CargoConnect September 2017

PAGES PAGES100 108INCLUSIVE inclusiveOF ofCOVER cover

www.surecommedia.in Postal Registration No.: DL (S)-01/3372/2016-2018 WPP No.: U(S)-81/2016-2018 th th same Posted at Lodi Road HPO, ND on the th4-5th-5 samemonth month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

VOL VIII ISSUE X september 2017 `20

Onset of Moving towards a new dawn in logistics

Will GST give a Fillip to the Air Cargo Sector?

The Dynamics of Warehousing Rising freight competition between rail and road

Proliferating services across the country: E-Commerce Logistics

Contents

Volume VIII • Issue X • september 2017

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

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16 COVER STORY

Onset of 4PL Moving towards a new dawn in logistics focus

SPECIAL FEATURE

The Dynamics of Warehousing

INTERVIEW Scott Norris, VP, Commercial Development, Vancouver International Airport ...................74 Oleg Orlov, Vice President, Antonov Company ................................................76

Will GST give a Fillip to the Air Cargo Sector? ...............................................8

FEATURES

Keku Bomi Gazder, Chief Executive Officer, AAICLAS ......................................................78 Glyn Hughes, IATA’s Global Head of Cargo .............................................................80 Vladimir Zubkov, Secretary General, TIACA .............................................................82 Mike Chew, CEO, AISATS ...............................84

Proliferating services across the country: E-Commerce Logistics ....52

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

Rising freight competition between rail and road ....................................64

GUEST COLUMN .......................92 NEWS ..................................92-97 INTERNATIONAL CONNECT........98 APPOINTMENTS .....................100 UPCOMING EVENTS ...............100

Air Cargo in Africa on a Fast Forward Mode .................72

EVENTS ............................101-105 INFOGRAPHICS .......................106

Director Ajeet Kumar Marketing Manager Niti Chauhan Asst Manager Marketing Asad Mohammad Administration Vipin Marwah Accounts & Administration Poonam Gupta Sr Designer & Visualiser Shaique Ahmad Designer & Visualiser Mayank Bhatnagar All material printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same.

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

Upfront Presently, as many as 1457 highway development projects covering a length of 45,830 kms with an estimated cost of `4,03,249 crores are under execution in the country.

In the next 15 days, the work of 10 inland waterways will be started in different parts of the country. Inland waterways is a game changer. It is going to reduce the logistics cost and this will help the industry in export promotion and creating more employment.”

Nitin Gadkari Union Minister for Road Transport, Highways and Shipping

“India’s aviation industry is the fastest growing industry in the world and we hope it will become the biggest in the world.”

Ashok Gajapathi Raju

Union Minister of Civil Aviation

Mansukh Mandaviya Union Minister of State for Road Transport, Highways and Shipping, informed in a written reply to the Rajya Sabha

The Public Investment Board has cleared the proposal for Bharatmala Pariyojana, targeting to construct a total of 24,800 kms of national highways across India and CCEA proposal for this is under inter-ministerial consultations.”

The warehousing space requirement in top seven markets of India is estimated to grow at

Important highlights of the study titled‘Indian Logistics Industry–Growth Insights and Forecast to 2020’ conducted by Frost & Sullivan are–

• Investments in infrastructure development across all modes of transportation, relaxed foreign direct investment regulations, implementation of GST, and increased technology adoption are altering the Indian logistics industry • Logistics services in India will greatly benefit from the development of transportation and logisticsrelated infrastructures, such as dedicated freight corridors, logistics parks, free-trade warehousing zones, port modernization, and container freight stations • In order to deliver better services to customers, e-Commerce firms are demanding bigger and more efficient warehouses, faster delivery options and improved last-mile connectivity, which is providing a plethora of business opportunities for 3PL companies and logistics startups.

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CargoConnect - september 2017

annual 8% by 2020 and storage requirements of the e-tail segment is expected to double during the same period, according to Knight Frank.

Third party logistics industry is growing at a rapid pace in India and according to a report, third party logistics industry is expected to touch `48,000 crores by 2019.

september 2017 - CargoConnect

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FOCUS

Will GST give a Fillip to the Air Cargo Sector?

India has turned into a unified market with the implementation of GST. The GST will impact on each and every businesses being conducted in the country. But, how much it will specifically impact Air Cargo sector is still an unanswered question.

Air cargo fraternity seems divided on the subject, as large number of business professionals are hoping for a positive impact, while exporters are worried because of tax imposition on international freight, as it will make goods non-competitive in the international market. We present here a current picture of the sector for our readers.

- Gaurav Dubey

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september 2017 - CargoConnect

9

FOCUS

G

oods and Ser v ice Ta x (G S T ) i s t h e m u c h talked about economic reform of the country a f t e r L i b e r a l i s a t ion , Privatisation and Globalisation reforms in the year 1991 which opened Indian markets for the foreign companies.

GST has created a lot of buzz in the country and specifically in business arenas because of its wide impact on business operations.

India has joined the bandwagon of countries that are under different forms of GST and now the country has turned into a single market under uniform taxation policy. Now the cascading effect of taxes has perished away and subsequently, it will pull down the overall MRP of a product. Some economists are even claiming that it could add another two percentage points to India’s GDP growth rate.

But, what does the passing of GST mean for the aviation and air cargo sector and is it as important as it seems to be? Yes, it’s a reform and a long pending one too, as it goes back to 2006 when it was mooted and rejected for the same reasons it’s approved now. Let’s try to dig deep into GST and find its impact specifically on aviation and air cargo sector.

Previously, air travel attracted service tax – six per cent for economy travel and nine per cent for non-economy travel. GST rate of 18 per cent may lead to a 9-12 per cent increase in the cost of air travel for passengers; this could hamper the growth of the industry.

In such circumstances, it is imperative that the carriers ask for a lower rate of GST on passenger travel.

Unlike the previous regime, where the place of supply for transportation of cargo was the destination of the goods, under the GST, the place of supply is segregated for B2B and B2C supplies: for B2B supplies, the place of supply would be the location of such registered person. For B2C supplies, the place of supply would be where the goods are handed over for transportation. This means

Recently, PHD Chamber of Commerce and Industry (PHDCCI) too organised an Air Cargo Summit which primarily focused on two issues viz., impact of GST on the air cargo sector and ease of doing business to arrive at sustainable solutions and initiatives that will aid implementation of a seamless state-of-the-art high-end logistic system in place. Through the summit, the government was urged not to impose GST on International Air Freight in tandem with international practices worldwide, where air freight is not taxable.

Severa l top i ndustr y ex per ts a nd seasoned air cargo players raised their concerns and kept their views on the imposition of GST on the international air freight in the summit. The summit

that export cargo, which was until now not subject to service tax, would now attract GST. Of course, the exporter may be able to claim a refund of the GST charged, but this could lead to cash flow issues.

However, as per GST, services rendered by overseas MROs attract GST in the hands of the domestic carriers even if the services are performed outside India. Though the carrier should be entitled to input tax credit of the GST paid, it could impact cash flows. Further, parts/spares imported into India and supplied to the carrier (for use in repair/maintenance of the aircraft) are currently exempt from the levy of customs duties. However, as yet, no specific exemption has been envisaged under the GST on such supplies.

pointed out that al l over the world, international freight is not taxable adding that Indian exporters need not be burdened with wrongly interpreted GST tax on International freight. This was based on well accepted principle that goods and services are exported but not taxed.

However, top notch players like Tushar Jani, Chairman of Cargo Service Centre and Ramesh Mamidala, CEO of Çelebi Delhi Cargo Terminal Management India Pvt Ltd are very much optimistic and looking forward towards GST with much greater hopes.

