CARGOCONNECT March 2018

PAGES 84 inclusive of cover

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VOL IX ISSUE IV MARCH 2018 `20

Will new Logistics Parks transform 8 Indian logistics industry?

Digital Opportunities to transform 36 the logistics value chain

UNION BUDGET

2018-19 STEPS TAKEN IN RIGHT DIRECTION?

Take up Profitability by improving 46 Reverse Logistics

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Contents

Volume IX • Issue IV • MARCH 2018

Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent Gaurav Dubey Deepashree Banerjee Director Ajeet Kumar

36

16 COVER STORY

Union Budget 2018-2019 steps taken in right direction?

SPECIAL FEATURE

Digital Opportunities to transform the logistics value chain

INTERVIEW

focus

Will new Logistics Parks transform Indian logistics industry? ...................................8

Mohammed Esa Senior VP, Global Business Development and CCO Europe, Agility .............................54 Aviraj Rathi Director, Namaste Group ...........................56

SORT INSPECT RECEIVE TRANSPORT RETRIEVE

Asst Manager Marketing Mehuli Choudhury Marketing Executive Sunpreet Kaur Simran kaur Accounts & Administration Poonam Gupta Sr Designer & Visualiser Shaique Ahmad Designer & Visualiser Mayank Bhatnagar

Rohit Chaturvedi CEO and Director, The Transport Hub .........58

FEATURE

Take up Profitability by improving Reverse Logistics ...................................46

Marketing Manager Niti Chauhan

UPFRONT .................................................6 GUEST COLUMN ......................................60 SHIPPERS SPEAK ...................................62 NEWS ...............................................64-70 PROFILE ...........................................72-74 EVENTS ............................................75-79 UPCOMING EVENTS ................................80 APPOINTMENTS .....................................80 PEOPLECONNECT Vandana Singh

Director, Global Corporate Key Accounts, Saudia Cargo ...82

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

CargoConnect is printed, published and owned by Smiti Suri, and

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

Editor–Smiti Suri

6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 97113 83365, 98109 62016 Email: cargoconnect@gmail.com info@surecommedia.in Website: www.surecommedia.in

Upfront “While only 76 airports of India were connected with commercial flights since independence, under ‘UDAN’, work has been initiated to connect 56 airports and 31 helipads in a short span of 15 months. So far, flights have commenced from 16 such airports.”

- Ram Nath Kovind, President of India

A whopping amount `1.48 lakh crore has been allocated for the railway capital expenditure in the Union Budget for

Globalisation is a reality of our times and to keep pace with globalisation, we need top quality infrastructure. Sagarmala project is ushering not only development of ports but also port-led development.

The Government of India is devoting significant efforts towards the development of waterways.”

- Narendra Modi, Prime Minister of India

financial year 2018-19. According to Arun Jaitley, Union Finance Minister, a large amount of money from the budget will be spent on capacity expansion, since it’s priority

“As committed by Hon’ble Prime Minister, Narendra Modi, the first phase of the terminal is ready in a record time. Logistics play a key role in the development of the economy and the government is committed to providing world-class logistics and infrastructure facilities so that trade can flourish.

for the national transporters

- Nitin Gadkari

Minister of Road Transport, Highways and Shipping said after Narendra Modi, Prime Minister of India inaugurated the Fourth Container Terminal of JNPT in Mumbai

“A lovely start for Indian aviation in 2018.

January records a growth rate of ~20%. We continue to be the fastest growing aviation market in the world.”

- Ashok Gajapathi Raju elated Union Minister of Civil Aviation tweeted on exponential growth rate of India’s aviation industry 6

CargoConnect - march 2018

- Jack Ma Co-founder & Executive Chairman, Alibaba Group

Alibaba has pumped at least `224 crore in an Indian logistics start-up to increase its stake in India’s logistics sector

focus

Will new Logistics Parks transform Indian logistics industry?

Establishment of 34 mega multi-modal logistics parks across India would certainly help the Indian logistics industry in reducing warehousing cost and contribute in bringing down overall logistics cost in the country. Nitin Gadkari, Minister of Road Transport and Highways, is quite hopeful that these parks will act as freight aggregation and distribution hubs which will enable long haul freight movement. However, the success of this project will depend on the proper execution which will be a decisive factor of its success.

- Gaurav Dubey

8

CargoConnect - march 2018

focus

T

he plan of Union Government to build 34 mega multi-modal logistics parks by investing `2 lakh crore has set logistics professionals on toes, major logistics companies are placing their resources around the proposed locations in order to take best advantage of this mega project. Land for the project is already available with state governments and the project will be carried forward through public-private-partnerships.

In order to execute the project, central government, state governments and private players would form a special purpose vehicle. The parks would lease space to private companies to run their operations centrally and save on warehousing cost.

“Logistics parks will act as freight aggregation and distribution hubs and will enable long haul freight movement between hubs on larger sized trucks, rail and waterways. It will reduce freight transportation costs,� said Nitin Gadkari,Union Minister for Road Transport and Highways in an interview to a leading English daily.

Ministry of Road Transport and Highways (MoRTH) has signed MoUs with 36 different government departments including various ports, state governments, transport corporations, railways and aviation ministries to come out with a joint multi-modal logistics park policy that will specify designs of parks, locations, trunk infrastructure required and the pricing structure.

march 2018 - CargoConnect

9

focus “It is a great initiative by the government. I appreciate the fact that this present government has recognised the importance of the Logistics Industry which was much needed.”

Kruti Jobanputra Director, JWC Logistics Park Private Limited

Kruti Jobanputra, Director, JWC Logistics Park Private Limited, is very optimistic on Government’s recognition of the importance of the logistics industry and said, “It is a great initiative by the government. First of all, the greatest move is that, this present government has recognised the importance of the logistics industry which was much needed. The logistics industry plays a very important role in the development of any country

history of trade and commerce is the testimony of this fact. Indian sea routes have always been favourable for any trader/ business/ sailor. Expansion and further development of our coast line will give a major boost to the logistics industry. On the question of advantages of the ‘Infrastructure’ status granted to the logistics industry, Jobanputra said, “We are looking at better taxation rates and more relaxation in government

mulling on the proposal of providing infrastructure status to the logistics parks and enabling 100 per cent FDI under automatic route for the same.

Viren Thakkar, Managing Director, Logistics Park (I) Private Limited, threw light on how Bharatmala programme will reduce logistics cost, and said, “Establishment of 34 Logistics Parks under Bharatmala program will surely

MoUs have been signed with 36 different government departments in order to come up with a joint multi-modal logistics park policy. but unfortunately previous governments had not given it the required importance in India. With these kind of government initiatives, I am sure more companies, individuals, foreign players will enter the Indian market in search of new growth opportunities. This will automatically boost the growth of the industry due to high flow of investment and it will certainly uplift the sector.”

India has always been considered a strategically located country when it comes to logistics/ trading due to its long coastline. Our rich economic

10 CargoConnect - march 2018

policies and rules and regulations for the logistics industry. I reckon it is too early to comment since more clarity is required on the benefits which private players could reap through the Infrastructure status.”

MoRTH has been planning to come up with a logistics policy that aims at increasing the movement of freight transportation on the highways network and reducing logistics cost by almost half.

The ministry is in touch with various global companies that build and maintain logistics parks. Union government is also

bring down logistics cost, driving exports and investment, through connectivity which would be built across India under the programme. This programme would increase vehicle travelling speed and reduce distance, which, in turn, will help in the reduction of Logistics and supply chain cost. Development of multimodal modes and an effective transport system would make the economy more competitive.”

Location is considered as a crucial factor when it comes to the establishment of a logistics park, a multi-modal one should be either closer to an industrial cluster

focus “Establishment of 34 Logistics Parks under Bharatmala programme will surely bring down logistics cost, driving exports and investment, through connectivity which would be built across India under the programme.”

Viren Thakkar Managing Director, Logistics Park (I) Private Ltd

or national highways to facilitate the efficient movement of freight along routes of economic importance. Logistics parks should be built along national highways and in the outskirts of cities for reducing traffic congestion and pollution in city areas. Moreover, logistics parks located near railway tracks and national highways have further advantages.

Determining the right location is a key factor in the establishment of a logistics park. A convenient location can lower transportation costs and minimize time in transit. Logistic companies while setting

time government should concentrate on the development of such logistics hub in tier two and tier three cities, which require high class infrastructure.

Undoubtedly, logistics sector plays a crucial role in the development story of any nation. Indian logistics sector has taken huge strides due to implementation of GST, relaxed FDI regulations and Bharatmala programme.

Logistics Industry professionals predict that ‘Infrastructure’ status granted to the industry will attract a great deal of private investments in the sector.

domestic and international markets. But, with the implementation of GST and easier access to capital and long-term borrowing, large format warehouses will soon crop up across the country.

This will eventually bring down the cost of logistics, which, in turn, will boost demand for Indian goods and further promote the ‘Make in India’objective.”

Recent reports suggest that global private equity players and pension funds have invested a whopping amount of $1.5 billion in India’s warehousing business in the last two years. The 34 locations

Tier two and tier three cities are lagging behind on the infrastructure part. It is a high time when Government should speed up the process of building infrastructure in these cities. their storage facilities, consider access road, infrastructure, connectivity, labour availability, local issues and so on and so forth for their smooth operation and on time delivery. Indian logistics industry is concentrated particularly in major metropolitan cities. Tier two and tier three cities across India are still lacking in required infrastructure which ultimately delays development projects. It’s high

12 CargoConnect - march 2018

Infrastructure industries not only get longer maturity loans compared to typical manufacturing sector, but, also the lending terms are typically easier. Thakkar further added, “The infrastructure status will give the logistics companies access to cheaper foreign currency funding through the external commercial borrowing route.

The high logistics cost added to Indian goods makes them less competitive in

that account for 50 per cent of the road freight movement in the country have been identified for developing multimodal logistics parks in the first phase. The largest of these would come up in Vijaywada, Chennai, Nagpur, Bengaluru, Surat, Hyderabad and Guwahati.

Rajkumar Shrirao, President and Director, Kargwal Construction

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focus “New Logistics Parks will facilitate the efficient movement of freight along routes of economic importance. It would also reduce the transport time minimum by 20-25 per cent which will help in on time delivery.”

Rajkumar Shrirao President and Director, Kargwal Construction

wholeheartedly appreciated the efforts of MoRTH and said, “The ministry has come up with an innovative idea of Logistics parks across India, which is certainly a good step towards growth of the Indian economy. These Logistics Parks will facilitate efficient movement of freight

Indian logistics sector has taken huge strides due to implementation of GST, relaxed FDI regulations and Bharatmala programme.

Logistics Industry professionals are elated by the recent ‘Infrastructure’ status to the industry. along routes of economic importance.

It would also reduce the transport time minimum by 20-25 per cent which will help in on time delivery. This step of the ministry will act as a catalyst for concrete economic growth in large metro cities.”

The government has given infrastructure status to the logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments.

Shrirao said, “Having infrastructure status would help the logistics sector acquire

14 CargoConnect - march 2018

credit at competitive rates and on a longterm basis as rising logistics cost impacts the global competitiveness of exporters.

Private players can get funding from banks at lower ROI which will help in minimizing the cost.

“Land acquisition and aggregation of land is a tiering process and the Government consumes a lot of time and efforts in completing the same. Private parties are capable of acquiring /aggregating the land at much faster pace. Infrastructure support is required to be at its best.

Connectivity with smaller town needs to be improved upon, so as to set up the

logistics and warehousing parks at these places. This will defiantly boost the economy in tier two and tier three cities.

Major metro cities can be decongested by moving the logistics and warehousing to tier two and tier three cities. Current Infrastructure can feed mostly metro cities which increase the burden of population density, cost of living, pollution, etc.

Easing out these cities and developing unripe territories will be the best move.”

India has been reeling under the pressure of high logistics costs – about 15 per

cent of the value of goods - which is far higher than the developed countries where logistics costs linger somewhere around 6-7 per cent of the value of goods.

Logistics costs is expected to fall by 1520 per cent on account of optimisation of warehouses on completion of ongoing MoRTH projects. The average cost to export/import one container in India is about 72 per cent higher than in China.

The plan, being spearheaded by the roads ministry, will bring together road, rail, air and urban planning to provide seamless movement of freight traffic across states. The upcoming policy,

for which the draft note has already been floated, will also focus on multimodal freight transportation. Under the proposed policy, logistics parks will provide value added services such as customs clearance with bonded storage yards, quarantine zones, testing facilities and warehousing management services.

In addition, provisions will be made for late stage manufacturing activities such as kitting and final assembly, grading, sorting, labelling and packaging activities, re-working and return management.

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Union Budget 2018-2019 steps taken in right

direction?

cover story

inside Challenges prevailing in the Logistics Sector Indian Logistics Sector: Current Status and Growth Projections Airports and connectivity: Govt to raise airport capacity to handle 1 billion trips a year `1,014.09 crore allocated for Northeast aviation infrastructure

A

Government keen on reforms, a collaborative approach towards the logistics sector in the Budget possibly yields big demographic as well as economic dividends, ensuring the growth of the country’s logistics sector, and in effect, the nation’s GDP.

If the investment is executed as planned, the infrastructure sector will receive a massive boost consequently giving an impetus to the logistics sector, and the effects of a solid logistics infrastructure would cascade on the domestic economy.

An improvement in the logistics sector translates to more competitive prices, better delivery times and in general, an economy that functions better.

Logistics, considered to be the lifeline of an economy involves the efficient management of forwarding and reverses the flow of goods and services across the country. The sector primarily subsists of transportation through rail, road, air or water, warehousing, cold storage, logistics optimisation and also involves packaging solutions. Logistics industry in India for the last decade has experienced a roller coaster ride; thanks to the mega

`4,469 crore for two new aircraft- one of the highest allocations for the Ministry of Civil Aviation.

Railways-Capital spending pegged at `1.5 lakh crore for railways E-way bill system for transport of goods on hold Union Budget 2018: What Has The Government Proposed What’s in Jaitley’s budget kitty for logistics startups in this digital age of commerce On the Shipping front What the industry players expected

In FY 2018 (April-November 2017), IIP grew 3.2 per cent as against 4.6 per cent in FY 2017. However, the index demonstrated strong performance during 3Q of FY 2018, registering a 25 month high growth rate of 8.4 per cent in November 2017.

(Courtsey: KPMG Union budget 2018-19 analysis)

push given to infrastructure spending to kick start the economy. Interestingly, the recent ICRA report reveals that the Indian logistics industry is bound to grow at a rate of 9-10 per cent per annum. The global standards remain a testimony to that too.

India’s logistics performance has improved as is evident with the claims of the World Bank Logistics Performance Index (LPI) which showed in its last Index that India has jumped to the 35th rank in 2016 from the 54th in 2014. Moreover, the government expects the logistics industry to grow to $360 Bn by 2032 from the current $115 Bn. The logistics sector is expected to create one million employment opportunities by 2021.

Challenges prevailing in the Logistics Sector

The way forward 18 CargoConnect - march 2018

As per the industry experts, the primary challenge hindering the true potential of logistics in India is integration. The logistics sector in India is currently very much fractured, and therefore grappling with many operational inefficiencies. The only

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cover story With the announcement of 1.48 Lakh crore allocated to Railways, we hope that there is a thrust on improving freight logistics apart from better passenger connectivity. This will help the logistics industry drive up efficiency through rail networks in terms of costs and CO2 reductions as the current logistics movement is skewed towards road transport.

