts from an interview:

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Please throw light on the latest megatrends and opportunities in the logistics sector. How do you think it will benefit the industry in the coming years? Large setups being established by e-commerce companies and positive development towards implementation of GST have thrown in huge opportunities for logistics sector. Challenges to meet e-commerce service levels would push logistics players to achieve greater efficiency in operations and be cost competitive. GST would simplify compliance requirements and reduce dwell time in deliveries, besides supporting cost efficiency.

Large setup being established by e-commerce companies and positive development towards implementation of GST has thrown in huge opportunities for logistic sector. GST will simplify compliance requirements and reduce dwell time.

Logistics industry is growing at a fast pace. What are the main factors that Please elaborate on the challenges that led to this constant growth? the Indian logistics industry is facing at Opportunity provided by Indian economy, stable present. government and its trade-friendly initiatives have Most common issue is infrastructure. Government has to speed up actions and policies to achieve all round development of infrastructure. Enhancement of efficiency at all airports and ports need to be focused on besides developing road infrastructure.

contributed a lot. Global players are bullish Indian economy which has created an atmosphere for large foreign investment in major sectors.

Coastal shipping is a great move but cost benefits have to be evolved with proper analysis and government support which is required to induce trade. Recent initiatives of government on Single Window Clearance are positive steps taken towards countering the current challenges at port and airports.

ment, is expected to witness an upward trend owing to introduction of additional freighters. As understood, cargo demand in India is expected to boost the air freight market to 2.8 million tons by 2018 at its present compound annual rate of growth of 5.5 per cent.

What is the current air freight market scenario? Where do you see the graph Please suggest some solutions to deal moving in the coming years? with these problems. Air freight market, though sluggish at the mo-


Interview

“AFS is a solution for un-interrupted flow of cargo” Setting up of private Air Freight Station (AFS) is a way out to resolve problems like congestion, pilferage and handling. PC Selvaraj, Sr Vice President, Indev Logistics Pvt Ltd in an exclusive interview with Roselin Kiro avows about the importance of establishing a private AFS in Chennai to ensure a smooth flow of cargo in the Air Cargo Complex (ACC). Excerpts:

What is the current scenario of Air Freight Stations in India? The AFS in India is likely to boom in the air cargo ground handling support services for all stakeholders. Congestion, pilferage and handling concerns are very high in the current scenario of Chennai airports, thereby forcing private operators like Indev Logistics to set up private AFS to ease out the present conditions in the ACC of Chennai. Such a move would also provide more cargo traffic diversions to Chennai, thereby increasing the revenue of Chennai Air Customs House. On the contrary, in this scenario, if such a move was not implemented, then the air cargo traffic would get diverted to Bengaluru and Hyderabad terminals, resulting in a dip in volumes. Cargo handling being the key function in the supply chain management activity has now been made simpler and faster by the introduction of the private Air Freight Station (AFS).

advantages to the growth of economy and trade, which could eventually result in setting up of more AFS in India for easy and un-interrupted flow of cargo meeting the economies of scale of operations, like a) Cost Advantage b) Operational Advantage c) Economic Advantage

Why do you think that India still lacks in establishing more AFS in spite of the government giving a green signal for the establishment of AFS? Although the government has given the green signal for the establishment of AFS, we feel that the norms and clearances for the green signal could be simplified, which are a hitch for new projects that include greater investments. Added to this, the Indian government could have a much more focussed vision and strategy to support the economic trade imbalances by giving the necessary permissions for new concepts, which could eventually boost up the Indian economy through trade agreements.

Do you think that the establishment of more AFS in India can help in the easy flow of cargo from one corner to anWhat are the prerequisites for setting other? Yes, we believe that India being a developing up of AFS in a particular area? country, efficient logistics infrastructure can reduce transportation costs, which in turn can directly contribute to the competitiveness of the country’s economic growth. Indev as a global LSP has been pioneering in setting-up new infrastructural base and concepts acting as an economic catalyst, eventually opening up new market opportunities and moving products and services with speed and efficiency. Our set-up of AFS aims to focus on the three key

The pre-requisites for setting up of AFS in a particular area are as follows: 1. Space requirements 2. Workload requirements 3. Customs and legal regulatory requirements 4. Regulatory environment governing AFS 5. Procedure for approval of AFS and its implementation 6. Application form for permission to set-up AFS

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Interview

“From enquiry upto tracking, shipping is automated” Serving as a marketplace, Vamaship, world’s first integrated online logistics platform, facilitates shipments to over 19,500 pin codes in India and 200 countries internationally. Bhavik Chinai, CEO, Vamaship in an interview with Sana Husain defines the status of its business, seemingly spreading out its wings and discusses what the government policies hold for them

How far have you come in organising the shipping processes with the help of technology? At Vamaship, we are integrating and automating the entire shipping process through air, ocean and surface, starting from the enquiry upto execution and tracking. For decades, only phone calls and e-mails have been used by all shippers to communicate to freight forwarders; today, all of that is automated including COD, reconciliation and payment through only one shipping platform. So, instead of going to 10 different forwarders, beseeching them for prices, and then negotiating offline, the technology automates quotes and negotiation. We have been able to automate processes post shipping through deep integration with several courier partners, freight forwarders and trucking companies. For shippers, we have been able to save thousands of hours which otherwise they would have spent coordinating. Till date, we have more than 500 steam businesses, which had started off with two, six months ago. The businesses range from an e-commerce start-up which has 10 deliveries a day to companies as large as Ashapura that has more than 1500 containers a month. But, of course, this is only the beginning and our clients keep sharing feedback about improving the product which we’ll continuously work on.