Tushar Jani in a candid discussion on impact of GST on the cargo sector emphatically kept his points and said, “This

Map of GST for the air cargo For the carriers, who have by and large been subject to a single service tax and have the benefit of various duty exemptions on imports, moving to a state-level taxation structure would be filled with complications.

The decision to keep out aviation turbine fuel from the GST levy would no doubt add to this complication, possibly resulting in increased costs, stated a study done by a research agency.

On the other hand, the GST is expected to give a fillip to the Maintenance, Repair and Overhaul (MRO) industry. On one count, the government’s intent to tax maintenance activities undertaken outside India (on reverse charge) would nullify the tax arbitrage associated with undertaking repairs outside India. Also, the treatment of work contracts as a ‘service’ under GST would bring certainty on taxability of maintenance activities and reduce the multiplicity of taxation.

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FOCUS GST is the smartest move taken by the government. It’s not just a tax but it would emerge as a ‘Business Enabler’ in the future. It will change the way in which Indian businesses operate – fast payment cycle, less turnaround time, removal of transportation barrier, removal of the cascading effect of taxes will facilitate the rapid growth of businesses.”

Tushar Jani, Chairman, Cargo Service Centre

year, cargo sector will grow more than 4050 per cent higher than the last year. The implementation of GST would bring change in the way businesses are done in India.

I am in complete support of GST, but the procedural complexities should be removed in terms of services. I reckon the procedure which was earlier during the service tax regime, should be applied in the present GST era too on the service sector. Government should remove the small flaws from the GST like mandatory registration in each state if a company is operating across India. However,

Enabler’ in the future. It will change the way in which Indian businesses operate – fast payment cycle, less turnaround time, removal of transportation barrier, removal of the cascading effect of taxes will facilitate the rapid growth of businesses. Tax collection will become more efficient and the central government would be able to deliver good governance to people. Economy will touch new height and inflation rate would certainly go down. I am sure, GST will create a different India in the year 2022 and the structural changes which government

On the question of the impact which GST is going to put on aviation and air cargo sector, Mamidala said, “Undoubtedly, GST is a radical step to change taxation pattern of the country. GST has taken the economy from multiple taxations to unilateral taxation system. I would like to extend my greetings to the current government for bringing this mega reform which will ultimately make Indian businesses competitive at the global level.

“This reform is expected to structure the tax collection pattern and make it efficient, curb corruption and facilitate the

Recently, PHD Chamber of Commerce and Industry (PHDCCI) organised an Air Cargo Summit. Several top industry experts and seasoned air cargo players raised their concerns and kept their views on the imposition of GST on the international air freight in the summit.

the government is also working towards it meticulously to uproot each and every flaw from the GST. “Now, tax collection will be buoyant as the GST has interlocking incentives and it will increase the tax compliance. There will be efficiency gains due to the removal of the cascading impact of multiple taxes.

It will catalyse the payment cycle which will in turn put positive impact on the manufacturing industry and consumption habits of consumers as well.

“GST seems to be a smart move taken by the present government. It’s not just a tax, but it would emerge as a ‘Business

12 CargoConnect - september 2017

is bringing will make every Indian a proud citizen within a few years time.” Jani concluded on a positive note.

India is the ninth-largest civil aviation market in the world, with a market size of around US $16 billion and is expected to become the third largest aviation market by 2020. To make this a success story, it is essential to have a standard tax regime which is comparable to the world standards and GST, the modern era tax system will be instrumental in bridging the prevailing gap and we are proud to be amongst one of the 160 nations who are a part of GST under different forms.

inter-state movement of goods. These are essential factors for ease of doing business.

The growth of the aviation sector will also be boosted by the implementation of GST Act. Aviation sector has become one of the fast growing sectors in India in the last few decades. Indian aviation sector is ranked among the top ten markets in the world and India’s civil aviation industry is on a highgrowth trajectory.

“The civil aviation industry has ushered in a new era of expansion, driven by factors such as Low-Cost Carriers (LCCs), modern airports, Foreign Direct Investment (FDI) in domestic airlines, advanced Information

FOCUS GST Implementation is in its nascent stage and thus, it is very difficult to access the cost benefit at this stage. Right now, it would be feasible to say that GST is going to bring down the transportation cost, especially of land based transport and it helps air cargo to connect from small hub station to the main station.”

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

Technology (IT) interventions and growing emphasis on regional connectivity. India is the ninth-largest civil aviation market in the world, with a market size of around US $16 billion and is expected to become the third largest aviation market by 2020. To make this a success story, it is essential to have a standard tax regime which is comparable with the world and GST, the modern era tax system will be instrumental in bridging the prevailing gap and we are proud to be amongst one of the 160 nations who are a part of GST under different forms.”

Air cargo on the other hand, would be primarily supported by some positive forces in the post GST era • Export orders have magnified as the mechanism for tax credit has been automated. However, applicability of GST on freight and reduction in drawback on a few commodities could pull back export temporarily.

• E-Commerce which depends heavily on air cargo is going to grow as their further connection in the post GST time would be from air route to road route and it would be cheaper and hassle free.

• There is also a positive sign in the high value specialised cargo as its substantial part comes under the temperature

14 CargoConnect - september 2017

sensitive category. Healthcare goods such as cold chain drugs and bio-pharma products are typically shipped by air.

On the role of GST in reducing the transportation cost of air cargo, Mamidala said, “Presently, GST implementation is in its

It seems that presently air cargo fraternity is divided on the question of GST’s impact on the industry.

One section is assured that GST will give a new fillip to the air cargo industry, while exporters are worried as the imposition of 18 per cent GST on international freight could make their goods uncompetitive in the international market. nascent stage and thus it is very difficult to access the cost benefit at this stage. However, based on various marketable inputs it would be feasible to say that GST is going to bring down the transportation cost, especially of land based transport which is an integral part of logistics frame work and also helps air cargo to connect from small hub station to main station.

“Post GST, the logistics framework is going to witness metamorphic change. It will facilitate the mobilisation and transportation

of goods and services at faster pace and thereby extending cost benefit to end users.

There were a few key changes post GST which is very positive from the point of view of cost management: • Check posts at the state borders have been taken down across the country and it would help in moving the cargo at faster speed and also reduce the hassles for trucks saving cost and time.

• States have been waiting for electronic way bills, which will further make truck movement easier. The E-Way Bill on GSTN (Goods and Services Tax Network) is expected to be introduced soon and will aid movement of trucks.

• The average speed of freight transportation has increased from the current 20-25 kms per hour to 40 km per hour. Trucks that were earlier covering 200 kms a day would now cover 400 kms a day.”

Conclusion It seems that presently air cargo fraternity is divided on the question of GST’s impact on the industry. One section is assured that GST will give a new fillip to the air cargo industry, while exporters are worried as the imposition of 18 per cent GST on international freight could make their goods uncompetitive in the international market.

An Indian trade organisation has also warned that a proposed tax on airfreight exports will stifle growth in the country’s air cargo sector, while it has also called for investment in the sector. It has said that India will be an “exception” in applying the 18 per cent tax as in the rest of the world international freight is not taxable. Exporters have become vocal for their demands but now ball is in the government’s court as the final call on taking down the imposed tax on international freight is to be taken by the central government.

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4P cover story

Onset

Moving towards a new da

16 CargoConnect - september 2017

PL of

wn in logistics

cover story

The evolution of supply chain outsourcing has been growing tremendously through the years.