Raaja Kanwar Managing Director, Apollo LogiSolutions Limited

way out is to back it up with the right kind of infrastructure with proper forward and backward linkages along with taking the help of evolving information technology, so that the logistics challenge can be tackled.

CPI growth (YoY, %) 0 5. 0

In the present Indian context, the cargo transportation model mix is skewed in favour of roads. A Mckinsey research report shows that, of all the goods transported by volume, roadways constitute 57 per cent of the goods resulting in under utilisation of the other cost-effective modes like railways, coastal shipping and inland waterways.

4. 0 3. 0 2. 0

Nov - 17

Sep - 17

Jul - 17

May - 17

Jan - 17

Nov - 16

2017 Average 3.4

Sep - 16

Jul - 16

May - 16

Jan - 16

Mar - 16

2016 Average 5.0

0. 0

Mar - 17

1. 0

Source: Monthly Economic Report-January 2017, DEA, accessed on 31 January 2018; Monthly Economic Report-November 2017, DEA, accessed on 31 January 2018

IIP growth (YoY, %)

1.7

1.2

2.2

Nov - 17

Sep - 17

Jul - 17

Mar - 17

Sep - 16

Jul - 16

May - 16

Mar - 16

4.3 3.8

-0.2

-0.4

-1.6 Jan - 16

2.7 2.7 3.1

May - 17

4.5 4 4.2

Jan - 17

1.9

5.7

Nov - 16

5.5

6.5

8.4

8 8

Source: ‘Monthly Economic Report’, Department of Economic Affairs, November 2017; Economic Survey 2017-18, India Budget, 29 January 2018

20 CargoConnect - march 2018

The penurious connectivity between inter-transportation modes results in higher lead-time of cargo movement. This has led to towering losses during transportation, especially for perishable goods. Additionally, finding skilled manpower for the Indian logistics landscape still remains another key challenge.

There is an urgent need to frame clear policy directives. Given the fact that logistics infrastructure is to become a critical enabler for India’s agenda of economic development and urbanisation, clear policy directives with an integrated and cohesive approach to realign the development strategy of each mode of transportation are currently missing from the ecosystem. The policy emphasis should be given to the development of cost-effective modes like railways and coastal shipping. This will help in reducing the overall logistics cost to GDP. Warehousing and storage is the second most important sector of logistics after transportation. It is yet another segment which has become crucial and needs significant attention.

Earlier, manufacturing or supplier houses used to have their inhouse logistics support. However, with the evolution of logistics industry, more and more suppliers are transferring their supply chain management to a specialised third party.

Indian Logistics Sector: Current Status and Growth Projections JLL India, India’s largest international property consultancy, in its report on logistics uncovers the fact that while in the US, food

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cover story It is fair to say that this year’s budget is a populist one, focusing on providing social security at the grass root level. The various announcements and funding provided are towards promoting the further growth of small scale industries as well as improving infrastructure, particularly across rural India.

Anshuman Magazine Chairman, India & South East Asia, CBRE

processing and e-commerce are the major industrial drivers for logistics, it is in reality, the auto components, pharmaceuticals, cement and textiles industries were the ones generating a steady return on which Indian logistics industry have been banking on so far.

However, with the policy thrust given to the food processing industries by the government and the developing e-commerce market in India, these could become the next big thing in the coming future.

The Finance Minister, Arun Jaitley has presented a well-balanced and posit ive budget, obser ves R a aja Kanwar, Managing Director, Apollo LogiSolutions Limited.

“We welcome the proposal of the National Logistics Portal as it will improve the transparency and visibility of cargo movement across the country,” says Kanwar.

“Infrastructure is the growth driver of our economy. With a large number of players serving metro cities and cut-throat competition on price, many logistics companies are looking to build out their last mile capabilities in Tier 2 and below cities. These regions are still relatively underserved by logistics companies and have a booming middle class which is driving massive demand.

With Digital India, bringing millions of Indians online, the rise of digital payments and dedicated marketing efforts of large e-commerce players, there is a big and growing e-commerce demand from regions beyond metros. On the multi-modal side, Bharatmala project is a positive development, coupled with the e-Way bill implementation which will result in faster turnaround times for on-road transportation.

With the announcement of 1.48 Lakh crore allocated to Railways, we hope that there is a thrust on improving

freight logistics apart from better passenger connectivity. This will help the logistics industry drive up efficiency through rail networks in terms of costs and CO 2 reductions as the current logistics movement is skewed towards road transport. The Government’s plan to expand its current 126 airports by five times seems skewed in favour of passenger movement, however, the development of airports across the board is a positive shift in building a robust logistics network. We expect that freight movement is given due cognizance as well.

The mass formalisation of MSME sector will spur local manufacturing which will increase the need for logistics services across the board. It will boost the overall logistics sector, resulting in robust economic development. Since this is the last budget before the government goes on to elections, these announcements a re welcom i ng, as they focus on

GDP growth (2011-12 base) (YoY, %)

7.9

7.5

7.1

5.7

6.3

1Q17

2Q17

FY17

1Q18

2Q18

FY18E

6.3 FY18E

Source: Press Note on Estimates of GDP for the second quarter of 2017-18, MOSPI, 30 November 2017 Press Note on First Advance Estimates of National Income, MOSPI, 5 January 2018 Note: Latest Q3 & Q4 GDP data is not available

22 CargoConnect - march 2018

More than three thousand machines serving factories, warehouses, super marts & churches in India.

cover story The allocation of `3,794 crore to the industry along with tax benefits will help in the growth of this sector. Setting up of a National Logistics Portal is a welcome initiative since it will lead to a single window access across key industry stakeholders. It will also mean more digitisation, which is always good for the industry.

Rachid Fergati MD, Indian Sub-Continent, UPS

strengthening Indian economy,” he adds.

Commenting on the Union Budget 2018– 19, Anshuman Magazine, Chairman ,India & South East Asia, CBRE says, “It is fair to say that this year’s budget is a populist one, focusing on providing social security at the grass root level.

The various announcements and funding provided are towards promoting the further growth of small scale industries as well as improving infrastructure, particularly across rural India.”

There is some good news for the real estate sector as well. With the aim of improving connectivity the Finance Minister has proposed the redevelopment of over 600 railway stations, completion of 9,000 kms of highways as well as improvement of regional connectivity with UDAN expected to connect 56 unserved airports and 31 unserved helipads in the country. This will have a positive

impact on the country’s trade movement.

Additionally, the budget also focusses on the development of the suburban railway networks in Bangalore and Mumbai. This focus on infrastructure development is in line with the governments long term objective of making India future ready.

The establishment of a dedicated affordable housing fund under the National Housing Bank for priority sector lending will provide a further impetus to the development of housing in this segment. Additionally, the fact that differentials between market value and circle rates for properties (upto 5per cent) will not be adjusted, will also help raise the demand for housing.

From a taxation point of view, the increase in standard deductions to INR 40,000 per annum will help individuals have more disposable income which could be channeled towards higher investments into real estate.

It was hoped that this year’s budget would finally address the need to put in place single window clearance and accord infrastructure status to the sector.

Though these issues continue to remain, this year’s budget has focussed towards strengthening the country’s agricultural and rural sectors, two significant contributors to India’s economy.

The Union Budget 2018 announced by honourable Finance Minister has recognised infrastructure as a growth driver of the economy, concludes Aneel Gambhir, CFO, Blue Dart.

The investments in infrastructure are estimated to be in excess of `50 lakh crore. This will support the growth of GDP and connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways.

To facilitate trade and e-commerce, the government should consider Aviation Turbine Fuel (ATF) under the ambit of

Fiscal defcit as % of GDP

4.1

3.9

3.5

3.5

3.3

FY15

FY16

FY17

FY18*

FY19**

Source: Union Budget 2018: FY19 Fiscal Defcit Set At 3.3 Percent, Bloomberg, 1 February 2018 Note:* denotes revised estimates and ** denotes budgeted estimates

24 CargoConnect - march 2018

cover story

The establishment of a National Logistics Portal will serve as a common platform for stakeholders and help digitise and streamline processes for logistics related to exports and imports.

Mike Chew CEO, AISATS

GST as the excise / VAT paid on these products are not available as input credit.

Under the Service Tax regime, input credit was available for the excise paid on ATF. Under GST, this has a negative impact on logistics costs.

India’s improving regulatory framework received widespread international acclaim, as it jumped 30 places to the hundredth rank in the World Bank’s Ease of Doing Business 2018 report.

Dibyanshu, Partner, Khaitan & Co views that the announcement by the Government to connect 56 unserved airports and 31 unserved helipads across the country should provide boost to the civil aviation sector.

Airports and connectivity: Govt to raise airport capacity to handle 1 billion trips a year The aviation sector overall seemed contented by the measures announced in the Union Budget 2018. Apart from

26 CargoConnect - march 2018

its push to expand airport infrastructure in priority areas to promote the regional connectivity scheme, the Centre has also proposed expansion of airport capacity by more than five times to handle a billion trips a year, compared with nearly 180 million trips as of now.

Amitabh Khosla, Country DirectorIndia of IATA thinks that the focus on the airport infrastructure capacity announced in the Union Budget 2018 is indeed a welcoming step. “According to our 20 year passenger forecasts, we anticipate India to evolve as the third largest aviation market by 2024. But, his is by no means guaranteed. To make this a reality, airport capacity in India needs to be augmented and expanded quickly.

IATA had earlier recommended and is supportive of leveraging AAI’s balance sheet for infrastructure creation and expansion. But the big question mark on capacity, and a critical area of concern for IATA continues to be about Mumbai airport. Navi Mumbai airport is still a distant dream. Meanwhile, Mumbai continues to fall behind in aviation activity, and Maharashtra is unable to maximise the economic potential that can be delivered by aviation. We urge the government to urgently look at innovative approaches to bridge the infrastructure shortfall,” he opines.

According to Pierre de Bausset, President and Managing Director, Airbus India, the budget has sought to strike a balance between India’s need for economic growth and the wellbeing of its

citizens. Investments to improve people’s health, education and skill development are vital for long-term growth prospects of a country, and the budget has rightly focussed on them, he said.

“It addresses the aspirations of a modernising nation through initiatives to expand air connectivity under the UDAN scheme. The government has also announced measures to push its ‘Make in India’ programme, including plans for two Defence Industrial Corridors and a new industry- friendly Defence Production Policy in 2018. We hope such steps will foster a sustainable eco-system that promotes investment and helps expedite the modernisation of the armed forces in a constantly evolving strategic environment,” he added.

Airport infrastructure plays a pivotal role in giving the much needed impetus to air connectivity, says Mike Chew, CEO, AISATS. The budget announcement to expand airport capacity by five times is very much a welcome step to cater to the ever increasing passenger growth. Chew seems hopeful that the establishment of a National Logistics Portal will serve as a common platform for stakeholders and help digitise and streamline processes for logistics related to exports and imports.

`1,014.09 crore allocated for Northeast aviation infrastructure The finance ministry announced an

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It addresses the aspirations of a modernising nation through initiatives to expand air connectivity under the UDAN scheme.

Pierre de Bausset President and Managing Director, Airbus India

allocation of `1,014.09 crore (this amount is nearly five times the allocation of `200.11 crore as per the revised estimates of 2017-18) for the upcoming financial year towards revival of 50 airports and viability gap funding for improving aviation infrastructure in the area under the flagship regional connectivity scheme.

`4,469 crore for two new aircraft-one of the highest allocations for the Ministry of Civil Aviation.

The Union Budget for 2018-19 has earmarked `4,469.50 crore for “purchase of two new aircraft for special extra section flight operations”, out of the ministry’s total allocation of `6,602.86 crore.

Railways-Capital spending pegged at `1.5 lakh crore for railways

exceeding `50,000 in value and 10 km in travel.

The Railways may chart a course to spend the highest ever plan size in Budget 2018-19 with sources pegging a figure close to `1.5 lakh crore of capital expenditure. According to the sources, unlike the last financial year’s Budget, the Railways will allocate resources on broad categories while detailed projects will be fitted into them later.

“In view of difficulties faced by the trade in generating the e-way bill due to initial technological glitches, it has been decided to extend the trial phase for generation of the bill, both for inter and intra-state movement of goods.

It will be applicable from a date to be notified,” says a tweet from the Central Board of Excise and Customs (CBEC).

CBEC Chairman Vanaja Sarna recently conducted a review meeting to discuss streamlining of the system. According to the sources, along with inter-state e-way bill generation by all states, 17 states also started generating such permits for intra-

E-way bill system for transport of goods on hold Due to technical glitches, the government postponed the rollout of an e-way bill system for inter-state movement of goods

To revitalise infrastructure development, and increase private investments, the Government announced an 83,677 km road construction programme with an investment outlay of INR 6.9 lakh crore

28 CargoConnect - march 2018

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The announcement by the Government to connect 56 unserved airports and 31 unserved helipads across the country should provide boost to the civil aviation sector.

Dibyanshu Partner, Khaitan & Co

state movement of goods, which caused pressure on the portal. Besides, NIC, in collaboration with GST Network (GSTN), had been conducting trial runs for the e-way bill system since January 16, during which about 2.84 lakh such permits were issued on the portal.

“Some of the a l locations a nd announcements are likely to have a positive impact on the logistics industry,

What’s in Jaitley’s budget kitty for logistics startups in this digital age of commerce

Union Budget 2018: What Has The Government Proposed Julian Michael Bevis, Senior Director, group relations, South Asia of the Maersk Group congratulates the government on broader electrification and use of technology in railways and for considering new technologies such as block chain and artificial intelligence.

These coupled with continued focus on in-country infrastructure development, Bevis believes will help connect smaller producers in India to global markets, and improve the country’s overall competitiveness.

“As a global integrator of container logistics, Maersk has been partnering Indian business for global trade since 1990. We recognise the potential of smaller farmers and businesses in the hinterlands and have been investing in building our in-country warehousing and container depot facilities to support these customers,” he says.

Rachid Fergati - MD Indian SubContinent, UPS thinks that Budget 2018 has indeed demonstrated the Government’s continued thrust on ease of doing business.

30 CargoConnect - march 2018

National Logistics Portal is a welcome initiative since it will lead to a single window access across key industry stakeholders. It will also mean more digitisation, which is always good for the industry,” he shares.

Nish it h R astog i, CEO, Locus, a Bangalore-based startup which deals with solving all inefficiencies for a logistics company shares his view.

In the medium to long term, GST roll out is likely to help in curbing the menace of black money, expand existing tax base, decrease logistics cost and establish a transparent and simplified tax regime. in the long run. The allocation to further strengthen the rail and airport infrastructure will help in infrastructure development and connectivity, which is extremely important for the logistics industry. MSMEs are crucial not just for the logistics industry but also for the overall economic growth of India. The allocation of `.3,794 crore to the industry alongwith tax benefits will help in the growth of this sector. Setting up of a

Infrastructure upheaval continues to take the much-needed limelight again this year, bringing in tectonic shifts in the logistics expansion across India.

Changes in reforms, taxes and policies last year could cause positive ripples in this sector in 2018. With allocation of `500 crores under Operation Green, Indian export sector pins its hope on massive agriculture growth, which constitutes to 10 per cent of the country’s exports. With the current major changes in agro-trade policies could lead newer avenues for logistics to sow their seeds in, informs Rastogi.

