CargoConnect November 2016 by Surecom Media

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VOL VII ISSUE XII November 2016 `20

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

Sit Back and Buckle Up For

The Driverless Future Railways and Waterways: Silkyways for Multimodal Transport

Warehousing Safety Kicks into High Gear An Upsurge in Warehouse Leasing Food Grain Logistics:

A Neglected Sector?

A Trusted Name in the Domain of Logistics for More Than a Decade The EXTRA EDGE • • • • • • • • • • • • • • • • • • •

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Contents

Volume VII • Issue XII • NOVEMBER 2016

Editor and Publisher Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent Sana Husain Feature Writer Nikhil Mishra Tariq Ahmed Nicin Varghese

24 COVER STORY

Sit Back and Buckle Up For The Driverless Future

SPECIAL FEATURE

Warehousing Safety Kicks into High Gear

FEATURE

FOCUS OF THE MONTH .........10

Food Grain Logistics: A Neglected Sector? ...........................46

Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad Mehuli Choudhury Marketing Support Sheetal Singh

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

Administration Vipin Marwah Lavish Thakur

INTERVIEW

Designer & Visualiser Shaique Ahmad Mayank Bhatnagar

Sunil Kumar, MD, Everfast Freight ...................66

UPFRONT ......................................6 REPORT .........................................8 GUEST COLUMN .........................70 appointments .........................83 EVENTS .................................84-88 TECH FLAP .................................89 PEOPLE CONNECT T. Venkataraman, Managing Director, Goodrich Group ...........................................90 Railways and Waterways: Silkyways for Multimodal Transport .........................60

Manager Marketing Niti Chauhan

NEWS ..............................................75-82

Anil Khanna, Managing Director, Blue Dart ..68

Nagpur Glorious Days Ahead ...............54

Director Marketing Ajeet Kumar

TOTAL PAGES: 92 (inclusive of cover)

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

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Upfront “The new Aviation Policy will help in reviving airports and increase employment opportunity in this sector. Air traffic in these places will have multiple economic effects on these regions,”

said Prime Minister Narendra Modi, after inaugurating the integrated international terminal building at Vadodara airport.

“More than ten million metric tonnes of cold storage capacity has been developed in previous ten years, and so far, the country has witnessed the commissioning of around 30.4 million

Seeking investments from the UAE in the infrastructure sector, Union Minister Nitin Gadkari pitched India as one of the world’s fastest growing economies and said the ease of doing business under the present government had substantially improved. Gadkari, in his keynote address at the India-UAE Business Forum, highlighted the positive initiatives t a ke n b y P r i m e M i n i s t e r Narendra Modi and the vast investment opportunities available in India.

“Sagarmala, India’s port modernisation project, can save up to `40,000 crore in logistics,” says govt study

The study has come as a whiff of fresh air at a time when India’s lopsided freight modal mix is costing the economy as high 14 per cent of its GDP. In contrast, developed nations spend at the most nine per cent of GDP per annum. As per the study, the Sagarmala project will save logistics costs for commodities such as coal, cement, iron, steel, food grains, fertilisers, and petroleum, oil and lubricant.

CargoConnect - NOVEMBER 2016

metric tonne storage capacity. However, the sector faces several constraints in its growth, which not only limits its potential, but also results in wastage and loss of value in the industry that depends on it.”

Dr R K Sharma, Agribusiness Specialist and Former Director, National Horticulture Board (NHB)

Regional Connectivity Scheme launched “We hope to have the first flight (under RCS) by January. I am cautiously optimistic about it,”

Ashok Gajapathi Raju, Minister of Civil Aviation

said at the launch of the scheme. The Government kick-started the regional air connectivity scheme on Friday by inviting submission of initial proposals from operators to fly to airports which do not have regular flights now. Operators have a six-week window (till December 2) to submit their initial proposals. The Government will take two to three days to scrutinize the proposals and the entire process is likely to take ten weeks to complete.

Guruprasad Mohapatra, Chairman, Airports Authority of India, at the launch of the new cargo and logistics subsidiary - AAICLAS, said: “AAICLAS would be covering the entire gamut of cargo and air cargo handling and related value added services, including ground handling services and security services for securing of cargo.”

“Hyperloop Is A Perfect Fit For India,” Bibop Gresta, COO Of Hyperloop Transportation Technologies India is a very interesting country. It has “ a great railway network already. Hyperloop

implementation would need a bit of modification but it is doable. And the technology is a perfect fit for the country as well. With a high population count, it makes more sense.

”

NOVEMBER 2016 - CargoConnect

report

Warehousing space requirement to grow at a CAGR of eight per cent by 2020 in top seven markets of India

night Frank India launched the second edition of its flagship India Warehousing Market Report 2016 on September 29, 2016. The report unravels the present scenario of the Indian logistics sector along with providing a definitive view on the country’s top seven warehousing markets which includes Mumbai, NCR, Bengaluru, Chennai, Pune, Hyderabad and Ahmedabad.

Key Takeaways: •

The total warehousing space requirement in the country’s top seven markets is expected to grow from 621 mn sqft in 2016 to 839 mn sqft by 2020 • Pune offers the best investment opportunity in India today with estimated investment returns to the tune of 22-24 per cent per annum • Warehousing requirements of the e-tail segment to double from 14 mn sqft in 2016 to 29 mn sqft in 2020 • Auto and Ancillary and Chemical and Pharmaceutical sectors emerge as largest demand drivers of warehousing space • 17 mn sqft of space transacted annually in the top warehousing markets of the country as of today • Goods and Services Tax (GST) and Make in India set to give a thrust from the manufacturing sector for Warehouse spaces The table depicts the warehousing space requirement in India’s top seven markets for the period from 2016-2020 (mn sqft) Along with unveiling the numerous facets of the Indian warehousing industry, this report also provides actionable assistance on investment opportunities available in the current scenario for readers. The table below depicts the Feasible Investor Return in India’s major warehousing markets Speaking about the report, Balbirsingh Khalsa, National Director - Industrial, Knight Frank India said, “The demand for warehousing is on the rise in the manufac-

CargoConnect - NOVEMBER 2016

turing and consumption sectors with the manufacturing sector dominating the overall space demand. Due to GST, there will be consolidation in the warehousing industry. Instead of state wise warehouses, companies will consolidate into zone-wise larger warehouses. This will lead to a surge in demand of Grade ‘A’ and large-sized warehouses which will ultimately result in an increase in rentals. The ambitious Delhi - Mumbai Industrial Corridor (DMIC), and freight corridors, such as the Western and Eastern

seven markets expected to grow from 621 mn sqft in 2016 to 839 mn sqft by 2020, the warehousing sector has shown a tremendous traction in the last couple of years. Further, investment in warehousing can provide an opportunity of realising returns in the range of 10–24 per cent per annum. The renewed focus on infrastructure development and the manufacturing sector offers opportunities across the logistics value chain which has attracted the interest of international financial and development institutions and

WAREHOUSING SPACE REQUIREMENT IN INDIA’S TOP SEVEN MARKETS (MN SQ FT) Warehousing space requirement 2016

Total additional Annual additional CAGR* space required from space required from 2016-2020 2016-2020

2020E

Manufacturing

487

656

169

Brick-and-mortar retail

120

154

42 8

E-tail

19%

14.4

3.6

Brick-and-mortar retail

621

839

218

* Compound Annual Growth Rate Note: The top seven markets include Mumbai, NCR, Bengaluru, Chennai, Pune, Hyderabad and Ahmedabad Source: Knight Frank Research

FEASIBLE INVESTOR RETURN IN INDIA’S MAJOR WAREHOUSING MARKETS Warehousing market

City

Feasible Quoted rentals Quoted land (`/sq ft/month) rate(` mn/ Investor return acre) Per annum

NH-8 warehousing cluster

NCR

11-21

25-40

10%-16%

Ghaziabad warehousing cluster

NCR

14-20

20-40

12%18%

Bhiwandi

Mumbai

10-16

10-50

12%-18%

Panvel

Mumbai

17-25

25-50

12%-18%

Bengaluru

10-16

10-35

12%-16%

Sriperumbudur-Oragadam warehousing cluster

Chennai

15-28

15-60

12%-16%

Periyapalayam

Chennai

14-22

12-100

14%-16%

Pune

16-30

10-34

14%-22% 18%-24%

Nelamangala-Dabaspete belt

Chakan-Talegaon belt Wagholi-Ranjangaon belt

Pune

14-22

8-45

Jeedimetla-Medchal warehousing cluster

Hyderabad

10 14

15-40

Upto 12%

Aslali-Kheda belt Changodar-Bagodara belt

Ahmedabad Ahmedabad

10-20 11-20

4.5-32 4-40

14%-18% 14%-16%

Dedicated Freight Corridors are gaining renewed focus thereby adding a further fillip to the warehousing sector. Overall we expect good growth in Warehousing and Logistics till 2020.” Dr Samantak Das, Chief Economist andNational Director- Research, Knight Frank India added, “With the total warehousing space requirement in the country’s top

global institutional investors and developers. The improving regulatory environment for the Indian Real Estate Investment Trust (REIT), which also covers the warehousing segment, has added to this inclination. We believe that the warehousing sector is going to experience a sea change in its structure and will open up opportunities for real estate players in the coming years.”

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FOCUS OF THE MONTH

An Upsurge in Warehouse Leasing The warehousing industry in India is growing at a pace that was never seen or heard of before. Close to five million square feet of warehousing space has been leased during the first half (H1) of 2016. Fascinated by this tremendous growth and the governmentâ&#x20AC;&#x2122;s all-round push for long-term sustainable economic growth, Tariq Ahmed explores the opportunities and trends that have sprung up as a result of this boom in the warehousing industry. 10 CargoConnect - NOVEMBER NOVEMBER2016 2016

FOCUS OF THE MONTH

arehousing is the second most important vertical after transportation when it comes to forming a robust distribution value chain in the country today. In today’s date, the warehousing sector is the strongest area that’s driving the Indian logistics industry towards growth. Segments like agriculture, manufacturing, ecommerce and organised retail are driving the exponential growth of warehousing. Warehousing costs constitute around 15 to 35 per cent of the total logistics cost depending on the product and markets served. “In the last five years, warehousing business has had a CAGR of 18-20 per cent, front-ended heavily by a huge spurt in ecomm driven businesses,” says Vikram Mansukhani, Head of 3PL services, DIESL. Demand driver of warehousing space, similar to logistics, can be broadly classified into manufacturing, consumption and Exim. Currently, manufacturing based demand has the largest share in total warehousing space. This is primarily because of three reasons. Firstly, India has a large manufacturing base covering all the major sectors like automobile, steel, cement, pharmaceutical, fertiliser and textile among others that require vast amount of space for raw material and final product storage. Secondly, India’s large landmass results in a wider gap between production and consumption of manufactured products. This compounds the need for holding a larger inventory at warehouses in order to avoid disruptions in the supply chain network. Finally, the existing tax structure has compelled manufacturers to maintain a separate warehouse in each state in order to avoid a higher tax outgo.

Vikram Mansukhani, Head of 3PL services, DIESL

In the last five years, warehousing business has had a CAGR of 18-20 per cent, front-ended heavily by a huge spurt in e-comm driven businesses.

Region (NCR), Mumbai and Bangalore, eCommerce payers leased medium to largesized space across Hyderabad, Chennai and Kolkata as part of their next phase of

growth. Engineering and manufacturing sector companies, electronic retailers and Fast Moving Consumer Goods (FMCG) players were the other prominent sectors driving the demand for warehousing during H1 2016. Large-sized investments into industrial and logistics space by foreign companies was another significant development during the current review period. Close to 140 acres was transacted by companies such as the Swedish furniture retailer, IKEA, the Japanese Mitsui Logistics, and a leading Danish manufacturer of wind turbines. Investments by domestic companies such as Blue Star at Sri City near Chennai further contributed to the strong off-take of industrial space in the country.

Leasing activities at an all-time high: According to a CBRE report, during the first quarter of 2015, leasing activity was recorded to reach a threshold value of ten million square feet. This led to strong rental value growth across most micro markets during the second half of 2015. Currently, rental levels across most cities have inched up to their ‘historic high’, with further upward momentum

The momentum stays strong: Demand for warehousing space continued to remain upbeat across most cities as close to five million square feet was leased during H1 2016, thus indicating a growth of approximately 37 per cent compared to H2 2015. Leasing activity was driven by large-sized space take-ups from e-commerce and Third Party Logistics (3PL) companies. Collectively, companies from these two sectors leased more than 50 per cent of warehousing space during the review period. Besides the leading urban centers of the National Capital

NOVEMBER 2016 - CargoConnect 11

FOCUS OF THE MONTH anticipated in the coming months. During H1 2016, rental value growth was strongest at ten per cent in locations such as Dhulagarh, Sankrial and Uluberia along NH-6 in Kolkata, followed by Bhiwandi in Mumbai at eight per cent when compared to H2 2015. Delhi at six per cent, the East Corridor in Bangalore at three per cent, and the Northern Corridor in Hyderabad at five per cent were the other micro-markets to witness rental growth during the review period. Aslali in Ahmedabad also witnessed an increase in rental values by three per cent over H2 2015. Strong and sustained demand levels amid limited availability of good quality warehouses for immediate possession led to rental value appreciation in these micro-markets. Across Chennai, rental values were largely stable during the review period along the Western Industrial Belt and South Chennai.

Balbir Singh Khalsa National Director – Industrial, Knight & Frank India

Modern warehousing units have still not reached a matured stage as old warehousing units are still to be replaced.

Issue of Quality lingers: The quantitative growth in the warehousing space has been quite commendable in the last five to ten years. Yet, we are still lagging in terms of quality. Several factors, both known and unknown, are acting as impediments for us in reaching that high-end efficiency where the storage and distribution process

12 CargoConnect - NOVEMBER 2016

truly becomes seamless. Industry experts are of the view that Indian warehouses are in a transitional phase – from dark, dingy, closed spaces of yesteryears where everything was manually conducted to modern and scientifically built units. But, this transitional jour-

ney is still far off from reaching a stage of maturity. Balbir Singh Khalsa, National Director – Industrial, Knight & Frank India, stresses, “If you refer to new warehousing units, then most of them are being made as per the new standards. But, modern warehousing units have still not reached a matured stage as old warehousing units are still to be replaced.” Around May this year, Patanjali Ayurved made a strategic decision to shift finished products from manufacturing centres to dealers and franchise operators all across the country into a typical 3PL (third party logistics) model wherein it will be taking warehousing space on lease at different strategic locations in the country with the assistance of logistics operators. Since then, it has been occupying the warehousing space in all its capacity – 11 lakh square feet of space in the last four months in 20 different cities. They plan to double this size in the next one year. But, finding the right product mix as per its specification has been an issue. Sanjeev Khanna, Head of Supply Chain Management, Patanjali Ayurved pointed out, “In Himachal, we were looking for a space size of around 50,000 square feet and had to settle for a 30,000 square feet unit since we could not find anything matching our speci-

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FOCUS OF THE MONTH

Currently, rental levels across most cities have inched up to their ‘historic high’, with further upward momentum anticipated in the coming months.

fication. While in places around metros, it’s much easier to find quality warehouses; this is a challenge even around state capitals. You may stumble upon some stand-alone units but there the owners may ask for premium rentals.” Most of the large warehouses have come up around the metros only, as these are large consumption centres. Supply overtaking demand was a reality till 2014 when e-commerce hit the market and now most of the Grade A supply across metros has been consumed. However, due to rising consumerism, increasing purchasing power and renewed focus on reducing the overall logistics cost, companies are now keenly considering large warehousing options outside of these three main urban centers. This has created immense opportunity for warehousing in cities such as Ahmedabad, Hyderabad, Chennai and Pune. During H1 2016, these cities have witnessed space take-up from companies such as Snapdeal (75,000 sq. ft.) at Kandlakoya in Hyderabad and leasing of approximately 250,000 sq ft by a global e-commerce player at Karanodai and Periyapalyam in Chennai. In Ahmedabad, close to 70,000 sq ft was leased by Asian Paints at Aslali and 60,000 sq ft by Onida Electronics at Aslali - Extension.

14 CargoConnect - NOVEMBER 2016

The Dynamics:

Sanjeev Khanna Head of Supply Chain Management, Patanjali Ayurved

While in places around metros, it’s much easier to find quality warehouses; this is a challenge even around state capitals. You may stumble upon some stand-alone units, but there the owners may ask for premium rentals

Warehousing, no doubt, has increasingly become a focus area, not only for logistics and 3PL operators but also for companies – either manufacturing specific industrial goods or consumer products. This trend has accelerated in the last ten years. The sudden explosion of the e-commerce sector has been a big catalyst in the last two years since the demand now is to deliver humungous amounts of goods with a time-bound commitment – something that did not exist at all until recently. No stakeholder in the production and distribution value chain has any issue on the quantitative growth of warehousing units in the country. They have come up and mushroomed in the last ten years at a modest speed. There also have been patches within this spell when their growth trajectory has been very high. If earlier, godowns or warehouses were supposed to serve an important role in the manufacturing value chain; now the advent of modern retail in its varied forms has meant a decisive consumption centric push to the business. Not surprisingly, the major warehousing clusters are mostly around big metros.

SPECIAL feature

WAREHOUSING SAFETY KICkS INTO HIGH GEAR

Indian warehousing industry has witnessed exponential growth in the last few years. With the concept of smart automated warehouses and world-class technology, the industry has grown by leaps and bounds. But the matter of adequate safety and security of warehouses still remains the question of concern for industry leaders. Ritika Arora Bhola, with the help of experts, explores warehousing safety: its hazards and solutions, adequate material handling and need for skilled labour 16 CargoConnect - NOVEMBER 2016

SPECIAL feature

ntil a decade ago, Indian warehousing industry was a synonym for basic fourwa l led st r uct ure with sub-optimal sizes, inadequate ventilation and lighting, poor hygiene and lack of racking systems and inventory management systems. But lately, Indian warehousing industry has witnessed exponential growth in terms of technology, investments and automation. Nowadays, smart automated warehouses have come into existence which employs robots and advanced technology like Warehouse Management System (WMS). It has almost zeroed down labour work and wastage or loss. According to a report by Ernst & Young, the size of the Indian warehousing industry (across commodities and modes) is pegged at about INR 560 billion (excluding inventory carrying costs, which amount to another INR 4,340 billion). The industry is growing at over ten per cent annually. Apart from conventional storing services, warehouses in India now provide value-added services like consolidation and breaking up of cargo, packaging, labeling, bar coding, reverse logistics, etc. However, with the modernisation and development comes the question of adequate safety and security of warehouses. No doubt, India has now become the manufacturing hub of many big

industries such as pharmaceuticals, automotive, apparel to name a few and every industry has its automated warehouses built and spread across the country. Therefore, the question of security and safety becomes very relevant for the end-users as minor carelessness can lead to heavy losses.