Companies following the footsteps of the West and imitating them have reached to a position that the industry has come to the onset of GST - a landmark reform - a fundamental characteristic of the economies of the first world countries. Hence, the introduction of innovative practices in supply chain, i.e. 4PL/5PL has led to a new era in supply chain industry. Delving deep into the foray of fourth party service providers and its scope in India, Sheena Sachdeva brings an exclusive informative piece while collating various industry perspectives about the subject.

september 2017 - CargoConnect 17

cover story

inside Understanding the need for Fourth Party Logistics Difference between 3PL and 4PL A Cost-Effective Option Technology Led 4PL

I

ndustry 4.0 is a phenomenon that is currently taking place and will gradually become a norm in the global industry. In preparation for the era of the digital supply chain, companies should consider working on a technology-enabled platform that are able to effectively manage the confluence of data and meet the ever-changing supply chain and technology requirements.

Technology driven non asset holding fourth party logistics (4PL) service provider is a new concept enfolding across the supply chains of the globe. The consultancy Arthur Andersen is credited to have coined the term ‘4PL’ in 1996. A 4PL service provider is defined as an integrator that marshals its own human resources, technical capabilities and expertise, technology solutions, and leverages those of other organisations, like third party logistics providers (3PL), to design and manage supply chains on behalf of clients.

Necessity is the mother of all inventions. Any individual or entity who would dare to dream big and think out of the box solutions, which haven’t been thought by anyone else before would succeed. With the globalisation and internet penetration to almost everyone on this planet, have taken the competition to the next level as no entry barriers exist anymore.

A third-party logistics provider (abbreviated 3PL) is a firm that provides solutions, desired logistics services to companies for a defined activity or complete end to end solutions. Fourth party logistics (4PL) is an asset less organisation that integrates and assembles the resources, capabilities and technology of its own organisation and offers complete solution as an integrated designed solution, by assigning jobs to various stakeholders as one entity. Since the advent of the

Drawbacks of 4PL Logistics

Actors Good owners

Envisioning the Future

Carriers

Services 1PL

Manufacturing, Retailing, Marketing

2PL

Transportation

Logistics service providers

3PL

Services

Lead logistics providers and consultants

4PL

Supply chain management

Supply Chain integration Source: www.cerasis.com

4PL service, the international logistics industry has been researching on the development of the fifth-party logistics service, i.e. the realisation of full-scale operation of e-procurement as a part of the complete value chain. Further, fifth party logistics or 5PL is to aggregate the demands of the 3PL into a bulky volume for negotiating more favorable rates with airlines and shipping companies regardless of which generation of logistics solution belongs to all.

In short, fourth party logistics and fifth party logistics perform functions such as consultation on packaging and transportation, freight quoting, financial settlement, auditing, tracking, customer service and issue resolution. 4PL and 5PL have teams of domain experts with accumulated freight industry expertise and information technology assets. They fill a role similar to freight agents or brokers, but maintain higher degree of involvement in the transportation of products.

A larger 3PL can for sure develop into a 4PL player or lead various other 3PL as a lead logistics service provider with innovative mindset and strategic focus to grow along with customers’ activities rather than just working as a cost plus organisation. It is necessary to have the proper

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Logistics through innovation, dedication & technology...

Infrastructure & Advantages

Administration Building

Customs notified area Customs bonded warehouse State of the art security & surveillance Covered warehouse facilities of over 4,50,000 sqft under one roof with modern racking systems which can house more than 40,000 pallet spaces 3PL facilities

Warehouse

Flexi warehousing Robust fleet of company owned vehicles, monitored & tracked electronically 24/7 operations with CCTV monitoring Automobile logistics services Spread over 40 acres of land

Covered Warehousing Facility

Over 6000 TUEs per month, i.e. 72,000 TUEs per annum CFS owned equipment: 5 top lifters, 80 trailers, 30 forklift, 2 empty handles, 1 crane Direct access to the National Highway 17, from Panvel to Goa Distance from Panvel station: 6 Kms 3PL Admin Building

JWC LOGISTICS PARK PVT LTD, National highway 17, Panvel Goa Highway, Village Palaspe, Panvel, Maharashtra - 410206 Tel: 2143-661900 (100 lines) , 2143- 661952 | Email: jwccfs@jwclogic.com, krutijobanputra@jwclogic.com, jignesh@jwclogic.com | Website: www.jwclogic.com

cover story In a real world it is next to impossible to have all the core competencies to do everything by oneself. This led to the concept of 4PL entities that could integrate various service providers and provide end to end solutions to customers, without owning any asset of its own.

Oliver Bohm, CEO, Schenker India Private limited

skill-set through a strong and knowledgeable management to be able to offer an out-ofbox solution. 4PL is not about changing an existing model, but it’s about getting the maximum value and service by integrating various stake holders and without owning any asset of its own.

4PL organisation acts as a single interface between the client and multiple logistics service providers who will assemble the resources, capabilities and technology of its own as well as other organisations including 3PLs, to design, build and run comprehensive supply chain solutions for clients. Any 3PL can easily turn into a 4PL organisation within its existing structure.

Understanding the need for Fourth Party Logistics The companies that are looking for end to end solutions in supply chain management, or the ones who want to reduce the efforts of managing multiple service providers and are looking at optimising their inventory and cost can look out for 4PL solutions.

5PL solutions are still not predominantly available in the market at this point of time.

The upward movement from 3PL to 4PL has not delved deep into the Indian markets yet.

Every customer desire is to outsource the noncore activities to the expert service provider for the best possible services at a very cost effective rate, without any hindrances. They would just love to have one point of contact and would not like to deal with various agencies and keep on chasing for one piece or the other information. Technology has a key role to play in converting third party logistics service provider into fourth party.

As third party logistics service providers are evolving, there is already a good overlap between 3PL and 4PL. What differentiates a

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4PL: The Evolution of Supply Chain outsourcing 3PLs Trucking 3PLs Ocean freight

Client

3PLs Air freight

4PLTH

3PLs Integrator

3PLs Warehousing

Source: N Peters

3PL from a 4PL is sophisticated IT systems which decides how the businesses organise supply chain network to leverage capabilities

of different service providers and align them to minimise the waste in system.

Adding to this phenomenon, Oliver Bohm, CEO, Schenker India Private limited informs, “In a real world, it is next to impossible to have all the core competencies to do everything by oneself.

This led to the concept of 4PL entities that

could integrate various service providers and provide end to end solutions to customers, without owning any asset of its own. Overall logistics market is very competitive and every service provider has to find out the ways and means to cut the cost as the margins are rapidly shrinking. On the other hand, the setup cost and other overheads are moving upwards. The only way left out is to work on the economy of scale to survive. The stiff competition leads the way for the growth of 4PL and 5PL to find out ways for seamless supply chain services that encompass effective practices in people, process and integrated technology at the least price. Executing new value added services, giving a leading edge over competitors. Customers are looking forward for plug and play solutions, without any disruptions of any kind.�

As the concept of 4PL has not penetrated well into the industry, quite a few companies are working on this concept especially in a market like India. Martijn Tasma, National Sales Director, Geodis Overseas Pvt Ltd

cover story The biggest benefit to customer with 4PL service provider is that they will get single window cost effective solution but at the same time the risk of choosing right partner and judging its capabilities and dependency on one service provider at times is a show stopper.

Yogendra Bellani, Vice President, Domestic Logistics, Agility India

(India) opines, “Organisations want to focus on their core business and outsource their non-added value tasks to logistics experts who are much better equipped (people, tools and processes) to optimise their logistics, than when these companies would do it by themselves. With the recent

chain, and the reduction of the overall fixed costs.”

Companies have their own parameters on the basis of which they plan to widen their boundaries. On the similar lines, Sudeep Narayan, Director - India, Expo Freight Pvt. Ltd (EFL) says, “As businesses focus

with technology frees up capital, resources and most importantly, supports meeting the high levels of delivery and service expectations from customers which can make or break businesses.”