On the Shipping front Essar Shipping, an Indian shipping corporation for the global energy busi ne ss, for i nsta nce, ope rate s a f leet of 13 ships of mostly bulk carriers, comprising one capesize, six mini capesizes, one panamax, two supramaxes, and two handymaxes as

cover story The investments in infrastructure are estimated to be in excess of `50 lakh crore. This will support the growth of GDP and connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways.

Aneel Gambhir CFO, Blue Dart

well as one very large crude carrier. The average age of the company’s vessels is 10.5 years. Its 13-vessel fleet grew capacity utilisation to 94 per cent from 80 per cent in the previous fiscal, the company officials said. It said the primary goal and focus for the coming years will be on third party engagement which it aims to increase to 50 per cent by 2020.

The budget clearly displays that post demonetisation, GST implementation and bank recapitalisation, the economy will witness an eight per cent growth, opines Rajiv Agarwal, MD & CEO of Essar Ports.

The stress is towards recharging the rural economy by shoring up infrastructure, ensuring livelihood, doubling farm income and increasing agri exports. On the infra side, large spends are being done this year—`14.3 lakh crore on rural infrastructure, `14.8 lakh crore on the Railways, and `5.9 lakh crore on overall infra spends. These investments w i l l provide impetus to growth, demand and employment generation, shares Agarwal.

32 CargoConnect - march 2018

What the industry players expected Let’s go back a little about the projection.It was expected that the government might take up initiatives to resolve pending issues on Goods and Service Tax, land acquisition, environmental clearances, digital disruption which could possibly reduce the delays in the transport and logistics infrastructure development. The budget was also expected to include incentives and schemes to increase private sector participation in the transport and logistics sector.

Moreover, it was believed to settle

pending issues in the sector, simplify tax procedures and rationalise the overall tax regime, and drive growth in the sector.

Increase allocation for i n frastructure a n d agriculture The key expectations were to increase allocation for infrastructure and in agriculture.

Reforms, rules, and taxes

for the e-commerce industry The 2017-18 budget was balanced, industry participants say, and did not cater to populist demands.

Setting up a dedicated Logistics Division under the Ministry of Commerce & Industry and granting infrastructure status to the logistics industry is a move in the right direction, believes Chander Agarwal, Managing Director, TCIEXPRESS. According to Agarwal, subsequent initiatives in relieving GST rules in Budget 2018 and implementing major infrastructure projects will further

uplift the logistics sector. When asked about his Budget 2018 expectation, Agarwal shared that the biggest boost that the Government can possibly provide through the same is by cutting regulatory barriers and offering a seamless, transparent digital platform that will ensure easy movement of goods and vehicles across the country.

Besides creating a level playing field, focused fiscal incentives to encourage investments in specific areas will

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cover story The announcement of a national program directed towards research and development of AI and Machine Learning, as well as efforts towards exploring Blockchain technology, are the testimony to the fact that India is taking significant steps to gain a rightful place on the global technology map.

Samay Kohli Group CEO, GreyOrange

allow the private sector to contribute, consolidate and expand. One area where private investments can show huge results is the upgrading of dilapidated government and railway warehouses across the country. Modern warehouses will prevent wastage of produce, saving the country thousands of crores, added Agarwal.

implementation, the startups are still woeful owing to the huge amount of funds being locked up as credit because of the prevailing system of producing a ‘proof of delivery’ in hard copy.

In spite of the big announcements, the logistics startups failed to encash the

George Lawson, Managing Director at DHL Global Forwarding, India on the other hand focuses on logistics cost.

“Logistics costs as part of GDP is still 13 per cent - 15 per cent, a percentage much lower in other countries. We would welcome whatever steps the government takes to make that chunk smaller,” he said.

The way forward The mega infrastructure projects, access to end-to-end railway solutions and funding help bolster logistics startups in the country. However, startups heavily relied on the Budget 2018 to pave way for technology-oriented solutions in their projects.

Besides creating a level playing field, focused fiscal incentives to encourage investments in specific areas will allow the private sector to contribute, consolidate and expand.

The startups, additionally, have been urging the government of India Electronic Proof of Delivery (e-POD) to release blocked credit for transport providers in the freight transport industry.

opportunity last year. This was precise because the technology-oriented startups failed to meet the end-to-end requirements of this brick and mortar sector.

The recent reports authenticates that while the government has already issued notifications regarding E-way bill on August 30, 2017, after the GST

Samay Kohli, Group CEO, GreyOrange, a leading warehouse automation solutions provider feels the Union Budget for 201819 is a breather for the industry as it

34 CargoConnect - march 2018

has laid a strong emphasis on emerging technologies, such as Robotics, Artificial Intelligence, Machine Learning, Big Data and IoT, which he considers an important step towards fostering innovation in the country. This would also help in creating jobs, improving the quality of education and healthcare, believes Kohli. “The announcement of a national program directed towards research and development of AI and Machine Learning, as well as efforts towards exploring Blockchain technology, are the testimony to the fact that India is taking significant steps to gain a rightful place on the global technology map. “Along with the push on technology, the new provisions for financial support, in the form of credit, financing and tax relief for MSMEs, will further boost the growth of smaller businesses in the country,” Kohli adds.

In order to enhance trade facilitation, automation and digitisation, the Finance Minister has empowered the board to provide specific relaxation to a specified class of importers/exporters/ goods in the arena of digital documentation, expeditious customs clearance to reduce the time and cost of clearance of goods.

Besides, the v isible undertone of protectionism in tax policies aiming to provide protection and competitive edge to domestic manufacturing sector may mandate many of the foreign brands to revise their manufacturing and supply chain strategy from India manufacturing perspective.

special feature

36 CargoConnect - march 2018

special feature

Digital Opportunities to transform the logistics value chain Although the Indian transportation industry is continually growing at a CAGR of 15 per cent, the industry still remains heavily fragmented, unorganised and very rough in nature.

With over seven million goods and vehicles moving around the country, the freight volume has reached 1,325 billion ton-km, a figure that is supposed to double by 2025. So, in order to develop a better understanding of the troubling issues, Deepashree Banerjee delves deep into the day-to-day operations of the industry.

I

n the Indian trucking industry context, spot market, popularly known as mandi plays a vital role. Irrespective of the market share earned by a player, one has to reach out to the spot market to fulfill their daily transportation requirements. The key players currently operating in the market are – Shipper: Basically refers to the primary owner of the goods, who needs it to be shipped from one location to its destination. The ship-

ment, at times, has multiple loading and unloading points. Â For example, Shippers such as ITC, Asian Paints, Patanjali, Tata Steel etc require moving goods on a regular basis.

The transporter shoulders the whole risk of shipping the goods and it is his responsibility to place the vehicles at the loading point, make sure that the necessary paperwork is done, and pay the vehicle supplier in advance so that the goods can be shipped on time. Transporters typically have to pay 80-90 per cent of the charges in advance and the re-

maining on the receipt of the proof of delivery, and they cannot raise an invoice to the shipper unless they receive a proof-of-delivery, which usually takes place two to three weeks from the day the goods are delivered.

Once the invoice is submitted, the shipper, typically, takes 30-60 days to make the payment. Thus, the role of the transporter is heavily capitaldependent.

Broker: The name speaks for itself, the broker is a trusted local liaison who heads the supply side. If march 2018 - CargoConnect

37

special feature “The combination of technologies that underlie the connected truck and the digitally integrated supply chain has already begun to transform the entire logistics business and is being adopted in stages in an effort to ready businesses for the supply chain. Hardware developments like self-driving trucks and electric batteries are going to change everything we thought we knew about logistics,”

Dileepa BM CEO, Shreeji Bonded Trucking

anything goes wrong with the vehicle during the transit period, it is the broker’s responsibility to ensure that the vehicle is replaced and the goods are shipped. As the industry professionals say, in India, this is actually a one-man shop that places anywhere between five and 100 vehicles on a day-to-day basis.

Fleet owner or carrier: The owner of the vehicle and his primary goal is to ensure maximum utilisation of the vehicle. If and when the vehicle gets ‘unplaced’, he’s the one who has to bear the cost. Fleet owners at times approach the transporter directly. However, in such cases there is a guarantee of a minimum load from the demand side and a strict KYC is done by the transporter.

As far as the Indian trucking industry is concerned, the fleet owners are heavily fragmented in India, with more than 80 per cent of the fleets owned by people having less than 10 vehicles, which naturally produces the intermediaries.

Allocating a load to vehicles is not a simple task, as there are multiple entities involved in the entire transaction and multiple activities happen in the background before the vehicle can be in-transit. The very nature of spot market makes it heavily time-bound, a shipper requires a vehicle urgently and reaches out to the transporter who, in turn, reaches out to the live spot market (read the brokers and the fleet owners)to get the current rates, and being a time bound process, these transaction processes leads to huge price volatility.

There are multiple modes of agreements carried out by shippers to manage truck load operations in India. The com-

38 CargoConnect - march 2018

mon approximation here in practice is that the contractual relationships cover around 30-40 per cent of the total market, whereas spot consists of the rest.

Shippers mostly use a combination of 1.

Vehicle-toinfrastructure communication

6.

Automated freight matching

5.

Integrated supply chain

Digitised trucking 2025

2.

Vehicle-tovehicle communication

3.

Remote diagnostics

4.

Autonomous driving

Source: Strategy & analysis c PwC. All rights reserved.

multiple types of relationships to manage their truckload operations.

Digitised trucking is the road to the future: This ‘Digitised trucking’, as part of the logistics industry, will take at least a

decade’s time to take its full shape, but parts of it are already being put in place , courtesy- two major global trends that are transforming the trucking industry.

Firstly, regulators around the world are making an effort to manage climate change and to save energy and resources are forcing the industry to develop cleaner, more efficient trucks and optimize the use of heavy vehicles. Secondly, social and cultural changes are causing new markets to open up and increasing expectations for the efficiencies to be gained through autonomous vehicles and the digitised supply chain.

These trends won’t just affect how trucks move down the highway, or how the global supply chain is managed, but digitized trucking as and when implemented fully is going to transform how virtually every stakeholder in these linked businesses including original equipment manufacturers (OEMs), logistics companies, warehouses, and local delivery businesses functions. Some stakeholders will see a wide range of new business models open up, while others will likely struggle as their roles in the logistics chain are diminished.

The trucking business will likely divide into two distinct markets in the longer term. Emissions regulations, increased competition, big strides in connectivity, and coming disruptions in the entire logistics chain will primarily affect developed economies.

As far as the emerging markets are concerned, the issues will entail the need for more reliable and economical trucks, a growing interest in regulating emissions, and strong overall growth prospects, but not necessarily the de-

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special feature The six technologies employed in this process are:

Vehicle toinfrastructure communication Vehicle-to-vehicle communication Remote diagnostics Autonomous driving Integrated supply chain Automated freight matching

A recent PwC report shows companies that digitise early could save up to 28 per cent by improving delivery accuracy, freight dispersion, and truck wear and tear.

40 CargoConnect - march 2018

velopment of digitised solutions. These distinctions will likely last into the foreseeable future.

The trucking industry is currently grappling with a lot of issues namely shortage of drivers, due to high turnover rates, strict federal regulations enforcing hours of service and safety measures. But, the experts predict that the trucking subsector will see a significant change over the next ten years.

A recent PwC report shows companies that digitise early could save up to 28 per cent by improving delivery accuracy, freight dispersion, and truck wear and tear.

There are many benefits to digitised trucking, among them greater safety, savings on fuel thanks to platooning (wherein drivers closely align their vehicles to benefit from reduced wind and resistance), quick and immediate rerouting in case of traffic, and advance parking notification.

But, these six technologies present the possibility of making these issues debatable by radically transforming the role of the truck driver. As Autonomous vehicles might turn into the industry standard by 2025, drivers will initially be freed to assist with vital administrative tasks and freed from safety hazard such as sleepless driving. Transport companies will benefit greatly from this implementation, not only in savings, but also in efficiency and customer satisfaction.

Vehicle to vehicle communication will result in swifter product delivery, therefore, the lag time between seller production and buyer delivery will significantly reduce inventory storage. The sooner transport companies adopt these coming changes, the more they will benefit.

Technology -driven Perhaps the best way to understand the technologies that are already being implemented in the trucking industry, and how they will transform the industry’s many stakeholders, is to break them down into two primary areas: the truck itself and the logistics chain of which it is an essential part.

• Vehicle-to-infrastructure (V2I) communication technology makes allows trucks to remain in constant communication with their surroundings through GPS tracking and digital links between the truck and the road or other infrastructure installations . The technology mainly aims to optimise traffic flows, automate routing, improve parking efficiency and safety, and makes drivers more efficient.

The technology at the same time will provide drivers with real-time information about congestion and accidents and automatically update routes. Automated parking features will also suggest where to park depending on the driver’s level of fatigue, regulatory provisions, and the traffic situation. Intelligent road signs will even be able to signal to specific vehicles.

• Though Vehicle-to-vehicle (V2V) communication, trucks will be able to communicate automatically with other vehicles on the road, resulting lesser number of fatalities. Intelligent telematics systems linking trucks will share information regarding position, speed, and direction, allowing for automated alerts.

• Remote diagnostics By constant monitoring of the truck’s condition, remote diagnostics will enable companies to make more timely repairs, develop more efficient maintenance schedules, and considerably reduce truck downtime. It is estimated that the technology can prolong a truck’s service life and reduce maintenance costs by as much as five per cent.

• Autonomous driving All these technologies, combined with shortand long-distance radars, cameras, sensors, and 3D mapping, will finally lead to the era of self-driving.The first road tests for autonomous trucks are already under way, carried out by OEMs such as Daimler and Freightliner, its U.S. subsidiary. Whether these trucks will be fully accepted aroundthe world is however not clear yet.

(Contd on Pg # 44)

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special feature Just as the arrival of the connected car is already changing how carmakers will operate in the future, the advent of the digital truck will completely transform how freight is transported on the world’s highways. Do you agree?

The future of freight will be supercharged by the self-orchestrated supply chain driven by the “Digital Truck” readily connected with multi transportation modes acting as the digital mobile nodes in the internet of freight and everything.

This will embed a real-time data exchange and seamless physical and communication connectivity with every individual and electronic devises in the network, thus driving high level of transparency and traceability.

The rapid proliferation of high-performance mobile phones and advancements in connectivity technologies supported by the new 5G communication technology enable the rise of “automated on-demand freight and logistics chain.

This drives the rapid acceptance of “Digital Truck” in a mobile-centric approach towards freight matching marks the next logical evolution of freight. It will travel beyond the highway entering into the inner city logistics management when the less than truck load delivery provides the superior physical connectivity cost effectively and adaptively responsive. Seamless cloud- based logistic matching management at lower cost, higher speed responsively with full transparency make omnichannel the most effective product management core competency. Less than truck load delivery will dotted the logistics and supply chain hugely cost effective make easy by advanced technology. Transparent flow of information across multiple points in the highly connected value chain significantly drive efficient decision-making, and naturally will have less deadhead runs as the central objective. “Digitisation” which enables the real-time data flow which is a prerequisite and becomes a necessary condition for efficient logistics.