Have you faced any trouble while catering to bauxite mining firm Ashapura Minechem Ltd? In terms of catering to the mining segment, the challenges we faced were about initially trying to make the team understand the importance of automating, and why a platform like Vamaship would be better in comparison to emails and phone calls. In the mining industry, we’ve experienced a little resistance to change, due to the shift in processes which everyone’s comfortable with. Also, the government policies have restricted mining for a few products, which has affected all logistics stakeholders.

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For Vamaship as a start-up, the impact has been minor.

The shipping ministry has recently finalised a transhipment policy, that’ll define a transhipment port as one that handles more than 50 per cent of such cargo. What’ll be the pros and cons? There are many pros and it’s an excellent policy. Today, India primarily uses Dubai for transhipments for a fairly larger percentage of India’s total imports. But, transhipment has its own additional storage and shipping costs, which will be avoided once we have a liberal transhipment port in India. The government supporting this initiative will help importers immensely in terms of saving time and cost, directly.

Considering the scale of consumer demands in India, should the government focus more on inland infrastructure and promoting coastal shipping? This year, the government has focused on improving inland infrastructure and increasing coastal shipping. The budget of 2016-17 focused on improving and building roads and highways, and supporting with duty payment extension to large importers, helping with cash flow. From our perspective, we believe both infrastructure and coastal shipping go hand-in-hand. Coastal shipping is an immense opportunity for India in the long run and inland infrastructure helps every industry, not only transportation.

What does the relaxation of cabotage policy by the Shipping Ministry mean to Vamaship and LSPs? As we primarily facilitate shipping through air, there’s no direct impact of this relaxation immediately as of today.


guest column

“Advantage of new generation employees is their friendliness with technology� By Manav Sachdeva

It is very evident in the industry that young employees are given the opportunity to handle the high responsibility positions in

The shipping world today is full of examples of young employees/ entrepreneurs who have accomplished critical milestones in this field. With the changing times, companies should focus on the process of mapping and nurturing young talent. If we talk about freight forwarding sector new minds work out the best possible methods and process for moving large volumes of freight from one point to another, also keeping in mind that the cargo reaches the user in the least possible time & at the most competitive price. Once I was discussing with one of the veterans of this trade, about the transformation the trade has seen in the past couple of decades. The industry has moved to new levels of technology and the global business has increased by many folds. With the increased volumes, one has to keep in mind the service levels expected by the clients; we as freight forwarders’ do not have any scope of negligence which might affect the clients business. The sense of ownership of all the jobs undertaken by the young and dynamic staff is the key to success of the organisation. In addition to the businesses being handled in the freehand market, the nomination business has also increased for the Indian forwarders. The communication skills required to handle the overseas partners is also a key activity to sustain the business, thus the need of individuals having good communication skills along with the subject knowledge definitely plays a vital role. It has been observed that many candidates from reputed B- schools have been fascinated to join the shipping industry. Not only this has given the organisations an advantage to handle their existing business in a better way but also the individuals have contributed with fresh ideas which directly contribute to the vision and mission of the organisation. Young talents have the capability to think radically and are innovative in approach. Young employees always have new ideas and have high risk taking attitude. If guided correctly, these individuals can bring tremendous value to the organisation and the industry. As far as career progress is concerned, career progression is dependent upon individual performance, work experience and professional qualifications. It is very evident in the industry that young employees are given the opportunity to handle the high responsibility positions in the company. The advantage of the new generation employees is their friendliness with technology, open-minded approach, positive attitude and last but not the least the fire in the belly to reach the top at the earliest is what keeps the individual up and running.

the company. (The writer is the Country Head, Everfast Freight Forwarders Pvt Ltd)

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sUPPLY CHANGE

Logistics for ‘Ting Se Tong, Ding Se Dong’ ShopClues.com is an online marketplace, founded in California’s Silicon Valley in 2011. ShopClues promises ‘No Anxiety Shipping’ for all the products ordered by customers and has collaborated with top courier and logistics partners to assure deliveries and returns –’on time, every time.’ Vishal Sharma, VP-Operations, ShopClues in a one-on-one with Joydeep Banik stresses on the technology masterstrokes leveraged by them for a seamless flow of the supply chain then, we help them with the packaging. Finally, it gets shipped through the LSP.

Significance of Logistics For us, in the marketplace, we have around 4.5 lakh sellers spread across the length and breadth of the country and also millions of customers on the other side. The connect between the two is really important. For the customer, the moment of truth is getting the order on time. We, being the service provider in between, the customers come to us for buying the product. That can only get fulfilled if there are logistics companies actively functioning in the market. 29, 800 pincodes is a large number and serving that is not easy. Hence, logistics plays a critical role there. If a seller gets an order, the logistics provider picks up the product and sends it to the customer who can be anywhere. So, we cannot survive if logistics players are not there in the market.