Few compa n ie s s uch a s Ap ol lo LogiSolutions have been providing such

ADVANTAGES EXPECTED FROM OUTSOURCING Share risks Make capital funds available Improve company focus Increase productivity and efficiency Gain resources not available Improve Customer service Reduce Operating Costs Surce: www.hiplus.de

0%

focus on the green supply chain (based on the Paris Treaty signed by many countries) more and more companies believe that the 4PL/5PL companies will be able to reduce their emissions in the supply chain besides the increase of visibility in the full supply

22 CargoConnect - september 2017

10%

20%

30%

40%

their investments and time on productivity and business expansion from their core products, they seek expertise in managing increasingly complex sourcing and delivery norms. The collaborative model that 4PLs and 5PLs bring to the supply chain along

50%

60%

70%

80%

solutions for a quite a long time now.

Anay Shukla, Vice President-Business Development and Solution Designing, Apollo LogiSolutions Limited added, “When companies have a huge hill to climb in terms of strategic business process change

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Learn more at www.2wglobal.com or contact our team directly: Name: Mohamed Jaleez Mobile: +91 87544 34590 Land Line: +91 44 2811 0193 E-mail: Mohamed.Jaleez@2wglobal.com Group id: 2WASINSales@2wglobal.com

cover story Organizations want to focus on their core business and outsource their nonadded value tasks to logistics experts who are much better equipped (people, tools and processes) to optimize their logistics, than when these companies would do it by themselves.

Martijn Tasma, National Sales Director, Geodis Overseas Pvt Ltd (India)

and radical growth, they don’t know how to handle market volatility, acquisitions or significant supply chain performance issues.

A 4PL service provider’s strategies can help align and direct projects with an eye towards future goals. The 4PL engagement begins with formulating a supply chain strategy.

Companies may have goals and objectives, but those don’t necessarily paint a picture of what they want to be and where they want to go. A 4PL approach helps define the supply chain capabilities and characteristics of an organisation as what they want to develop and establish the methodologies necessary to drive results month-to-month and year-overyear to achieve that vision.”

A recent player in the market but with immense experience, Chetan Kumria, CEO and Director, Xcell Supply Chain Solutions (P) Ltd informs, “The wave of change is coming forward due to the fact that companies need end to end visibility across supply chain and accountability of services and also because supply chain partners lack uniformity and consistency in service, also as the acquisitions or rapid growth have created an inefficient and fragmented logistics network, there is a need to move to 4PL. But 5PL is still a distant fact for the logistics industry in India.”

Joh n G eorge, A ssista nt G enera l Manager – Logistics Services, GAC

Shipping (India) Private Limited added, “4PL and 5PL have an al located and integration function within a supply chain, with the aim of increasing the efficiency of the chain. Specialisations in providing supply chain management and offering system oriented consulting and supply chain management services to customers have led to more companies adopting 4PL and 5PL. Advancements in technology and the associated increase in supply chain visibility and inter-company communications are also some of the reasons why companies are moving towards 4PL and 5PL.” Elaborating about this drastic wave of change, Vinod Kumar Vahinipati,

The 4PL Concept Primary Clients Contribution: • Start-up equity • Assets • Working Capital • Operational Expertise • Operational staff • Procure Logistics Services • Procure Logistics Services • From 4PL organization Prmary Clients

3PL Service Providers contribution: • Transportation services • Warehouse facilities

4PL Organization

Key characteristics • Hybrid organization-formed from a number of different entities • Typically establish as joint venture or long term contract • Alignment of goals of partners and clients through profit sharing • Responsible for management and operation of entire supply chain • Continuous flew of information between partners and 4PL organization • Potential for revenue generation

24 CargoConnect - september 2017

Partners’ Contribution: • Set-up equity • Logistics strategy • Re-engineering skill • Best practice benchmarks • IT Development • Customer Service Management • Supplier Management • Logistics consultancy Partners Four key components • Systems architecture and integration skills • A supply chain ‘control room’ • Ability to capture and utilize information and knowledge across the network • Access to ‘best of breed’ assets providers

cover story The collaborative models that 4PLs and 5PLs bring to the supply chain along with the technology frees up capital, resources and most importantly, supports meeting the high levels of delivery and service expectations from customers which can make or break businesses.

Sudeep Narayan, Director – India at Expo Freight Pvt Ltd (EFL)

4PL Architect/ Integrator Decision-makers • Supply Chain Visionary • Multiple Customer Relationship • Deal maker and shaper • Supply chain reengineers • Project management • Service, systems and information integrator • Continuous innovation

Control room (Intelligence) Decision-makers • Experienced logisticians • Optimization engines and decision support • Neutral positioning • Manage multiple 3PLs • Continuous improvement

Corporate Executive Officer, Business Head, Yusen Logistics India Private Limited adds, “Worldwide economic conditions are forcing customers and companies to revisit and modify their supply chain networks to become more agile and adaptable due to frequently changing procurement requirements.

Under the 4PL and 5PL model, the shipper engages a provider to serve as its primary outsourcing partner. The company shares their logistics targets and KPIs with them while maintaining an ongoing, strategic dialog with this partner. The 4PL and 5PL is accountable for coordinating the activities of all 2PL and 3PL providers in the end customer’s value chain and ensuring that everybody is meeting its targets and achieving the requirements of the company.”

In a nutshell, the 4PL and 5PL keeps the companies informed with a performance dashboard of the critical aspects and key

26 CargoConnect - september 2017

Resource Providers

Supply Chain Infomediary Information (Nervous system) • IT system integration • IT infrastructure provision • Real time data capture • Convert data to information • Provide onto to point of need • Technical support

factors of the supply chain including, inventory, orders, and shipments. The controlled monitoring and communication stream lines the outsourcing process and improves the customer’s view of its partnerships with third party logistics and second party logistics while leveraging the expertise that 3PLs and 2PLs have accrued in the industry.

Difference between 3PL and 4PL The main difference between 3PL and 4PL is whether you are actually handling the business directly (3PL) for example Contract Logistics, or if you are in charge for the complete outsourcing of the logistics function of a company (4PL/5PL). The 4PL players have to be completely neutral and are able to manage several 3PLs to optimise the supply chain costs. For service providers the main benefit is that they are able to have a single fee for the entire logistics department,

Assets • Transportation assets provider • Warehouse, crossdock, property facility • Procurement service • Co-packing service Source: www.diva-portal.org

which is directly linked to the activity level (variable charge), and is managed by logistics experts who do have processes, excellent tools and people already in place.

One of the pioneers in logistics industry, JWC Group has been leading the country in almost all the verticals of logistics. Raaj L Jobanputra, Director, JWR Logistics Pvt Ltd opined, “The basic concepts of 3PL are hitherto to stay (specifically the assetsbased providers) and the evolution to extend services such as 4PL will be the deciding factor for logistics companies to become a larger contributor to the overall supply chain.

A 4PL company takes over the logistics section of a business. This could be the entire process, or a side business that’s imperative to have as part of the main business. This enables the company to focus on their core competencies and the 4PL solution provider can help that company in doing so. In India, companies are yet to see the benefit to

cover story A 4PL company takes over the logistics section of a business. This could be the entire process, or a side business that’s imperative to have as part of the main business. This enables the company to focus on their core competencies and the 4PL Solution Provider can help that company in doing so.