The advent of internet with super 5G communication technology give rise to enhanced online loadboards that became a marketplace for shippers to lo-

42 CargoConnect - march 2018

view of the fact that freight transport is set to triple in volume in 2025 without commensurate expansion of the road network. Connectivity increases vehicle availability and dead mileage, or dead heading will be effectively reduced. This generates higher revenue cost effectively. Origin to destination point to point Dr. Lai Ving Kam

Associate Professor, Head of Logistics and Supply Chain Management, Berjaya University College of Hospitality offers a glimpse into the possible impediments of digitization in the current scenario.

cate capacity and truckers to uncover loads. With many significant players expanding their already more advanced communication and physical connectivity software systems and technologies make it possible to have lightning-fast reactions in connecting the “Digital Truck” not only with each other but also to the transportation infrastructure. This will deliver the highly advanced technological advanced transportation topography. Transportation and physical connectivity will take the world to a totally new dimension in supply chain. With Truck Platooning system enhanced and implemented, it will allow more effective use of highway responsively and cost efficiently. Endto-end intelligent transportation solution or developing individual components of a smart transportation system will rapidly become a reality.

With the rise of new technologies, trucks will move down the road guided by a wealth of information from transportation infrastructure and other vehicles, improving utilisation through remote maintenance, increasing efficiency, and boosting safety. Do you believe such initiatives will reduce operational costs and increase revenue growth in due course?

Enhanced freight transportation information system and highly intelligent infrastructure make the transportation most cost effective and responsive. With rapid adjustment and enhancement, the existing infrastructure can be used significantly more effective than at present.

This offers noteworthy advantages in

runs will be digitally managed allow lesser wastes.

Share your thoughts on the possible impediments of digitisation.

The “Digital Truck” requires much better transportation infrastructure. Road engineering has to re-address the road and traffic infrastructure. Central and local authorise may hesitate to loosen their control due to unfamiliarity of the new transportation technologies. There may be also the need to strengthen the road safety requirements.

Smart transportation suggests that efficient and sustainable intermodal transport systems and infrastructures can deliver higher levels of intelligence and performance that make lesser gridlock on roads and at ports of incoming and exit. But, the most critical concern can be the challenge of IoT and Cyber security. Smart transportation systems will be made possible through the integration and interconnectivity of countless devices, networks and other key infrastructure, all of which must be secured. Otherwise, one rogue device or errant application can wreak havoc to the transportation system. Every electronic device or sensor that connects to the transportation network widens the assault surface areas, constructing a potential attacking point for cybercriminals to hack to or hack through. The digital transformation required for smarter transportation will result in huge amounts of data being generated by new devices—data that must be correlated, analysed and acted upon in near real time.

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special feature

• The integrated supply chain According to experts, it will soon be possible to merge the truck into real-time logistics data across the entire supply chain, from parts and materials suppliers to manufacturers to warehouses and distributors and finally to the end customer.

• Automated freight matching Due to their ability to communicate with fleet management and with shippers of goods and in the future with cloud-based solutions for freight matching, trucks will eventually be able to determine whether they can take on additional freight or not.

According to Dileepa BM, CEO, Shreeji Bonded Trucking, managing climate change, saving energy and natural resources have become a world-wide challenge and is forcing the industry to develop cleaner, more efficient trucks and optimising the use of heavy vehicles.

As a result, digitised trucking will transform how virtually everyone in these linked businesses will operate, he feels.

“The combination of technologies that underlie the connected truck and the digitally integrated supply chain has already begun to transform the entire logistics business and is being adopted in stages in an effort to ready businesses for the supply chain. Hardware developments like self-driving trucks and electric batteries are going to change everything we thought we knew about

44 CargoConnect - march 2018

logistics,” says he.

These are just a few of the exciting developments happening in the transport industry.This “Digitised trucking,” and the logistics industry of which it is a part, is still at least a decade in the

Although the radical transformation coming to the trucking and logistics industries over the next 10 or 15 years presents many risks, it also furnishes a handful of opportunities for all the players in the business future, but parts of it are already being put in place, he believes. “So, now is the perfect time to start revolutionising your supply chain. It’s one of the few industries that not only holds the promise of making a colossal positive environmental impact, but is also unlikely to run out of demand in our lifetimes,” he adds.

About 25 per cent of trucks on the road right now are currently empty. It’s one of the most regrettable market inefficiencies in the world — both in terms of money, and in terms of pollution.

There is no straightforward way for trucks to find cargo. Truck companies are notoriously fragmented — once they drop

off their initial load, they can’t easily find a load for their return (back haul) trip home.

The platform will notify driver and fleet management about available freight-sharing opportunities, and an agreement that meets all specified criteria can be automatically struck between the truck operator and the shipper. In the future, trucks will eventually be able to determine whether they can take on additional freight. The truck trailer itself will be able to determine through sensors its available space and weight, as well as scheduled route, ETA, and other relevant information, and communicate this data to a digital freight-matching platform.

Connectivity itself will play a key role in recruiting younger, more “digitised” drivers, who trucking companies are desperate to hire, in part because they are less expensive.

Improved safety will reduce insurance premiums. Drivers can turn their attention to administrative tasks that would otherwise have to be done by others. This level of savings by itself will completely change the economics of fleet ownership.

The Era of Digitised Trucking Although the radical transformation coming to the trucking and logistics industries over the next 10 or 15 years presents many risks, it also furnishes a handful of opportunities for all the players in the business. Some say the risks will be so huge that they are most likely to get over-shadowed. For others, success will depend on their ability to understand the opportunities available to them, and to develop or buy the capabilities needed to aggressively pursue them.

But, the real risk though lies in failing to move forward.

Technology undoubtedly plays the key role in this field, especially in the Indian context. There is a flurry of startups such as Blackbuck, Rivigo, 4tigo, TruckHall, Freightbazaar who are striving to make some dents in the landscape and smoothen the operations. However, this sort of a revamp will take years of hard work before some substantial impact can be brought in the industry.

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46 CargoConnect - march 2018

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feature

C

ompanies are run with the prime objective of increasing sales, decreasing costs and reducing risks in order to achieve profitability and better delivery

1 2 3 4 5

Process of receiv i ng ret ur ned components or products for the purpose of recapturing value or proper disposal and all other related activities come under Reverse Logistics. Entire supply chain gets reversed in the reverse logistics process where companies have to correctly identify and categorize returned products for disposition.

This area itself offer many windows of earning additional revenue if done in a planned manner.

The process is not only restricted to counting defective items returned by customers and has more activities involved in the process. Also, it is much more complex than outbound shipping in that customers and/or consumers initiate a return, making it an inbound shipment process that is less predictable.

INNOCENCE

No reverse logistics, no understanding of the benefits and need.

UNDERSTANDING

Non-existent or poorly developed reverse logistics, but a growing understanding of the need from an environmental control and warranty perspective.

COMPETENCE Solid reverse logistics has the capability for traditional repairs and good controls on 3rd party services and returns.

DEVELOPMENT

Increasing scope of reverse logistics to include a much broader range of parts. Growing focus on warranty recovery meeting environmental legislature.

EXCELLENCE World class optimised reverse logistics minimises warranty cost by pushing it back to supplier’s full environmentally compliant excellent warranty claim revenue from waste materials.

of the services. But, during tough economic times, companies tend to take easy ways to put in place simple processes of cutting costs. Companies often-overlook reverse logistics that could help them in reducing waste and also improve profits.

48 CargoConnect - march 2018

The science of reverse logistics includes return policy administration, product recall protocols, repairs processing, product repackaging, parts management, recycl i ng, product d isposit ion management, maximising liquidation values and much more.

Despite involvement of several process, reverse logistics seldom receive attention, until something important goes wrong.

Many executives go out of their way to avoid dealing with returns because it can be ugly and is thought of as nothing more than a cost of doing business. An average manufacturer spends nine to fifteen per cent of total revenues on return which creates a huge impact on their customers, resources and bottom line. In fact, improving reverse logistics can help a company increase revenue up to five per cent of the total sales.

Poor reverse logistics functions could have horrendous impact on customer relationship and on the financial health of a company. Companies lose millions in profits; customer relationships are severely impacted and external liabilities that get created has big impact on the business. While, on the other hand, if the reverse logistics process is efficiently managed then companies can explore hidden profit areas, improve customer relationships and minimise liabilities.

There are a few companies who recognises the importance of reverse logistics in supply chain and offer tailor-made endto-end return solutions to customers.

Ryan Oliver, National Head – Contract Logistics, Agility Logistics Pvt. Ltd. says, “We give its due relevance to reverse logistics and understand how much impact it creates on profitability of a company.

Apart from picking up of materials from end users through small sized vehicles adopting a ‘Milk Run’ format we have also contracted with a large pool of Bikers and runner boys for delivery and collection of material based on urgency of requirement. Agility also deploys vehicles on a standalone per trip basis in order to cater to large volume returns.”

Techniques Agility uses to reduce costs in Reverse Supply Chain A high level of coordination and route planning among the warehouse team

“Our world revolves around our customers”

feature We give due relevance to reverse logistics and understand how much impact it creates on the profitability of a company.Apart from picking up of material from end users through small-sized vehicles adopting a ‘Milk Run’ format we have also contracted with a large pool of Bikers and runner boys for delivery andcollection.”

Ryan Oliver

National Head – Contract Logistics, Agility Logistics Pvt Ltd

helps to optimise the vehicles and resources being deployed on a daily basis.

Load consolidation helps to bring down high transaction cost, which we are able to pass on to our customers.

Challenges in Reverse logistics Most of the compan ies face huge challenges in the management of reverse logistics despite having a robust primary and secondary distribution network. It is usually found that, vehicles used for distribution of finished goods can seldom be used for customer returns. More often than not, such returns accumulate overtime causing a congestion at the end users site. It ultimately delays accounting and passing of credit notes to the end user.

Steps to OptimiSe Reverse Supply Chain Agi l ity maintains a h igh level of coordination between the warehouse team and its customers. We help the team in route planning and in optimising vehicles and resources deployed for the management of reverse logistics. We ensure that vehicle placement and returns are carried out on time through a defined monitoring process.

It is important to understand that, a large part of a company’s finished goods, particularly equipments and appliances r ight f rom mobi le phones to a i r conditioners, refrigerators, engineering products etc. are dependent on a strong ‘Service back-up’. A strong service back up is totally dependent on a reliable reverse logistics solution and network.

50 CargoConnect - march 2018

like refurbishing, repackaging and reselling to parts reclamation and recycling.

With the secondary, discount market for products continuing to grow, there are even more reasons to think about returns as revenue opportunities.

Prime for customer A c c o r d i n g to a sur vey satisfaction Inefficiency in reverse logistics puts a cascading negative impact on sales, forward logistics and the supply chain on a whole. A poor reverse logistics network leads to erratic vehicle deployment which results in high cost of transportation.

Moreover, unprocessed credit notes due to poor reverse logistics, lead to customer dissatisfaction and reduces the level of reorders from end users.

Impact on Profitability of Reverse Logistics Executives often have the perception that if they invest the amount spent on processing returns to other supply chain activities to elsewhere they would yield greater results. Therefore, they just focus on trying to reduce the cost of return processing. In reality, reverse logistics costs are less than four per cent of total supply chain costs for most companies. And while maximising efficiency is always important. Reverse Logistics can also provide a wide variety of opportunities for improvements, from customer service and returns processing to supplier relations and an unexpected revenue source. There are several key areas where companies can positively impact their revenue with reverse logistics activities: Returned products are a good source of revenue. Companies save more and earn more when they ensure timely delivery which is a result of proper time managment involved in processing of return of products. There are activities

More opportunity to earn

conducted by a research company, 95 per cent of customers will not buy from a company if they have a bad returns experience.

This, in part, explains why companies considered best-in-class in reverse logistics enjoy a 12 per cent advantage in overall customer satisfaction.

If a company knows about t he pr o d uct which will be returned and the potential place where it lands, then it becomes easier for companies to deal with regulatory issues and evaluate returned stock for possible secondar y sales channels. There are also other beneficial byproducts to disposing of products, such as avoiding excess inventory carrying costs, minimising taxes and insurance, and managing staff levels.

Visibility advantages

Mishand led or completely misplaced returns affect the efficiency of any reverse logistics process, but also means that products could end up being a total loss for a company instead of an opportunity for resale, or a spare parts resource.

Another resale opportunity

Role of Warehousing in Reverse Logistics The need for efficient reverse logistics just can’t be brushed aside, and warehouses have always an important role to play in the process. Process involved in reverse logistics like return, processing, repair and replacement of products create a huge impact on customer service. Warehouse is the nerve center of all above mentioned

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feature Generally, we opt to sell the products on discounts instead of going through the process of reverse logistics. The vehicles used for delivering products at the store or directly to customers are used for picking up reverse stocks which help in controlling the reverse cost.”

Harpreet Kohli

Zonal Head – Operations, Future Supply Chain

operations. Three important roles which are performed in a warehouse are 1- Streamline turn-in procedures 2- Route items with an eye to what happens to them next 3- Integrate the forward and reverse pipelines Bill Tyng, systems consultant with Forte Industries of Mason, Ohio, gives some insights on the warehousing business of the international market and says, “One

RETRIEVE

TRANSPORT

hundred percent of WMS packages were designed to get stuff out, they also had to be adapted to get stuff back in.”

The situation is more critical in Europe, where retailer policies tend to be laxer and returns can account for 30 per cent of one’s business. But reverse logistics is taking on increased importance in the U.S. as well. The trend has given rise to a number of niche vendors, offering software or services specifically to handle returns, while the larger integrated vendors are also scrambling to adjust.

52 CargoConnect - march 2018

“Reverse logistics can be the black hole of your warehouse,” says Mary Haigis, chief marketing officer of Optum Inc. in White Plains, N.Y. The return process involves huge inefficiencies, but they’re manageable with the help of the right technology and processes. She cites an example of a large retailer and customer of Optum that piloted a reverse-logistics application at a pair of its DCs through the Christmas season. “The company typically has a

RECEIVE

high rate of return,” she says, “but realised ‘incredible savings and efficiencies’ with the help of a formal system.”

The generous return polices offered by most major retailers these days ensures that there is always a given percentage of returned products working their way back up the supply chain. As such, Reverse Logistics also has different names like Aftermarket Logistics, Retrogistics, or Aftermarket Supply Chain. Business owners have to deal

with the pain of reverse logistics its importance further magnifies in the e-commerce business. On top of that, most warehouse managers consider returns a necessary evil, and therefore assign a low priority to dealing with them - one should not underestimate the role of warehouses in reverse logistics.

This can often result in inefficient supply chain practices, such as ordering new inventory while as-new returned products are sitting in the warehouse dock.

So, here is the crux Reverse logistics which is considered as a pain, could mint high profit for a business if handled with proper planning and in an efficient manner. It could give business a definite competitive advantage. If a supplier receives returned item two months late then he will not take you seriously and it’s definitely

INSPECT

SORT

going to impact business relationships in a negative way. All too often, reverse logistics are piled on top of regular supply chain warehouses. The returns section can become a tangled mess of stock keeping units, with defective and “good as new” products becoming hopelessly entangled. This situation usually emerges when reverse logistics is kept on low priority by companies.

Hence, lack of well thought reverse logistics policy can turn a company upside down.

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Interview

“Thanks to e-commerce, retailers & customers have come closer�

54 CargoConnect - march 2018

Please comment on the current scenario of Indian Pharmaceutical Industry. How is it evolving?

Overall the Indian pharmaceutical industry is growing.