Warehousing Safety: Hazards and Solutions Warehouses can be hazardous places to work if proper care is not taken. Workers can be seriously injured or even die as a result of warehouse hazards. Activities at a warehouse generally include loading and unloading various materials and goods from trucks onto pallets by hand and using forklifts. Mentioned below are some of the most common hazards: Heavy Equipment Accidents – Employees tend to get very comfortable using the heavy equipment such as a forklift but the operator should never underestimate the danger of the machine and should be alert. Educating employees about the potential hazards of a forklift or other equipment present in a warehouse is a must. Also important instructions while using the equipments should be followed closely. Slips and Trips – Slipping is a very common warehouse hazard that can be easily avoided. To prevent the majority of slips and trips in your warehouse, eliminate the following: • Loose material such as sawdust

• • • • •

Liquids Unnecessary steps or ridges Boxes from the floor Dark areas Implementing anti-slip floor tape is essential for ensuring the safety of your warehouse. Fires – A fire can jeopardise your entire warehouse. Building permits, clearly marked exits, exit strategies and fire extinguisher laws are all in place to prevent fires. Still, fires are very common and require constant prevention awareness. Crushed – According to the OSHA weekly fatality/catastrophe report, two workers are crushed to death every month on the job. It is mandatory to provide sufficient training for any machine with augers or press machines to employees. Moving machines and trucks in the loading dock should be avoided. Also, be weary of heavy materials that could fall on your employees. Exposure to Harmful Substances – Always ensure that your employees are not exposed to harmful substances. Harsh chemicals such as asbestos are a serious workplace hazard. Any employee who feels that the working conditions are not adequate can get the warehouse inspected. Ergonomics – Every warehouse employee must take care of themselves. Constant mistreatment will lead to pain and injury. There are several ergonomic solutions to common

NOVEMBER 2016 - CargoConnect 17

SPECIAL feature P Alli Rani, Director–Finance, CONCOR

The quality consciousness has to be instilled via good quality training in the workers who enter this sector. India will lose out in the e-commerce race for quality consciousness if Supply Chain Management is not improved. Hence, education and training through good institutions should be set up in India to complement physical infrastructure that is being created in the country to reap the benefit. warehouse problems such as back and foot pain. Also, always make sure your employees understand the importance of proper lifting techniques. Falling Objects – A common material handling practice is stacking objects on high platforms and shelves. Always keep heavy loads stacked neatly to avoid a shifting load or cylindrical objects from rolling off of shelves. Lack of Safety Education – Without proper education, a warehouse will not perform at its full potential. Many warehouses choose to skip thorough training to save money. This practice is unwise and will result in workers compensation lawsuits or OSHA fines. A safe warehouse is an efficient warehouse. Samir Gandhi, Managing Director, Gandhi Automation Pvt Ltd also jots down some of the hazards workers could be exposed to and its solutions which includes: 1. Storage and Racking systems: Pallet racks usually made of steel support heavy loads which could collapse and severely injure or kill a worker. Racking hazards include: • Partial or total failure/collapse of racking systems • Lift trucks colliding with racks, causing material to be displaced or causing potential damage to the racking itself • Material falling through the back of racks • High floor vibration at forge shops, causing loads to crawl and fall off racks if improperly secured 2. Loading and unloading areas: Workers can be exposed to a range of high-risk hazards at indoor and outdoor loading and unloading areas of workplaces including loading docks. These fatalities have included workers being: • Pinned between forklifts on loading docks • Pinned between loading dock and truck

18 CargoConnect - NOVEMBER 2016

or trailer Pinned between truck and trailer Struck by or run over by a truck Struck by falling items that were not secured • Struck by falling dock plate Workers in shipping and receiving areas can also be exposed to hazards involving external trucking firms contracted to deliver and carry loads. The truck drivers can be at risk if they are not familiar with the workplace. For example, there may be: • Different measures and procedures for securing vehicles against accidental movement • Different levels of access to each workplace • • •

• •

Unique features involving the yard layout Specialised dock levelling and dock locking systems • Lifting devices which drivers may not be trained to use 3. Slips, trips and falls: Slips, trips and falls

are some of the leading causes of injuries resulting in lost time at work. Common hazards include: • Slippery surfaces (e.g. oily or greasy) • Seasonal trip hazards (snow and ice) • Spills of wet or dry substances • Changes in walkway levels and slopes • Unsecured mats • Poor lighting • Debris and items stored in pedestrian walkways • Trailing cables in pedestrian walkways • Smoke, steam or dust obscuring view 4. Manual handling: Workers are at risk of back injury and muscular strains from lifting and moving heavy or bulky items of stock. Gandhi also suggests few measures that

can be adopted to avoid such hazards. He says, “Employers and supervisors need to ensure workers comply with rules and regulations set by them. They should ensure that any equipments, protective device or cloth-

SPECIAL feature John Thomas, Associate Director, Realistic Realtors

It has been proven that modern warehouses can reduce the labor costs, can improve space efficiency and make quick and easy movements of SKU’s with less pilferages and damages. A modern warehouse with latest technologies can improve ergonomics and safety, provide flexibility to different order profiles and lead to higher customer satisfaction due to timely delivery of products.

Employers, supervisors and trainers should emphasise the need for workers to communicate any questions or concerns that they may have about warehousing hazards. 20 CargoConnect - NOVEMBER 2016

ing which is necessary for the safety of the workers should be used or worn by them. They should advice workers of any potential or actual health or safety dangers known to them. Workers should use or operate equipment in a safe manner. They should report defects in equipment if they notice any. They should work according to the instructions given to them, in compliance with OSHA.”

employees. We also develop and maintain a program to implement that policy. We keep a copy of the Occupational Health and Safety Act (OHSA) in the workplace. The workers are educated about their rights, including the right to refuse unsafe work and the right-toknow about any potential hazards to which they may be exposed in the workplace. If required, workers are provided with written instructions about measures and procedures to be taken for their protection. Employers, supervisors and trainers should emphasise the need for workers to communicate any questions or concerns that they may have about warehousing hazards.” Agreeing with Gandhi, P. Alli Rani, Director–Finance, CONCOR, avows, “The quality consciousness has to be instilled via good quality training in the workers who enter this sector. India will lose out in the e-commerce race for quality consciousness if Supply Chain Management is not improved. Hence, education and training through good institutions should be set up in India to complement physical infrastructure that is being created in the country to reap the benefit.”

Skilled Labour: Need of the hour

Safe Handling and Usage

In India, jobs in warehouses are not really favored and appreciated. It’s still underpaid and demands full-time labour and hard work. No such training is given to the employees by the employers. Warehouses in India are generally trapped with cheap unskilled labour who have a very little or no knowledge of safety. Talking about initiatives taken to make the employees abreast with the safety procedures, Gandhi informed, “Our employees are an asset to us, thus we need to take care of them properly by providing them proper training and guidance while working in the warehouse. We provide written occupational health and safety policy to

Material handling equipments used in warehouses, if not handled carefully, can cause accidents and injuries. When asked how they ensure that the employees are well-trained from time to time on the usage of these products, Gandhi stresses, “Our workplaces comply with the Occupational Health and Safety Act (OHSA) and its regulations. We regularly provide information, instruction and supervision to workers to ensure their safety, including information on safe work policies, measures and procedures specific to the workplace and the work to be performed. We educate and train the workers if any new equipment is added to the ware-

SPECIAL feature Samir Gandhi, Managing Director, Gandhi Automations Pvt Ltd

A well-designed warehouse can reduce the possibility of hazards significantly. Although the costs involved are huge but looking at the long term benefits like employee safety, efficient loading and unloading of goods thus reducing damage to products, saving time by speeding up operations, etc. makes it a decision worth considering. house. We take every precaution possible in the circumstances for the protection of our workers. We also ensure equipment or materials and protective devices are maintained in good condition.”

Warehouse Design A well-designed warehouse can shun possibility of hazards. Although it involves a huge expenditure to design a warehouse that is protected or secured from hazards but it is just a one-time investment. John Thomas, Associate Director, Realistic Realtors articulates, “Creating a modern warehouse and upgrading a conventional working process can allow businesses to streamline efforts, utilise digital inventory and supply management solutions and ensure supply-side solutions to keep up with demand. It has been proven that modern warehouses can reduce the labour costs, can improve space efficiency and make quick and easy movements of SKUs with less pilferages and damages. A modern warehouse with latest technologies can improve ergonomics and safety, provide flexibility to different order profiles and lead to higher customer satisfaction due to timely delivery of products. Quick response and access to information

22 CargoConnect - NOVEMBER 2016

It has been proven that modern warehouses can reduce the labour costs, can improve space efficiency and make quick and easy movements of SKUs with less pilferages and damages.

are other valuable advantages of a modern warehouse. Apart from this proper storage of SKUs, track and trace becomes easy due to organised stacking of the products and standardised procedures.” He continues, “The pull has come and will continue to come in the form of increasing consumer demand, the demand for better services, increasing product variety and higher responsiveness and all of this at lower costs. While the companies must modernise their supply chains, they will be increasingly constrained by the availability of modern warehouses which can support any modernisation effort. The situation does provide a great opportunity for enterprising developers to get the early mover advantage. However, the approach must lead towards a partnership model where the developer and the customer company enter in a trust-building exercise, sharing each other’s long-term objectives and expectations. The governments, both at the national and the state levels, have to play an even more proactive role. It needs to implement the policy reforms with an increasing zeal and it needs to complete the large infrastructure development plans on time. The onus is on the industry experts to understand and visualise the need of good quality warehouses, the tangible and intangible benefits of the logistics park, and take the necessary initiatives to ensure the required changes.” Observing the same, Gandhi concludes by saying, “Yes, a well-designed warehouse can reduce the possibility of hazards significantly. Although the costs involved are huge but looking at the long term benefits like employee safety, efficient loading and unloading of goods, thus reducing damage to products, saving time by speeding up operations, etc. makes it a decision worth considering.”

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cover story

Sit Back and Buckle Up For

The Driverless Future

The swift transition from handling human intelligence to that of machine is going to redefine logistics in the world, as driverless vehicles shall zoom past your door, once its enormous potential today is tapped right. Sana Husain offers a glimpse into the R&D of driverless vehicles segment and whoâ&#x20AC;&#x2122;s gearing up to take this fantastic futuristic ride

24 CargoConnect - NOVEMBER 2016

cover story

here is no doubt that self-driving vehicles will change the world of logistics, as well as many aspects of our personal and business lives. The question is no longer “if” but rather “when” autonomous vehicles will appear on our streets and highways where DHL is ready to take a front seat on this journey. Obviously, the more dynamic an object is, the more difficult it is to predict its future movements. For example, it is not always easy to know which way a bicyclist or pedestrian is likely to turn next. To improve predictive ability, this technology would have to analyse indicators such as the bicyclist’s hand signals or the pedestrian’s facial expressions. This level of capability is not yet available in today’s video recognition systems or even through rapid vehicle-to-human interaction. Today, there are already a number of applications of autonomous technology in logistics, providing further evidence that driverless vehicles are safe and successful in closed environments. It’s the next evolutionary step to start applying this technology to outside premises and on public streets. Beyond warehousing operations, analysts expect many more applications in future along the entire supply chain, particularly in outdoor

logistics operations, line haul transportation and last-mile delivery. For many years now, dedicated warehouses have been deploying autonomous vehicles that handle products of all shapes and sizes, and move around the warehouse environment as directed. However, most of these self-driving vehicles stop when they encounter an obstacle, and won’t move again until the object is removed or a driver takes manual control. Also most of these vehicles can only follow a predefined route and require a relatively expensive and inflexible infrastructural investment due to the challenges of indoor navigation. Robust navigation and situational analysis capabilities are essential for autonomous vehicles. To get past the hurdle of indoor navigation, early solutions used wire technology, where the vehicle is fitted with a radio sensor that receives radio waves transmitted by a wire that is embedded in the floor of the warehouse. Improving on this, guide tape technology used markers such as colored images around the aisles that a camera on the driverless vehicle recognises for navigation. Other similar tactics included using magnets and sensors to guide the vehicle in the right direction. However, physical markers and wires proved to be inflexible

NOVEMBER 2016 - CargoConnect 25

cover story Raman Kaul, Group General Manager- Corporate Planning, Jayem Logistics

Driverless vehicles will eat away the man’s job, so I’m not sure. It’s a practical thing, yet debatable.

and often costly. Therefore, the best and the most common method today and in the future is to rely on a mixture of depth cameras and lasers on the vehicle; these devices constantly scan and capture the environment to identify the vehicle’s position and any obstacles. Vision guidance technology relies completely on cameras that perform 360 degree depth scans of the environment in order to create a 3D map which the vehicle then uses for navigation. These are the next generation of self-driving vehicles in warehouses and they have complete, flexible navigational authority, enabling a much larger range of potential applications and autonomy. Situational analysis monitors the

pedestrians, traffic signs, and traffic lights. A downside is that this solution requires considerable investment. Other key techniques are to use radar and ultrasonic sensors. These solutions create images with electromagnetic waves and ultrasonic waves, respectively. While visual image recognition depends on good weather, radar and ultrasonic technology can work reliably in difficult weather conditions such as fog or heavy rain. One discerning technique is to use a remote sensing technology known as LIDAR (light detection and ranging). The principle is comparable to radar systems but this technology works with laser pulses (optical detection) instead of electromagnetic waves.

environment through which the vehicle is moving to ensure the autonomous system is aware of all relevant objects and their movements. Visual image recognition techniques, broadly defined as video cameras, identify relevant objects in the environment such as other vehicles,

The LIDAR system creates a rapid series of 360 degree profiles; it matches each of these to each other to detect any deviation such as movement. Although LIDAR is a state-of-the-art system, it is just one of the several recognition technologies that make autonomous driving possible.

26 CargoConnect - NOVEMBER 2016

By 2014, almost every car manufacturer and supplier had started to experiment with autonomous driving technology – BMW, Bosch, Continental, Delphi, Fiat, Ford, General Motors, Renault-Nissan, Tata, and Toyota. A handful of them had already launched test cars and deployed these in designated approved areas and closed environments. On the open road, a number of high-end vehicles including the Mercedes S-Class Intelligent Drive32, BMWi333, and Hyundai Genesis34 are now equipped with a highway pilot feature, specifically developed to assist drivers when they encounter traffic congestion on highways. This feature is activated in heavy road traffic, and autonomously keeps the vehicle on its lane, brakes and accelerates up to 60 km/h (37 mph). This maximum speed is likely to increase incrementally over time and, technically, this application can support velocities in excess of 100 km/h (62 mph). Jo i n t v e n t u r e p a r t n e r s Un i t e d Technical Services (UTS) and 2getthere are collaborating to deliver three different versions of a rapid-transit Automated People Mover – personal vehicles, group vehicles and freight vehicles. Each is constructed to r u n a s a n on- d e m a nd non stop transportation system between any two points on a network, at a maximum speed of 40 km/h (25 mph). The personal vehicle carries up to six people; the group vehicle carries up to 20; and the freight vehicle conveys a total weight of up to 1,600 kg (3,500 lb). With a 1.5-hour charge time, these electric vehicles have a range of 60 km (37 m).