Raaj L Jobanputra, Director, JWR Logistics Pvt Ltd

4PL

Reduce logistics costs Liberate resources to manage

Concentrate on its core business

Reduce assets and increase its flexibility

4PL

Knowledge management

Improve process quality

Source: ampmglobal.com.ar

outsource to a 4PL solution provider – mainly due to absence of a uniform tax regime – GST is poised to change this.”

On the similar lines Narayan from EFL says, “The fundamental difference is in terms of the collaborative nature of the services offered by the Logistics Service Providers.

While third party logistics focuses largely on goods transportation from a supplier to a buyer, including additional services like warehousing, terminal operations, custom brokerage, and track and trace, the fourth

28 CargoConnect - september 2017

Adapting to scale

Other reason party logistics and fifth party logistics service providers cover all aspects of the supply chain, including managing the third parties, playing a consultative role as a neutral entity, providing recommendations and solutions to increase efficiency. While fifth party logistics is a new term floating within the industry, the central ethos of 5PL is its commitment to collaboration and obtaining a higher degree of resource utilisation in order to achieve savings and open up opportunities to secure the best possible solution at minimum cost/

carbon footprint with a focus on e-business.”

Agility, another giant player in logistics is ready to embrace the change. Yogendra Bellani, Vice President, Domestic Logistics for Agility India added, “3PL service providers have almost all the insights of the logistics activities which has been outsourced to them and with experience of dealing different activities for different customers they have the best knowledge of the market, processes and requirements. 3PL service providers have to synergise their knowledge, get together

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cover story A 4PL approach helps define the supply chain capabilities and characteristics of an organisation as what they want to develop and establish the methodologies necessary to drive results month-to- month and year-over-year to achieve that vision.

Anay Shukla – Vice President-Business Development & Solution Designing, Apollo LogiSolutions Limited

its expertise, vendors, work with a broader term and provide single window solution for the entire logistics activities which will help 3PL service provider to climb a ladder and become a 4PL service provider. The biggest benefit to customer with 4PL service provider is that they will get single window cost effective solution. But at the same time, the risk of choosing right partner and judging its capabilities and dependency on one service provider at times is a show stopper.�

30 CargoConnect - september 2017

Various startups have commenced to utilise this foreign concept in an Indianised way. Rupesh Choudhary, Lead ConsultantSupply Chain, Holisol Logistics Pvt Ltd added, “3PL companies manages part of supply chain or sometimes complete supply chain for its customers. It can be a single service like warehousing, transportation or distribution or a bundle of all activities depending on requirement of customers. 4PL acts as a single point of contact for customers

while integrating all resources, capabilities and technologies. 4PL can be an integrator for multiple 3PL organisations and act as a single point of contact for managing all supply chain functions. Contract management is another interesting aspect of fourth party logistics where their scope starts right from floating RFQ to finalisation of vendors and contract rates. 5PL does the entire planning and implementation of logistics solution for the customer and focuses on use of

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cover story the wave of change is coming forward due to the fact that companies need end to end visibility across supply chain and accountability of services and also because supply chain partners lack uniformity and consistency in service.

Chetan Kumria, CEO & Director, Xcell Supply Chain Solutions (P) Ltd

4PL company can help to generate more value for the customer by promoting greater collaboration and visibility across the customer’s entire supply chain.” On the same lines, Bohm from Schenker adds, “A larger 3PL can, for sure, develop into a 4PL player or lead various other 3PL as a lead logistics service provider with innovative mindset and strategic focus to grow along with customers’ activities rather than just working

CUSTOMER

Source: www.diva-portal.org

LOGISTICS CONTROL TOWER

SUPPLIER

PRODUCTION/WAREHOUSE

technology to optimise operations. In many cases, the role of 5PL is extended to manage the business transactions on behalf of the customers as well.”

A Cost-Effective Option Cost effectiveness depends on what the companies are looking for as a best logistics solution. For example, if companies with their own in-house IT and related solutions are looking to outsource their warehousing and transportation functions, third party logistics would be a good option. For

32 CargoConnect - september 2017

END CUSTOMER

companies that prefer a supply chain service provider who is able to assemble and manage the resources, capabilities and technology to deliver a comprehensive supply chain solution, fourth party logistics and fifth party logistics become the more attractive options. Working with the right logistics service provider will help companies to reduce costs, drive efficiencies, deliver a reliable service and uphold the latest health and safety standards.

George from GAC added, “A supply chain network created or managed by a

In short fourth party logistics and fifth party logistics perform functions such as consultation on packaging and transportation, freight quoting, financial settlement, auditing, tracking, customer service and issue resolution.

as a cost plus organisation. It is necessary to have the proper skill-set through a strong and knowledgeable management to be able to offer an ‘out-of- box’ solution. 4PL is not about changing an existing model, but it’s about getting the maximum value and service by integrating various stake holders and without owning any asset of its own.”

We are still in an economy which is not developed and matured enough. We do have a very long way till we can dream of moving to those desired level of trust and confidence in each others’ capability. Fifth party logistics scenario would be the best in its commitment to collaboration and resource utilisation in order to achieve savings and bring more opportunities to secure the best

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cover story 3PL companies manage part of supply chain or sometimes complete supply chain for its customers. It can be a single service like warehousing, transportation or distribution or a bundle of all activities depending on requirement of customers.

4PL acts as a single point of contact for customers while integrating all resources, capabilities and technologies.

Rupesh Choudhary, Lead Consultant- Supply Chain, Holisol Logistics Pvt Ltd

possible solution at minimum cost, without any negative impact on our environment.

On the other hand, when various players are supporting the oncoming of these new trends in logistics, Narayan from EFL added, “The 4PL and 5PL models outsource a major chunk of the supply chain to the domain experts. Eventually the industry verticals, the management ethos of what levels of control an organisation is seeking over their supply chain, and most importantly the amount of time and capital businesses would like to invest in non-core activities would be the deciding factors on whether a 3PL, 4PL or 5PL partnership adds value.”

In a globalised supply chain, the shift from 3PL to 4PL is largely built around IT and network development. The fourth party logistics player essentially takes ownership of an organisation’s entire supply chain where an integrated IT framework that addresses

Technology driven nonasset holding fourth party logistics (4PL) service provider is a new concept enfolding across the supply chains of the globe.

supply chain efficiencies through defined focus on logistics will more often than not be the variable that makes or breaks businesses.

Tasma from Geodis informed, “This all depends on the requirement of a company.

All forms will have a certain cost saving

reducing cost. In a way fourth party logistics enjoy discounted rates due to consolidation of volumes. Also, 4PL manages multiple 3PL vendors and exercise higher control on cost due to better negotiation as there is little dependency on one logistics player.

Technology Led 4PL From an organisational perspective, it makes sense to have centralised strategic command over localised day-to-day operations. When you expand this business model globally and across multiple vertical organisations, a horizontal layer of control— driven by technology, geography, or corporate governance— is often compulsory. Different cultural dynamics around the world shade how businesses approach organisational hierarchy.

The 4PL idea has been more widely accepted and adopted in Europe and among global supply chain networks than as a pure-

Supply Chain Value Enhancement Profitability Enhancement

Revenue Enhancement

Invested Capital Reduction

Operating Cost Reduction

Working Capital Reduction

Fixed Capital Reduction

Source: N Peters

all stakeholders across divisions measuring established KPIs becomes critical. With e-commerce significantly changing consumer expectations across the broad, a spectrum of products - be it food, fashion, electronics, automobile, engineering or perishables -

34 CargoConnect - september 2017

potential. The choice which forms the best one, is linked to the size of the company and the level of supply chain maturity (Keough model) today.”