Warehousing vs. E-Fulfilment Centres At ShopClues, there is no warehousing that happens. There are lakhs merchants on one side; we enable them to get products. We give them services like payment services, fulfilment services, marketing services. We follow a non-innovation kind of model. Having said that, we have Just-in-Time fulfilment centres which is not based on warehousing model where the product does not stand there beyond four to five hours. These are consolidation centres across geographies which are helping markets. Imagine a scenario where a merchant sells thousands of products in a day; he needs help on packaging those products as he doesn’t have the infrastructure or manpower. He only understands the product and the pricing. We, as a marketplace, get the product to our fulfilment centres, post the order coming in, and

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Technology Integration In the entire process, from the time a customer orders to the time the order gets fulfilled, there has to be a seamless flow of technology. As soon as the customer places an order, depending on where the seller is and what kind of product he is selling (in terms of size/volume, etc.), there is an algo-based process which we have in place which decides on which 3PL should pick and ship it to the customer. There are lots of considerations around serviceability. For example, if you are ordering from Coimbatore and the merchant is based out of Kolkata, depending upon the product delivery mode, the specific service system in the background checks the serviceability first. Then, it looks at the shipment cost and finally the SLA s in the recent past. Taking all this into consideration, consequently a courier partner is chosen who is allocated to pick up the order from the seller to be shipped to the customer. Secondly, there has to be an integration of technology between us as a service provider, the seller and the logistics player. We, at all point of time, keep the customer informed in the entire life cycle of the shipment of the order. From that perspective, integration with the logistics firms is crucial. So, there are technologies which have been built around this aspect to talk to logistics players all the time. Further downstream, for e-com busi-

nesses, returns play a critical part. For the customer who files a return, there has to be a seamless experience. If he is not happy with the product, the product has to be picked up from him. Accordingly, a logistics player is involved, and therein, a refund has to go back to the customer. All of this reverse logistics happens on the basis of the integration that we do with our partners. So, that’s where the third role play of technology comes in. Coming to the fourth part, we have built apps which help our logistics partners to give real-time info on the time of pickup of the products from the sellers. So, these are the different scenarios where technology comes to play and all these technologies are built in-house by us. We are also trying to essentially connect the offline merchant to the online environment by building digital channels on cloud platform which is in development phase.

Significance of LSPs We do not have a captive logistics arm. Hence, we are dependent on our 40 odd logistics partners whom we are working with. We strongly believe as a philosophy is that the logistics service provider is the best in his job. He understands his business best and knows how the shipment should move. So, unlike our competitors, we have purposely not built abilities around it. We work hand-ingloves with all the LSPs whom we work with. They need technology; we build technology for them and integrate it. We are also ready to give them any other kind of support to them.


“Continually Innovative”


news

China opens new trade route to Nepal amid India tensions China recently announced the opening of a new rail and road trading route to Nepal, coming amid fresh strains in the country’s relations with India following the cancellation of its president’s visit and the recalling of its envoy from New Delhi. Months of strains in ties with India, first sparked by unrest over the new Constitution and an ensuing trade blockade, has seen Kathmandu turning increasingly to Beijing, primarily to step up fuel imports amid an energy crisis caused by the blockade.Further tensions were triggered this week after Nepal announced the cancellation of a scheduled visit by its president to India, with Kathmandu blaming New Delhi for what it described as efforts to destabilise Prime Minister KP Sharma Oli’s government. In March, China officials had told Oli when he visited Beijing that it would back his government against ‘any external interference’ and would support stability in Nepal and aid his government within its capacity, with trade and investment.

Tata Group enters e-commerce market The 148-year-old Tata Group has made a foray into the Indian ecommerce market through TataCLiQ.com. The venture will sell apparel, electronics and footwear among other products. “Currently, there are only 30 million regular online shoppers in India and there is immense potential to bring the next 100 million with an offering that builds from their current path to purchase rather than expecting them to change behaviour,” Ashutosh Pandey of Tata Unistore which runs Tata Cliq, said in a statement. The group said it developed the Tata Cliq website over a year-and-a-half at a cost of ‘several hundred million dollars.’ The site would act as a marketplace for its in-house and partner companies. The venture marks a new direction for the salt-to-steel conglomerate which has so far focused on physical retail stores.

DB Schenker Dubai logistics facility ready DB Schenker’s new Dubai Logistics City facility has reached 100 per cent utility after just two months of operations, and two years after breaking ground on the project. This is the company’s first fully owned facility in the middle east, and represents the first of three phases of expansion that will ultimately reach 25,000 square meters by 2019. DB Schenker has worked closely with the Dubai government to establish this outpost of the fastest growing logistics service provider in the Middle East and North Africa region, expanding the total area of its operated logistics centers from 70,000 to 170,000 square meters in the last three years. The facility also benefits from its close proximity – just meters from the runway – to the air operations.

Shipsy raises $1m from DTDC Shipsy, a Gurgaon based company, which provided logistics services but now has moved to being an integrated analytics platform service, has raised $1 million in funding from DTDC Express for a 20 per cent stake. Shipsy will use the funds for padding its technology infrastructure. It plans to break even in the next financial year. DTDC plans to use Shipsy’s tech for its e-commerce and e-fulfilment wings. According to its press statement, The platform will address inefficiencies in existing logistics systems. Shipsy provides architecture design for analytics, systems for business processes and analytics platform for insights.


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news

Kewill collobrates with INTTRA

IAG Cargo add flights to Abu Dhabi, Bahrain, Doha, Muscat

Kewill, a leading provider of innovative software for supply chain execution, has teamed with INTTRA to deliver the first freight forwarding software capable of helping shippers and forwarders comply with the new SOLAS Container Weight Verification requirement set to take effect in July. Shippers and forwarders will now be able to easily validate the verified gross mass of their containers and transmit that data electronically to their carriers. “Thanks to our partnership with INTTRA, customers who use Kewill Global Forwarding can easily comply with the new SOLAS regulations,” said Jim Hoefflin, President and COO, Kewill. “The tight integration between our products will allow companies to simplify and streamline their ocean shipments, which will lower operational costs and guarantee that their cargo reach on time,” he added.