SCOPE FOR LOGISTICS INDUSTRY China’s Chang’an Automobile Engineering and Research Institute conducted a 2,000-kilometer test run of two driverless cars, The Hindu reported. The cars

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cover story Sushil Gupta, Chairman, Richa Industries

The driverless system, before it comes to highways or roads, will come into the factories first. So far, I know that it’s in the trial stages.

performed well under simple road conditions on urban driveways and highways but still needed human assistance to navigate situations such as pulling into gas stations and going through toll booths. Chang’an’s Deputy Director Tan Benhong says the company will work on improving its vehicles’ sensors and processing technology next in order to prepare the car for mass production. Chang’an hopes to get a jump on Google, which plans to have its driverless cars publicly available by 2020. At least 18 compa n ies globa l ly a re racing to get ahead in the driverless car market, which promises to radically transform transportation. In the process, d r iverless cars w i l l join a number of technologies that will have an equally profound effect on logistics in the next decade. Voicing over the scope of driverless vehicles in the Indian logistics industry, Raman Kaul, Group G enera l Ma nagerCorporate Planning, Jayem Logistics says, “We do a lot of automation as none of our warehousing companies which is into inventory management and distribution. We do a lot of automation in the sense, we have RFID technologies/y taking place. Driverless forklift and robotics in India is still a dream. In the beginning, people started using some automation with robotics but in India and it has to travel a long way. It’s quite common in US, UK and Singapore. But, here in India, the dependency on automation is less. Here, the manpower is cheap. Getting one robot costs a bomb. So, people in India have a mentality that instead of buying a robot which costs a bomb, in that cost I may have labour that can work for some years. It’s a slow process. But, people are now upgrading themselves from there, in bits and

28 CargoConnect - NOVEMBER 2016

pieces. We automating their manual work first, then comes the conveyor the automatic or the automatic driverless forklifts or these trucks. In my profession, it’ll take ten years.” Sush i l Gupta , Cha i r ma n, R icha Industries points out, “Maybe, Google is already working on the “driverless” concept with other companies. Of course, with time it has to succeed. The logistics system is going to change in a major way, which people might not have thought of. But, as far as Richa Industries is concerned, we are targeting

mainly the structures and buildings. So, I don’t think these things will have much of an impact. Already, e-commerce is growing rapidly, so we are already working on that. The driverless system before it comes to highways or roads, it’ll come into the factories first. So far, it’s in the trial stages is what I know. It’ll require some amount of time. It’ll bring the changes. As far as logistics is concerned, we have heard the news that Amazon was trying to use drone for the system. Somehow, we are just waiting to see if there’s anything because government approvals are also coming into play there. Right now, we are seeing congestion in roads here. How much of driverless concept will be able to breakthrough are the things

we are pressing on. It’ll take more time. Our R&D team is working towards mass housing and technologies that people are able to use economically, for its implementation.” Girish Grover, MRICS, of London based PE fund, Turnit believes, “If such technology can enable safe and efficient movement of goods, at the same time reducing the labour dependency and operational costs, it would be a welcome advancement in the logistics sector.” DHL Trend Research has launched their latest trend report, titled “SelfDriving Vehicles in Logistics”, which takes readers on a journey of discovery, highlighting the key elements and incredible p o t e n t i a l o f aut o no m o u s technologies. The report sheds light on various best-practice applications of self-driving vehicles in various industries today, and also reveals a detailed look into the use cases of selfdriving vehicles across the entire logistics value chain. Applications for self-driving vehicles that are discussed in the report include:  Warehousing operations  Outdoor logistics operations  Line haul transportation  Last-mile delivery Driverless vehicles could save the haulage industry nearly £34 billion, according to a research. A study by AXA UK and independent financial analyst Douglas McNeill, found there would be significant economy-wide business and consumer advantages with the advent of automated or ‘driverless’ haulage and logistics vehicles, including nearly £34 billion in savings. A report, The Future of Driverless Haulage, found when considering the anticipated

cover story Girish Grover, MRICS, of London based PE fund, Turnit

If such technology can enable safe and efficient movement of goods, at the same time reducing the labour dependency and operational costs, it would be a welcome advancement in the logistics sector.

cost savings across four categories - labour, fuel, insurance and vehicle utilisation there would be an estimated £33.6 billion of savings, potentially rising as high as £47.5 billion, after ten years. The logistics industry is experiencing rapid change with the future of logistics paved with innovation and technology. One emerging technology that’s been garnering a lot of attention is the self-driving car. In 2011, Google announced that this technology that had been envisioned and imagined for the better part of the 20th century was within its grasp, as a result of increasing sophistication of computer navigation, GPS technology and camera technology. Apple, likewise, has pledged to jump on the bandwagon, targeting 2019 as its shipping date for its own self-driving car.

THE WAREHOUSE FACTOR The RoboCourier For tight, crowded warehouse spaces, an even more flexible and intelligent solution is required for autonomous transportation. One solution is called RoboCourier developed by Swisslog. It also uses laser navigation technology and a 360-degree turn range to allow the vehicle to navigate seamlessly through tight spaces, doors and crowded hallways. It can even request an elevator which means it can navigate autonomously between multiple levels of a building. The RoboCourier is currently deployed in the life sciences and healthcare industry where it is handling the transportation of laboratory samples, pharmacy supplies, medical devices, and other items inside a hospital building. It carries the items in a container which can be sealed, protecting drugs and other materials that need to be transported safely and securely. The MultiShuttle Move, jointly developed by Fraunhofer IML and Dematic, describes a swarm of self-driving vehicles handling small load carriers and pallets, and operating

30 CargoConnect - NOVEMBER 2016

almost anywhere. Vehicles communicate and coordinate tasks among themselves each using radio interface communication and laser navigation technology. The overall system is able to adapt its capacity to seasonal and daily fluctuations, and to changing orders, customer preferences, and product structures. The swarm can switch performance between storage and transport processes and adapt to specific operational locations including under shelves, on packing floors, and in picking spaces, receiving bays

Dedicated warehouses have been deploying autonomous vehicles that handle products of all shapes and sizes, and move around the warehouse environment as directed. However, most of these selfdriving vehicles stop when they encounter an obstacle, and won’t move again until the object is removed or a driver takes manual control. and shipping areas. The MultiShuttle Move consists of a bottom chassis and a shelf chassis; it is therefore able to move on floors and also in high-bay racking, making this system ideal for picking a designated load from one height and moving it to another height. After deployment, minimal effort is required to achieve system extension

or layout changes, since the vehicles autonomously adjust their routes and adapt to changing conditions. Using vision guidance, this forklift is equipped with an innovative 3D camera and intelligent image recognition software. This enables the vehicle to recognise its environment, identify humans and obstacles, and move autonomously through the warehouse. This forklift creates a map of the warehouse on its own, following a humanguided introductory tour. An excellent logistics deployment for this forklift would be in a goods receiving area. Imagine there is a pallet on the floor that has already been identified and assigned a storage location. By pointing at it, an employee instructs the forklift to pick up this pallet, drive to the target location, and put the pallet on the floor or into the rack. Once finished, the forklift returns to its starting position. By using several of these forklifts, a single employee can handle the entire receiving area of a warehouse. All the above systems make the process of loading and transport within warehouses safer and more efficient. Equipped with sensor technologies, these driverless vehicles can also be deployed in a mixed human-machine environment – in this way, they provide a high level of flexibility that allows users to move step by step to a fully autonomous solution. In warehouses and other indoor locations, self-driving vehicles have proved capable of improving process and increasing safety. Many companies are looking for ways to reduce congestion and improve safety in yards. The combination of classic forklifts and trucks as well as pedestrians in the yard environment can make manoeuvring difficult, dangerous, and inefficient. Therefore self-driving vehicles could provide a great solution by executing all types of yard logistics including manoeuvring and repositioning transport items such as pallets and swap bodies.

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cover story Amit Pandey, Senior Vice President, Head - Procurement, SCM, HR & Admin at Tikona Digital Networks Pvt Ltd

Majority of businesses in India rely on human supply chain. It’s not a volume game but class-based, that works on a large warehousing scale. In smaller ones, driverless technology isn’t economically viable.

Line haul transportation Taking one step further into the world of outdoor logistics operations, the prime focus is on long-distance intercity freight transportation where trucks are the typical vehicle in use. In a public environment like this, there is a constant risk of road traffic accident, even for the most experienced truck drivers, as no-one can control all factors such as another driver’s error of judgment or the onset of treacherous weather conditions. Accident scenarios often illustrate the difficulty of performing a sudden manoeuvre with a large truck – these vehicles are intrinsically heavy, and may also be transporting heavy cargo. Any collision often results in disastrous damage to other road users. Autonomous technology can help drivers to react faster to oncoming dangers and calculate the safest manoeuvre, taking into account the truck’s current status and the driving conditions. This could drastically reduce the number and severity of accidents, and therefore self-driving vehicles have the potential to play a significant and useful role in reducing driver error and avoiding accidents. Last-mile delivery In the morning, the delivery person drives the vehicle out of the depot to the first point of delivery, and steps out of the vehicle. Thanks to an intelligent spatial concept that uses ergonomic design, the delivery person finds it easy and efficient to locate in the vehicle the correct parcels and letters required for delivery in a particular area. After extracting and delivering each item to each recipient, the delivery person now starts walking to the next delivery area and the driverless vehicle follows autonomously. If there is a big distance between one destination and

32 CargoConnect - NOVEMBER 2016

the next, the delivery person can choose to get back into the vehicle and drive. When the support vehicle is nearly empty, a second one (loaded with more parcels and letters) arrives autonomously; this means there is no need to drive back to the parcel center to reload. This type of delivery-assistance vehicle would be perfectly suited to support urban delivery processes. Amit Pandey, Senior Vice President, Head - Procurement, SCM, HR & Admin at Tikona Digital Networks Pvt Ltd opines, “Driverless concept which pertains to the internal movement in warehouses, if we take care of the safety, it’s a wonderful thing

to do. But, it’ll only be applicable for a large number of equipment, SKUs handled for one to two lakh square feet space of warehouses, where things are verticalised. Majority of businesses in India rely on human supply chain. It’s not a volume game but class-based, that works on a large warehousing scale. In smaller ones, it isn’t economically viable. In terms of technological development, India is very selective because here the manpower cost isn’t that high. So, people think that rather than investing money in technology, I’ll put one person who can do the entire work and pay `300-500 for labour.” Amit adds that for road transport, one needs to have a driver. Grey White is one company which is automating processes, a

lot of it inside warehouses. Fedex and DHL are more into material movement. One can take a call whether it’s required or not. If organisations can afford, it’s always better to have it. Stéphane Descarpentries, Director, Strategic Projects and Director, Operations Asia at FM Logistic expresses, “In a report by Warsaw Business Journal Observer, FM Logistic said, ‘Amid the increasing use of robots in warehouses, a new generation of robots has been introduced to the market. These machines, called ‘co-bots’ are designed to work together with people. They are equipped with sensors that detect people working nearby and are programmed to optimise and standardise simple repetitive manipulation tasks and to significantly reduce employees’ musculoskeletal disorders.’ After having equipped the module with a speech synthesiser, the Automation Department of FM Logistic will soon also give it sight through a special app. Yes, robots are becoming more and more efficient, flexible and affordable. Hence, in Western European countries, we now have a good return on investments. So, we are deploying robots to automatise repetitive and physically demanding tasks as well as AGVs (Automated Guided Vehicle) to automate large distances inside the warehouses.” Stuart Scott, Director, Enterprise Mobi lity a nd Solutions Ma rketing APAC at Zebra Technologies says, “In the warehouse, DHL predicts augmented reality will be used to streamline the picking process, which accounts for 55 to 65 per cent of the cost of warehousing operations. For instance, virtual reality headgear will enable workers to automatically find items within their field of vision instead of relying on paper-based picking procedures. At other points along the shipping route,

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cover story Stéphane Descarpentries, Director, Strategic Projects and Director, Operations Asia at FM Logistic

Our innovation roadmap in India for the next few years is based on four main pillars: digitalisation of our IT, especially for transport; development of a new version of our WMS based on the state-of- art technologies; development of green technologies and solutions in warehousing and distribution and implementation of trolleys which allow multi-order picking with weighing control.

augmented reality input will allow drivers to automatically check to see if loads are complete and instantly identify boxes for delivery. That’s a good point. Different economies move at different speeds. There are some basic things that we need to put in place. We have augmented reality, for example, on roadmaps. There is a lot of talk about augmented reality. But as of today, we are not augmented. I know a couple of logistics companies who have tried this in Europe. They have said that this technology looks promising and might deliver results in one-two years. Even though we don’t have

is always picked up in this dimension. Historically, logistics is a business where the weight is accounted for, not the volumes.” Dr Lai Ving Kam, Associate ProfessorLogistics and Supply Chain Management, Berjaya University College of Hospitality states that the driverless technology mayn’t be viable in India –not for another 25 years due to infrastructure limitation. “However, the entire system has been made simple just like the smart phone industry, the entire world will have no issue to adopt and adapt. Question is the market size. If the same systems and concepts can be extended to

Augmented reality dashboards can receive input from the environment, other vehicles and the internet to provide dashboard or windshield displays showing information about vehicles approaching from the rear and blindspot areas, navigational maps and weather conditions.

a headset today, but you have started to see augmented reality on mobile computers, in pretty much the same way. There are some enhancements taking place. The other thing, in terms of technology, in the warehouses is called mobile biomentioning. You can effectively use this to see the size of the packages moving in the warehouses. It becomes important when you are in the world of e-commerce and shipping clothing, where inevitably the clothing

34 CargoConnect - NOVEMBER 2016

another application with good market sizes, the marketers will make the transition much faster and cheaper,” says Dr Lai. Sandeep Chatterjee, Associate Director, KPMG explains that the Indian market is a very price-sensitive market. Here the consumer is willing to wait for days for a delivery at a lower cost. Additionally, this is a country where labour is excess and cheap and hence any efficiencies which we achieve using technology will be more than offset by

cheap and excess supply of manpower. This kind of scenario works where labour is in short supply and expensive. He does not see any such potential in near future.

TRIAL RUN Dr Lai opines that there is high probability of realising the “Driverless Van”. “We need the following, where I have led my teams to develop and marketed not less than 3,500 products over the last 35 years. 1. A higher speed computer with good sensing devices to aid the CPU to compute and reach a decision instantly. In fact the 5G telecommunication system will push forward this project much faster. 2. There will be a need to adjust the traffic rules and infrastructure to make the driverless van / vehicles a near perfect transportation asset. There can be no 100 per cent perfect product at a marketable price. This is the stage that the driverless car will have to go through to gain the significant learning experience before a true driverless car can be safely put into complete approval from the relevant safety and reliability labs. By 2017, Singapore will have a fully automated container port with fully driverless vehicles but it is in a controlled and pre –programmed environment. The driverless car will need the similar precondition to make it a success. Thus the traffic rules and infrastructure system has to be adjusted to the new requirement. This is a reality even now. Logistics and transportation will be much more technology driven in the next three to five years. The China One Belt One Road has already changed the entire topography of logistics and transportation. There are two to three fully automated ports in Europe thus it is already a reality now. By 2017, Singapore will have the largest fully automated port in the world that are doing much more that what you have

cover story Stuart Scott, Director, Enterprise Mobility and Solutions Marketing APAC at Zebra Technologies

In the warehouse, DHL predicts augmented reality will be used to streamline the picking process, which accounts for 55 to 65 per cent of the cost of warehousing operations.

described so far. This is network management where the software and telecommunication companies have the better technology and software control. The 5G will accelerate this change. This group of companies have the peripheral network structure, finance and expertise to master the game much faster than any new players. When you take the computer hardware and software as the example, the products/ service and users will adjust to the new requirement through the entire life cycle. The telecommunication industry has gone through these changes. To me , these will be the natural processes that technology and

products / service will mutate and we will be there in one good piece. Yes, it can be done by using “Hub and spoke” to secure the economies of scale to make it commercial viable as it involves row in-row out, to break the lines. The automated container ports are using these now and it is very easily extended to inter-city and interregion. This is a very simple process.” Sandeep feels that ideally, there needs to be communication between the FedEx delivery man and the vehicle through a sensor. “When we talk of Internet of Things, the vehicle should be able to sense the signals from the delivery man to avoid any kind of mishaps,”

says Sandeep. He adds that as a logistics provider, he will always preferably try to move full truckloads. But once we introduced the concept of same day delivery, we started differentiating where the customer started paying for the costly less than full truckloads. “In those cases, where we offer an augmented service to the customer, this needs to go as an input to the device. Technology is always an enabler to make our life efficient and easier but at the end of the day we need to understand Murphy’s Law i.e. if something has to fail it will. If technology fails, we need to have a backup plan. This is where too much reliance on technology is

cover story Dr Lai Ving Kam, Associate Professor- Logistics and Supply Chain Management, Berjaya University College of Hospitality

The 5G platform, traffic rules and infrastructure assets adjustment must be done to support the driverless car. If there is an economic benefit, the authority will make such intelligent decision very soon.

harmful. Google has always been a pioneer in whatever they have done. But, given the fact that there is lot of money here, many players will/have already joined the bandwagon. It will be interesting to see who gets there first. High-tech companies like IBM, Cisco, Microsoft may leverage the power of Internet of Things (IoT) which they already possess to make it a reality. There will be tough competition for Google. “Yes, this will work on similar principles. We need to ensure that all devices are connected and can emit the signals as and when needed. However, the point is when two vehicles are running at the same speed side by side which one gets the first right to enter the narrower lane. “A chain is always as strong as the weakest link. So if the master truck is slow, the entire convoy will move at a snail’s place. In case of an obstruction, how will the entire convoy adapt itself so fast to the obstruction? What if there is a technical snag in one of the trucks in between, how will the convoy cope? How can the collision be avoided?” says Sandeep.

conditions for truck drivers. If proven safe, the idea of driverless trucks raises intriguing possibilities. After all, driverless trucks wouldn’t be covered by hours of service driving limits. They would not abuse alcohol or drugs. They wouldn’t quit in the middle of a run. And they wouldn’t text while driving. Most automakers and components companies such as Delphi prefer L3 autonomy to the full-on L4 level: They say it’s a faster and cheaper way to reduce traffic fatalities. It also suits their business models.

HITS & MISSES The greatest hurdle to the deployment of these vehicles may be a regulatory environment with a patchwork of state and federal laws unable to keep pace with these evolving technologies. Need for driverless: Still, the lure of driverless trucks is intriguing to an industry struggling to put enough “fannies in the seats,” as truckers say. Estimates are the industry is short as many as 20,000 drivers right now. Noel Perry, chief consultant to FTR, a major transportation consulting company, estimates that number could be over 100,000 in the next few years because of demographics, poor pay and tough working

38 CargoConnect - NOVEMBER 2016

Features such as collision-avoidance radar, self-steering and self-parking boost profit per vehicle. Anil figures that driverless vehicles will continue to create excitement and demand in the niche segments despite all the impediments; however it would lack the mass appeal and commodity kind of usage due to its shortcomings. “Virtual reality headgear offerings are yet to be formalised, commoditised and produced for masses. Once a reasonable

offering is on the cards, even if the performances are at par with that of the Radio Frequency (RF) or voice devices, we will find extensive usage of the same. Drones usage will be limited in the Indian context, due to regulatory and acceptance of such devices/technology in the remote areas. However the same drone might be used in assisting emergency support and during calamities and extreme circumstances,” tells Anil. Raman expresses, “If you see what’s happening to drones in India, it’s still stuck in the regulatory issue, the use of drone for commercial purpose. Not even in India, in a lot of other countries there are a lot of restrictions on drones. So, now you imagine that they have a restriction on drones which won’t be used for a commercial purpose, if we bring robotics, purely a commercial product, there’ll be a huge “hungama”.” Sanjay Shaha, Senior Manager Supply chain at Whirlpool of India Ltd., Whirlpool reveals, “Considering that robotics is automated, this system is only applicable for storage operations in the rack. A robot can’t shift parts that way. It’ll be difficult to programme it due to different material handling requirements. Robotics can work in automobile companies even in India, mainly in automotive logistics segment, in companies like Mahindra and Volkswagen. Also, companies that deal in racking are using the robotics system. There are many limitations to it and isn’t that easy. There are technical hurdles which’ll not make it possible at this moment in India. Government will definitely not allow it.” Dr Lai elaborates that the 5G platform, traffic rules and infrastructure assets adjustment must be done to support the driverless car. If there is an economic benefit, the authority will make such intelligent decision very soon.

cover story Sandeep Chatterjee, Associate Director, KPMG

As we graduate from Internet of Things (IoT) to Internet of Everything (IoE), this will not be a problem. Driverless cars will be able to navigate through all impediments.