Indian manufacturers and pharma companies, such as Biocon and Dr. Reddy’s, have become global multinationals. In parallel to this development, other global pharma players are expanding their operations here in India. The combinations are bringing the industry needs and standards to another level. The market is going to flourish, both from local consumption and because India Agility is the first freight is becoming a key exporter. The growing forwarder to collaborate demand is resulting in an increased need for temperature-regulated transportation on the Maersk-IBM solutions. Ultimately, all the supply chain joint initiative to provide stakeholders are dealing with the safety of efficient and secure patients. Everybody– from manufacturer, freight forwarder, airlines to handling agents methods for conducting – has to collaborate closely to ensure data global trade using transparency and product integrity.

blockchain technology to manage and track container shipments,

Please throw light on the new trends that are driving the Indian Pharmaceutical Industry.

We have seen lots of mergers and acquisitions happening in the pharmaceutical industry.

Esa, Senior VP, Global Every pharmaceutical company is trying to find the next big product. While multinational Business Development drug manufacturers face rising costs and and CCO Europe, Agility. expiration of drug patents, various new products are coming in, both branded and In an exclusive interview generic. There is a lot of interest in biotech with Ritika Arora Bhola, companies that are on the verge of discovering he talks extensively about new drugs. Everybody is looking for growth, which is driving the shipment volumes and the industry, new trends movements.

asserts Mohammed

and their future projects.

Experts are talking about Blockchain technology, Internet of Things (IoT) and Artificial Intelligence at large. Do you think these new techniques will bring a change in the coming years?

Certainly, I think the pace of change will accelerate.

There is no looking back from this evolution, irrespective of the industry. The pharmaceutical industry is changing and growing, and products are now reaching patients directly. Thanks to the rise of e-commerce; retailers had to change their supply chain to respond faster to changing customer behaviour. Furthermore,

pharmaceutical manufacturers must have complete visibility of their supply chain. This requires a significant amount of data and a special focus on potential security and product integrity issues. With regards to blockchain, Agility is the first freight forwarder to collaborate on a Maersk-IBM joint initiative to provide more efficient and secure methods for conducting global trade using blockchain technology to manage and track container shipments. We are very excited about this development, as blockchain technology has the potential to make shipping cheaper, safer and more reliable.

Do you think Indian pharma industry has adequate technology and infrastructure for efficient working?

Yes, the technology is available in India and not restricted to any particular area. That said, infrastructure probably needs a deeper understanding and willingness to invest.

It’s a key part of the process. But, there is no way around it, it’s more a question of the pace at which this is going

The market is going to flourish, both from local consumption and because India is becoming a key exporter. to be achieved. I am convinced that India will build up the necessary infrastructure to answer its booming economy and trade. They have realised how important it is for Indian airports and facilities to meet the highest world standards.

Do you think right investments are being made for improving infrastructure?

Yes, I believe investments are being made, and it needs to continue for India to compete globally.

Please tell us about your future projects.

Currently, we are mainly focusing on organic growth. We have also recognised that technology is a key driver to gain growth. We are looking at ways to interact with our customers using new digital platforms to enhance their experience and engagement with Agility. Additionally, in line with our strategy, we are driving major expansions and investments across emerging markets, particularly in Africa, Middle-East and Asia Pacific.

march 2018 - CargoConnect

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Interview

Taking the leap through technology Having a corporate office in New Delhi and IGI Airport, Namaste Group’s integrated business model is built to cover areas like cargo and courier services, logistics, warehousing, door-todoor service aircraft chartering, and airport handling services.

Aviraj Rathi, Director, Namaste Group, in an exclusive interview with Deepashree Banerjee discusses his perspective about centralized warehousing and future mega trends in the logistics and warehousing industry. Excerpts.

56 CargoConnect - march 2018

Please brief us on the varied safety measures taken for the smooth transport of pharmaceutical and dangerous goods products.

If we talk about the safety measures for the transportation of dangerous goods, we have to understand that the “DGR” journey is not in complete isolation.

Therefore, the UN organisation and the authorities for dangerous goods work tirelessly to develop recommendations on the model regulations. They publish these recommendations every two years which further keeps the procedures and the protocols up-to-date with the current scenarios. We need to find a balance between providing safety and also trying not to hinder the air-freight journey of these goods.

Due to the high count of known chemicals (more than fifty million), they have come up with ways to determine whether a substance is dangerous or not through series of tests and criteria establishment. The UN came up with nine classes of “DGR” goods having no preferential order. As far for Pharmaceuticals, the safety measures are slightly different, they range from keeping temperature-controlled storage spaces to having the same in the pallet boxes.

Having time-and-temperature sensitive labels ensures safety through effective cold chain distribution as well.

Air freight is mirroring the improvement in global trade, says IATA in its recent report. What is the current global scenario in terms of air cargo?

If we measure the global trade in freight tonne kilometers (FTKs), it is impressive to see a 9.0 per cent growth as compared to last year. It grew nearly twice from a 3.6 per cent in 2016. The year-on-year demand for cargo as well as the freight capacity also increased from previous years.

The current global scenario seems really promising for pharma-based, textiles, and telecommunication services.

The demand in the developing and underdeveloped countries is on an all-time rise and this only means one thing; increase in air freight.

It was predicted by many industry professionals that GST is going to change the entire landscape for warehousing in India. What is your take on the concept of centralised warehousing?

New-age warehousing and logistics in India would be midwifed by the Goods and Services Tax (GST), which also aims to transform the South Asian nations into an integrated market for the first time since Independence.

Small and often ill-equipped storage space in the country would now give way to neatly stacked, air conditioned warehouses, with higher levels of automation, as India ushers in the biggest tax reforms since 1947. And, driving the change in India’s supply chain landscape are the consumer goods companies.

C o n cept of C e n tralised warehousing Centralised warehousing is a system where a retailer or its supplier maintains a single, central warehouse versus several facilities spread out to cover a territory.

While a centralised approach may lead to longer lead times on orders, it does offer a number of benefits compared to decentralised warehousing.

Customer Service With centralised warehousing, a distributor has its best people, equipment and inventory systems concentrated in fewer places. This is beneficial to customer or retail store service as the warehouse can more actively focus on the needs of its customers.

Lower Operation Costs Centralising an operation like warehousing and distribution usually leads to a number of cost reductions.

You have fewer buildings to own or rent, which means you pay less utility expenses, require fewer employees and don’t need as much equipment and computer technology.

Lower Inbound Costs Along with reduced costs of distribution operations, centralised warehousing

contributes to lower inbound distribution costs. This means that a distributor saves on shipments from manufacturers because it takes in larger quantities in a single location, versus having shipments go to multiple locations. This enables better value for retailers and consumers.

Online Retailer Relationships Another benefit of centralised warehousing is expansion of opportunities for relationships with online retailers.

Distributors can appeal to online storefronts by offering concentrated inventory storage and fast delivery on order fulfillment. This helps online retailers to keep costs low to attract customers online with better pricing.

As we step into another calendar year, what are the mega trends that you foresee in the coming years as far as logistics, warehousing, door-to-door service aircraft chartering, airport handling services are concerned?

The trends that I see to prosper in the coming years are in the field of warehousing and airport handling services. For warehousing, blockchain implementation seems a certainty now because having an automated record system of all the transactions that occur in a network would ensure access to trusted sources of data in real time. It could very well be one of the best methods to achieve transparency without having to compromise the privacy for security reasons.

One last thing that might see a major upgrade in the field of warehousing could be the nature of warehouses shifting towards more flexible sorts. It must develop a network of mid-sized to large facilities which are systematically placed according to the changing needs of the customers.

The airport handling services are going to make the next big leap by implementing the well-tested RFIDs and GPS systems.

Using these IOT(internet of things) services can fasten the existing procedures and time-durations. Having such systems in place also ensures the credibility of airlines flying the cargo which makes accountability easier.

march 2018 - CargoConnect

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Interview

“Currently Indian Logistics Industry is at the Cusp of Revolution” Please tell us about the genesis of your company in India. Please elaborate on the offerings of your company.

Technology is an enabler and means to achieve strategic objectives rather than being an end itself Rohit Chaturvedi, CEO & Director, The Transport Hub. In an interview with Ritika Arora Bhola, the technology service provider talks about the genesis of their operations, USP, significance of IoT and technology, current scenario of logistics industry and future projects.

The Transport Hub (TH) is the first technology ecosystem for the supply chain, logistics and transport industry. The company’s whole objective is to seamlessly intertwine technology with the strategy of its clients in a user friendly approach, yet utilising cutting-edge technologies.

TH provides tangible benefits visible on its clients’ top line and bottom-line performances. We believe, technology is an enabler and means to achieve strategic objectives rather than being an end itself.

In the current scenario, technological solutions made for other industries are force fit to the supply chain and logistics industry without understanding the complexities of the industry. On the other hand, we solve the business problems of the supply chain industry through understanding the strategy of its clients, deep diving into their operations and then suggesting right set of technology interventions. We utilise modern technologies in analytics and IoT to develop solutions which can be plugged to the core platform. The advantages of this approach lie in marrying the customised solutions with efficiency.

Please tell us about how your technologies help in the logistics activities and supply chain strategy of your clients as so as to offer maximum safety, higher efficiency and minimum damage.

TH makes sure that all the technologies work together to provide the most effective and easy experience to its clients. TH’s actionable insights enable managers to take timely actions. The insights are designed to enable preventive measures rather than corrective measures, which are more expensive and inefficient.

What is your USP? The uniqueness of our solutions is their

58 CargoConnect - march 2018

user friendly nature while utilizing the most complex technologies from the areas of analytics, software and IoT. TH’s customised solutions can be implemented quickly (within days) in a very costeffective way. As mentioned previously, we are the first technology ecosystem for the industry which provides customised solutions with the efficiency of the off-theshelf products.

Please comment on the current scenario of Indian logistics industry.

How is it evolving? How has it changed post GST? Currently, Indian logistics industry is at the cusp of revolution. GST, new technologies and push to transportation infrastructure will revolutionise the industry in unprecedented ways. Post GST, reduction in transit times have been well-recorded and it is a matter of time it will show up in financial performanceof the industry.

However, it is important to leverage the technology in the most appropriate ways to reap the benefits.

Rate of adoption for technology is expected to be much faster in the next few years than before, owing to likely consolidation of industry post GST. The increased scales of businesses will make technology initiatives affordable. The changes will also expose the industry to new risks which are not understood yet.

For example, it will be difficult for the industry players to anticipate the extent of technological changes and thus it will be difficult for them to change the business models. It will also pose a risk.

Your future projects...

TH is introducing machine learning algorithms in its endeavour to make the supply chain and logistics strategy more effective. In a few months, we will roll out its machine learning based tools which can easily be used by clients.

8

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By Abhik Mitra he Road Express Logistics sector in India is poised for significant growth over the next five to ten years, driven by the implementation of GST and the e-Way bill.

T

With theimprovement in road quality and coverage across the geography of India, improving service levels from existing players, driven hugely by the overall GDP growth, there would be higher consumption levels of higher value items by Indian consumers thereby fuelling the demand for the road express logistics sector.

The implementation of GST is a huge positive factor in the acceleration of growth.There are two primary reasons for this: 1. R e d u c tio n in nu m ber of warehouses.

2. Shift from the unorganised sector to the organised sector.

The reduction of warehouses has already started and should see an overall reduction in logistics cost as a percentage of revenue for the shipper and at a higher level as a percentage of GDP for the country.

Given that shipments will still need to be delivered at

60 CargoConnect - march 2018

disruption consumption points on time, to avoid potential loss of sale or impediment in services, the Express distribution continues still, given their ability to deliver loads across a dispersed and fragmented delivery eco system.

The implementation of the e-Way bill will also drive shift from unorganised to organised. Those players with strong process and technology orientation will be able to deliver compliance with ease of doing business.

Spoton is extremely well positioned to take advantage of the above positive growth drivers and will continue to remain the fastest growing Road Express Company in India. Spoton’s significant investment in people, technology, and processes coupled with strong values and a professional culture will help drive Spoton’s growth over the next decade.

Spoton has made significant investments to scale up the business in terms of high quality world class infrastructure with regard to its hubs and service centres.Our Hubs are designed using best in class technology and also involve cross docking to boost rapid movement of loads in the network.

Our service centres have also been expanded to cater to increased volumes and improve service levels.

Technology has been the corner stone of Spoton’s success over the last six years and Spoton continues to invest aggressively in this area. Over the next few months Spoton will move to 100 per cent Piece Level Tracking mechanism along with complete electronic pickup and delivery systems supported by a best in class vehicle tracking system for pickup and delivery. The linehaul vehicles have already been equipped with vehicle tracking systems and this has contributed hugely to Spoton’s on time performance.

Spoton is currently working on an ISO 9000 accreditation which will enable external validation of our process disciplines and values.

Spoton’s future growth plans envisage building a domestic air express platform for commercial shipments and an independent 3PL business which is also synergetic to the road and air express distribution business.

(The author is the Managing Director, Spoton Logistics Pvt Ltd.)

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Shippers Speak

Leveraging emerging technology is must for innovation in Supply Chain functions How important is the logistics for the growth of your organisation?

Prashant Bhatmule, a Mechanical Engineering graduate, has more than a

Logistics is an art and science as well and perfect coordination needs to be maintained in order to achieve successful results. In past, logistics was a neglected area but now it has taken a front seat in every business. Logistics has become a business enabler in the present scenario and smooth functioning of logistics is now a deciding factor of success in any business.

decade experience of working with renowned companies as a decision

In the past, logistics was a neglected area but, now it has taken a front seat in every business.

Logistics has become a business enabler in the present scenario and smooth functioning of logistics is now a deciding factor of success in any business.

62 CargoConnect - march 2018

maker and head in the Supply Chain Management (SCM) vertical. Presently, Bhatmule is holding the position of Vice President – SCM, Bajaj Electricals Ltd., in an exclusive interview he talks about his ways of managing supply chain functions in the company.

- Gaurav Dubey

What are the unique innovations and technological advancement methods adapted by your organisation to improve the overall supply chain process?

Leveraging emerging technologies is must to enable innovations in the business.

Right mix of strategy, processes and organisation are must to embrace new ideas and initiatives.

In fact, 75 per cent of highly innovative companies agree that their IT investments are made primarily to support growth i n it iat ives a nd leverage emerg i ng innovations such as mobile devices and social media.There are four key technologies that have converged to drive innovation: social networking, mobile computing, analytics, and cloud computing.

While each of the four technologies has its own unique impact, they are complementary in support of getting work done. Social media helps people find colleagues with whom to collaborate and co-create. Mobile devices give people access to each other, applications stored in the cloud, and other data sources. Analytics help them make actionable sense of all that data. The cloud increasingly contains more of the information and applications that people use. We use all these technologies

to meet today’s requirements and it also help in making stage ready for tomorrow.

W hat are your expec t ations from LSPs? Could you please specify their names and way of functioning?

Ho w do you en sure smo oth coordination between suppliers, transporters and other departments?

The effectiveness of a LSP is decided by percentage of complaints received.

Timely and responsive delivery of products and services are one of the basic expectations which a shipper has from a LSP. Expectations differ from time to time, and hence it has no end. Shippers also expect repacking of goods, kitting and other services from their logistics service providers. Thus, service levels should be defined in a way that can meet business needs on time whether it’s a project or a product.