IAG Cargo is expanding its operations in the Middle East, starting from this winter when the company will separate its current Abu Dhabi and Muscat service into two flights, and will also split its Bahrain and Doha service. These four separate services will allow customers to benefit from 83 per cent additional capacity for the region. A Boeing 787-9 will serve the Abu Dhabi route, while an Airbus 777-200 will serve the Bahrain, Doha and Muscat routes, offering a cargo payload of up to 20 tonnes per flight. Flights to Muscat will operate five times a week, while services to Abu Dhabi, Bahrain and Doha will operate on a daily basis.

Scoot takes off in India Scoot launches services from Singapore to Amritsar and Chennai, bringing exceptional value and scootitude to guests as it spreads its wings to India. Scoot’s service to Amritsar commences three times weekly and will increase frequency with an additional Monday service from July, restarting the Singapore-Amritsar route for the SIA Group. Scoot takes over the Singapore-Chennai daily service from Tigerair, expanding capacity to Chennai for the SIA Group with its new and spacious Boeing 787 Dreamliner as the world’s first all-787 operator.

R. Sai Logistics India Advantage Finished Vehicle Logistics Pan India The trucks/trailers are installed with global positioning tracking system and the location of the trucks/trailers are available on our system via the Internet. Provision for the customer to access this information can be extended. High levels of Expertise and Experience On Line Track and Trace 24x7

R. Sai Logistics India Pvt. Ltd. 603, 604, Vipul Trade Center, Gurgaon-Sohna Road, Gurgaon - 122 018, Haryana, India Tel: 0124-2666080-99, Fax: 0124-2666090, Email: admin@rsailogistics.com


news

DB Schenker opens logistics centre in Bhiwandi Schenker India Pvt Ltd, a part of DB Schenker, the transport and logistics division of the Euro 40.4 billion Deutsche Bahn Group, has announced the opening of its third Schenker Logistics Centre (SLC) in Bhiwandi. Spread over 200,000 (approx) sqft, the SLC is one of the largest logistic centers in the area and would be providing integrated logistics solution to businesses involved in baby care, mother care, fire protection, camera and accessories and bathroom fittings. Strategically located at a distance of 3 kms from NH-3 Mumbai – Nasik Highway, 60 kms from JNPT and 60 kms from NH-8, Mumbai –Ahmedabad Highway, the logistics centre comes with material handling equipment like - Reach trucks, Stacker and Forklifts and features warehouse height (side)30ft, (centre)38 ft.

Turbo Ventilators and louvers, and three phase electricity connectivity. Proposed dedicated freight corridor is just 0.5 km away from the new warehouse which will start from JNPT port and end at the northern state of Uttar Pradesh covering through the states of through Gujarat, Rajasthan and Haryana. Commenting on the development, Oliver Bohm, CEO, Schenker India Pvt Ltd said, “The western industrial corridor is one of the busiest in India with a high concentration of existing and upcoming manufacturing units. This creates an immediate demand for effective logistics and warehousing solutions. Our new Schenker Logistics Centre (SLC) in Bhiwandi, with its strategic location, is well-placed to cater to the logistics requirements of customers in the region.”

Logistics firm Rivigo to treble truck fleet

EKART introduces EKART Courier

Eyeing a larger market share, logistics solutions provider Rivigo is banking on ‘drivers relay system’ for faster delivery of goods and is looking to take its trucking fleet to 3,000 this fiscal. The firm, which has a fleet of 800 trucks, claims that based on its innovative Deepak Garg , CEO, Rivigo ‘drivers relay system’, truck loads are delivered to Chennai from Delhi in two days instead of conventional eight days. “Logistics is one of the largest industries - more than USD 100-billion size and there is enough to do in this market. We started working on the ‘Driver Relay Model’ wherein we change over the drivers after every few hundred kms. This improves the turnaround time and service levels,” Deepak Garg , CEO, Rivigo said in a statement.

EKART, the logistics arm of Flipkart, recently announced the launch of EKART Courier. This courier service aims to ramp up the game of logistics industry through its well-established technological prowess. EKART, through this service will deliver across 3800 pin codes with pick-ups enabled in eight cities by June 2016. An industry first, the service will allow users to drop a pin for both the pick-up and delivery addresses on a map that is provided by the FLIP (Flipkart’s mapping platform) which will significantly solve the issues of pin code-address mismatches, reduce misrouting of couriers and improve reliability. This will soon be coupled with RFID and GPS based real time tracking enabling users to visualize the courier’s journey over the mapfurther enhancing the existing track and trace.

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Reduced logistics costs key to lifting India’s economy According to an ‘ASSOCHAM-Resurgent India’ joint study, India can save up to about `3.25 lakh crore ($50 billion) if logistics costs are slashed from 14 per cent to 9 per cent of country’s GDP, leading to more competitive global presence for its domestic goods. “With expected inflow of new investments owing to government’s thrust on promoting domestic manufacturing sector, India’s cargo and logistics industry is likely to clock a CAGR of about 16 per cent during the course of next few years,” noted the study on ‘Cargo and logistics industry in India,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with knowledge firm Resurgent India. “The ‘Make in India,’ campaign will see investments connect India to global production networks that would generate new business for logistics in the country thereby making it an attractive location to do business as compared to other regions in the world,” it said.