“With my vast product development experience, the technology – hardware and software will one day reach the technological capability to make the driverless car a reality,” affirms Dr Lai. He adds that just the line rail needs to be a set of predetermined routes with inbuilt infrastructure. This can be applied to the drones where they have to travel in a set route and pathway with good satellite communication control. Human has to remap their thinking to meet the new requirement which is imperative. China is using drones in areas when normal mode of transport find difficult to satisfy the commercial and social requirement. There must be stringent rules and working principles to ensure drones are used for a just course. This will happen. The entire transport system needs to gear up towards this new trend. It should start in a cluster zone to allow close security monitoring. The sea port and inland ports are already using these modes. We just need to perfect the control and monitoring system to realise it earlier on the road. They are already shipping in the high sea performing the same mode. Sandeep tells, “As we graduate from Internet of Things (IoT) to Internet of Everything (IoE), this will not be a problem. Just that we do not have the technology right now but some years down the line, this will be there. Driverless cars will be able to navigate through all impediments. It always boils down to the cost of fulfilment. Do I have a priority customer in a remote area? If yes, is the customer willing to pay for the augmented delivery? While as a concept this looks fantastic, we need to look at the cost of the technology as for a business it will always try to be profitable. This is the precise reason why RFID technology did not pick up. Right now, we already have a rule that trucks cannot enter the city premises during the daytime. If everybody thinks

40 CargoConnect - NOVEMBER 2016

Vision guidance technology relies completely on cameras that perform 360 degree depth scans of the environment in order to create a 3D map which the vehicle then uses for navigation. These are the next generation of self-driving vehicles in warehouses and they have complete, flexible navigational authority, enabling a much larger range of potential applications and autonomy. that trucks will ply at night, there is bound to be congestion. So the point is not about the time but alternate routes which will do the magic.”

INDIAN VS INTERNATIONAL OUTLOOK The experts portray the side on which the grass is greener.. Raman comments, “Google always tries to have a monopoly. In the context of internet,

Google has a monopoly. You cannot do anything beyond Google. It’s the only platform where we can do a lot of things. They’re driving this as a pilot to have a monopoly in the market. But, I’m sure it won’t work. To some extent, it may work in some industries, maybe in manufacturing, other industries, but definitely it won’t work in the Indian context. “For instance, I went to Singapore a couple of years back to HP warehouse, measuring up to almost three lakh sq ft and manned by four guys. Rest was fully automatic. In two lakh sq ft facility managed by four people, one was the floor supervisor and the rest were the engineers in the control room. So, it’s fully automated. It’s your place and your truck, where it comes to your docking station and then the automated conveyor will pick up the parcel, they will route it, keep it at the destination and for the pickup they’ll again go; like what happens in robotics to pick the parcel up. They may bring robotics to India to some extent. They’ll depend at least 50-60 per cent on manual interference. It’ll not be fully automated.” Sanjay raises the point, “Ultimately, Indians will operate technology. It can generate output but when it comes to loading it in vehicles, for infrastructure is to be developed and roads must be good. Along with that, the vehicle needs to be improved and hence these factors are necessary for it to function. Government wil l not al low drone technology in India because we are prone to terrorism activities in India. For the purpose of photography, it’s ok and not for delivery. A lot depends on the battery life and weight carrying capacity of drones. It’s in an experimental stage right now. Google is using it, but not in American cities, where there are high-rise buildings. In Delhi, drones can be used to deliver in suburban areas and hospitals. Death by a driverless vehicle can’t be

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cover story Sanjay Shaha, Senior Manager - Supply chain at Whirlpool of India Ltd., Whirlpool

A lot depends on the battery life and weight carrying capacity of drones. It’s in an experimental stage right now. In Delhi, drones can be used to deliver in suburban areas and hospitals.

forgiven in India. Highest road casualties are in India. If there’s driverless scene, what can happen here isn’t predictable.” Stéphane says, “Of course, we have to adapt the technology used for the cost of labour, which is calculated 20 times higher in France than in India and around eight times higher in Central Europe than in India. T h e r e fo r e , w e c a n s a y t h a t implementing robots in India is not yet a priority. However, we are already using some advanced technologies, especially for the activities, for which we have a huge number of SKUs, wherein we are picking large volumes of consumer units, like conveyors, radio-data equipment, packing machines, et al. Our innovation roadmap in India for the next few years is based on four main pillars: digitalisation of our IT, especially for transport; development of

a new version of our WMS based on the state-of- art technologies; development of green technologies and solutions in warehousing and distribution and implementation of trolleys which allow multi-order picking with weighing control.” Dr Lai clearing the picture, says, “Although developments are taking place right now, but it involves slow communication process with people. Just like the one belt one road of China, there are already daily schedules from main producing areas in China to Europe and Middle East while India is still in its planning stage. The high speed train that takes only three days from Inner China to UK is happening in June 2016. So the world does not wait on us.”

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FACT BOX A m a z o n h a s b e e n q u ic k l y increasing its shipping and logistics capabilities, and it has the potential to reduce shipping costs by eliminating the need for delivery drivers. This is one of the main reasons Amazon has been aggressively pushing for drone deliveries. If Fiat can offer driverless cars to Amazon, then the e-commerce titan would have autonomous delivery options through both air and land.

42 CargoConnect - NOVEMBER 2016

What if the driverless age snatches jobs away from the logistics field workers? Raman voices, “So, it’ll lead to huge opposition or protests. They will eat away the man’s job. I’m not sure. It’s a practical thing, yet debatable. I can’t expect it to be a reality. It may come one day.” Sanjay agrees, “Unemployment is a big problem. It’ll take ten years for implementation in India. Robotics will snatch away humans’ jobs. If employees are available at a low cost, Indian companies won’t invest into the concept. It’ll happen only where manpower isn’t available.”

DOES GOVERNMENT APPROVE OF IT? Having checked the lucrative aspects of these vehicles, the approval from government seems like a far cry from now, until the technology will be deployed at every nook and cranny in the industry. Raman defines, “Fedex and DHL have already matured in their developed countries, where their entire facility in US or Europe, if you see is fully automated. They’ve done it five to ten years back. But, still they’re struggling in India. They can easily bring the technology in India but they know that it can’t work in India. We’re ten years behind these countries in terms of technology, especially the US. Government of India has the liberty to ease the regulations, ease the process so that they can bring the technology, but then here Indian politics is also a mess. When we see how GST Bill has taken so many years for being implemented, imagine for a simple bill or the land acquisition bill, they are giving trouble in those two bills that are India focused. If they get a bill which is totally dependent on the foreign technology, the infrastructure which is out of India; they’ll make a huge ruckus out of it.”

CAN CARS KILL? After the fender-bender, Google temporarily pulled its 56 test vehicles off public roads and developed 3,500 new driving scenarios for its self-driving software to digest. But perfection remains elusive, even impossible, Google executives acknowledge, and at some point a driverless vehicle will cause a more serious, perhaps fatal, accident.

cover story Dr. Anil Chinnabhandar, Senior Vice President - SCM at Landmark Group

Driverless vehicles will continue to create excitement and demand in the niche segments despite all the impediments; however it would lack the mass appeal and commodity kind of usage due to its shortcomings.

A study by AXA UK and independent financial analyst Douglas McNeill, found there would be significant economy-wide business and consumer advantages with the advent of automated or ‘driverless’ haulage and logistics vehicles, including nearly £34 billion in savings. When that day comes, society will begin facing a difficult moral choice. On the whole, machine-driven cars will almost certainly kill fewer people than human drivers do. But will the public accept any human traffic deaths at the hands of an automaton? Dr. Anil Chinnabhandar, Senior Vice President-SCM at Landmark Group believes that a large segment of the community will be highly skeptical on the driverless cars or machines due to the nature of our environment rather than actual numbers. Amit says that India is a cost-conscious country. We have lot of pressure while taking care of the costing and similarly all the industries do. On the warehousing side, there won’t be a challenge. But, on roads, there will be. If one accident happens, the activity will stop altogether; like in Ola, there’s a lot of hue and cry, being a reactive type of society. Just see what happens if there’s an accident by a driverless vehicle. Dr. Lai feels that this is an acclimatisation process that we all need to go through. The statistics will convince people to accept. But, the world has to compensate such eventuality

44 CargoConnect - NOVEMBER 2016

with much humane understanding. There will be some hard issues that some will find it hard to accept. Sandeep brings to the fore that when it comes to life, it really does not matter who did it. The only difference is that if it is a human being, he/she may be sued while if it is a machine, things become more complex. We cannot say that machine-driven cars will almost certainly kill fewer people than human drivers do. “What if technology fails and then it is going to be a catastrophe as the machine may not have the capability to take corrective action once the technology fails?” says Sandeep.

The Unforeseen Lap Providing a wide range of crucial benefits including improved road safety, greater fuel efficiency and reduced environmental impact, self-driving vehicles are sure to impact our daily lives. We are only just beginning to understand the magnitude of this impact. In the near future, we are likely to see enhancements to existing driver assistance functions, with a particularly

strong focus on safety. Next, we can anticipate the introduction of autonomous driving in specific situations – for example, on congested highways and with strict low speed limits at first, although speeds will be allowed to increase over time. In parallel or soon after situation-specific autonomous driving, we should see an increase in lowspeed driverless passenger transportation vehicles in non-public areas. Looking further into the future, we could start to see the first fully autonomous highway journeys, 24/7. These vehicles will come when called, travel in convoy, communicate with each other, and even follow you around! Several improvements can be anticipated, including greater precision in digital mapping, better algorithms to predict the behavior of other road users, and additional system flexibility for easier integration and deployment. Alongside technology development, we may see a gradual reduction in current legal and liability framework gaps, along with more widespread public acceptance of autonomous driving.

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Food Grain Logistics: A Neglected Sector?

46 CargoConnect - NOVEMBER 2016

Logistics is a crucial part of any business activity and every business is incomplete without it. Logistics of food grains like pulses, wheat, rice and perishable products like meat, fruits and vegetables contribute the maximum to the Indian economy. But, food grain logistics sector in India needs immediate attention of Indian government and other private authorities as millions of tons of food grains get wasted every year because of certain constraints prevalent like inadequate infrastructure, technology, transportation and storage facilities. Ritika Arora Bhola in line with experts explore the working of the sector, challenges faced by the industry, role of government and future

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ood Grain Logistics sector is often considered as a neglected sector because of the constraints that the industry faces in terms of infrastructure, technology, transportation and storage. Every year, millions of tons of food grains get wasted due to inadequate number of reefer vehicles, poor handling strategies, lack of advanced technology to name a few. If we go by the facts, India is the second largest producer of horticulture products producing 48 million mt of fruits and 68 million mt of vegetables. India wastes as much as the total production of fruits and vegetables in the United Kingdom. There are different estimates on the quantum and value of this wastage due to lack of supporting infrastructure such as refrigerated storage and transportation. Establishing proper and integrated cool chains will take out the seasonality and perishability from the agricultural produce, lower inventories, shorten lead time required for deliveries, quickly bridge the gap between demand and supply, and provide value-added services. In India a lot of food is lost and wasted due to lack of adequate infrastructure, however, a 2011 report by a UN body, FAO, puts wastage in fruits and vegetables as high as 45 per cent of produce (post-harvest to distribution) for developing Asian countries like India. Infrastructure and services are important

UP has seen a large scale development of cold storage for potatoes and potato seeds. Out of a total 8.7 million ton cold storage facilities presently available in the country, UP has a 48 per cent (4.83 million ton) share followed by West Bengal (2.24 per cent). Western India has only 0.5 million ton capacity in which Maharashtra has a share of 0.35 million tons. Maharashtra has over 50 million cubic feet cold storage space in capacities ranging between 500 to 1000 mt per unit. Nearly, 80 per cent of this is privately owned. Cold storage provides location specific facility but is not linked in any manner across the country.

48 CargoConnect - NOVEMBER 2016

for growth in agri-business. In agriculture, logistic costs are greatly influenced by the bulkiness of the produce, seasonal demand and supply, and perishability of products. As the agricultural goods are generally bulky, most of their inland movement is through road transport while shipping is used for carriage across seas. The movement of perishable agricultural goods requires technical improvements such as reefer transportation for management of temperature and humidity. Appropriate road and sea transportation will have to meet this growing demand in an economic manner. The competitiveness will be greatly affected by the speed and economy with which cargo moves from factories to markets inland or ports and beyond.

Challenges Anurag Awasthi, Founder & CEO, Save Indian Grain stresses that the shortages can be examined under three heads, namely, storage loss, transit loss, and non-issuable / damaged food grains. As per FCI’s data, the third category is negligible. The factors contributing to the storage loss are: • Loss in moisture • Prolonged storage • Poor texture of gunnies, accentuated by use of iron hooks • Improper storage practices The factors contributing to the transit loss are: • Multiple handling • Poor texture of gunnies, accentuated by use of iron hooks • Poor quality wagons • Enroute pilferages

• Inadequate security at rail points, especially during night working and BG/MG trans-shipment

Other Major Challenges: According to various case studies and government reports, the food grain logistics sector is facing many challenges such as inefficient price signals, limited reach of mandis, inadequate infrastructure for storage, etc. 1. Inefficient price signals: The Indian government has been buying almost onethird of wheat and rice produced in India through the Public Distribution System, but in other kinds of grains, fruits and vegetables (both being highly perishable), the role of the government is limited. This leads to Minimum Support Price being ineffective as both price signals and as insulators from the perspective of the larger agricultural population. 2. Limited reach of mandis: Also, this procurement system has failed to cover the entire country evenly (On an average a farmer needs to travel 12 kms to reach the nearest mandi and more than 50 kms in NE India) while according to the recommendations by National Farmers Commission, availability of markets should be within a 5 km radius. 3. Too many intermediaries, information asymmetry: The above mentioned problems have led to formation of long marketing channels, with multiple intermediaries, adding to the woes of the producers of perishable agriculture goods. 4. Inadequate infrastructure for storage: The Planning Commission has recently estimated the gap between agri-warehousing supply and demand at 35 mn

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Government of India has advised to frame policy/roadmap for construction of 100 LMT silos in next four years. It has also submitted that the High Level Committee constituted for re-structuring of FCI had recommended construction of silos for capacity 100 LMT. Subsequently, FCI had conducted an exercise with regards to the existing storage gap and requirement of silos for storage of wheat and accordingly, Ministry of CA, F&PD had decided that silos for capacity of 43.5 LMT silos will be constructed by FCI and state agencies. Anurag Awasthi, Founder & CEO, Save Indian Grain

MT. Currently, public sector agencies like the FCI, Central Warehousing Corporations (CWC) and the various State Warehousing Corporations (SWC) have a storage capacity of 71 mn MT, while the private sector has close to 25 mn MT. To put the scarcity in perspective, food grain stocks held only by the government was 80 mn MT last year (peak) according to the FCI annual report. 5. Skewed distribution of capacity: Skewed distribution of this capacity is another issue, with North India having access to 60 per cent of the total storage infrastructure. The Planning Commission has recently estimated the gap between agri-warehousing supply and demand at 35 mn MT. 6. Lack of cold storage infrastructure: India’s current cold storage capacity at 25 MT is barely sufficient for 10 per cent of fruit and vegetables produced in the country. 7. Lack of collateral management options: Collateral management refers to financing of agricultural goods stored at warehouses, and is estimated to be a `3,500 cr opportunity by industry sources. Observing the same, Devangshu Dutta, Chief Executive, Third Eyesight reiterates, “Our storage capacity in public, cooperative and the private sector is about 109 million tonnes, which is short of the overall storage requirement. Moreover, instead of hermetically sealed or controlled environments, much of food-grain storage in India is still open to the elements and to pest infestations. This is true not only of the much-maligned government stocks of food grains, but also private storage and transportation. While many modern storage systems for food grains, including fixed installations like warehouses, indoor and outdoor silos, and flexible such as hermetic storage and silo bags have been introduced in India, they are sparingly used. It

50 CargoConnect - NOVEMBER 2016

is ironic that while millions of Indians sleep hungry, we are not showing enough regard for proper handling and distribution of our surplus or buffer stocks.”

Special Care for Perishables The concept of cold storage is not alien to agri-business in India. If we go by the facts, over the years, UP has seen a large scale development of cold storage for potatoes and potato seeds. Out of a total 8.7 million ton cold storage facilities presently available in the country, UP has a 48 per cent (4.83 mil-

lion ton) share followed by West Bengal (2.24 per cent). Western India has only 0.5 million ton capacity in which Maharashtra has a share of 0.35 million tons. Maharashtra has over 50 million cubic feet cold storage space in capacities ranging between 500 to 1000 mt per unit. Nearly, 80 per cent of this is privately owned. Cold storage provides location specific facility but is not linked in any manner across the country. Even though India is blessed with varied ecological conditions which enable growing of all types of fruits and vegetables throughout the year, efforts at boosting the exports of fruits like mango and grapes have gone down. Same is the status of floriculture exports when viewed in global context. In each of these and other similar cases, infrastructure has been the key bottleneck. For vari-

ous reasons there are few reefer ships calling on the Indian ports. Instead, the perishable cargos move inland as well as on sea in reefer containers on feeder services connecting to the hub ports. This adds cost to the exports, adversely affects their quality and reduces the competitiveness.