Generally, shippers expect these services from LSPs: • Advice on technology • Sound knowledge of regulatory requirements • Direction on quality

The name Supply Chain Management (SCM) itself talks about a chain whose major components are suppl iers, transporters and other departments. We ensure smooth coordination between suppliers and other departments like Accounts/ Sales through more and more use of technology and web portals. In the EPC business transporters are generally connected with the suppliers directly at the place of keeping the Purchase department in a loop. It allows effective control on dispatches, which are made through multi modal ways of transport, in order to make supplies more cost effective.

Few functions which are managed externally are warehousing, kitting etc. while functions likepassing of bill etc. are outsourced completely. Outsourcing of supply chain function helps in effective cost management along with greater degree of responsibility.

Our warehouse management is same as made by others on a common platform.

Partially vendors are also a part of business management through portals hence they become a part of warehouse management for Kanban etc. Same is practiced under the Theory of Constraint ( TO C) wh ic h m a ke s i nve n t or y control much tighter than the normal warehousing. The TOC concept not only deals with requirement but also with the extra inventory at each and every step of the process.

Considering supply chain management and logistics as a critical success factor, what is the scope for Logistics Service Providers (LSPs) in this regard?

What functions are performed by your logistics partners and what are controlled internally? Also comment on the cost effectiveness of in-house supply chain vs.

Outsourced network.

The concept of RLC or Centralised Wa re housi ng h a s bot h pro a nd cons and it depends totally on time requirements. The supply chain process of EPC division is more inclined towards supplying directly at the site but at the same time, it is essential to ensure that consignments are delivered as per TOC requirements.

Nowadays, internal teams are becoming costlier day by day therefore outsourcing of such services have become essential and a crucial factor in success. SCM function is redundant without a LSP. Thus, LSPs play most crucial role to make the SCM function more effective.

The quality of LSP decides the output quality of the organisation.Hence, a good LSP partner is a key to success.

LSPs are expected to be growing at much faster pace in order to meet tomorrow’s expectations.

It is a difficult task to separate functions of a LSP and the internal logistics team of a company as they both work in a tandem. We try to get the mix of requirements for EPC business and also try to have a control on the activity. In my opinion, outsourcing brings cost effectiveness but at the same time the external service provider also takes its own time in delivering consignments.

LSPs must understand the exact requirements and work meticulously with the internal support.

I believe in the concept of “Continual improvement”, and hence the timely need makes you look towards the new initiatives for improvement. Nowadays, warehousing industry has changed metamorphically, indirectly it has become a profit center through strict inventory control and providing value added service to meet expectations of customers. Efficient SCM has become a backbone of organisations in today’s world of complex supply chain.

will not find it difficult to prove that battles, campaigns and even “Youwars have been won or lost primarily because of logistics.”

- Dwight D. Eisenhower march 2018 - CargoConnect

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news

Safexpress to invest `100 Crore in NE India Safexpress has announced the biggest-ever investment in the Northeastern region at the occasion of the recently held Advantage Assam Global Investors Summit at Guwahati. Notably, the Prime Minister of India, Narendra Modi was the Chief Guest of this Global Summit, which witnessed the participation of numerous dignitaries from Northeast as well as from several countries across the world.

Speaking to the media, Rubal Jain, Managing Director, Safexpress said, “We are pleased to announce an investment of `100 crore in Northeast. We whole-heartedly support this wonderful initiative by our Prime Minister to boost investment in this region. We also sincerely compliment the Chief Minister of Assam, Sarbananda Sonowal, the Hon’ble Minister of Industries & Commerce, Chandra Mohan Patowary, and several other people who have collectively worked hard to bring Northeast to the centre stage of investment.”

Jain added, “Assam is a crucial location from the point of view of logistics connectivity in Northeast India with the rest of the country.

Also, the development of strong ASEAN relationships with Northeast is a great boon for the entire region and all business entities serving the region.”

Also, speaking at this occasion, Vineet Kanaujia, Vice President – Marketing, Safexpress said, “Given the vital role Assam plays in connecting Northeast to the rest of the country, Safexpress has

recently built up an ultra-modern Logistics Park at Guwahati. We have invested `30 crore in creating this state-of-the-art Logistics Park which spans over an area of more than 1 million square feet and is located strategically on National Highway 31. It is functional 24x7x365 and ensures excellent connectivity of Northeast with the rest of India.”

Explaining about the massive logistics network created by Safexpress in Northeast, Kanaujia added, “Northeast has always been a very high priority region for us. We have offices across the whole of Northeast region and our logistics network covers even the remotest of the locations. We deliver to all 1001 pin codes in Northeast. With a huge investment of `100 crores planned by Safexpress for the region in the field of logistics, we intend to contribute hugely in the Northeast growth story, given the massive role logistics needs to play in the growth of this region.”

National Logistics Portal to ease movement of goods To ease transportation of goods and reduce logistics costs, the governments’ plan to develop a National Logistics Portal as a single online window to link all stakeholders will significantly aid to the logistics industry by dealing with a single ministry, said R Dinesh, Joint Managing Director, TV Sundram Iyengar & Sons Pvt. Ltd., and Deputy Chairman, CII Southern Region.

Earlier, there were seven different ministries, including shipping, road transport and highways, railways and civil aviation, among others. Now, it will be a single portal.

This is the single biggest change with this common portal coming; he mentioned reacting to setting up of the portal, which will be developed by the Department of Commerce.

The portal will also mean more focus on digitisation.

CII Institute of Logistics had in January signed a memorandum of understanding (MoU) with the Commerce Ministry to get one core ministry with which the industry could help deal with all major issues.

News

PM Narendra Modi inaugurates `7,900 crore terminal at JNPT

The Port of Singapore Authority (PSA)’s Bharat Mumbai Container Terminals (BMCT), Jawaharlal Nehru Port Trust (JNPT)’s fourth container terminal, was recently opened by India’s Prime Minister Narendra Modi to much fanfare. The `7,900-crore terminal project of the JNPT will raise the cargo handling capacity of the nation’s largest container port by 50 per cent and will make it the 33rd biggest port globally.

On the occasion, the Prime Minister said that globalisation is a reality of our times and to keep pace with globalisation, we need top quality infrastructure. He mentioned that the Sagarmala project is

St. Britto’s College awarded best B-School for Shipping and Logistics St. Britto’s College has been selected as the “Best B-School for Shipping and Logistics in Tamil Nadu”

by Worldwide Achievers. The award will be conferred to the college in the World Education Summit and Awards, 2018, to be held at Hotel Ashok in New Delhi on March 27, 2018.

Prakash Javadekar, Human Resource Development Minister, Government of India, will be present as the chief guest on the occassion. Elated on the announcement of the award, Xavier Britto, Chairman, St. Britto’s Group of Institutions said, “We have done a lot in framing the overall syllabus and structuring the Logistics course. Logistics industry requires more skilled people and we are committed for providing the best to our younger generation.

I personally started this course to make it professional, accessible and affordable to many people.”

ushering not only development of ports but also port-led development and that the Government of India is devoting significant efforts towards the development of waterways.

Tan Chong Meng, Group CEO of PSA International said, “We are highly honoured by the prominence placed upon Bharat Mumbai Container Terminals by the Government of India and by Prime Minister Modi. They have fittingly regarded BMCT as a major port investment that will give rise to India’s largest container terminal when it completes its Phase 2 expansion to realise a total of 4.8m TEU annual container handling capacity. BMCT will consolidate Mumbai’s position as the premier seaport gateway for India and elevate it to be an international hub of call. BMCT is both a milestone in India’s port infrastructure development to support its ‘Vision 2022’ and a crucial sea node that will facilitate the movement of global trade and commerce.”

BMCT’s Phase 1 development is currently operational with a quay length of 1,000 metres, six super post-panamax cranes, the deepest berths and largest rail yard in Jawaharlal Nehru Port. It is capable of accommodating some of the largest container vessels afloat and aims to offer flexibility and scale for shipping line customers and port users.

The gate complex has eight in-gates and eight out-gates and provides paperless transactions, weighbridge and radiation detection facilities.

Eastern, Western Expressways to be functional by March, June The National H i g h w a y s Authority of India (NHAI) today informed the Supreme Court that the ongoing construction of the 135-km long Eastern Peripheral Expressway, which would help decongest Delhi traffic, would be completed and functional

by March this year.

Meanwhile, the Haryana government told that the construction work related to the 135-km long Western Peripheral Expressway, which connects Kundli to Palwal via Manesar in Haryana, is expected to be completed by June this year.

The Eastern Peripheral Expressway envisages signal-free connectivity between Ghaziabad, Faridabad, Gautam Budh Nagar (Greater Noida) and Palwal.

The two expressways were planned in 2006 following the top court’s order to build a ring road outside the national capital for channeling non-Delhi bound traffic bypassing the city. march 2018 - CargoConnect

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News

Hopes nearing for a betterconnected megapolis After 21 years of wait, the Navi Mumbai International Airport (NMIA) is finally taking shape. Prime Minister, Narendra Modi, laying the foundation stone for the `16,700-crore airport on has opened the doors for a well-connected megapolis.

Ideated in 1997 as a secondary airport to meet the growing needs of Mumbai, the project was delayed for more than two decades mired by political indecision, issues of environmental clearances and the funding.

Situated within kilometres from the Jawaharlal Nehru Port Terminal, the airport will help the smooth transition of cargo movement, thereby creating an integrated hub for freight in the western part of India.

A special purpose vehicle, Navi Mumbai International Airport Pvt Ltd (NMIAL) was formed with GVK holding 74 per cent and remaining held by CIDCO. After completion, the new airport is planned to handle minimum 60 million passengers annually.

Infra giants bid for NHAI’s toll-operate-transfer projects Macquarie, Brookfield, Roadis Infrastructure Holding, National Investment and Infrastructure Fund and IRB Infrastructure, have bid for the first bunch of toll-operatetransfer (TOT) projects of the National Highways Authority of India (NHAI). According to Rohit Singh, Director-Finance, NHAI, “NHAI will first evaluate the technical bid, and then open the financial bid, something that it expects to complete in the next 10-12 days.”

Under TOT, the investor will collect toll for 30 years and maintain the assets for as many years. He will have to pay upfront for the rights. This is different from the earlier operatemaintain-transfer projects in two ways — first, the bidding period is spread over 30 years instead of five-six years. Second, the developer has to share the expected toll upfront instead of paying at the end of the year. The investor will also have responsibilities for capacity enhancement in case the road capacity is used up before 30 years, which will be measured in terms of vehicles using the road. As for the funds raised from the process, they would accrue to the Consolidated Fund of India, but will be ring-fenced for NHAI to be ploughed back for road projects like the toll receivables.

DURABLES 20 CONNECT 18 DURABLES LOGISTICS CONFERENCE

Join us in Delhi for DURABLESCONNECT 2018 DURABLESCONNECT a prestigious durables logistics event, bringing together key stakeholders from the entire durables supply chain, with a focus on the air supply chain to share experiences, debate the key industry issues and showcase success stories.

We look forward to welcoming you in Delhi, the city, famous for being the commercial and cultural hub, having a vibrant historical significance attached to it.

Mark your agenda for DURABLESCONNECT - Durables Logistics Conference and join over 200 leaders for this action-packed event    

Meet & network with over 200 durables supply chain professionals Engage with experts at workshops and panel discussions Benefit from one to one meetings with leading suppliers Identify new business opportunities and network with leading suppliers and exhibitors from across the world

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Ajeet Kumar: +91 9810962016, ajeet@surecommedia.in

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News

Cabinet approves six railway projects worth `11,661 cr

To boost trade, Bangladesh seeks access to Kolkata port

The Union cabinet has approved six projects at a cost of `11,661 crore for new lines as well as doubling and electrification of tracks. The projects would cover 881 km of lines in Uttar Pradesh, Madhya Pradesh, Bihar and Odisha. The Cabinet Committee on Economic Affairs has approved doubling and electrification projects of the 425 km-long Jhansi-Manikpur and Bhimsen-Khairar lines at a completion cost of `4955.72 crore, and doubling with electrification of the 116.95 km-long Bhatni-Aurnihar line.

The project, at a cost of `1300.9 crore, is likely to be completed by 2021-22 and will cover the districts of Deoria, Ballia, Mau and Ghazipur in UP. Approval has also come for the doubling and electrification projects on the 100.6 km-long Muzaffarpur-Sagauli and 109.7 km-long Sagauli-Valmiki Nagar lines at completion costs of `1347.61 crore and `1381.49 crore respectively. The doubling of the Bhatni-Aurnihar line will not only decongest the route between Mugalsarai and Allahabad in UP, but also benefit passengers travelling to Eastern India, especially Bihar, West Bengal and North East. The CCEA has also approved the new 130 km-long JeyporeMalkangiri line project at a completion cost of `2676.11 crore.

Bangladesh has sought access to Kolkata port for carrying out exports and imports. This move may help Bangladesh attract Indian FDI in designated SEZs on the West Bengal border. Recently, a formal presentation in this regard was made during the Commerce Secretary-level bilateral talks in Dhaka. The proposal that came through bilateral platform will contribute to the Bangladesh, Bhutan, India, Nepal (BBIN) sub-regional initiative.

Chittagong port, the busiest seaport on the coastline of the Bay of Bengal suffers from capacity constraint, more importantly due to poor rail network and over dependence on road movement, which has lead to high logistics costs in Bangladesh. As a result industrial and commercial activities are mostly centered around Chittagong and Dhaka - on the eastern part of the country. By requesting for access rights to Kolkata port, Bangladesh is trying to fill up this loop hole.

As rail and inland water connectivity between the two neighbours widens access to Kolkata port, there is highpotential for Indian investments in western Bangladesh.

Meanwhile, Bangladesh granted India’s North-Eastern States access to Chittagong port through Tripura.

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LGBI airport to be the center for NE UDAN project

Adequate allocation for CR, WR in 2018 Budget

The Lokopriya Gopinath Bordoloi International Airport in Guwahati will be the centre for project UDAN (Ude Desh ka Aam Naagrik) in the North East region and ASEAN (Association of Southeast Asian Nations), according to AAI. Speaking at a session on Civil Aviation at the recently held Global Investors Summit – Advantage Assam, in Guwahati, Regional Executive Director, Dharmendra Kumar Karma mentioned that small airports will also be developed in towns such as Jorhat and Tezpur in Assam under the UDAN project.

Air Asia, India MD and CEO, Amor Abrol said, “The development of necessary infrastructure to cater to the needs of international flight services is important and we want airports in the North East region to remain operational between 10 pm and 6 am.”

B P Sharma, CMD, Pawan Hans helicopter service, NE region, said that all cities and towns of the country cannot be covered by airports. Indian aviation system must rely on helicopter services, and Pawan Hans is going to add 52 more towns to its service map and 20 per cent of these towns will be in Assam.

Go ve rn me n t o f f ici als have said that the Central Railway as well as the Western Railway will not face fund crunch to execute projects this year as “sufficient” allocations have been made in Budget 201819. While the allocation for the Western Railway this year stands at `5,802 crore, which is 31 per cent more than the previous year, the Central Railway has received `4,619 crore for the new projects and passenger services. The pink book comprising the nitty-gritty of the railway projects and estimates was tabled in the Parliament and it was then shared with the respective rail zones.

WR General Manager A K Gupta said the budget has provided a bumper allocation for Mumbai suburban network so that long-awaited infrastructure projects can be taken up.