In Indian scenario, fourth party logistics will be beneficial for companies looking for

play U.S. solution. Culture, politics, business practices, and geography are primary reasons for this divergence. Outsourcing logistics functions requires intensified communication and information exchange between the parties involved. This virtual business environment

E

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No 34, Block 3, Sindhu Logistics park, Behind MVIT college, Bettahalasuru, Bangalore North Taluk, Bangalore - 562157 CIN NO. U85110KA1991PTCO12381

Phone: 080-7188-8008 Email: info@sindhucargo.com

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cover story Worldwide economic conditions are forcing Customers and Companies to revisit and modify their supply chain networks to become more agile and adaptable due to frequently changing procurement requirements.

Vinod Kumar Vahinipati, Corporate Executive Officer, Business Head, Yusen Logistics India Private Limited

KPI & Statistics

Planning

Movex

SAP

Invoice handling

Integrator

Shipping

Baan

Log 2000

Monitoring

Customs

Source: www.diva-portal.org

enables companies to optimise forecasting, order processing, production and distribution collaboratively with suppliers and service providers in the sense of integrated supply chain management. The key distinction between 4PL and current approaches to supply chain outsourcing is a unique ability to deliver value to client organisations across the entire supply chain. Organisations investing in technology, skilled manpower and focusing on solutions and anticipating customer needs will be the ones who can transcend the 3PL, 4PL and 5PL lines.

Worldwide economic conditions are forcing Customers/Companies to revisit/ modify their supply chains networks to become more Agile and Adaptable due to frequently changing Procurement

36 CargoConnect - september 2017

requirements. Under the 4PL and 5PL model, the shipper engages a provider to serve as its primary outsourcing Partner. The Company shares their logistics Targets and KPIs with them while maintaining an ongoing, strategic dialog with this partner.

The 4PL and 5PL is accountable for coordinating the activities of all 2PL and 3PL providers in the End Customer’s value Chain and ensuring that everybody is meeting its Targets and achieving the requirements of the Company. The 4PL and 5PL keeps the Companies informed with a performance Dashboard of the critical aspects/Key Factors of the supply chain including, inventory, orders, and shipments. The controlled monitoring and communication streamlines the outsourcing process and improves the

customer’s view of its partnership’s with 3PLs and 2PLs while leveraging the expertise that 3PLs and 2PLs have accrued in the industry.

Europeans and North Americans talk about this topic in different ways. In Europe, they often refer to this as a 4PL (fourth party logistics) service; in North America, we are more likely to call it “managed transportation” or “transportation management. When Europeans talk about a 4PL arrangement, what they are referring to tends to be more tightly defined and less flexible than what North Americans mean by “managed transportation.” For Europeans, 4PL means a logistics service provider managing other 3PLs as a single point of contact. They tend to think of these arrangements as being end to end in terms of the transportation process and existing across all modes.

Big 3PLs – whether asset-based or nonasset based – that offer MTS as one of their solutions, tend to be some of the biggest suppliers in the MTS market. These include C.H. Robinson TMC, DHL, Echo Global Logistics, Geodis, Kuehne + Nagel, Penske, Ryder, Schneider Logistics, Syncreon, Transplace, and XPO. The largest MTS suppliers usually seek to leverage their visibility into the billions in transportation spend and freight under management under their control, and use that visibility to provide network advantages for their customers.

Drawbacks of 4PL Logistics Potential drawbacks include the possibility of information being passed on to the customers’ competitors and the loss of control and possible delays in delivery schedules. The system also makes it difficult to perform a physical count of the products in the event of a discrepancy in orders. In this context, Tasma from Geodis added, “The

People. Partnership. Performance...

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Storage area 28,000 sqmt Direct access to the Naational Highway 4B leading to the JNPT port Ample space for parking of 10000 cargo trucks 24X7 CCTV monitoring CFS owned equipment: 4 top lifters, 80 trailers, 30 forklifts, 2 empty handles, 1 crane Distance from JNCH: 11 Kms

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cover story Advancements in technology and the associated increase in supply chain visibility and inter-company communications are also some of the reasons why companies are moving towards 4PL and 5PL. John George, Assistant General Manager – Logistics Services, GAC Shipping (India) Private Limited

main challenge for a 3PL to move into a 4PL is their neutrality. The 4PL part of the company is not allowed to share any information with the 3PL part. Would you trust a 4PL who would give all logistics requirements to their sister-company? Is this sister-company truly the best on all trade lanes/functions around the world? How can you ensure that you can fully trust this neutrality in the organisation?

These questions draw a significant line for 3PL organisations entering into 4PL zone.”

Losing sight of original core-concept

service provider, the most important requirement is the need to understand the manufacturing company’s supply chain and therefore a deep understanding of running a company’s supply chain function is required.

A 3PL also requires building capabilities around technology enablement, inventory management and supply network modeling along with control tower operations to move from a 3PL to a 4PL capability. Challenges in 4PL: Some 3PLs have not fully stepped up to meet the exact needs of customers.

and resources, as to inventory and personnel.

Envisioning the Future In the era of fast paced growth some radical changes are anticipated in the coming years.

With the onset of GST, various procedures have been made easier for some and difficult for others. Thus supply chain is meant to go through a tremendous overhaul in the coming years. Depending on these changes, it is envisaged that technology led solution whether in terms of 4PL or service centric solutions

End to end network need to be re-designed based on pure supply chain principles Supply chain network Channel margins and service contracts need to be relooked at due to reduced costs for channel partners

Inventory levels need to Inventory management optimized to deduce cash lock up caused by higher tax rate

Channel management

Key impact areas S&OP process need to be synced to the new network design and inventory plan

Sourcing strategies and Strategic contracts need to be relooked sourcing/ for cost optimization Procurement opportunities

Sales and operations planning (S&OP) Logistics and warehousing

Source: KPMG

of SCM due to loss of control along with customer relationships should not be dismissed on basis of efficiency. Strict functional organisation structure hinders integrated Supply Chains Resistance to change – the big gest obstacle to implementation of new approaches. For a 3PL to move to the next level as a 4PL

38 CargoConnect - september 2017

In-house Vs Outsourced service model need to be re-evaluated for cost advantages 3PL will become competitive against LSPs

Some have become too focused on and quot; managing and quot; tasks, not processes and on serving the parent company and core business, and have missed opportunities to present value. As a result, 4PLs have become important for business process outsourcing.

Users of a 4PL can focus on core competencies and better manage and utilize company assets

will present a new dawn in the logistics industry. Hence, as it said “change is the only permanent thing”, by following this parameter various companies can actually bring about a significant but a turbulent change. But still if this change is for the betterment for the industry and its people, then it should be embraced with both hands.

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SPECIAL feature

The Dynamics of Warehousing 40 CargoConnect - september 2017

SPECIAL feature

T

The warehousing industry has been transforming at an unmatched speed over the years. Call it the rise of the machines or the wrath of technology.

Constant innovation and new technologies have really made the growth possible in the warehousing sector.

Tariq Ahmed tells the tale of how the dark, dingy warehouses have transitioned themselves and adapted to the changing needs of the industry.

he general perceived notion about a warehouse is that it is considered to be a place to store things. Whenever a plant modernisation process takes place, the most common element that is often missed is the warehouse. But in today’s competitive manufacturing and business environment, the vital role of warehousing has to be properly understood. The warehouse is a critical link between a manufacturing plant and the external world. It significantly affects the performance of the entire manufacturing and logistics system. The time to pay attention to the warehouse and to integrate it in the material supply chain is long overdue, especially in India.

The newest technological trend in developed markets in the warehousing sector is using robots in warehouses and distribution centres to aid operations. It has been found that this brings down operating and fulfilment expenses. Not only do robots save labour costs, but they are also the bulwark against shortages in labour. Additionally, robots are a more effective way of managing warehouse operations, as they ensure speed and accuracy and increase productivity per square foot of warehouse space.