Tech Power Awasthi adds, “The solution is to develop an integrated software application linking overall production, demand, procurement and storage, keeping in view the associated regions and infrastructure available. The system will create most optimal location network of grain storage, minimising travel distance for storage as well as distribution. Such integrated software system is the key to building an efficient grain storage network. The ﬁnancial institutions, technology, consumer markets and infrastructure move along with structure of society. The change of joint family to nuclear families has forced these to change from hub and spoke model to distributed architecture. Therefore, rather than one big bank, we now have thousands of ATMs; intelligence is stored in clouds rather than in one big computer; and home deliveries take care of our requirements, instead of one big shop. Similarly, the grain storage infrastructure architecture also needs to change. From several hundred big storage spaces, the architecture needs to move into several thousand small godowns close to farmers and distribution spots.” He continues, “The second intervention of technology is needed in the storage infrastructure itself. Today, new-technology steel silos and silo bags are available, whereby the life and safety of grain are enhanced multiple times by creating modiﬁed atmosphere of low oxygen and high CO2. Through these technologies, one can create smaller stor-

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Our storage capacity in public, cooperative and the private sector is about 109 million tonnes, which is short of the overall storage requirement. Moreover, instead of hermetically sealed or controlled environments, much of food-grain storage in India is still open to the elements and to pest infestations. Devangshu Dutta, Chief Executive, Third Eyesight

age of 2,000 tonnes per bag next to farmers, taking only 1/10th of an acre of land. It is the most chronic supply chain problem ever.”

Government Initiatives Awasthi shares, “Government of India (GoI) has set up a High Level Committee (HLC) in August 2014 with Shanta Kumar as the Chairman, six members and a special invitee to suggest restructuring or unbundling of FCI with a view to improve its operational efficiency and financial management. GoI also asked HLC to suggest measures for overall improvement in management of food grains by FCI; to suggest reorienting the role and functions of FCI in MSP operations, storage and distribution of food grains and food security systems of the country; and to suggest cost effective models for storage and movement of grains and integration of supply chain of food grains in the country. The HLC had wide consultations with various stakeholders in its several meetings in different parts of the country. It also invited comments through advertisements in newspapers and electronic media. HLC would like to gratefully acknowledge that it has benefited immensely from this consultative process, and many of its recommendations are based on intensive discussions with stakeholders.”

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Roadmap to the Future According to Awasthi, Government of India has advised to frame policy/roadmap for construction of 100 LMT silos in the next four years. It has also submitted that the High Level Committee constituted for re-structuring of FCI had recommended construction of silos for capacity 100 LMT. Awasthi elaborates, “Subsequently, FCI had done an exercise with regard to the existing storage gap and requirement of silos for storage of wheat and accordingly, Ministry of CA, F&PD had decided that silos for capacity of 43.5 LMT silos will be constructed by FCI and state agencies. In view of the directions of the government, present strategy is to make a roadmap for construction of 100 LMT silos in next four years in a phase wise manner as the actual requirement of silos is dependent on existing storage capacity, stocks in central pool and the resultant storage gap. The Silo strategy is also dependent on the government policy with regards to Direct Benefit Transfer which was also one of the recommendations of the High Level Committee for restructuring of FCI. Already, the government is implementing the DBT Scheme on a Pilot basis in the UTs of Chandigarh, Puducherry, Dadra and Nagar Haveli. Thus, in case there is a change in the procurement and distribution

policy under NFSA/TPDS, creation of capacity that might not be required with a financial commitment for 30 years will need to be reviewed and evaluated with regard to the financial implications of the same.” He adds, “In view of this, it has been planned to undertake construction of silos in a phase wise manner. A three phase approach has been adopted which ensures that if needed, we can have the creation of 100 LMT of silo capacity in four to five years and at the same time we have the flexibility to limit the construction of silos to capacity that is actually needed and financially viable.” Agreeing with Awasthi, Dutta concludes on a positive note by saying, “Although many private players are expressing interest in the area, more participation of the private sector is dependent on projects being modeled as viable businesses with timely returns and lower (or better managed) risk, as well as optimum capital and operational costs. Indigenous and traditional techniques also need to be improved, and affordable technologies need to reach the farmer. With the government’s push towards processing, changing consumer needs, and developing business interests in both domestic and export markets, the standards of storage need to improve dramatically. It is important to remember that, while food safety and hygiene standards may be applied to finished, packaged products, the quality standards that are finally achieved start getting determined from procurement and storage onwards. Other than private storage capacities, it is imperative that the government’s storage capacities are upgraded. The lakhs of tonnes of wheat, rice and other grains that get spoiled each year can literally feed millions. Not only will investment in modern storage will add percentage points to the country’s GDP, it will bring a mass of Indians closer to the basic dignity that they need and deserve.”

“Continually Innovative”

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Nagpur

Glorious Days Ahead

Nagpur is the second largest city in Maharashtra and is centrally located. Due to its advantages like geographical location, availability of semi-skilled and skilled man power, efficient road and rail network and the presence of leading transporters, it is the ideal destination and attraction for companies to open their C&F and warehousing operations as most companies would also prefer to minimise their storage points across India and supply to central India or entire India from Nagpur. Tariq Ahmed discusses the opportunities and trends that Nagpur has in store for the cargo industry and also gives the grim picture

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a g pu r i s a n i mp or t a nt industrial hub with more than 22,000 micro, small and medium enterprises (MSME) and is one of the fastest growing cities in Maharashtra because of its economic and political power. It is one of the biggest commercial and trading hubs in the Vidarbha region. Butibori is the largest industrial area in Asia, having two big thermal power stations and includes huge units like Indo Rama Synthetics, KEC, Hyundai, Unitech, and many more. Sitabuldi is the major commercial area of Nagpur. Nagpur is fast expanding to its northwest, north-east and southern regions. Vardhaman Nagar, Pratap Nagar and Surendra Nagar are one of the most soughtafter areas with property rates ranging between `3,000 to `5,000 per sq. ft. A `400-crore integrated township ‘Empress City’ is being built and will have a provision for a 400-room five-star hotel, shopping mall, multiplexes and 600 luxury apartments ranging from 1,000 to 1,500 square feet area. Locations like Wardha Road, Civil Lines, Godhani, Manewada, Manish Nagar and Takali have projects both in affordable and luxury sectors. Average property rates (residential) range between `2,100 to `5,600 per sqft, depending on the location. Tata Realty, Mahindra Life Spaces, DLF and Satyam Realities are some of the major realty players. In the commercial real estate segment, a logistics park is coming up on NH 7. With leading IT firms, management and medical institutions set to spring up in the city; the real estate market will grow at an exponential rate. Nagpur has taken up a major path of change in IT and SEZ segment and will be a growing hub for employment generation in the coming years. The city of Nagpur is well connected with Road and Rail networks. The country’s two largest National Highways, NH 6 and NH 7, cross each other in Nagpur city. The total distance of NH 6 is 1949 kms and NH 7 is 2369 kms. Moreover a well-developed state highway network connects Nagpur to the other regions of Maharashtra, MP, Telangana and Chhattisgarh. Each and every train from Kashmir to Kanyakumari and from Okha to Puri pass through Nagpur. Some of the best logistics and transportation service providers in India like CONCOR, TCI, Gati, Blue Dart, FedEx, and Safe Express are growing business operations in Nagpur,

meaning that the crucial element of logistics i.e. quality transportation is easily available in Nagpur making it the logistics destination or a national distribution centre.

Nagpur has taken up a major path of change in IT and SEZ segment and will be a growing hub for employment generation in the coming years. Nagpur is fast expanding to its

good availability of power are some of the hallmarks of this industrial estate. Started in the year 1994, this industrial area has already attracted an investment of over `2400 crores and gives direct employment to around 7000 persons. Butibori developed on 2312 hectares of land, is rapidly emerging as a textile zone with the presence of major textile units such as the Indorama Synthetic (I) Ltd. With the construction of common efficient Treatment Plant, it is expected that the textile industry will receive further boost at Butibori. To provide superior infrastructure, a five star industrial zone has come up on 270 hectares within the Butibori Industrial Area. This five star zone is sought to be expanded further in future.

north-west, north-east and Mumbai Nagpur Expressway – The lifeline for connectivity southern regions. Mumbai Nagpur Expressway (named Butibori – The Millennium Five Star Industrial Area Developed by Maharashtra Industrial Development Corporation (MIDC), Butibori Industrial Area has every conceivable infrastructural facility required for any industry and has the potential to become one of the strongest nuclei for industrial growth in the country. Potable quality water from Wadgaon Dam, nearly 65 kms of internal roads and

Maharashtra Samruddhi Mahamarg) is the proposed 710 km expressway between Mumbai and Nagpur. The expressway will connect Nagpur, Amravati, Aurangabad, Ghoti with Mumbai and will be six-laned. It will be completed in a phased manner. It would be completed in a time-bound manner by 2019. In phase I, land acquisition will be processed and a four-lane road will be constructed. In second phase, it will be expanded as a concrete six-lane road with service roads, tunnels and flyovers as part of the project.

NOVEMBER 2016 - CargoConnect 55

feature The total cost for this expressway is projected to be `30,000 crore. The road passing through Mumbai, Aurangabad, Nashik, Nagpur will be complete with installation of CCTV, optic fibre and educational institutions. The expressway, expected to reduce the travel time between Mumbai-Nagpur from 16 hours to eight hours, is also being evolved to develop 22 districts, through which it will pass, that will include a drought-hit region.

The Multi-modal International Cargo Hub and Airport at Nagpur Nitin Gadkari, Union Minister, Road Transport & Highways

MIHAN: the BIG boon Nagpur is all prepped up to be the next IT hub, with Infosys and TCS setting up their campuses in MIHAN. The Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) is an airport project for Dr Babasaheb Ambedkar International Airport, Nagpur. It is the biggest economic development project currently underway in India in terms of investments. The project aims to exploit the central location of Nagpur and convert the present airport into a major cargo hub with integrated rail-road connectivity. The project has already spurred a real estate boom in Nagpur with property prices increasing 25 to 40 per cent. Project is expected to add 12 million people to city’s population by means of direct and indirect employment. The project aims to boost the economy of under-developed Vidarbha region of Maharashtra and stop the brain drain to other parts of Maharashtra and India. From environmental perspective, half a million trees would be planted and there would be no polluting industries in MIHAN. For the growth of any area, presence of core industries is a must and Nagpur has MIDC area, Asia’s second largest air maintenance workshop, SEZ, Gitanjali Jewellery Park, Food Park and many more other projects under implementation with IT majors presence and logistics businesses. The

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(MIHAN) is an airport project for Dr Babasaheb Ambedkar International Airport, Nagpur. It is the biggest economic development project currently underway in India in terms of investments. Maharashtra government has already taken care of infrastructure availability like roads, water, power, etc. The Government of Maharashtra formed a special purpose entity in the name of Maharashtra Airport Development Company (MADC) for the development of MIHAN. The project is financed by multiple Indian banks with total loan amount of `3,000 million along with investment from state government and Airports Authority of India. With a projected target of serving 14 million passengers and handle 0.87 million tons of cargo this is one of the largest aviation project in India. The estimated capital cost of the project is `2581 crores (by year 2035) and is supposed to generate revenues `5280 crores. The existing airport of 400 hectares

would be expanded to 1364 hectares. The project consists of widening and extending the present runway (3200 metres × 45 metres) to (3600 metres × 45 metres) to meet international standards. Also, it will have provision for a similar runway (4000 × 60 metres) in the future. The airport will have parking space for 50 aircrafts at any time with 50 additional bays in fringe areas. If completed on time, it will result in India capturing the globe market. An airport terminal building in semi-circular shape with conductive weather dynamics will have a total area of 3,000,000 sq ft (280,000 m2). The project is also building a separate cargo complex for handling and transferring cargo to-and-fro airport.

The ‘post GST’ scenario: With the GST regime, Nagpur can emerge as a national hub for imported cargo in the short run. Goods brought into the country can be stored in bonded warehouses and eventually distributed to various destinations. In a bonded warehouse, the customs duty can be paid as and when the goods are removed. For an importer, Nagpur can be an ideal location to cover the entire country. Gurgaon-based Distribution Logistics Infrastructure Private Limited (DLI), which has the first private inland container depot in the region, plans to set up bonded warehouses for imported goods near Nagpur. DLI had started off over a year ago with a logistics park at Borkhedi, 35 kms away from the city. After dealing in domestic cargo, it will be flagging off its first train of imports. Going through DLI’s private railway siding, the rakes will join the main railway network via Borkhedi railway station before going toward the ports. DLI Managing Director, K Sathianathan,

feature said that there are plans to send almost 11 to 12 trains with foreign bound cargo in a month. The company is already sending around nine trains carrying 90 twenty-foot equivalent containers of domestic cargo. Adding foreign bound cargo is expected to take its turnover to `100 crore as against `40 crore at present, he said. DLI is already in talks with a couple of players to set up dedicated warehouses to store their imported goods. It is expected that the warehouses may be ready by the end of the financial year. The focus will also be on liquid cargo but not petroleum, on account of the hazards and regulations related to its transport. DLI has created the integrated logistics park in Nagpur considering its geographical advantage. Nagpur is located almost at the centre of the country and is the natural choice for a logistics hub.

The Darker Picture: Few months ago, Union Minister Nitin Gadkari created quite a stir by declaring that Patanjali was going to set up its manufacturing hub in 100 acres of MIHAN and offer employment to hundreds of local people. The truth was that Baba Ramdev had demanded land at `10 lakh per acre just outside SEZ area of MIHAN where current market rates are `1 crore per acre. (Now a tender is being floated for 230 acres of land to build a ‘Herbal Food Park’ where the base price will be kept at `25 lakhs per acre. The only interested party as of now is Patanjali, though they are trying to entice other players like Dabur and Himalaya also. This is also just one fourth the market price, but MIHAN officials hastened to add that the land being offered is not ‘developed’ and hence can be offered cheap.) In many meetings that followed, regarding MIHAN, both Chief Minister Devendra Fadnavis and Gadkari are trying hard to enthuse investors and build up and create a positive sentiment about this ‘multi-modal international cargo hub and airport’ which is an idea that had looked great on paper 20 years ago but lost its sheen during the long procedural delay and changed international scenario. In a series of interviews that Nitin Gadkari gave on completion of the new goverment’s two years in office, he was asked why MIHAN had not been able to fulfill its promise of creating 50,000 jobs annually as he had promised. His reply was that 13,000 jobs have been created and the situation is going to improve rapidly.The truth is that today 9,000 people are employed within and outside the SEZ; there has been an investment of `7,000 crores and there are just one or two new projects in the pipeline. A real estate giant, who was supposed to build 15 software complexes, has completed just one and space in it still lies practically unsold. Many other factors add to the situation. The Nagpur Airport which was supposed to be at the heart of MIHAN has still not been privatised, though on paper this decision was taken many years ago. It is now being jointly managed by Airport Authority of India and MADC. Insiders opine that no private player is really interested in taking on this responsibility of making Nagpur an international hub. Meanwhile, newer designs in commercial airlines ensure that they can do long hauls without having to land for fuel. So, Nagpur as a airport for refueling is not relevant anymore. Political interference is another factor that slows down legitimate work. Industrialists and corporates approach Ministries directly and often rash promises are extracted that cannot be implemented. The IAS lobby, again sitting and meeting in Mumbai, often finds many such proposals untenable.

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Railways and Waterways: Silkyways for Multimodal Transport

With the growth of logistics industry and with the growth of trade, especially with the entry of several major global firms alongside domestic players in this arena, in the wake of e-commerce and start-up firms flourishing in the country there is an urgent need to shift our eyes at the transportation of goods from one place to another especially through multimodal transportation. How far is this adopted by the Indian logistics sector? This story is about the importance of railways and waterways which is one of the most environment friendly modes of transport. They also provide the backbone for accelerated economic growth since they are able to carry huge freight over long distances in an economically efficient manner Roselin Kiro NOVEMBER 2016 - CargoConnect 61

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n the recent times, it has been observed that the importance of railways and waterways is highlighted by the industry with the encouragement from the government. Now, the question is how much of it has been accepted by the logistics industry? Vivek Kele, President, Association of Multimodal Transport Operators of India (AMTOI) elaborates, “The logistics sectors had traditionally accepted water and railways as the preferred modes of transport, if we look at the share of these modes at the time of independence we will know the answer. However, post independence we never concentrated on developing infrastructure for transporting cargos using these modes, talking about railways, efforts were made in uni-gauge project where all narrow and meter gauge tracks in far flung areas were converted in to broad gauges, but no real effort was made as such to create additional capacity on the trunk routes, keeping in mind the growing needs of the economy especially post liberalisation of 1991. Some off projects like ‘Konkan railways’ came up but they did not address the issue at a national level. Thereafter, the first such project concentrating on carriage of cargo was DFC and it has been a decade that the same has been announced. We hope to see it as functional in the coming two-three years. There are six of such corridors proposed of which work is done only on two of them. We need to get the work on the other four going as soon as possible so that we are able to keep pace of infra growth with the trade volume growth and the gap is minimised” Talking about the importance of waterways, which is the most ecofriendly and cheap mode of transportation, he says, “For movement of cargo by water we never looked

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Dr P Alli Rani, Director (Finance)/CONCOR

“Railways are definitely an environment friendly mode of transport and is currently the backbone of the Indian economy. However, waterways also are environment friendly and even a cheaper alternative in places where large rivers are available. However, since such waterways are limited, railways would continue to be the backbone of transport as far as India is concerned.” at it seriously. We only had five official waterways in existence till about 68 years post independence. Only in 2016, through the National Waterways bill, we added 105 new waterways and now the real work of developing them can start. We don’t

have the mindset and know-how of carrying cargos by waterways, so lot of user awareness will have to be created. We will need huge investments in areas of creation of cargo handling infrastructure along the waterways and dredging to maintain uniform draft to make this mode work.” Waterways were at a negligible stage until recently there were a lot of initiatives taken to encourage it, like Sagarmala Program, PM Modi’s recent visit to Iran where Narendra Modi and Iranian President Hassan Rouhanities signed dozen of agreements ranging from a contract to develop the strategic Chahabar port to an initial pact to set up an aluminium plant and one on laying a railway line to give India access to Afghanistan and Central Asia. Dr P Alli Rani, Director (Finance)/CONCOR says, “Railways are definitely an environment friendly mode of transport and are currently the backbone of the Indian economy. However, waterways also are environment friendly and even a cheaper alternative in places where large rivers are available. However, since such waterways are limited, railways would continue to be the backbone of transport as far as India is concerned.”