“Among the major works in the suburban network, 43 new FOBs at a sanctioned cost of `450 crore, 372 escalators in WR and CR, extension of platforms between Andheri and Virar slow corridor to accommodate 15 car rakes, have been sanctioned,” he said.

Shipping Ministry to set up technology centre at IIT-Madras

Blockchain tech can reduce transaction costs: FICCI-PwC

The shipping ministry in a joint initiative with IIT Madras has set up a National Technology Centre for Ports, Waterways & Coasts (NTCPWC) at IIT Madras’ satellite campus on VandalurKelambakkam Road. Minister for shipping Nitin Gadkari laid the foundation for the `70-crore institution under the Centre’s Sagarmala project.

Conceived to empower the ‘Make in India’ initiative, the centre will function as the shipping ministry’s technology arm, providing technological support to ports, Inland Waterways Authority of India (IWAI) and other institutions. It will accelerate indigenous development of technology and patents, and reduce reliance on costly foreign consultations.

On the occasion, Gadkari said the port sector was creating lots of jobs, giving the economy a push. “In line with this, we are planning port-led development. The focus areas will include Special Economic Zones (SEZ), port-led clusters and industrial clusters.”

To formalise the partnership, IIT-M director Bhaskar Ramamurthy signed a Memorandum of Understanding (MoU) with the shipping ministry. Operating under IIT-M’s department of ocean engineering, NTCPWC will create capital equipment, capable manpower and build competencies to work on ten major projects in its first three years.

A recent joint report by industry chamber FICCI and consultant firm PwC stated that the next generation blockchain technology can help in reducing cost of transactions in various government schemes.

“By removing the need for third parties to manage transactions and keep records, blockchain technology can massively reduce transaction costs. Leveraging blockchain technology for social benefit schemes will support the government’s wider policy objectives of sustainability,” the report said. The report also cited examples of land record management, smart cities, air pollution, agriculture, etc. where many of the issues can be resolved using blockchain technology.

“Blockchain solutions, if implemented, may lead to the elimination of intermediaries or middlemen, thereby leading to improved pricing, decreased transaction fees, thus eliminate issues of hoarding,” the report concluded.

70 CargoConnect - march 2018

Avail 20% discount on Sponsorships & Registration till 31 March Join us in Mumbai for PHARMACONNECT 2019 PHARMACONNECT is the most prestigious annual pharma logistics industry event, bringing together key stakeholders from the entire pharma supply chain, with a focus on the air supply chain to share experiences, debate the key industry issues and showcase success stories.

We look forward to welcoming you in Mumbai, a city poised to become a global financial, commercial and entertainment hub with a potential to generate $50 billion revenues.

MARK YOUR AGENDA FOR PHARMACONNECT-PHARMA LOGISTICS SUMMIT AND JOIN OVER 350 LEADERS FOR THIS ACTION-PACKED EVENT    

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FOR FURTHER DETAILS Ajeet Kumar: +91 9810962016, ajeet@surecommedia.in Mehuli Choudhury: +91 9810730347 / 8700292866, mehuli@surecommedia.in

When 17th - 18th January, 2019 Where Mumbai, India Audience Pharma Supply Chain Professionals

Profile

Kerry Indev Logistics bags ‘World Customs Organisation Certificate of Merit’ for exceptional service

K

erry Indev Logistics was the proud recipient of the ‘World Custom s O r ga n i sat ion Certificate of Merit’ at the International Customs Day Ceremony 2018, organised by the Central Board of Excise & Customs held in New Delhi on January 27, 2018. The recognition was made on the grounds of the company’s commitment and rendering of exceptional service to Customs.

Xavier Britto, Chairman of Kerry Indev Logistics, accepted the honour f rom Sh iv P ratap Shuk la, Un ion Minister of State (Finance), in the presence of Finance Minister Arun Jaitley, Finance Secretary Hasmukh Adhia, CBEC Chairperson Vanaja Sarna, CBEC Members, Customs officials and other key dignitaries present at Vigyan Bhawan in New Delhi. The senior management of Kerry Indev Logistics was also present on the occasion.

Britto said that this is the most important honour in the history of the company and considers it as a great milestone and a source of great pride for him and the entire Kerry Indev Group.

He expressed his appreciation towards the collective contribution from all the team members and thanked one and all for their continuous support.

Sarna, Chairman, CBEC, in her welcome note highlighted the recent Key Initiatives taken up by Customs for enhancing trade facilitation in line with the Action Plan for implementing the Trade Facilitation Agreement of the WTO ratified by India, and in alignment with ease of doing business at the highest levels of government.

In his addressal, Finance Minister, Arun Jaitley, shared light on how the dynamic nature of Indian economy a n d av a i l a bi l i t y o f t e c h nolo g y

72 CargoConnect - march 2018

tools is changing the nature of tax administration. He pointed out the early stability of GST and underscored the twin challenge of trade facilitation and enforcement before the Customs administration. He seemed confident that CBEC would take required steps to ensure that India’s ranking in trade across borders improve substantially.

The Finance Minister also released two IT tools, ICETRAK and ICETAB, developed by the CBEC to provide easy solutions to traders; to track their consignments and to provide them with other important information and updates.

The Minister of State for Finance, Shiv Pratap Shukla, in his address complimented the role of Customs in implementing GST in record time, in

securing international borders and for facilitating trade and international passengers at airports.

Dr Hasmukh Adhia, Finance Secretary, congratulated the Customs Department for smooth implementation of GST and adoption of technology. He underlined the important role played by Customs in improving the nation’s ranking in trade and commerce across borders while appreciating the efficient adoption of technology in their business processes.

PK Das, Member (Customs), Central Board of Excise and Customs, also spoke in length about the thrust on enhancing trade facilitation and the role of other stakeholders including participating government agencies, while Sunil Kumar Sawhney, Chief Commissioner of Customs, Delhi Customs Zone, presented the vote of thanks.

Profile

LDB– Single Window Platform to track EXIM Containers DMICDC Logistics Data Services’ (DLDS) HOME OUR SERVICES COVERAGE REPORTS ABOUT US NEWS/EVENTS CONTACT US flagship project, Logistics Data Bank (LDB), is a Track your Container trailblazing solution that uses RFID technology CONTAINER to provide near real time visibility of container

By Clicking search, I am agreeing to the Terms and Conditions for data search as per the defined policy movement. LDB integrates the entire supply chain and provides a single window for viewing EXPORT end-to-end container movement information through its portal i.e. www.ldb.co.in.

LDB has successfully established operations across the port terminals in the western corridor of India including Jawaharlal Nehru Port Container Terminal (JNPT) and Adani Ports and Special Economic Zone Limited (APSEZ), thereby providing visibility to approximately 70 7,033,775 4 5 18 56 70% per cent of India’s EXIM container volume and Containers Handled Terminals Of JNPT Port Terminals Of APSEZ Visibility Across Toll Plazas Provided CFSs & ICDs Visibility Coverage Completed of India’s Container Volume Handled has tracked over 7 million EXIM containers till date. Suresh Prabhu, Minister for Commerce and Industry has recently announced the nationwide rollout of LDB services. Subsequently, the LDB project will expand pan India to the other major and minor ports. Apart from the container tracking service, DLDS publishes LDB Analytics report that has helped in imbibing a growth spiral, where the visibility and transparency induces competition thereby setting benchmarks in the supply chain sector and it will eventually address India’s higher transaction cost. These reports have enabled quick decision making and are inculcating competitiveness across the supply chain industry. Data published has also provided better governance and complete transparency and visible management for performance evaluation of port terminals, inland container depots, container freight stations and supply chain industry as a whole. The LDB portal can be accessed through any device – mobile, laptop, personal computer, etc. LDB mobile application is also available for android users to enable visibility of the container. The service is integrated with Google Maps to give a map view of the location of the container. The portal provides various other features like average delivery time, grouping of containers, news features, etc.

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Airports Authority of India (AAI)’s march towards digital technology

T

he Airports Authority of India (A AI) is a statutory body working under the Ministry of Civil Aviation and is responsible for building, upgrading and maintaining all the airports in India. The AAI was formed on 1 April 1995, after Government of India merged the National Airports Authority (NAA) and the International Airports Authority of India (IAAI), to create a centralized organization that could effectively manage both international and domestic airports within the country.

The corporate headquarters (CHQ) of AAI is located at Rajiv Gandhi Bhawan, Safdarjung Airport, New Delhi. At present, AAI manages and operates 126 airports, including 18 international airports, 89 domestic airports, 7 customs airport and 26 civil enclaves at military airfields.

In tune with its global approach to modernise Air Navigation infrastructure for seamless navigation across state and regional boundaries, AAI has been going ahead with its plans for transition to satel l ite based Communication, Navigation, Surveillance and Air Traffic Management. A fter the successf ul implementation of the GPS Aided GEO Augmented Navigation (GAGAN) in 2011, Automatic Dependence Surveillance System (ADSS) in 2014, introduction of the Performance Based Navigation (PBN) procedures from 2012 in a phase-wise manner across major airports in India, and Reduced Vertical Separation Minima (RVSM) in 2009 in the Indian air space to increase airspace capacity and reduce congestion in the air, AAI has recently launched their web portal named ‘AIM-India’ to disseminate aeronautical information to all airlines, airports and other users of Indian airspace. The web portal provides dynamically managed integrated aeronautical information package through the provision and exchange of quality assured aeronautical data in collaboration with stakeholders. The ‘AIM-India’ portal provides easy access to duly notified aeronautical data/ information along with a link to the Aeronautical Information Circulars which are issued by the Directorate General of Civil Aviation (DGCA). The portal can be reached through the corporate website of AAI portal, www.aai.aero.

AAI has four training establishments, viz. The Civil Aviation

74 CargoConnect - march 2018

Training College (CATC) at Allahabad, National Institute of Aviation Management and Research (NIAMAR) at New Delhi, and Fire Training Centres (FTC) at New Delhi and Kolkata, respectively. An Aerodrome Visual Simulator (AVS) has been provided at CATC, while non-radar procedural ATC simulator equipment is being supplied to CATC Allahabad and Hyderabad Airport. AAI has a dedicated Flight Inspection Unit (FIU) with a fleet of three aircraft fitted with flight inspection system to inspect Instrument Landing Systems up to Cat-III, VORs, DMEs, NDBs, VGSI (PAPI, VASI) and RADAR (ASR/MSSR). In addition to in-house flight calibration of its navigational aids, AAI undertakes flight calibration of navigational aids for the Indian Air Force, Indian Navy, Indian Coast Guard and other private airfields in the country.

AAI is involved with various consultancy projects in countries such as Libya, Algeria, Yemen, Maldives, Nauru and Afghanistan.

AAI also provides trained personnel for operation, maintenance and management of airports in these countries.

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events

Secured Pharma Handling Procedures is need of the hour Agility India recently hosted “The Un-broken Cold Chain event” at Novotel Hyderabad Airport as an industry initiative. The event was attended by key stakeholders in the supply chain, including Head of Supply Chain from leading Pharmaceuticals companies, Airlines having Pharmaceuticals products handling expertise, Airport Operators, Airport Custodians / Pharma Zone Operators, Regulators, Visibility Technology Partners, Pharmaceutical qualified Reefer Transport operators, Active / Passive cold chain Packaging providers, Media & Education Partners, etc.

As part of the event, a panel discussion was hosted with Satish Lakkaraju, Chief Commercial Officer, Agility India, as the moderator.

Pradeep Panicker, Dy CEO of GMR was present as the chief guest and Mohammed Esa, SVP, Global Business Development, Agility, was the guest of honour for the event. Some of the key takeaways addressed were - need for compliances, partnership between stakeholders, need to create training and learning centres, need for all stakeholders to have an understanding of requirements of ‘Quality Systems’, dedicated quality resources to be in place with all stakeholders, domestic distribution of pharmaceuticals that need paradigm shift in processes and systems, necessity for pharma compliant infrastructure development, questions on challenges of pharmaceutical imports, Risk Assessment procedures that needs to be in place, knowledge sharing within the industry for increased

awareness, visibility on the destination data availability, and loading and unloading aspects in the Cold Chain use of technology in linking all the stake holders.

As a first action point from the event, a nominated task force will work on developing a White paper which will explore the need to set up a Training institute to focus on aspects like Cold Chain, Dangerous Goods, GDP and other IATA certified courses.

The sponsors for the event were GMR Hyderabad International Airport and Hyderabad Menzies Air Cargo, while media partner for the event was Cargo Connect.

Saudia Cargo upbeat over Air Cargo India 2018 Saudia Cargo was upbeat over the three-day exhibition Air Cargo India 2018, organised by Stat Trade Times, the flagship publication from the global multimodal transport media specialist, The STAT Media Group.

Saudia Arabia is the fourth largest market in the world for Indian exports after China, US and the UAE. Its major exports include food products, electronics, machineries and raw materials. The Kingdom, likewise, accounts for India’s major imports primarily, oil, metal products and precious stones. Bilateral trade between the two countries was valued at USD25 billion in 2016-17.

At the event, Saudia Cargo had showcased its capabilities and expertise in handling general and special cargo, among other specialized freight services, in keeping up with the event’s “fly perishables and fly pharma” theme for

the booth. Reliable and effective mode of transportation is a key element to keep up with the fast growing pace of commercial trade between India and KSA and the rest of the world.

Rainer Muller, Executive Director Commercial, underscored the event’s importance in connecting with the global cargo industry and shared insights on many issues and challenges that affect the sector. “ACI 2018 will give us the opportunity to connect with our peers, share experiences with each other and discuss at length possible solutions for the challenges that we face as well as finding solutions for the complexity and the dynamics of the Indian market,” the aviation executive veteran said.

“Technology is changing the way we think, work and do business. Through forums such as this, we identify, discuss and update our skills and find solutions for common problems,” he further added. march 2018 - CargoConnect

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Penta Freight’s state of the art warehousing facility inaugurated

Penta Freight, in its modernisation and expansion program, under the umbrella of celebrating their 25th year in business, has built a state of the art transit warehouse in close proximity to the Air Cargo Complex in Mumbai, which was inaugurated by Manoj Singh, Senior Vice President & Head-Cargo, MIAL Pvt. Ltd. The new cross docking facility has been segregated into separate zones for Pharmaceuticals and General cargo. The Pharma zone has

over 3000 square feet of temperature-controlled area for +15 to +25 °C and a cold room for +2 to +8°C. Automated and insulated rolling shutters ensure the area is free of dust and temperature loss. Stringent operating procedures have also been revised to maximize safety, security and quality as per ISO 9001:2015 and CT- PAT norms and regulations.

The General cargo zone is spread over 3000 square feet, with designated and demarcated areas to handle and store all types of cargo in transit as well as a stronghold for high value consignments.

The entire premises are covered by CCTV surveillance and physical security guards 24/7.

A control room and warehouse management system ensure that every parcel of cargo that enters and leaves the facility is properly documented and communicated with the relevant departments, airlines and authorities.

Value added services such as consolidation, palletizing, shrink wrapping, labeling are offered as part of Penta’s integrated end to end solutions, customized to their customers individual requirements.

Penta Freight is now embarking upon AEO and CEIV* certification to clearly underline its commitment to continuous improvement and being a specialist service provider to some of the largest Pharma companies across India.

ÇELEBI launches India’s first Aviation Security Training Institute ÇELEBI DELHI CARGO TERMINAL Pvt. Ltd. has launched India’s first Bureau of Civil Aviation Security (BCAS), accredited to Aviation Security Training Institute located inside Çelebi premises at IGI Airport, Delhi.