Business gets an extra space to breath with SWC Say goodbye to Bill of Entry that has been replaced by Integrated Declaration. The CBEC Circular 10/2016-Cus dated 15-03-2016 with effect from April 1, 2016 will re-define the facet of the logistic business. The implementation of the SWC has acted as a new catalyst in the various logistic processes. The new process involves simplified and quick procedures, and direct interface to address customer concerns and enhance quality services for better business opportunities with ease. As per the sources from logistic industry, people are happy since the new implementation will lead to no more unnecessary waiting for customers at the port and nor will be the delay of financial transactions.

TCI offers cold chain warehouse in Gurgaon Transport Corporation of India Ltd (TCI) officially inaugurated its first state-of-the-art Cold Chain Warehouse on Pataudi Road, Gurgaon in the NCR region. This is TCI’s first foray in temperature-controlled warehouses as part of an overall strategy to build a cold chain network of warehouses and refrigerated trucks. The warehouse will be managed by TCI.

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94 CargoConnect - june 2016


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APPOINTMENTs

Cathay-Lufthansa enter joint business agreement

Anil Mantri joins Sealair as Director

More direct connections, greater flexibility and time savings combined with service enhancements – these are just some of the benefits customers will enjoy thanks to the cooperation between the cargo division of Cathay Pacific Airways and Lufthansa Cargo. Simon Large, Director Cargo, Cathay Pacific and Peter Gerber, CEO and Chairman -Executive Board, Lufthansa Cargo, signed an agreement for a highly integrated bilateral cooperation in Frankfurt. With respect to the cooperation routes between Hong Kong and Europe, both airlines will, in the future, work closely together on network planning, as well as sales, IT and ground handling. This will bring Hong Kong, the world’s busiest air cargo hub, closer to Europe, strengthening one of the world’s great trade lanes. “Our joint network will cover more than 140 direct flights per week between Hong Kong and 13 European destinations,” says Large. “Cathay Pacific’s large number of direct connections to multiple European destinations fits perfectly with Lufthansa’s strength in Frankfurt,” he adds.

Anil Mantri recently joins Sealair Freighters International Pvt Ltd as the Director. Prior to this, he was associated with FedEx Express Transportation and Supply Chain Services Ltd. His education qualification includes PGDBA in marketing and PGDSCM (St Xavier’s College, Kolkata). He loves travelling, watching movies and playing badminton.

Elektrans appoints new MD Elektrans Group recently announced the promotion of Capt. Deepak Arora to the position of Managing Director of Elektrans Shipping Pvt Ltd. Capt. Arora has been working with Elektrans Group for four years, during which he has served several executive positions within Elektrans, proving himself as a committed company advocate. His positive influence on his team, leadership style combined with poised and great customer service skills have been truly appreciated, both within Elektrans as with our many stakeholders. Capt Arora will report directly to the Group CEO of Elektrans Group.

Kribhco gets new GM (Mktg & Sales) N Rama Krishna has been appointed as the General Manager (Marketing & Sales) of Kribhco Infrastructure Ltd on March 2016. He has an experience in Terminal and Rail Operations, Warehousing. Ramakrishna is presently managing the entire logistics activities at KRIL He is a Mechanical Engineer with Masters in Computers and holds Diploma in Export Management. Prior joining KRIL, he has vast experience of 24 years with various Shipping lines like APL, MSC, J M Baxi & CO, posseses rich experience in Marketing of Ports, Container Train and Terminal Operators like, Gateway Rail Freight Limited, APL India Linx and DP World Intermodal. Presently he is heading the Marketing and Commercial activities at KRIL. He is also currently an Extended Board Member of Associated Multimodal Transport Operators of India.


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VOL VII ISSUE VI may 2016 `20

Postal Registration No.: DL (S)-01/3372/2016-18 Postal at IPMBC on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

AN

N I V ERSARY ISSU E

SPECIAL FEATURE

Cabotage Relaxation

Megatrends & Opportunities Roadmap for Logistics

Supply Chain Complexities in Emerging Markets

Young Blood Rules the Roost in Logistics


impact tale

Ethiopian Airlines Bridges Gap between Indo-Africa Ethiopia was among the 10 fastest growing economies in the world over the past decade. Its gold mines, and the potential to exploit recently found natural gas reserves (currently 25 billion cubic metres), will attract significant amounts of investment over the next few years. Ethiopian Airlines, formerly Ethiopian Air Lines (EAL) and often referred to as simply Ethiopian, is Ethiopia’s flag carrier and is wholly owned by the government of the country. EAL was founded on December 21, 1945 and commenced operations on April 8, 1946, expanding to international flights in 1951. The airline has been a member of the International Air Transport Association since 1959 and of the African Airlines Association (AFRAA) since 1968. Ethiopian is a Star Alliance member, having joined in December 2011. Ethiopian Airlines has completed 70 years of operations in March 2016 bringing it into the elite league of carriers with longest history of operations. Its hub and headquarters are in Addis Ababa, from where it serves a network of 82 passenger destinations —19 of them domestic— and 23 freighter ones. Ethiopian flies to more destinations in Africa than any other airlines. It is one of the fastestgrowing companies in the industry, and is among the largest on the African continent. It is also one of the few profitable airlines in the Sub-Saharan region. Ethiopian Airlines has a code-share agreement with Air India and has double daily operations from Mumbai and Delhi. From Mumbai, Ethiopian Airlines has deployed the latest B-787 Dreamliners for the flights from Mumbai to Addis Ababa. The flag carrier of Ethiopia has been operating from Mumbai since December 1971 and from Delhi since 1965. The second largest airline in the African continent currently connects Delhi and Mumbai with one daily flight each to its main hub Addis Ababa, the capital of Ethiopia. With its daily flights to Mumbai and Delhi, the carrier provides optimal connectivity options for passengers travelling between India and its 49 destinations across Africa. Out of the 53 countries in the continent, Ethiopian flies to 49 of them, Ethiopian Airlines Regional Director for the Subcontinent. Daily passengers from Mumbai last year stood at 212, while from Delhi it was 94. Tewolde Gebremariam, CEO, Ethiopian Airlines Group is very optimistic on the prospects of Africa-India market. By increasing the frequencies of the passenger flights and cargo capacity also to major destinations in Africa, Ethiopian Airlines desires to become the airline of choice for travel between Africa and India. In future, Ethiopian Airlines plans to increase current frequency to New Delhi and start operations to additional destinations in the South India. Ethiopian Airlines serves 84 global destinations and is the fastest growing and most profitable airline in Africa.