Challenges The challenges faced with these modes of transportation are that the railways and waterways transport must be linked to road to provide final connectivity to industries or ultimate customer. Therefore, in order to leverage large infrastructure investments, it is necessary to have strategically placed transshipment hubs or multimodal stations that allow for multimodal logistics, combining rail, water and road. It is good news that the Indian logistics companies have started thinking on this ground. Experts in the industry foresee a bright future for transshipment hubs or multimodal hubs. Dr Rani optimistically avows that through such initiatives, the country would witness a boom in trade. She says, “India has been lacking transshipment hubs in the past, but currently multimodal logistics hubs are coming up rapidly

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feature and storing cargo. They also have an opportunity to take a lead in creating and using the multimodal system of transport.”

Things You Should Know

to gear up and start building

A report reads, “The World Bank in India is developing an objective approach for optimising multi-modal transport on the Eastern Corridor (covering the Indian states of West Bengal, Bihar, Jharkhand, Uttar Pradesh, Haryana and Punjab). There are several on-going investments in transport infrastructure along the Eastern Corridor including the Eastern Dedicated Freight rail project from Ludhiana to Kolkata, which is part of the Golden Quadrilateral of rail corridors connecting the main centers of economic activity. The World Bank also has provided the Government of India with a $2.7 billion loan to build 1,176 kilometers of dedicated freight-only rail lines. The National Waterway 1 system is also an opportunity to use waterways for freight on the River Ganges between Haldia to Allahabad. The waterways and railways are close to several state and national highways that could together form a network of transport infrastructure that provides a multi-modal backbone for greater economic growth in the region.”

Supply Chain systems using

Government’s Initiatives

the newly available logistics

Any kind of increase in logistics infrastructure will be very welcome and will trigger economic growth. The better the infrastructure network, the cheaper logistics will be. Hence, trade can look forward to speed, efficiency as well as economies in logistics. “Additional infrastructure and alternate modes are always welcome as it gives the trade more choices, creates competition leading to competitive pricing and efficiency in services. The port connectivity through Indian Port Rail Corporation is expected to give some immediate results as these are smaller projects whereas DFCs and waterways will take some time to operationalise and we will have to wait for a little more time to experience the benefits. Private sector will now have to gear up and start building supply chain systems using the newly available logistics infrastructure,” says Kele. The ease in logistics will come for sure but after a bit of waiting and some proactive measures; not only on behalf of the ministry but also on behalf of other government institutions and private operators.

Vivek Kele, President, AMTOI

“Private sector will now have

infrastructure. The ease in logistics will come for sure but after a bit of waiting and some proactive measures; not only on behalf of the ministry but also on behalf of other govt institutions and private operators.” with CONCOR at the helm of this change. Several multimodal logistics parks at strategic locations are under construction and these will act as a boom to the industry and trade.” Harmonising on the same tune Kele states, “We have now actually started to think and talk about it, which I believe is a great beginning. The first of this kind of a hub has been announced at Allahabad. The government will have to play a pivotal role in this. Concor has been a pioneer in inland transport of containers by rail and they can take a lead in this.” Talking about the initiatives that the government have to take regarding this matter, he adds, “Additionally government should identify such projects and give land and soft loans to private parties to develop such infrastructure as traffic projections are still hazy. We need to identify commodities which move in large bulk modes like food grains, fertilisers, coal, etc and see as to how it can be moved using multimodal systems. Ministry of Agriculture is responsible for movement of grain and fertilizers. They have entities like FCI and CWC which already have experience in handling

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The Way Out The advantage for India, from a national policy perspective, is that a critical transport and logistics network is still to be built, and so the country can pursue an optimal multimodal transport strategy that maximises cost efficiency, responds to needs of customers and reduces losses for users, while reducing the impact of freight transport on the environment. Ordinary people, for example, will benefit from reduced congestion in cities as more freight is transported on rail and waterways, and capacity is released from existing rail lines, which currently have to carry both freight and passengers. This will also lead to communities along the corridor having better access to employment opportunities, health, education and other services. To encourage multiple modes, however, it is crucial to find the optimal location to provide freight exchanges between modes. Only if these things are taken into consideration, there is no doubt that through the railways and waterways transportation India can be a multimodal hub easing the trade in the country. Often considered the backbone to efficient transport, modern modes of rail and waterways have become the focus of project owners, government officials, and community stakeholders. Railways and waterways are the key to unlocking congestion, maintaining efficient movement of goods and people and exploring opportunities for sustainable and greener system design.

Interview

Accuracy and Speed Drives the Industry

Over these years, the logistics industry has evolved a lot and the future depends upon the availability of skilled man power and critical problem solving. Sunil Kumar, MD, Everfast Freight, in an interaction with Nicin Varghese speaks about the scope, challenges and future plans of the company

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How well Everfast prepares itself for the challenges that arise from current market trends? Everfast, since its inception, has always raised up to the challenges the market and industry has thrown at it. The current market trends and scenario is not encouraging but we have been able to analyse and come up with solutions. Globalisation has changed the way companies view and use their supply chains to compete and gain market share. Globally, the life span of products are decreasing and the predominance of online business necessitates the fast and economical delivery of goods. The current world not only demands delivery on time but tailor-made solutions for competitive

pricing and packages with value additions to withstand the cut-throat competitions.

Everfast is an offer that one should not refuse. What is your comment on this? We may not have grown up to those levels, in order to make such tall claims. But, the way we have shaped up to offer customised and personalised services to our clients, the retention rate of our clientele and the business give us immense confidence that in coming days Everfast cannot be overlooked. We have evolved ourselves as per the market requirement and in our continuous investment in augmenting the manpower and technology for carrying out the complex logistic

requirements in supply chain management. In the present times, where cost cutting is inevitable for any business to survive, our focus on offering better last mile customer services and deliveries, needs to be lauded.

Can you speak about the dispatch of post-shipment documents? Also please tell us in what all ways does this help you to offer effective cargo services? Accuracy and speed of delivery is crucial for efficient logistics, and dispatch of postshipment documents is no exception to it. After completing the shipment formalities, the C & F Agents are expected to forward/ deliver important documents to the customers. This includes airway bill, exchange control copy of the shipping bill, duplicate of Form SDF, AR4, customs signed export invoice & packing list. This can help the customer to prepare the documents for banks and overseas buyer to discount the export bill and arrange collection of payments and completion of export formalities. Such documents are express/ hand delivered on the basis of urgency and requirement of the customer.

What kind of scope and challenges do you face while you provide freight brokering for your customers both in air and sea freight? As India is a developing economy, the opportunities are phenomenal. A wave of reforms is sweeping over India in terms of foreign direct investment (FDI) policies, emphasis on public-private partnerships to improve infrastructure, export tax rebates etc. All industry players are optimistic that the demand of freight picking up is strongly boosting. Just-in-time manufacturing will continue to push demand for air cargo business in India with faster movement of raw materials, components, parts and spares. However, the signs in the ocean freight industry are not favourable as the market is saturated and the industry is now in a race for market share. This results in squeezing out smaller players and another wave of price wars. Shipping companies are not honouring

What makes Everfast ‘one of its kind’ when it comes to cargo tracking? Also please tell us how modern technology is efficiently utilised in Everfast for the same? The traditional cargo tracking devices such as Radio Frequency IDentification (RFID) and bar codes are being used and it remains relevant. At the same time, cellular and satellite technology is being used to secure near-real-time coverage. The major challenge is to balance budget constraints with a realistic view. None of the existing tracking system is enough for the visibility of the entire supply chain. At Everfast, we intend to invest in this area, while working with solution providers to enhancement.

Please tell us about your management team and your strategy of work for air freight? Our management team comprises of young and energetic people who are committed to the company and are focused towards the pursuit of the company’s objectives. They concentrate on their profile to make sure that the business objectives are met. The future growth of the industry is crucially dependent upon the availability of skilled manpower and our management has invested to build up an efficient team, who are critical problem solvers and strategic in approach. The air cargo industry in India has undergone significant changes in the last decade with the growth and specialisation of door-to-door services. As the prospect of global market becomes a reality, the demand for air cargo movements will continue to grow as part of an expanding logistics system, that will require speedy and time definite delivery and more specialised customer services at reduced costs. There is a significant untapped potential for air cargo in India which we have already started tapping by studying the market, deploying resources and opening up new offices to take on the challenge.

for medium and long term requirements and thus is inadequate and overloaded. Inordinate dwell times, missing and nontraceable cargo, damaged cargo, lengthy cargo processing times and queues at the cargo terminals are also bottlenecks. The cargo facility development at airports is also underdeveloped as they are primarily meant for passenger requirement. Lack of shipment visibility requires constant follow up with carriers, shippers and custodians, resulting in increased communication cost, penalties and delays. Limited working hours of concerned agencies at the cargo terminals is one of the key reasons for the delay in clearance of international cargo. In many countries, cargo clearance is done 24X7. India also requires similar process, considering the vibrant imports and exports’ activity in the country to various destinations covering different time zones.

What sort of customised supply chain solutions does Everfast offer to auto parts and fashion industry clients? their guidelines on pricing. Based on the cargo traffic, the requirement of infrastructure facilities in future is likely to be much more than what is presently available. Currently the accountability of the various agencies involved in cargo handling and movement like carriers, custodian, customs, freight forwarders, custom house agents is not demarcated. Therefore, it is important to ensure accountability at all ends for delivery of services as per the standards. Out of many challenges, the following are worth mentioning; cargo infrastructure in our ports is not planned

The fashion industry is characterised by short product life cycles, volatile and unpredictable demand. But, for the automobile industry reducing operational cost and overall inventory levels are important. The prime focus has shifted to improve customer service and speedy delivery of products. India is on course to becoming the world’s third largest automobile manufacturer by 2020. The supply chain cost should be reduced to protect margins. To fulfill both this dynamic and important vertical, developing customised value chain with improved lead times and cost efficiency is the priority of Everfast.

NOVEMBER 2016 - CargoConnect 67

Interview

New civil aviation policy will boost air cargo segment According to Anil Khanna, Managing Director, Blue Dart the provisions for the air cargo industry in the recently announced civil aviation policy are indeed far-sighted and progressive. In an exclusive conversation with Ritwik Sinha, the top boss of India’s largest air express company also underlines the strong growth momentum owing to economy’s recovery

In precise growth terms, the GDP numbers seem to have significantly improved recently vis-a-vis the trends two-three years back. How is this trend reflecting in your business? WThe Indian economy expanded 7.9 per cent year-on-year in the first three months of 2016, buoyed by improved agricultural performance and growth in consumption. The government announced several changes in India’s economic policy for various sectors. In the Defence sector, under the new FDI policy, up to 100 per cent will be allowed, giving access to modern technology. In the road sector, the focus on highway developments, golden quadrilateral and increased traction to develop 40 kms a day is gaining momentum. The Civil Aviation Ministry has commissioned the National Civil Aviation Policy which lays down the directional guidelines for improvement of air cargo and setting up of international air cargo hubs in the country, where both are welcome steps.

68 CargoConnect - NOVEMBER 2016

in the first mile/fulfilment/last mile &

Blue Dart is the first and reverse logistics, parcel lockers (the first in the largest Express Com- the country) and Mobile Service Centres ease the end consumers delivery process, the pany in India with dedi- various payment options of Cash on Delivery, cated air services through a Card (Debit/Credit) on Delivery, Integration with Mobile Wallets, etc. The innovative & fleet of six Boeing 757 – 200 responsiveness track record has resulted in freighters with capacities the growth of this segment. It accounts for close to one-fourth of our business today, up to 504 tonnes per night, making us by far the most dominant leader in the seven main metros of in express solutions. India, operating at night to How do you expect the demand trends from the allow for late cut-offs and e-commerce business growing in the near to early deliveries. medium run? Will it get more robust? Besides this, the government also undertook the development of Air Freight Stations (AFS), developing six metropolitan airports, etc. backed by undertaking reform oriented measures in certain sectors. The DIPP introduced in April 2016 has impacted e-tailing which earlier attracted big-ticket investments and registered good growth numbers. The growth of the logistics industry is directly linked to the country’s economic performance. With the revival in GDP, likely implementation of industry-friendly legislations such as Goods and Services Tax (GST) and the government’s ‘’Make in India’’ thrust, we expect to see a strong growth in the logistics industry in the times to come. Our shipments from other industry verticals are showing better growth this year.

The demand trends will improve with more smart phone adoption. Currently, we have 240 mn smart phone users and 50 mn online shoppers. This number is expected to go up to 175 mn by 2020. With penetration of e-tailing logistics and payment options to tier-I, II and III cities from the current urban centric consumption in metros, Know Your Customer (KYC) norms becoming easier with Aadhar, acceptance of digital money, faster internet speeds etc., the e-tailing industry is at an inflexion point to becoming more robust.

In the domestic air cargo segment, you have been an undisputed leader for quite long. But, with the airline industry doing well (thanks to low oil prices since late 2014) and more passenger planes coming into the Indian market, do you think that there’s some serious competition emerging? All Has e-commerce emerged as the biggest catapassenger airlines have begun emphasising on lyst for the domestic air cargo business? How has this segment and entry of every new plane also your own e-commerce centric business grown in means capacity addition. the recent years? Does it account for one-fourth Over the past three decades we have of your business today? transformed ourselves to offer the customer The landscape of logistics sector is changing due to the increasing focus on e-tailing logistics and express logistics with the domestic e-tailing industry growing at 20 - 40 per cent CAGR. It has resulted in large logistics service providers introducing dedicated e-tail logistics business. The Indian e-tailing space is experiencing an exciting time where innovation is the key. The boom in e-tailing has brought significant changes in the Indian economy and this has greatly impacted our business too. We have introduced several products and services that focus on the convenience of our e-tailing customers such as automation

complete end-to-end supply chain solutions. Not so long ago, the express industry encompassed only small packages – mainly letters and documents and urgent deliveries. Today, it has metamorphosed to provide express delivery services for packages of all kinds and sizes to any destination. Blue Dart is the first and the largest Express Company in India with dedicated air services through a fleet of six Boeing 757 – 200 freighters with capacities up to 504 tonnes per night, in the seven main metros of India, operating at night to allow for late cut-offs and early deliveries. In March 2016, we added our 6th Boeing 757-200 freighter, re-

emphasising our commitment as an express logistics backbone and trade facilitator to the country.

I would like to get a sense of the trends of your ground express business. What have been the growth trends in the recent past? You clearly have been pursuing the grand vision of making it a major pillar of your business. Where has the story reached? We hold 46 per cent market share in the organised air express segment in India. Our market share in the organised ground express market has also consistently grown over the years to reach 13 per cent. We have also regularly added new customers across industry segments. We aim to be a one-stop shop for all logistics needs. For that to happen, a strong road network is a must in order to harness the huge potential for express surface movement. But, the road infrastructure in India is such that the average speed of a vehicle is just 30 kmph, while in the developed world it is as high as 100 kmph. The checkpoints further add to the delays. Almost an hour is lost at every stop and results in the 1400 km journey taking 42 hours instead of 14 hours. With the implementation of GST, we hope to see the productivity to triple in the ground vehicle segment.

Finally, from the recently announced new Civil Aviation Policy, what are the large takeaways for players in the air cargo segment? Precisely, where has it fumbled in terms of meeting your expectations? The Ministry of Civil Aviation has put in considerable efforts in ushering in reforms for the Indian Aviation Industry. The Civil Aviation Policy, which has been under discussion for the last two years is set to transform India’s aviation sector, which is poised to become the world’s third largest by 2022. Cargo facilities co-located at an airport are covered under the ‘Harmonised List of Infrastructure’ and will get the benefit of ‘infrastructure’ sector. It has put in place norms for space allocation for air-cargo, including express cargo for all Greenfield airports. All relevant central government authorities will be available through a single window at cargo terminals. Airport operators will provide space for at least ten years lease to operators of express cargo freighters who can develop dedicated infrastructure for improving the operational efficiency.

NOVEMBER 2016 - CargoConnect 69

GUEST COLUMN

Can driverless technology change the future of logistics transportation in India? By Vishwanadh Chowduri

oman philosopher Lucius Annaeus Seneca said, “It is a rough road that leads to the heights of greatness.” In India’s case some well-paved ones would do the trick. In 2015, India spent around 14.4 per cent of its GDP on logistics, while the industry itself remained riddled with problems of mismanagement and inadequate infrastructure. We are slowly working our way through an array of problems, but emerging technologies have completely changed the game. Driverless technology, though touted to be truly functional by 2020, is capable of changing not only the way we travel, but also the way we transfer our freight. Autonomous driving technologies are currently backed by the support of giants like Apple, Google, Daimler-Benz, among others. And their capabilities are not limited to just self-driving cars or cabs — the reality of driverless trucks is much closer than you might think. Yes, autonomous driving has extended its reach to the logistics industry as well. Mercedes-Benz unveiled its selfdriving Future Truck 2025 more than two years ago. It claimed that these trucks would consume lesser fuel and could provide a safer and more efficient driving experience. The trucks use radar and stereo camera technology, and can monitor roads up to 60 metres ahead. They are driven by an automated

70 CargoConnect - NOVEMBER 2016

system; and though a ‘driver’ does sit behind the wheel, he doesn’t actually do any driving. The human counterpart’s job is to simply plan the route on an attached tablet and keep a check on the condition of the freight being carried. The German vehicle manufacturer has now gone on and unveiled a self-driving Future Bus, that made a 20 kilometre test run in Amsterdam, in July this year. Automobile experts claim ongoing developments in driverless technology can incredibly reduce the room for human error with ultra-responsive technologies. Merc’s Future Trucks are already capable performing quick lane changes if they sense a broken down vehicle ahead or even an approaching ambulance in the rear. In India, on the other hand, overturned or crashed trucks are a common sight on roads. According to a Scroll.in report, 382 people died of road accidents in the country in 2014, with overloaded and badly loaded trucks being responsible for a 100 of those deaths. Drivers have a hardtime controlling overloaded vehicles. Further, speeding, drunk driving and drivers sleeping off at the wheel are some other common factors that lead to tragic accidents. Driverless technolog y can help alleviate each of these problems, making Indian roads a lot more safer. The advent of new technologies can also take our economy to new highs. Innovative, technologically advanced trucks can carr y freight over long distances in shorter periods of time. And they can also be trusted to keep the freight safe, regardless of the weather or surrounding conditions. In time, we can drastically reduce our transportation costs. Labour costs will also reduce with autonomous vehicles. And we can further cut down on the time lag and losses that result from aforementioned accidents.