With the operationalization of this institute Çelebi India will be able to give Aviation Security training and certification accredited

by Civil Aviation Security Regulator-BCAS as per ‘NCASTPNational Civil Aviation Security Training Programme’.

Kumar Rajesh Chandra, DG - Bureau of Civil Aviation Security (BCAS) while speaking at the inauguration ceremony of ASTI, congratulated the Celebi team and asked them to work efficiently in this direction. He said, “Terrorists have to be lucky once and we have to be lucky all the time. Though we try our level best to ensure that security should be intelligent but one needs to realize that security is non- negotiable. At BCAS it has always been our endeavour to provide the guidelines and perception. Cargo security is the weaker area and setting up of this institute is a welcome step in this direction”.

Ramesh Mamidala, CEO, Çelebi, Delhi Cargo Terminal Management India Pvt. Ltd. said, “So far we have taken help from external training institutes, and for that we had to coordinate for external logistics amongst other requirements. We at Çelebi itself have close to 3500 people who will be required to take the training including screeners and other staffs. We are also willing to help other partners in the trade industry, and therefore, this institute

76 CargoConnect - march 2018

will be advantageous to the industry. This Institute will also be a part of The Çelebi Global Academy that we are in the process of establishing in India”.

The Aviation Security Training Institute of ÇELEBI will conduct the following AVSEC Courses: 1. AVSEC Initial Induction Course.

05 days 2. AVSEC Basic Course for Security Staff.

13 days 3. AVSEC training for X-Ray Screeners (Stand Alone). 03 days 4. AVSEC Basic Refresher.

03 day 5. 1 day AVSEC Awareness Programme 1 day 6. Any other AVSEC Training allotted by DG, BCAS.

events

ACFI Interactive Summit on innovation and disruption in air cargo An Interactive Summit of ACFI on ‘’Innovation and Disruption in Air Cargo” was inaugurated by Jayant Sinha, Minister of State for Civil Aviation, Government of India, on 31st January 2018, at Ashok Hotel, Chankyapuri, New Delhi, in the presence of more than 135 senior Govt. officials, members from various trade bodies and representatives of entire air cargo logistics industry. The event commenced with the lighting of the lamp by the dignitaries on the dice, and welcome address by the President ACFI Tushar

Jani followed by Vandana Aggarwal Economic Adviser MoCA, Mr Sanjiv Edward, CCO DIAL & the immediate past Chairman TIACA, Yashpal Sharma the Hon. Secretary ACFI, Binoy Kumar, Special Secretary Logistics, Ministry of Commerce & Industry and

by Jayant Sinha. The inaugural session was also followed by two Business Sessions on “Block Chain and Internet of Things (IOT) for the Supply Chain Management” and“E-Commerce & Freight Forwarding – The Future Race”.

DTDC inaugurated 1,00,000 sq ft warehouse in Delhi’s Samalkha DTDC, India’s leading express parcel service provider, recently announced the launch of its largest integrated hub in Delhi’s Samalkha region. The integrated hub will house the operations for all four big verticals of express delivery business – Air, Ground, International, and B2C. The state-of-the-art hub, occupying an area of 1,00,000 sq ft, will be equipped with an array of cutting-edge devices and state-of-the-art amenities such as automated sorter, x-ray machines, hydraulic trolleys, and several other devices that will enhance the facility’s compliance, efficiency, and productivity quotients manifold.

Commenting on the launch, DTDC’s Executive Director, Abhishek Chakraborty, said, “With the launch of our latest hub in Samalkha, DTDC has taken a step further in its efforts to establish a strong operational backbone that emboldens the entire logistical framework of the country. We envision the hub at Samalka to emerge as one of the largest and busiest integrated express hubs of the country that will be equipped with all the latest technological solutions to help achieve this goal. With an ideal balance attained between labour intensive activities and automation, we hope Samalkha hub sets an example in optimising productivity without compromising on job creation, efficiency or compliance to regulations.” march 2018 - CargoConnect

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AIRLINES+CHA wins Cricket Tournament 2017 The annual Cricket Tournament, 2017, organised by Bangalore Air Cargo Club (BACC) witnessed a series of action packed cricket matches. Team AIRLINES+CHA defeated JET FREIGHT’s team in the final match and lifted the winner’s trophy. Dileepa B.M., Joint Secretary, BACC, informed that Bobban, VP, AISATS, handed over the winning trophy to AIRLINES+CHA team whereas Rex, President, BACC, felicitated JET FREIGHT team with the runner-up trophy.

The tournament was sponsored by AISATS COOLPORT, Dhanyatha Cargo, Holiday Homes Club, and Force Logistics. Co-sponsors for the tournament was Tripath Logistics Pvt. Ltd., ShreejiTranslogistics Ltd.,Pelican Air Pvt. Ltd., SVL India LLP, and MASKargo.

Divya Jain, Founder & CEO, Safeducate wins ASEAN Young Woman Achiever Award Divya Jain, Founder & CEO, Safeducate, has been honoured with the extremely prestigious Young Woman Achiever Award at the recently concluded ASEAN Summit in New Delhi. This venerated award was bestowed upon Divya Jain by the Minister of External Affairs, Sushma Swaraj. The award ceremony was organised in the presence of leaders of ASEAN countries.

Speaking at the award ceremony, Jain said, “It is my privilege and honour to receive this award. I would really like to thank the ASEAN Awards Jury for choosing me for this recognition. Having spent over a decade in the extremely challenging domain of skill development, I feel this recognition will drive me to work even harder and achieve much more.”

Founded in 2007, Jain had curated a team at Safeducate of highly experienced consultants and trainers. These professionals offer world-class training as a part of uniquely designed programs and courses, through which participants are able to gain extensive supply chain and logistics understanding. The participants are provided with comprehensive domain knowledge and practical training, enabling them to face day-to-day challenges of working in the supply chain & logistics industry. So far, Jain has enabled more than 50,000 individuals across India to achieve their livelihood by skilling them.

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Jain has been credited with creating India’s First Container School which was inaugurated by Prime Minister, Narendra Modi.

Jain had created this unique innovation in the field of education and skill development under the aegis of Pradhan Mantri Kaushal Vikas Yojana, launched by Ministry of Skill Development & Entrepreneurship and NSDC.

events

Air Cargo India 2018 pumps up India’s air cargo prospects The three-day event, dubbed as the biggest congregation of the global air cargo supply chain, organised by the STAT Media Group was held Mumbai from February 20-22.

The event, themed “Indian air cargo: A revolution enhancing global trade” aimed to showcase India’s potential in the global scenario and successfully provided a platform for the Indian air cargo industry to learn from the best global air logistics leaders and network with them.

Delivering the keynote address, Vandana Agarwal, Economic Advisor, Ministry of Civil Aviation, Government of India impressed upon that the ministry’s goal to bring down logistics costs to 9 per cent of GDP by 2022. “The ministry is also working towards improving India’s ranking in World Bank’s Logistics Performance Index (LPI) from 35 to 15 by 2020. We have earmarked `88000 crore for capital projects at airport covering air cargo facilities also over the next five years,” she said.

Other attendees include the likes of Manoj Singh, Senior Vice President and Head – Cargo, Mumbai International Airport – GVK, Dheeraj Kohli, Vice President and Global Head for Travel and Transportation, Unisys and Ashok Rajan, Senior Vice President Global Business Head - Airline Cargo Services, IBS Software Services.

Welcoming the delegates to the event, RK Patra, Group Editor-in Chief, STAT Media Group spoke about the revolutionary changes that the Indian aviation industry is going through. “The air freight landscape has experienced some dramatic shifts in recent years.

Digitisation has become more prominent in the air cargo industry.

As in most industries, big data obtained in real time, from real events, combined with flexible management, is helping air carriers take a more efficient approach to traffic planning and infrastructure,” he said.

“Our conference sessions are themed around topics that are most talked-about and address the pressing needs of the industry. We have put together a compelling agenda and pooled the best resources of the global air freight industry to discuss, debate and share the best ideas and trends that shape the future of air cargo industry,” Patra added.

The first panel discussion had industry stalwarts discuss on charting a new flight path for Indian air cargo as a global destination. Those on the panel included Glyn Hughes, Global Head of Cargo, IATA; Alexis von Hoensbroech, Member, Executive Board and CCO, Lufthansa Cargo; Russi Batliwala, CEO, Chapman Freeborn Air Chartering; Keku Gazder, CEO, AAI Cargo Logistics and Allied Services; Dheeraj Kohli, VP & Global Head for Travel and Transportation, Unisys; Abhay Pathak, Executive Director, Cargo, Air India; Manoj Singh, Senior Vice President & Head Cargo, Mumbai International Airport and Hemanth DP, COO, Aerocommercial Cargo & Asia Pacific Flying School, GMR Airport.

Hughes, who moderated the discussion, put forth an important question: Is India ready for consistent growth in air cargo? All the participants were in agreement that while it is not fully ready for sustained growth, it is on its way to reach there soon.

Hemanth DP talked about another pertinent pitfall. “It is a stated

objective of the government, airports and some of the airlines, to create a hub in India. We rank the seventh largest country, one of the top economies and the only country of this size that does not have a logistics hub,” he said.

“We have nearly 600 aircraft doing close to 2000 flights a day.

Indigo alone does 1000 flights. That is 2000 flights with a capacity of 3000 tonnes, which works to around 6-8k belly capacity per day connecting 40-50 airports in the country. 60 per cent of the domestic belly air cargo has an underload. If we use that, there’s lot of potential.

If there is lot of cargo to be moved, shippers will be more than happy to send it via air provided the price point is right,” he added. march 2018 - CargoConnect

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APPOINTMENTS

upcoming events Asia Warehousing Show Three-day event from March 07 to March 09, 2018 at Bangkok International Trade and Exhibition Centre in Bangkok, Thailand.

To know more visit at www.asiawarehousingshow.com

SupplyPlus South Four-day event from March 09 to March 12, 2018 at Hitex Exhibition Centre in Hyderabad.

To know more visit at www.supplyplus.in

Gujarat Junction One day event on March 17, 2018 at Radisson Hotel in Kandla, Gandhidham.

To know more visit at www.gujaratjunction.com

ChemLogistics India Two-day event from April 25 to April 26, 2018 at the Bombay Exhibition Centre in Mumbai.

To know more visit at www.chemlogisticsindia.com

India Warehousing Show 2018 Three-day event from June 21 to June 23, 2018 at Pragati Maidan in New Delhi.

To know more visit at www.indiawarehousingshow.com

Supply Chain Summit Two-day event from June 5 to June 6, 2018 at Hotel Holiday Inn in New Delhi.

To know more visit at www.supplychainsummit.in

Shipping and Logistics India Three-day event from July 13 to July 15, 2018, at Chennai Trade Centre in Chennai.

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Ahmad Luqman joins as COO of Malaysia Airlines Berhad Ahmad Luqman has joined as the Chief Operations Officer (COO) of Malaysia Airlines Berhad in the month of February.

Previously, the post of COO was held by Izham Ismail who was elevated to the post of Group CEO. While announcing the appointment, Izham said, “On behalf of the Board of MAG, I am pleased to welcome Luqman to this new role. He is an internal homegrown talent who started his career with Malaysia Airlines as a management trainee. With over 20 years of expertise in the field, Luqman has vast knowledge and experience to draw upon when leading the Operations and Engineering divisions. With his six-sigma training and recently completed Business Leader Development Programme from the University of Oxford, I am confident that he is well-prepared to take on the challenge of bringing these two key functions to new levels of efficiency.”

Wilson Kwong to take over as Chief Executive of Hactl Wilson Kwong will be the new Chief Executive of Hong Kong Air Cargo Terminals Limited (Hactl). Mark Whitehead, the present Chief Executive of Hactl will retire from the post on March 7 after successfully steering the company for about 8 years. Whitehead said in his welcome note, ‘‘I am confident that Hactl will flourish under the proven leadership of Kwong”. Presently, Kwong is the chief executive of Jardine Engineering Corporation (JEC).

Rajesh Krishnamurthy to head digital operations at CMA-CGM Marseille, France-based CMA CGM has named Rajesh Krishnamurthy to the newly created post of Group Senior Vice-President, IT and Transformations.

Previously, Krishnamurthy served as the President and Head of Europe and Global Head, Energy, Utilities, Telecommunications & Services at Infosys, a global leader in technology services & consulting. Krishnamurthy spent most of his career in the field of IT and transformation.

He was an integral part of the Infosys success story. In his two and half decades long career with the company, he held senior leadership positions across the business and in all major markets.

PEOPLECONNECT

Taking

things

in her

own stride Even as the world is just coming to terms with women leadership in the present scheme of things, Vandana Singh, Director, Global Corporate Key Accounts, Saudia Cargo has always been triumphantly passionate towards aviation and cargo. In an exclusive chat with Deepashree Banerjee, she opens up about existing challenges and her journey spanning over 22 years in the Indian air cargo industry which was primarily considered a male bastion. Excerpts.

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Tell us about your journey so far.

In 1995, I recall a meeting with a CEO of a European company mention how the ‘Cargo industry did not measure up to the quality standards they expected’.

I must admit it bothered me as I was working with The Oberoi Hospitality group at that time and felt that if we can provide the best in hospitality, then why not in Logistics. Things fell in place and I joined Logistics which was better known as Cargo and, since then, I have been trying to bring in the best in practice into our Industry.

The journey has been remarkable; I have met some very supportive people along the way, and have had the privilege to work literally along with CEO’s of companies and Airlines like Lufthansa and now, Saudia Cargo, and have been taken seriously enough to ensure that best in practice have been implemented in our work sphere.

The biggest challenge faced My major experience as well as focus from

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benefit of the economy and manpower practices have definitely improved where quality of manpower entering the industry and work ethics are concerned.

Technology has made a huge impact with real time monitoring systems and reduced response time as well as efficient point to point solutions.

the beginning was very big on quality and efficiency along with commitment.

Making sure that everyone does not cut corners has been a challenge as that spoils reputation in the short and long run. Ensuring that people back up their promises with boots on the ground to deliver them was also a challenge.

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How has the industry changed from the time you stepped in?

It was very male dominated and a push and pull industry with a lot of adhocism in the early years. We have brought in systematic quality plans, delivery excellence, and commitment to customers and a very planned and streamlined way of working. Coupled with my previous experience in India, Germany and Singapore helped a lot in opening the door for efficiency to become a part of my working as well as the working of wherever I was picked up for.

Government regulations always remain a challenge but, it also depends on how you view them. They can also be seen from the perspective of policies evolving for the

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Your success Mantra You have to “Walk the Talk”. Short cuts don’t succeed so never opt for them.

I have learnt a lot from various leaders from different cultures and different countries. Each has taught me a bit more and how to look at options from a different perspective. I would say a combination of the best in hospitality and the best in Aviation Industry.

Other interests and hobbies..

I am a huge sports fan, be it Soccer or F1 racing. It gives me a rush that makes me feel more energised. Spending quality time with my family and going out for small vacations with them releases my stress.

@TheJSWGroup

www.jsw.in

JSW Jaigarh Port India’s modernised greenfield multi cargo environment friendly deep water port regularly servicing capesize vessel

Creating world-class maritime infrastructure to 200 MTPA by 2020

JSW Jaigarh Port is poised to service:

400,000 TONNES

350,000 TONNES

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