98 CargoConnect - june 2016


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june 2016 - CargoConnect 99


HIGHLIGHT

‘Dream Big Bird Flying Machine AN-225’ made maiden landing at Hyderabad Airport The world’s largest aircraft, AN-225 Mriya, Antonov Airlines of Ukraine, made its very first landing in India during May 2016 by making an overnight technical halt at one of the Indian private airports, GMRowned RGI Shamshabad Airport, Hyderabad, which had explicably accepted to welcome this super bird flying machine. To bring this aircraft to make its maiden landing in India, Rishabh Birla, MD, Air Shagoon (Network) Pvt Ltd one of the leading Indian aviation companies, M/s Air Shagoon (Network) Pvt Ltd, was in thorough touch with various Indian Airports while trying to make viable for the aircraft to land and get parked. “We managed to get the final acceptance from the technical expertise of Shamshabad Airport, Hyderabad which was chosen for the halt based on several factors such as runway length, ground manoeuvring area, technical facilities, air traffic density and proximity to the trans-continental air route. The aircraft arrived in India on May 13, 2016 from Turkmenbashi in Central Asia and after 20 hours halt at Hyderabad it proceeded to Jakarta and thereafter to its final destination Perth, Australia. On board aircraft was a generator that weighs 116 tons.” said Rishabh Birla, Managing Director, Air Shagoon (Network) Pvt Ltd. The AN-225 Mriya was initially designed to carry the Buran spacecraft as an external load. Currently the only one aircraft of its type with six Turbofan Engines, it is the biggest, longest and heaviest aircraft with a maximum take-off weight of more than 600 tons. This unique transport airlifter was designed and constructed during 1984-1988. There are only few airports in the world which can accept this type of aircraft since the length and width of AN-225 through its wing-span is double the size of A-380 double decker aircraft. The aircraft has been created to transport various cargoes (large-sized, heavy, long-size) with total weight upto 250 tons, intercontinental non-stop airlift of cargoes weighing 180-200 tons, intercontinental airlift of cargoes with weight up to 150 tons and also transportation of a heavy large-size single pieces with weight up to 200 tons on the external store. Mriya has set 240 world records including transportation of the heaviest cargo with mass of 253 tons, the heaviest single piece of cargo with mass of 1867 tons as well as the longest cargo having length of 421 metres. The aircraft has the spacious cargo compartment with length of 4332 m, width of 6.4 m and height of 4.4 m, that allows carrying a variety of cargoes inside such as sixteen standard aeronautical containers of UAC-10 type, 50 cars, and single piece of cargoes up to 200 tons (satellites, turbines, generators, dump trucks, etc. to name a few). M/s Air Shagoon (Network) Pvt Ltd is largely responsible for making an all out efforts by getting all technical supports from various government agencies, authorities at Hyderabad airport, and airport ground handling agency Menzies Bobba was honoured to welcome AN-225 Mriya in India during its maiden sojourn.

100 CargoConnect - june 2016


events

ACFI organises round table conference

on ‘Improving India’s Ranking in Ease of Doing Business’ Air Cargo Forum India (ACFI) recently organised its fifth annual conference with the theme ‘ACFI, CEO’s Round Table – Improving India’s Ranking in Ease of Doing Business – Sector (Air Cargo).’ The idea was to bring together industry experts representing air cargo logistics sectors and policy makers in the government to discuss on the overview of air cargo industry, the existing bottlenecks/challenges of the air cargo logistics industry and the possible solutions for improving India’s present ranking in Ease of Doing Business. Najib Shah, Chairman, CBEC was the Chief Guest. Some of the important CEOs who participated in this conference include Samir J Shah, Chairman, FFFAI, P S Nair, CEO, GMR Airports Ltd, Veli Polat, Regional Director, Lufthansa Cargo, Stenislas Brun, MD, Middle East Gulf & Indian Subcontinent, Air France KLM, Pradeep Kumar, SVP Cargo, Jet Airways, Amitabh Khosla, Country Director, IATA to name a few. Prominent among the government senior officials were Dr Renu Singh Parmar, Sr Economic Adviser, MoCA, Anup Wadhawan DGFT, J K Dadoo, Addl Secy, MOC, Satya Srinivas JS (Customs) etc. Pradeep Panicker, President, ACFI delivered the welcome address and Tushar K Jani, Chairman, DCSC and Vice Chairman, ACFI gave the vote of thanks.

june 2016 - CargoConnect 101


events

NMIS offers course in Shipping Management in New Delhi branch ‘Narottam Morarjee Institute of Shipping (NMIS) has starting Post Graduate Diploma course in Shipping Management in collaboration with Narottam Morrarjee Institute of Shipping, Mumbai. The classes will be held every Saturday from 10 AM to 1 PM at Institute premises, New Delhi. This could be a good opportunity for officers who are looking for alternative career after retirement. The inaugural function was held in the capital recently and Capt M M Saggi, Director, NMIS gave a short presentation to brief about the course.