A ll in all , as cost reduces and p r o d u c t i v i t y i n c r e a s e s s h a r p l y, driverless technology can create the optimum conditions for the logistical transportation industry to thrive. A thriving industry creates more, better-paying jobs, that can make up for those that are cut or automated thanks to the technology. The UK is hoping to create 320,000 jobs on the back of driverless technology, meanwhile the transportation network in the US is hoping to double their current output at 25 percent of the cost. In India, Mahindra Group has begun Research and Development to develop autonomous commercial vehicles. The focus at present is mainly on the agricultural sector, however, which can employ driverless tractors. If you’re wondering why, the answer lies in the many problems plaguing road infrastructure in the country. Before we can even think about bringing autonomous vehicles from farmlands to India’s highways and roads, a lot of improvements are in order. Array of potholes, bad planning, severe congestion and lack of proper road safety laws make Indian roads highly unsuitable for driverless technology. Factors like congestion and damaged roads, that are also responsible for road accidents, directly affect the chances of driverless technology growing in India. There’s also the problem of lane markings, which are followed by driverless vehicles to avoid potential accidents. In March this year, Reuters reported that a semi-autonomous prototype in the US refused to move because of missing lane markings. One can imagine a similar scenario play ing out in India. The i ndu s t r y ne e d s t o c at ch - u p a nd clean-up soon, if it wants to get on the driverless technology bus… and ride to sweet results. (The author is the Co-founder of Cognigo.in )

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GEFCO, EDJ, BKW inaugurate Switzerland’s largest solar plant

Emirates SkyCargo unveils the new purpose-built pharma hub

BKW, EDJ and GEFCO inaugurated the largest solar canopy power plant in Courgenay, Switzerland. The plant production will cover half of the Canton of Jura objectives in terms of renewable energy by 2021. A part of the energy produced will be used directly on site to charge electric cars imported by GEFCO. The surplus will be injected into the BKW network and provided to customers via the “Energy Green” product developed by BKW. The solar power plant production should be therefore certified to meet the growing needs in electricity from renewable sources. This achievement will cover nearly half of the Canton of Jura energy production objectives by 2021. This plant will allow GEFCO Switzerland to reduce its environmental impact effectively.

Emirates SkyPharma, Emirates SkyCargo’s new purpose-built facility dedicated exclusively to the timely and secure transport of temperature sensitive pharmaceutical shipments at Dubai International Airport (DXB) was officially inaugurated by His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Airline and Group. His Excellency Abdul Rahman Al Owais, Minister of Health, United Arab Emirates and His Excellency Humaid Mohammed Obaid Al Qatami, Chairman of the Board and DirectorGeneral of Dubai Health Authority (DHA) were also present at the inaugural. The new purpose built Emirates SkyPharma facility, part of the new 11,000 square meter extension of Emirates SkyCentral terminal at Dubai International Airport, offers 4,000 square meters of space dedicated to pharmaceutical cargo.

Schenker India to handle warehouse operations for Volkswagen Schenker India Pvt. Ltd. a part of DB Schenker, the transport and logistics division of the Euro 40.4 billion Deutsche Bahn Group, has announced that it will be managing the aftermarket warehouse operations of Volkswagen Group Sales India in the National Capital Region (NCR) and Bangalore. The company would be responsible for receiving, binning, pick, pack and dispatch operations in the aftermarket spare parts warehouse of VW, Audi, Skoda, Porsche and Lamborghini spare parts and accessories through its skilled and trained staff. The National Capital Region warehouse of Volkswagen is located at Sultanpur, Gurgaon, and is spread over 120,000 sqft. DB Schenker commenced operation successfully at this facility on August-16 with trained personnel for Volkswagen group automotive spare parts warehousing. Volkswagen’s Bangalore facility located at Dobaspet is spread over 55,000 square feet area. DB Schenker commenced operation successfully on September-16 with highly trained resources in place. The distribution centers in NCR and Bangalore caters to dealers of VW, Audi, Skoda, Porsche and Lamborghini across North India, East India and South India.

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Safeducate launches India’s Largest Logistics Job Fair

Emirates SkyCargo launches freighter service to Oslo

Safeducate, on October 18, 2016, announced India’s largest and first-ever of its kind Logistics Job Fair. Safeducate Logistics Job Fair is being organised with an aim to bridge the skill gap and make fresh talent available to the industry. This Logistics Job Fair will be held on October 22, 2016 at seven different locations across India at Delhi, Jaipur, Lucknow, Indore, Kochi, Ranchi and Ambala simultaneously. Over 1200 jobs in the field of supply chain and logistics will be offered during the Logistics Job Fair. The students will get an opportunity to evaluate if their existing skill sets match up to the industry requirements. Announcing about the Logistics Job Fair to the media, Divya Jain, Founder and CEO, Safeducate, said, “Safeducate Logistics Job Fair is a unique and first of its kind endeavor by us in the field of supply chain and logistics industry. This Logistics Job Fair will provide students with the tools and resources to make important and valuable career decisions. During the Logistics Job Fair, job seekers will take their first steps towards meaningful employment by meeting with prospective employers.”

Emirates SkyCargo is expanding its presence in Scandinavia with the launch of a new weekly freighter service from Oslo to Dubai starting October 11, 2016. The service is operated by an Emirates Skycargo Boeing 777 Freighter aircraft which has the capacity to carry just over 100 tonnes of cargo. Large and outsized shipments can also be easily uplifted through the aircraft’s wide main deck cargo doors. The cargo capacity offered through the weekly freighter is in addition to the 175 tonnes of belly hold capacity offered on the five weekly Boeing 777-300ER passenger flights from Oslo. The new weekly freighter service from Oslo will facilitate increasing exports of seafood, in particular salmon, from Norway. The last six years have witnessed a doubling of Norwegian seafood exports because of increased demand from global customers for Norwegian salmon, trout, cod and crab. Emirates SkyCargo has state of the art facilities at its Emirates SkyCentral freighter hub at Dubai World Central for the transportation of temperature sensitive seafood shipments.

Shipping ministry moves to scrap monopoly policy

Govt to invite bids for development of 36 waterways

The shipping ministry is weighing a plan to scrap a policy that was designed to check the emergence of private monopoly in terminal operations at stateowned ports, holding that it was no longer relevant and continuing with it may deter private investors from bidding for cargo terminals. “If there is only one private terminal/berth operator in a port for a specific cargo, the operator of that terminal/berth or his associates shall not be allowed to bid for the next terminal/ berth for handling the same cargo in the same port,” according to the policy for preventing private sector monopoly in major ports (a term used to refer ports run by the Union government) that was issued by the shipping ministry in August 2010. The Indian Private Ports and Terminals Association (IPPTA), an industry lobby, says the move to scrap the monopoly policy was positive for port investors.

Moving fast on its ambitious waterways project, the government has said it will augment the process of development for 36 waterways in the first phase and soon float tenders to invite bids for the project. “Draft feasibility reports have been received for 36 waterways. We will be developing these in a major way in first phase as India has huge potential in this so far untapped segment despite endowed with rivers that could change the economy,” Road Transport and Highways Minister Nitin Gadkari said. Parliament earlier in 2016 had enacted a legislation allowing 106 rivers across the country to be converted into National Waterways (NWs) in addition to the existing five such NWs in a bid to boost movement of goods and passengers via rivers and reducing transportation costs substantially. The Minister said the environment-friendly and cost-effective mode of transportation will reduce the logistics costs significantly from as high as 18 per cent in India.

76 CargoConnect - NOVEMBER 2016

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India’s first integrated on-airport perishable cargo handling centre – AISATS COOLPORT commences Trial Operations

Air India SATS Airport Services Pvt Ltd (AISATS), India’s premier airport services company, commenced trial operations of India’s first integrated on-airport perishable cargo handling centre, “AISATS COOLPORT”, at the Kempegowda International Airport, Bengaluru (KIAB). The state-of-the-art, 11,000 sq. meter facility will meet the everincreasing demands and handling requirements of temperature-sensitive cargo and will further enhance the State of Karnataka’s status as the pharmaceutical and perishables hub of India.AISATS COOLPORT, with a handling capacity of 40,000 tons per annum, will cater to an extensive

range of perishable commodities such as pharmaceutical products, fruits, vegetables, poultry, sea food and flowers. It is customised to offer the most comprehensive cold storage solutions with 17 dedicated cold rooms with adjustable temperatures ranging from – 25OC to + 25OC. Designed as a “One Stop Shop” to facilitate the import and export processes of the air cargo industry, the integrated facility will house a state-of-theart Drug Controller lab as well as a Plant Quarantine Inspection and Certification office. In recent years, Bengaluru has witnessed a steady increase in perishable cargo volume, with a CAGR of 15 per cent. With this new facility, AISATS aims to be a key player in promoting an efficient, safe and secure cool chain handling for temperature sensitive products. “South India with its established presence in the global logistics network has the potential to create the necessary fillip towards the development of air cargo in India. As an airport that is strategically positioned at the heart of South India, we have the opportunity to take advantage of this momentum and be the single gateway for cargo traffic and shippers aspiring to reach this fast-growing region. We firmly believe new logistics that redefine the cargo business will propel us closer to our vision of being the Cargo Gateway to South India,” said Hari Marar, President, Airport Operations, BIAL.

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news

Allcargo’s Transindia Logistics to operate at Central Warehousing Corporation’s CFS in Mundra, Gujarat Transindia Logistics, part of Allcargo Logistics Ltd, one of India’s largest integrated logistics players in the private sector, listed on BSE and NSE, has bagged the contract to manage and operate Central Warehousing Corporation’s (CWC) Container Freight Station (CFS) in Mundra, Gujarat. The CFS facility is located in close proximity to an existing Adarsh Hegde, Joint Managing CFS operated by Allcargo. Director, Allcargo Logistics Ltd With 40 acres of sprawling space, Transindia is poised to transform the way operations are conducted in Mundra. With the expertise of Transindia the operations at Mundra CFS will bring in new level of supply chain capabilities and will serve as a benchmark in the realm of CFS. With unique features like the presence of cutting edge technology and processes, highest safety, se-

Blue Dart wins Regional Express Provider of the Year Award Blue Dart, South Asia’s premier courier and integrated express package distribution company, has been awarded the Regional Express Provider of the Year Award and the Corporate Social Responsibility Award at the Payload Asia 2016 Awards Ceremony held on 29 September 2016 at the SkyCity Marriott hotel in Hong Kong. Organised by Payload Asia and supported by Logistics Insight Asia, the annual awards is a celebration of excellence, spotlighting the air cargo supply chain companies that have excelled in the industry by rising above the very challenging global air freight market. The winners were selected post a very high standard, transparent and legitimate process of elimination with more than 90 nominations. The awards were presented by Brian Wu, Vice Chairman, Hong Kong Association of Freight Forwarding and Logistics (HAFFA) and received by Anil Khanna, Managing Director, Blue Dart & Ketan Kulkarni, Senior Vice President and Head–Marketing, Corporate Communications and Sustainability, Blue Dart.

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curity standards, expertise in handling over dimensional cargo (ODC) and hazardous (HAZ) cargo, Transindia will create a new standard in CFS operations at Mundra. A trained staff of professionals will handle the freights with well equipped facility to provide best services to its customers. The pioneers in CFS operations in India, Allcargo already has its presence in Nhava Sheva, Chennai, Mundra, Indore and Dadri (NCR) via Inland Container Depots (ICD) and CFS facilities. The company has also invested in a fourth CFS facility at Kolkata and a logistics park in Jhajjar (Haryana) which is expected to begin soon. Commenting on the occasion, Adarsh Hegde, Joint Managing Director, Allcargo Logistics Ltd said: “Our growth strategy for CFS business lead to the acquisition of Transindia Logistics a few years ago. We are glad to expand our operations with our second facility in Mundra, which is set to transform the business scenario. Coupled with the highest safety and security standards, our customers can expect speedy turnaround, expertise in handling business operations in the western region of India hereon.”

Apollo Logisolutions Limited signs MoUs with PIL and its Subsidiary Singamas Apollo Logisolutions Limited (ALS) and Pacific International Lines (Pte) Ltd (PIL) have signed two Memorandum of Understanding (MoUs) to explore logistics opportunities in India. First MoU between ALS and PIL is for mutual cooperation in container freight station and allied services whereas second MoU between ALS and Singamas (subsidiary of PIL) is to jointly pursue transportation of specialised liquids in India. The MoU signed with PIL will enhance logistic services relating to container freight station, inland container depots, freight forwarding, custom brokerage, 3PL, warehousing and allied services. The scope of the partnership with Singamas will include movement of all types of non-POL liquids either by rail or road, operation and management of movement of liquid tanks, their maintenance and cleaning. The timeline of the MoUs will be five years, during the course of which an investment of USD 50 million has been embarked upon. The partnership will provide an excellent opportunity to promote bilateral trade between the two countries and will also help the Indian logistics providers build strong network with their counterparts and showcase their abilities.

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news

Lufthansa Cargo freighter named Marhaba Egypt A Lufthansa Cargo MD-11F freighter now bears the name “Marhaba Egypt” and will carry this message with it around the world. The aircraft with registration D-ALCF received its name at Cairo International Airport from the Egyptian Director of Civil Aviation, Hani Al-Adawy, the German Ambassador to Egypt, Julius Georg Luy and Sören Stark, Lufthansa Cargo board member Operations. The eventful ceremony featured a classic water salute from the Cairo International Airport fire brigade. The aircraft’s name “Marhaba Egypt” underscores Egypt’s role as an important market in air freight transport. In a statement Sören Stark said, “The greeting ‘Marhaba Egypt’ stands for the close connection between Lufthansa Cargo and Egypt. We are proud of being so well positioned in this key market with more than a dozen passenger and three freighter flights per week.”

Lufthansa Cargo and Cathay Pacific now under one roof As a key milestone step of the joint business agreement (JBA) between Lufthansa Cargo and Cathay Pacific Cargo, which was announced in May, Europe’s largest air cargo carrier has moved its local freight handling into the Cathay Pacific Cargo Terminal (CPCT) in Hong Kong. The move, which took effect on 1 October, benefits customers of both carriers, with one single location for export drop-off and import delivery arrangements. As part of the JBA, both cargo carriers are working closely together on network planning, as well as sales, IT and service enhancements, and plan to transport the first shipment under the cooperation framework from February 1, 2017 – initially from Hong Kong to Europe. The ability to also book eastbound shipments from Europe to Hong Kong will then follow in 2018. “We are very pleased to share a handling location in Hong Kong. There will be many advantages for our customers and it represents an important milestone for the start of our partnership at the beginning of the year,” said Peter Gerber, CEO and Chairman of the Executive Board of Lufthansa Cargo.

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Emirates SkyCargo brings Onam closer to home for Keralites For many Keralites celebrating Onam in the Gulf region this year, Emirates SkyCargo brought in a special flavor from home. Earlier in September, the cargo carrier deployed three dedicated freighter flights, two from Thiruvananthapuram and one from Kochi, transporting more than 288 tonnes of perishables to the Middle East especially for the Onam celebrations in the region. The perishables uplifted exclusively by Emirates SkyCargo included all kinds of vegetables, different varieties of fruits including bananas and banana leaves. These fruits and vegetables are important ingredients for the Onam Sadhya – a vegetarian banquet served on fresh banana leaves during the festival. While the majority of the shipment was headed to Dubai, the perishables also reached other destinations in the Gulf region including Bahrain, Doha, Kuwait, Dammam, Muscat and Jeddah. Emirates SkyCargo has witnessed a steady growth in the export of cargo from Kerala over the years. In FY 2015-16, the carrier helped export over 29,000 tonnes of cargo, a growth of 8.7 per cent from FY 2014-15.

Radical pharma-logistics collaboration initiative announced at AirPharma TEAM-UP is a pharmalogistics initiative expressly designed to inspire the mutual understanding, common procedures and universal climate of trust that are prerequisites for the creation of sustainable, fully-integrated supply chains. Speaking at the IATA AirPharma Conference in Brussels on October 12, 2016, TEAM-UP founder Alan Kennedy stressed the urgent need for greater integration of the pharma-logistics supply chain: “With the huge challenges it is facing, the pharmaceutical logistics sector faces a very uncertain future unless it is prepared to abandon its traditional silo thinking and practices in favour of a more collaborative approach. The advent of the TEAM-UP integration framework will help accelerate the changes needed and open the doors to faster, more equitable, more systematic supply chain integration. There is no longer any excuse for inertia.”

appoinTments

Former VP of TCI Joins Freightbazaar

Alexandre Takes the Reins at IATA

Ravindra Gandhi elected as President

Hanumanta Rao, an experienced transportation logistics veteran and visionary leader has joined FreightBazaar.com, India’s first Integrated and the most trusted online platform for inter-city freight transport as President of Sales and Operations. Over his illustrious career spanning 28 years, Rao has held a series of Leadership positions in the TCI group, one of the oldest and the largest Logistics companies in India. Rao served as Vice President of TCI - Freight Division in his previous role. As a Vice President, Rao headed FTL and ODC segments as National Head. He was one of key persons in formulating systems and policies of company and he was a core committee member.

Alexandre de Juniac became the seventh person to lead the International Air Transport Association (IATA) when he took on the role of Director General and CEO from September 1, 2016. De Juniac has almost three decades of experience in both the private and public sectors. This includes senior positions in the airline and aerospace industries and the French government. De Juniac served as Chairman and CEO of Air France-KLM (2013-2016) and prior to that as Chairman and CEO of Air France (2011-2013). Under de Juniac’s leadership Air France and Air France-KLM underwent a successful restructuring that improved efficiency and strengthened performance. He has also served on the IATA Board of Governors (2013-2016).

At the IndoB e l g i a n Luxembourg Chamber of C o m m e r c e and Industry’s (IBLCCI) 15th Annual General Meeting (AGM) held on September 2, 2016, Ravindra Gandhi, Managing Director of Hans Maritime Services Pvt Ltd, was elected as President of the Chamber, succeeding Raman Madhok, Managing Director of CMI FPE Ltd. He will be supported in this role by two elected Vice-Presidents, Paras Savla, VicePresident on the Finance Committee, and Els Reynaers, Vice President on the Admin. Committee. In his annual report to members, Raman Madhok, reported that 2015 was a very successful year for the chamber.