If we talk about India, labour cost tends to be a fraction of those in developed countries.

This makes it challenging to derive required financial benefits from implementing 100 per cent automation in a warehouse in India. Moreover, excessive automation can lead to an increase in the unemployment of Indian labourers. Hence, in India, the aim should be to find a right balance between automation and labour to get an improved and predictable productivity.

Warehousing sector is set to witness numerous technological advancements in the coming years and digital warehouses will be in trend. Some of the key transformations would be: 1) Advancements in automatic identification and date capture, enabling optimum utilisation of resources and end to end tracking of cargo.

2) Warehouse management systems and other IT enabled solutions are enabling tracking, resource optimisation and increased service levels leading to enhanced customer satisfaction.

3) Big data analytics and Internet of Things: These improve planning and facilitate quicker replenishment. Also, they assist in maximising workflow, increase efficiencies and directly impact revenue by optimising warehouse inventory and floor space utilisation.

IoT is about interconnecting and creating intelligence from all the devices around us. This game-changing technology will offer enormous cost savings and massive productivity enhancements in the future. The sheer volume of data is staggering, but it offers a world of opportunities for businesses to better manage inventory, improve customer relationships and enhance daily operations.

4) Cost effective and easy to use application on cloud is making scaling up of warehousing operations easier and quicker.

Automation paving the way Automation in warehousing immediately conjures the image of a high-rise Automated Storage Retrieval System (AS/RS). Typically, AS/RS involves the use of high-rise racks with a storage machine operating within the aisle, serving both sides of the aisle. Loads are stored in the racks and retrieved either automatically or in a semi-automated fashion. The loads could either be unit loads that are palletised or, in some cases involve drawers and totes that are used to store smaller parts. The heights of AS/RS systems can vary, depending on the application. The highest systems are 100 feet high. But these are few and far between.

As more automation is implemented into warehouses, it is critical that product moves seamlessly and effectively throughout the system. The use of plastic reusable totes, crates, pallets and other plastic packaging is one consideration that offers repeatable performance in all types of systems, including mini-load systems, conveyors, robotics, automated guided vehicles (AGVs) and full automation. Major trends are emerging as more facilities adopt sustainable and earth-friendly solutions. These are the five trends that we predict will make a big impact as automation and reusable packaging continue to gain a foothold in the logistics market.

1. Ergonomic handling: The handling of totes will dramatically change. Previously, totes and crates were packed based on strict weight or height capacity requirements, so that

september 2017 - CargoConnect 41

SPECIAL feature “Post GST, there has been some consolidation in warehousing requirements as customers are hesitant to have state-wise warehouse setups for taxation purpose. Hence, these central/zonal warehouse requirements will increase. The difference will be confined to the size of warehouses that would be needed; all operations activities will be in line with the current requirements.”

Akash Bansal, Head Logistics, Om Logistics Ltd

workers could manually lift and move them. By implementing automation into the facility, manufacturers can increase the overall tote capacity and tolerance. Totes will be packed heavier and stacked higher because the automated systems and robots have the ability to handle taller stacks and heavier loads.

2. New tote configurations: Boxes and totes will take new forms and will be designed with customised automated solutions in mind to better fit the system’s needs. For example, a semi-manual and automated facility will start to see reusable, plastic corrugated boxes with sealed edges, so that the flutes will not be exposed. This Reduction in manpower

High density of storage by utilising the cubic space available and with the help of narrow aisles

Better utilisation of storage and retrieval equipment

will facilitate easier worker handling.

The box flap will go back to its original place each time prior to entering the automated system. Collapsible, dividable compartments and hopper fronts are three more configurations that will emerge as tote and crate designs continue to evolve.

3. Standardised totes: The standardised tote sizes that can be purchased and ready for automation is the future and will bring significant value to end-users and integrators. Currently, the cost to build a mould for a custom tote can be challenging to financially justify and can add time to project plans. By removing the need to create a custom tote each time

Tighter inventory control through computerisation resulting in higher inventory accuracy Reduced access in the aisles, improving the security of the material

Advantages of a high-rise storage system

Increased space utilisation via random storage versus dedicated space allocated to different parts

42 CargoConnect - september 2017

Ability to tie the storage system to the manufacturing and the distribution systems via computer control, permitting a higher level of system performance

and creating a small group of standardised totes that can be handled by automation, manufacturers will be able to save design and engineering costs. Eventually, the industry may see a refined pre-packaged, out-of-the box solution with a proven track history being offered. In the end, this can reduce the overall amount of capital investment needed to build a new system.

4. Reduction in racking: Automation will allow for warehouses and distribution centres to move away from racking. By removing racking, manufacturers will have a cleaner work environment and better access to product, all within a smaller work area allowing for better space utilisation.

5. More traceability: Customers are demanding to know where their product is, once they’ve clicked “Submit Order” and many industries need to be able to trace where product has been along the entire supply chain. This will result in more totes and crates with radio-frequency identification (RFID) tags being moved through automated systems with sophisticated warehouse management system (WMS) that can easily track and trace products. This will allow for greater visibility of each specific tote and crate as it flows within distribution centres and warehouses and is transported to the customer.

Consumers have rapidly embraced online technologies in order to receive their products faster, which in turn requires manufacturers to adapt just as quickly. To ensure that the most cost-effective system solution is brought forward, first we need to determine the organisation’s requirements and then find the right vendors to make it a reality. By readily embracing advancements in integrated automated systems, manufacturers and distributors can stay competitive while meeting customer demands.

SPECIAL feature “IoT is about interconnecting and creating intelligence from all the devices around us.

This game-changing technology will offer enormous cost savings and massive productivity enhancements in the future. The sheer volume of data is staggering, but it offers a world of opportunities for businesses to better manage inventory, improve customer relationships, and enhance daily operations.”

R Shankar, CEO, TVS Dynamic Global Freight Services Ltd

Warehouse Strategic Master Plan

The correct approach to plan for warehouse automation is to develop a Warehouse Strategic Master Plan (WSMP). The WSMP provides the future direction for the warehouse over a five or ten-year period.

It addresses the facilities, staffing, equipment and inventory required throughout to meet the corporate business plan. The role of warehouse automation is a significant portion of a WSMP. The automation plan should be regarded as one component of a broader view and not a separate end unto itself.

Developing a WSMP is a methodical, five-step process: 1. Conduct Operational Assessment: The first step is to understand the present status of warehouse operations. Data should be collected on the following: • Customer Service Layout Control Systems • Equipment Methods • Inventory Accuracy • Equipment Utilisation • Space Utilisation • Building Facilities • Labour Productivity • Housekeeping and Safety • Warehouse strengths and weaknesses should be identified.

2. Define Future Requirements: Once the present operation has been analysed, future warehouse requirements should be determined. This can be accomplished by examining a business forecast. A fiveyear projection is needed to answer the following questions: • How will the order volumes change?

• Will the inventory levels change?

• Will the inventory turn rates change?

• What new types of material will be present?

3. Develop Alternatives: Once the weaknesses of the present warehouse and future requirements are known, various approaches to warehouse automation can now be considered and budget investment and operation costs can be developed. Potential savings in space and labour should be determined.

4. Evaluate Alternatives: For each alternative, an economic analysis should be performed. In addition, a qualitative analysis should be performed to consider issues, such as safety and ergonomics, that cannot be expressed in economic terms. The method of warehouse automation that is best suited to the particular operation and that is most justifiable, can then be selected.