DP World enhances

GEODIS moves to

DP World operated Chennai Container Terminal, with the support of the Chennai Port Trust has been taking significant steps to reduce congestion at the port. The infrastructure at the North Gate was recently enhanced to facilitate smooth movement of empty trailers to the terminal. The road approaching North Gate, CCTPL through the erstwhile ‘Iron Ore Area’ which was previously made of mud has been re-developed with tar. The opening of this re-development was held in presence of Leeladharan, Chairman, The Chennai and Ennore Steamer Agents Association, Chennai Custom House Agents Association (CCHAA) Vice President Bhujangaram and Secretary, Natarajan along with K K Krishnadas, CEO, DP World Chennai.

GEODIS increases its presence in Mumbai, India. The global transport and logistics provider is relocating its premises to “The Qube” at MV Road in Andheri (East). The move is driven by the continuous growth of GEODIS’ India business and the expansion of the Mumbai team. “The relocation will foster a higher level of service excellence to our customers and also accentuates our commitment towards increasing our business development focus in the Western Region of India”, says Leif Voelcker, Cluster Managing Director South Asia, GEODIS. The main services GEODIS provides in this region are freight management, industrial project management, buyer’s consolidation, and a Free Trade Warehousing Zone. As a unique positioning in the market, GEODIS India is offering tailor-made solutions for different vertical markets. GEODIS has been present in India since 1998, operating from 14 locations in the country and offering integrated logistics solutions covering freight services, warehouse management as well as local distribution. In India’s western region, GEODIS has offices in Mumbai, Pune, Ahmedabad and Baroda.

infrastructure at Chennai

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a new office in Mumbai


events

PHD organises 3rd edition of Global Rail Convention - 2016 PHD Chamber’s Railways Committee recently organised the third edition of the PHD Global Rail Convention, 2016 – ‘Indian Railways-Transforming into an engine of growth’ with a focus on the development and transformation initiatives of Indian Railways towards an Engine of Growth for the country, working towards achieving its objective to overcome challenges, reorganise, restructure and rejuvenate Indian Railways. Jitendra Singh, Hon’ble Union Minister of State for Development of North Eastern Region (DoNER); MoS of Science and Technology, Earth Sciences, Department of Atomic Energy, and Department of Space; Ministry of Personnel, Public Grievances and Pensions, Prime Minister Office graced the occasion as the Chief Guest. H E Milan Hovorka, Hon’ble Ambassador, Embassy of the Czech Republic; Hemant Kumar, Hon’ble Member Mechanical and Ex. Officio Secretary to Govt of India, Railway Board, Ministry of Railways; A.K. Kapoor, IRSEE, Member –Electrical, Railway Board, Ministry of Railways etc also graced the inaugural session of the convention.

APM celebrates Global Safety Day Under the theme ‘Safe for you, Safe for me,’ APM Terminals Inland Services, South Asia celebrated Global Safety Day recently with emphasis on raising awareness on the importance of risk management among employees, contractors and external stakeholders. Participative presentations, skits, contests and activities were conducted across its Container Freight Stations, empty depots and container maintenance & repair centers at multiple locations in Mumbai, Dadri, Chennai, Kochi and Tuticorin. Safety and management of risks related to people, cargo and environment were the key messages delivered to over 1300 own and contract professionals, Custom House Agents, Freight Forwarders and their children participated in the event. Employees and contractor workers who demonstrated high commitment to safety standards and the safety-first culture were also felicitated as Safety Heroes. “Safety is everybody’s responsibility and risk awareness and management is the first step in helping to create a safe place to work. The Global Safety Day is an effective platform to help build collaborative culture around safety and risk management,” said Ajit Venkataraman, MD, APM Terminals India Pvt Ltd.

AAI organises

Swachh Bharat Pakhwara Airports Authority of India (AAI) organised Swachh Bharat Pakhwara and Pledge taking ceremony on ‘Mission Swachh Bharat. The Swachh Bharat Pakhwara started on May 16, 2016 and continued till May 30, 2016. The event was organised at AAI Corporate Headquarters, Rajiv Gandhi Bhawan, New Delhi. S Raheja, Chairman, AAI administered the pledge taking ceremony wherein a large number of officials were present and emphasized to give two hours per week for cleanliness drive to realise the dream of Mahatma Gandhi - ‘Swachh Bharat’. The Chairman also conveyed the message that the cleanliness drive should be continuous part of life and not limited to mere a day. A large number of senior officers and staff cleaned the area at Rajiv Gandhi Bhawan Safdarjung Airport, New Delhi.