Industry Veteran now Snapdeal VP

The new CFO of APL Logistics: Shigeo Mori

New EU operations director for BCA

Snapdeal, India’s largest online marketplace, on October 17, 2016 announced the appointment of Pradeep Desai as Senior Vice President – Engineering. With more than 14 years in the industry, Pradeep has been at the forefront of building many industry-first technology enabled logistics solutions, which are well known in the global e-commerce industry. In his new role, Pradeep will be responsible for spearheading a team that builds innovative logistics interventions and creates a world-class delivery experience.Prior to his appointment, Pradeep spent three years at Groupon, where he led the product and engineering functions.

APL Logistics is pleased to announce the appointment of Shigeo Mori as Chief Financial Officer, effective from October 18, 2016. As CFO, Mori will be responsible for leading the global finance, treasury, accounting and global support service functions in APL Logistics. Leveraging off his international experience, he will support APL Logistics’ growth plans. Mori brings over 30 years of experience in accounting and finance leadership in various roles within the Kintetsu World Express (KWE) Group in Japan, UK and the USA. Immediately prior to APL Logistics, Mori held the position of Vice President for Finance in KWE USA. He has held this role since June 2010 and was responsible for supervising revenue and general accounting, consolidated financial statements, et al.

BCA is continuing its expansion plans in Europe with the appointment of Bertrand de Techtermann into the new role of European operations director. He brings with him a wealth of experience gained over 17 years in the automotive industry and finished vehicles logistics, most recently at logistics group Gefco, where he set up its Algerian business. His career has spanned France, Germany, Switzerland, Slovakia and the UK. This new role aims at providing “a unique customer experience, offering BCA’s business partners the expertise, assistance and agility to leverage the full potential of the European market”.

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CDPQ acquires a substantial minority interest in TVS Logistics Services TVS Logistics Services Ltd. (TVS LSL), the India-based multinational third-party logistics service provider, announced that it has reached an agreement with Caisse de dépôt et placement du Québec (CDPQ), one of North America’s largest pension fund managers. Under this agreement, CDPQ will invest over INR 1000 crores ($155 million US) to acquire a sizeable minority stake in TVS LSL, a privately held subsidiary of the TVS Group. Following this transaction, existing investors Goldman Sachs and KKR will fully exit their investments in TVS LSL. CDPQ will purchase most of their joint stake, while TVS family members and management will acquire the remainder. Beyond this equity investment, CDPQ is ready to commit significant additional capital to finance transformative acquisitions and support the expansion of TVS LSL in India and globally. R Dinesh, Managing Director, TVS Logistics Services Ltd, said, “We are happy to have CDPQ, a leading global institutional asset manager, on board. Over the years, we have benefitted from a meaningful partnership with global investors like Goldman Sachs and KKR. We believe CDPQ

is the perfect long-term partner for our next phase of growth as we look to expand the scale of our business. TVS Logistics, over the years, has grown at a CAGR of more than 30 per cent and has a strong global track record of growth, both organically and through acquisitions. We look forward to continuing this evolution and building on our successes through a fruitful partnership with CDPQ.” Michael Sabia, President and Chief Executive Officer, CDPQ, said, “Efficiency in delivering goods to customers is a key driver of business performance. TVS Logistics is well positioned to seize growth opportunities resulting from recent tax reforms in India and global demand for state-of-the-art logistics services. CDPQ’s strategy is to identify world-class management teams and to support them over the long term. This is precisely what we intend to do with TVS Logistics as it expands in its home market and abroad.” Sanjeev Mehra, Goldman Sachs’ representative on the board of TVS LSL, said, “We have been privileged to partner with Dinesh and the TVS Group as their first private equity investor.”

EVENT FACT SHEET

M : +91 98407 01269 | E : cii.logistics@cii.in | W : www.ciilogistics.in

events

FFFAI to organise Biennial Convention and FIATA World Congress

IIFF starts its 9th batch of IIFF/ FIATA Diploma in Logistics

The 23rd Biennial Convention of the Federation of Freight Forwarders’ Associations in India (FFFAI) has been scheduled to take place from January 19-21, 2017 at Crowne Plaza Hotel, Kochi (Cochin). The theme of the Convention, as was in the previous Conventions, will be relevant to prevailing scenario of global business as well as logistics Industry. FFFAI will also organise the ‘FIATA World Congress 2018’ from September 24-29, 2018 in New Delhi. The forthcoming FIATA World Congress in 2017 will be held in Kuala Lumpur, Malaysia from October 4-8, 2017. FFFAI urges members of the Indian Logistics Community to participate in large numbers as a part of the Indian Delegation for the FIATA World Congress 2017 Kuala Lumpur, to showcase the prowess of the Indian Logistics Community. On the occasion of FIATA’s 90th birthday, FIATA held its 2016 World Congress in Dublin, Ireland. Hosted by the Irish International Freight Association (IIFA) working closely with FIATA, this congress presented a new format and welcomed an array of high profile speakers to discuss the key issues of the industry, with a strong accent on innovation. During the Congress FIATA and IATA signed the new air cargo cooperation agreement and likewise FIATA and Organisation for Co-operation between Railways (OSJD) signed a Memorandum of Agreement. Other agreements at government level were also prominently featured and attracted global and regional attention.

Indian Institute of Freight Forwarders (IIFF) on September 11 announced its 9th batch of IIFF/FIATA Diploma in Logistics, Shipping and Freight Forwarding. The inauguration ceremony, which was held in Mumbai, was graced by Tej Contractor, President and Nirav Thakkar, Hon. Secretary, IIFF. Also present on this occasion were Della Crasta, Course Coordinator, IIFF and Viren C Dayal of FFFAI/IIFF. Later, regular classes commenced from September 18. Commending the IIFF efforts pertaining to skill development Samir shah, Chairman, FFFAI, in his message underlined that with increasing threats to security, the Freight Forwarders will have to be more and more driven to understand the nuances of Cargo handling. “It is important to remember that cargo handling is a very dynamic activity i.e. it is constantly changing. Its process, principles, documentation, etc. are changing continuously,” he added. Therefore, said Shah, it is important that people who want to be in freight forwarding business need to have very clear knowledge on their domain and have the ability to constantly look at new changes as well as be ready to adopt all changes as well as challenges.

Dachser India inaugurated the new regional office in Mumbai Dachser India has moved to a new regional office in a thriving business area in Mumbai, to be closer to its brand named customers and enable staff from different departments to communicate more effectively. The new office, which is situated in Andheri was inaugurated by Thomas Reuter, COO, Air and Sea Logistics. Edoardo Podesta, MD, Air and Sea Logistics, Asia Pacific, Huned Gandhi, MD, Air and Sea Logistics, India were also present for the inaugural ceremony. “2018 is an important year for us since we focus on the consolidation and upgradation of the IT system of Dachser in all spheres including accounts, communication and operation. We are upgrading the existing technology with home grown IT system and aims to provide more visibility to our customers,” says Thomas Reuter. The upgradation is completed in Europe and US and the team expects India to get fully upgraded by 2018. Dachser has recently shut down three offices in Mumbai and incorporated them as a single big office which is close to the international airport in Mumbai. It incorporates air, ocean, customs and operations staff under one roof in a the new operational office in Mumbai. “With India’s strong developing manufacturing, automotive, FMCG and e-commerce market, there is an increasing need for quality and integrated logistics solutions. As we focus on India’s positive economic growth and upcoming favourable government reforms, we are very excited about our strategic investment in the new Regional Office in India. We believe that with Sagarmala project and the newly introduced time tabled freight trains, the sea and rail freight will witness tremendous changes,” says Huned Gandhi. Dachser now has 25 offices across the subcontinent with one of the largest country wide logistics networks of any international company.

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events

Diwali Baash by ACCD With Diwali round the corner, the Air Cargo Club of Delhi lit up the lives of its members with delicious dinner and power packed performances at Four Points Sheraton earlier this month. ACCD followed the tradition of celebrating Diwali with pomp and grandeur this year too. Many members complemented the event with their presence along with their spouse and children dressed in colourful attire which added more glamour to the air. The mehendi designers present in the event added the excitement for the women. The evening was further complemented by the casino royal theme along with several mind blowing performances by the dance troop who enthralled the members with their act along with variety of drinks and scrumptious food concluding yet another memorable event for Air Cargo Club of Delhi. The event started by 7 pm and followed till late night. The event was more like a family get together where everyone was happy to have an opportunity to meet and greet their friends. ACCD requested all the members of the trade and their guests to block the date, December 17, 2016. The club is all set to host the biggest event of the year - Annual Ball at Kundan farms, Kapashera, New Delhi. The branding committee is all geared up to cover the event and reach out to as many people as they can.

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events

FFFAI organises EC meeting and AGM in Madurai, discusses impact of GST The Federation of Freight Forwarders’ Associations in India (FFFAI) held its 6th Executive Committee Meeting and 53rd AGM at Madurai on 16th and 17th September 2016 respectively. The meeting was attended by more than 100 members representing the respective 27 Custom Broker Associations, which are the members of FFFAI, from across the country. On this occasion K Vaitheeswaran, renowned Advocate and Tax Consultant, made a presentation on the details and impact of ensuing Goods and Services Tax (GST) on customs brokers, freight forwarders and logistics industry in India. In his speech Samir Shah, Chairman, FFFAI highlighted the rapidly changing ecosystem of the freight forwarding and logistics business and role of the Federation to train its members to cope up with the changes.

Independent cargo subsidiary company launched by AAI Shri P Ashok Gajapathi Raju, Hon’ble Union Minister of Civil Aviation launched AAI Cargo Logistics And Allied Services Company Limited (AAICLAS) on October 25, 2016 at Hotel Taj Palace New Delhi. The AAICLAS is an independent cargo subsidiary company formed by corporatisation of AAI’s cargo department. Neera Rawat has been appointed as the MD of the subsidiary and BK Mehrotra would be the CEO of AAICLAS. The vision of the company is to become the foremost integrated logistics network operator in India with primary focus on air cargo handling and allied services. This new subsidiary will be allowed to develop its own distinct culture, organisation structure and business model while at the same time draw upon the strength of its large parent origination, Airports Authority of India. All the activities currently being carried out by the cargo department of AAI will be merged into the new company and the department will no longer be functioning with AAI. The company will be shortly initiating comprehensive discussion with all the stakeholders to ensure smooth transition of all cargo activities to the new company. Creating AAICLAS by AAI would bring multiple advantages as there is lot of activities on the cargo front from the AAI in the period ahead. AAI already has vast reservoir of human resources in cargo handling who possess the requisite expertise and experience in handling cargo operations which would be gainfully utilised for the organisational benefits. The efforts are being taken by AAI in establishing regional connectivity through air cargo movement across the country. Dr Guruprsad Mohapatra, IAS, Chairman, AAI wished them and their team success in their endeavour to make this first of its kind AAI subsidiary a force to reckon. He also urged them to take this company from its fledgling stage to an effective establishment and ensure that AAI and the nation benefit from this effort.

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| tech Flap The supply chain of tomorrow will be leaner, faster and most importantly, self-orchestrated. This unprecedented pace of change will be driven by he following few radical technologies that will be cautiously adopted by industry participants over the next 15 years. Smartbox Smartbox.in is a one stop solution for all last mile delivery problems. Their automated delivery terminals enable consumers with a highly secure, private, and convenient way to collect their online orders. These terminals are present at 120 centres in Delhi NCR including metrostations, shopping centres, central locations etc. They are using cutting-edge technology and smart physical infrastructure to store, notify and track orders. Customers receive an OTP when the parcel is delivered at the terminal which that can be used to pick-up the order at a convenient time. The robust cloud-based system easily integrates with the e-commerce portals. This will give a boost to the e-Commerce market to enhance their efficiency to a whole new level.

Porter Porter is a pioneer and the leader in tech-enabled intra-city logistics. It is an online market place which offers mini-trucks (LCVs) to SMEs, small businesses and individuals on demand as well as on fixed arrangement basis. In fixed arrangement, vehicles are provided to industries for managing their first mile, last mile and inter-warehouse movement of goods. Porter was founded in 2014 by three IIT graduates Pranav Goel, Uttam Digga and Vikas Chaudhary. The company’s goal is to weed out the inefficiencies that plague the existing unorganised intra city logistics market with the use of its proprietary technology platform. There is reduced competitive intensity in the intra-city market. The competition has not been able to raise credible institutional funding, build technology or scale. Porter is the market leaders in the metro cities and the company is approximately ten times bigger than the second biggest player in the market. But other intra-city players operating in the market are LetsTransport, Parcel, Blowhorn.

Load24*7 Load24x7’s USP is borne out of the right mix of technology and business sensibility. It has emerged as India’s first transportation mobile app that connects goods and vehicles. The inchoate start-up already boasts of a wide network with 15,000+ registered mobile users, over 45,000 transporters, 4500+ packers and movers and over 120 advertisers. By providing transporters free platform to post their availabilities sans brokerage fee, Load24x7 supports transporters, vehicle owners, manufacturing companies, goods owners, packers and movers and transportation allied industries by connecting goods and vehicles.

XSTOK XSTOK.com, an online B2B marketplace for ready and surplus stocks across Fabrics, Denims, Home Textiles, Apparels and Yarns is using technology to mobilise the ready and unsold stocks of the mills. They onboard mills, currently has on boarded close to 750 mills- premier producers like Arvind Mills, Nahar, Oswal Denim, D’Décor, Welspun, Trident and many more,. The mills upload the ready stock details on XSTOK, which is turn is sold through auction pricing to its registered buyers from all across India. They have conducted over 700 auctions. In one of the case, they have managed to sell five year old stock of scarf for a factory. Going forward they want to mobilise more than ten per cent of the total surplus produce in the country.

API Google Maps API makes it easy for companies to include fully interactive Google Maps on their public and internal websites. The Maps API helps your customers and employees make the right business and purchasing decisions by visualising important information on a familiar map. DHL Same Day chose Google Maps API. The couriers’ GPS coordinates are now integrated into Google Maps and displayed on plasma screens in the service centres. Using Google Maps, dispatchers can either focus on particular areas and couriers or get a summary of all courier journeys, just by using the scroll bar to zoom in or out. They can also use Google’s Street View service for more detail with 360 degree, street-level imagery. Google Maps also has integrated traffic reporting. A dispatcher can inform couriers of any traffic issues and advise them of alternative routes. Customers also benefit from the Google Maps API. They can now track couriers online through the mapping service. The GPS system is updated every minute, so both the dispatcher and the customer always know a package’s location. With integrated traffic reporting, dispatchers can amend the estimated arrival time of a package online, so the customer is always aware of any delay.

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PEOPLE CONNECT

Adrenaline Rush on the Gangway Following the footsteps of his father, he learnt to tread on the logistics path with unparalleled ease. T. Venkataraman, Managing Director, Goodrich Group in an interview with Sana Husain discusses the need for a reduction of tonnage and revival of trade for sustenance of the logistics industry were deployed in the Bombay â&#x20AC;&#x201C; UK /North Europe trade lane to the current burgeoning sizes of vessel calling Indian ports which are capable of moving at super speeds to ports globally. The technology of building ships again underwent a sea-change. An automation of a supreme kind leading to more fuel efficient ships took place. Government regulations in India and the practices at the port did not change at the same pace as compared to the other aspects that were developing. Still, the age-old practices continued.

What was the biggest challenge that your company has faced till date? The biggest challenge that my company has faced was the recession that hit the ship owning industry, post 2008, wherein problems galore with excruciating frequency threatened us. But, thanks to the well-designed variety of our services, of course within the core competency of shipping and logistics, my company successfully navigated through.

Where do you see the graph of the logistics industry moving in the coming decade?

What motivated you to be a part of the logistics industry In the coming ten years, we shall be clearly fooling ourselves if we believe that industry will completely turn around for the better. The and how has your experience been so far? I must categorically state that the only reason is my late father, who served in the logistics industry for close to four decades and also during my entire life I have stayed in a neighborhood consisting only of people from the same shipping industry. Right from my childhood, I used to get frequent opportunities to visit ships of various sizes and shapes and during all these visits I can vividly remember the adrenaline rush that used to flow through my veins the moment I set foot on the gangway. It frequently presented me challenges, coupled with enthusiasm and the rewards that I sought right from the year 1976.

How has the industry changed from the time you stepped in? What major transformations have you observed in the industry in terms of technology, manpower, practices, government regulation, etc? During the first ten years of my career in shipping and logistics, the industry was going through an unfortunate recession, between 1976 to 1987. In the Indian context, the erstwhile breakbulk liner service was fast getting decimated by the onset of containerisation in India, to the extent that very soon, quite a few of the Indian flag companies involved in this activity had to call it a day due to sustained losses. Much as they tried, they could not progress or keep pace with the accelerating containerisation of liner cargo. Containerisation itself in India underwent a speedy metamorphosis from a scenario where 200 TEU capacity vessels

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current unprecedented erosion of the freight rates does not seem to be stopping at all. Today, the lines and the NVOCCs, to keep their vessel and equipment moving, are forced to accept hitherto unknown quantities such as zero freight, discounted shore side recoveries and granting higher number of container detention free days. The authorities not only remain oblivious to the industryâ&#x20AC;&#x2122;s crisis, but also are further recommending strictures against recovery of legitimate charges. Due to over-tonnaging and a bulging container fleet, compounded with a lack of cohesiveness among operators, the freight erosion remains unabated. So, as such no immediate turnaround of fortunes is in sight. As was witnessed, in the recent times, quite a few lines and NVOCC operators might close down, similar to what happened in the late 70s and early 80s! For the industry to survive, one has to pray for a reduction on tonnage and revival of trade.

What specific beliefs or value that you live and work by and how do you define success? Keeping yourself up to date with the changing times in terms of skills and knowledge, keeping your manpower forever motivated and continuing to inculcate honesty and transparency in all that you do! This way, a corporate entity can continuously succeed.

Apart from work what are your other interests? Music, writing articles and public speaking are a few other interests that I have.