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events

Mercurio Pallia, India sponsors

education for kids of driver employees

While working in the interest of driver community in India, Mercurio Pallia Logistics, a member of group GEFCO (a global player in industrial logistics) recently announced to sponsor education of 36 kids coming from the families of drivers employed with the company. The event was organised in association with TATA Motors and Urmi Foundation and saw the presence of PremVerma, CEO, Tata Motors Distribution as well as Rajesh Kaul, Head, Marketing and Sales, HCV, Tata Motors Limited. From GEFCO Group, Arnaud Cauchy, MD, GEFCO India and Vipul Nanda, Chairman, Mercurio Pallia were present to give away the scholarships to the kids. Talking about safeguarding the future of driver employees in their company, Arnaud Cauchy, MD, GEFCO India said, “We continue to work in the best interests of our employees. Driver employees are an integral part of our business and we take pride in associating with them. Understanding the stigma attached to the driver community in India, unlike anywhere in the world, at GEFCO, ensure that our driver employees and their families are benefitted especially when it comes to education of their kids and their secured future.” The scholarship amount worth INR 10000 per annum was handed over to the kids. The annual scholarship will continue till the child graduates from the college. Talking at the event, Vipul Nanda, Chairman, Mercurio Pallia said, “Education is a basic right of any child. We continue to stand by our driver employee community and work with them to understand and aid their basic necessities. Education for their kids has been a major concern for our employees and thus, we made sure to contribute our bit towards this cause.”

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events

AMTOI’s Northern India Region Chapter launched

The Northern India Region Chapter of the Association of Multimodal Transport Operators of India (AMTOI) has finally taken off, an official release announced. A roadshow was organised on May 3, 2016 at the Cafeteria, International Cargo Terminal 2, DCSC, IGI Airport, New Delhi

as an introductory event to bring together all the MTO’s from north India and stakeholders like CHAs, shipping lines, terminal operators, government agencies and the media. The aim of the roadshow was to primarily introduce and highlight the presence of AMTOI’s NR Chapter and its activities, focusing on issues and concerns of the trade specific to the north India hinterland. Vivek Kele, President, AMTOI, briefed the gathering about the effective role and importance of AMTOI, and on the initiatives taken by AMTOI in the area of skill development for the benefit of the trade. It was also explained how AMTOI could help members become a registered MTO as well as assist in the renewal formalities. The Chief Guest on the occasion was H D Gujrati, who gave an update on the development of the Dedicated Freight Corridor, pointing out that the work order for the Delhi-Mumbai sector had been awarded and the work contracts were under process for the Delhi/CCU, CCU/Chennai, Mumbai/Chennai and Kolkata sectors. The event was a huge success attended by more than 100 top executives from the trade, including AMTOI’s managing committee members from Mumbai, Chennai and Kolkata chapters.

Intl Civil Aviation Conference held The two-day-long International Civil Aviation Organisation-Asia Pacific Civil Military Cooperation Regional Conference was recently held in New Delhi. The conference was attended by 130 delegates from ICAO APAC Office at Bangkok, Regional Sub Office at Beijing, Civil and Military. Representatives from Uganda, Indonesia, Malaysia and India was inaugurated by the Director General Civil Aviation India, M Sathiyavathy, IAS and touched upon the robust relationship between the Armed Forces of the Union and State aircraft operators and the Civil Aviation Regulator and ANSP for seven long decades. The Member ANS in his welcome address highlighted the achievements of AAI as an Air Navigation Service Provider (ANSP) and its distinct role in being a catalyst in Civil Military Cooperation. S Raheja, Chairman, AAI was the special guests. The ICAO Asia Pacific RO-ATM, Len Wicks, set the goals and objectives of the conference and he added that India has performed creditably in Civil Military Cooperation and the ICAO APAC Office recognizes the excellent work in progress.

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PEOPLE CONNECT

“There’s no shortcut to success but only hard work”

Having been associated with the organisation for a decade now, Sanjay Goel, CEO, Bolloré Logistics has witnessed many changes occurring in the company, even the change from SDV to Bolloré. In a tete-a-tete with Roselin Kiro, he shares his experiences, challenges and expertise of his leadership Tell us about your journey in Bolloré so far. My journey in Bolloré has been very good. It’s a great experience working with the French. I started my journey as Regional Manager of Western India in Mumbai. A fter two years, I came back to Delhi as Regional Manager for North and then I was appointed as the Chief Operating Officer for four years. Since January 2013, I took over as the Chief Executive Officer of Bolloré.

What is the biggest challenge that you have ever come across and how did you overcome it? The biggest challenge is that we are part of an international network. India is perceived by all multinational companies as a difficult market to deal with because of so many compliance and regulatory issues, and lot of bureaucracy to deal with. But, every country has its own laws. We have to comply with the

106 CargoConnect - june 2016

law and once you do so, things turn simple. I don’t really think that there has been many challenges, but to mention a few, there are challenges in terms of customs issues, as the interpretations of customs is different in different commissionarates for the same law.

What are the values and practices that you live by? The values I live with are honesty and integrity. There is no shortcut to success, but only hard work.

Apart from work, what are the activities that ease your mind and body? Photography, playing cricket, long drive and travelling are some of my hobbies.

Mantra for Success My mantra for success is that you need to be focussed on what you are doing; you need

to have product knowledge and a complete knowledge on what you are up to. Also, you must know your goals and your must be honest with impeccable integrity

Message for Aspirants Logistics is a very simple and complex industry. Logistics is actually logic and if you follow your logic, it is very simple. It is a challenging industry and of course, one can make a career in it. Today, many people are coming into it. If you look back, earlier not many people with formal qualification would come into this industry but now things have changed and people with formal education have started exploring this industry. This is a very good industry for young people to join. It is a highly successful industry and an industry which will always be needed. With the globalisation of trade today, there will be a lot of movement of goods from one place to another, then we would need more experts to handle this trade.



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