5. Document the WSMP: A written description of the WSMP, including alternative analysis should be developed. The document should cover facility layouts, specify staffing levels and detail equipment and system descriptions. Once written, it can be presented to senior management to obtain funding and support.

Using the WSMP approach provides a systematic method of properly confronting warehouse automation.

The process provides clear direction as to the degree and type of automation to implement for any specific application. As the pace of warehousing quickens and customers demand better service, those who take a systems approach to warehousing and its automation will be the ones best prepared to meet the challenges of the future.

44 CargoConnect - september 2017

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SPECIAL feature “Goods moving within a state have to be stored somewhere; they can’t be sold immediately. Storage of goods at any place across the country leads to rise in cost.

Now, with the GST regime, people will look at centralising their warehouses and keeping the number minimum.”

Yashpal Sharma, MD, Skyways Air Services

How Warehousing Began to be Automated

In the US, automated warehousing in the 1960s and 1970s meant AS/RS. One of the driving forces for this phenomenon was the doubling of the value of business inventories between 1962 to 1972. The value of the business inventories tripled between 1972 and 1982. The explosion in inventory in the 1960s and 1970s led to considerable growth in warehouse capacity and the need for significantly increased control of inventory. AS/RS was the solution of choice.

The early euphoria of AS/RS in the 1960s and 1970s gave way to a rather flat decade in the 1980s. This was due to a much slower growth in manufacturing Inventories, which grew by only about 25 per cent between 1972 and 1982. The competition from the Japanese and the need to control manufacturing costs forced the U.S. manufacturers to find ways of reducing inventories. Suddenly, AS/RS the darling of warehouse professionals became something that people did not want to talk about. A number of projects were, in fact, abandoned mid stream. There were several AS/RS systems that were lying empty and had to be dismantled in the 1980s.

AS/RS became a bad word during the 1980s when growth in business and industry came, not from a growth in inventories, but from an increase in inventory turns. The focus was on reduction of inventories, small batch production and just-in-time delivery. While no one can argue with the objectives of just-in-time and reduced inventories, the tactics adopted by business to adopt efficient manufacturing practices were too extreme and lacked sufficient thinking on the part of management when it came to warehousing.

Companies began to indiscriminately cut any and all funding for warehouses, as inventory was “evil”. What a number of these companies did not realise is that although a number of the early applications of AS/RS were not justified, several others were doing an excellent job. The one area in which AS/RS was - and still is - a very viable option, is distribution. Also, another development had taken place in automated warehousing systems in manufacturing. A number of smaller, decentralised mini S/R systems made their appearance in manufacturing in the 1980s. Interestingly, the trend in distribution was quite the opposite. The trend has been towards greater centralisation and larger, more automated warehouses. Companies began to realise that, instead of higher inventories in several smaller distribution centres spread throughout the country, it was more efficient to centralise inventories and to ship to various outlets, from fewer distribution centres. Faster and reliable transportation systems made this possible.

46 CargoConnect - august 2017

SPECIAL feature “If we talk about India, labour cost tend to be a fraction of those in developed countries.

This makes it challenging to derive required financial benefits from implementing 100 per cent automation in a warehouse in India. In India, the aim would be to find right balance between automation and labour to get an improved and predictable productivity.�

Anay Shukla, VP, Business Development & Solution Design, Apollo LogiSolutions

Evolution of the Forklift Forklifts have had the same basic function over the years i.e., moving a heavy load from one place to another, but the technology to get the job done is constantly changing. The forklift industry has advanced in its power source technology, mobility and automation; allowing for even more versatility from an already versatile truck.

More environment-friendly technologies are being incorporated into forklifts partly because of rising fuel costs, but also because some energy-efficient forklifts can last 20 to 30 per cent longer than internal combustion engine forklifts.

The Yale Company has a battery-powered forklift with regenerative braking to send power back to the batteries when it slows down and can also recapture energy while lowering a load as well. Aside from batterypowered forklifts, clean-burning and alternative fuels like liquid propane, clean diesel and hydrogen fuel cells are used as power sources as well.

Aside from being more environment-friendly, forklifts have also changed in their mobility with the introduction of the sidewinder forklift. The sidewinder is built by Vetex and can move in any direction. Instead `The sidewinder forklift can roll over obstacles up to 3 inches (7.6 centimetres) high and move a 40 ft (12.2 metres) long beam through a narrow entrance while driving sideways, both of which would be difficult or impossible for traditional forklifts to do.

Another innovation in forklift technology is the automated forklift. These forklifts use guidance systems to manoeuvre themselves through a warehouse or building and pick up and drop off loads automatically.

The automated forklifts are used in the aerospace, automotive, manufacturing, printing, newspaper and warehouse industries.

There are several types of guidance systems including the laser, inertial, wire and optical. The laser system uses retro-reflective targets throughout a warehouse to bounce the laser beam off of and back to the forklift, so it can determine its location. The inertial system uses magnets placed inside the floor in straight lines. The forklift has sensors to locate the magnets and stays on course wherever the magnets are located. The wire system uses an antenna to determine where the forklift is; in relation to wires placed inside the warehouse floors and optical guidance systems use sensors to locate ultra violet strips painted on the floor.

The WMS Impact A warehouse management system (WMS) primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put-away and picking.

A WMS is a database driven computer application, to improve the efficiency of the warehouse by directing cutaways and to maintain accurate inventory by recording

48 CargoConnect - september 2017

warehouse transactions. The system also directs and optimises stock, based on real-time information about the status of bin utilisation.

It often utilises Auto-IDCapture (AIDC) technology, such as barcode scanners, mobile computers, wireless LANs (Local Area Network) and potentially Radio frequency identification (RFID), to efficiently monitor the flow of products. Once the data has been collected, there is either batch

synchronisation with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse.

The primary function of a warehouse control system is to receive information from the upper level host system, which is most often the warehouse management system; and translate it for the daily operations. A common goal is to ensure a situation where warehouse

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SPECIAL feature “As far as warehousing or other things are concerned, the impact of GST is still being looked into and its effects are still being studied. We would not like to talk of its effects right now. Yes, we are definitely working closely with few of our customers to redesign their supply chain post GST.” Nihar Parida, Director, Minerva Integrated Logistics Pvt Ltd

employees never have to retype information because it already lies in one system, or is collected automatically. Warehouse control system is usually the interface that is used to manage processes, people and equipment on the operational level. Based on warehouse control system, there are three distinguished types of warehouse management systems: Basic WMS – This system is apt to support stock and location control only. It is mainly used to register information. Storing and picking instructions may be generated by the system and possibly displayed on RF-terminals. The warehouse management information is simple and focuses on throughput mainly.

Advanced WMS– Above the functionality offered by a basic WMS, an advanced WMS is able to plan resources and activities to synchronise the flow of goods in the warehouse. The WMS focuses on throughput, stock and capacity analysis.

Complex WMS – With a complex WMS the warehouse or group of warehouses can be optimised. Information is available about each product in terms of where it is located (tracking and tracing), what its destination is and why (planning, execution and control).

satisfaction. Packing stations can be equipped with mobile wireless computers, scanning and RFID devices, as well as fixed mount kiosk solutions, to increase speed and efficiency while reducing errors and damage. Workers can utilise wearable devices to see real-time updates on pack and load plans. Robust wireless outdoor coverage will integrate dock and yard operations with the warehouse, providing end-to-end efficiency while integrated video capabilities can be used for quality control and proof of compliance.

Outbound Handling Technologies

The location of warehouse is generally chosen to minimise the cost of delivery for both the company and the customer. Other factors considered are access arterial highways, access to highways, ports etc. for shipment and labour availability. The local state taxes are also a factor considered by companies before locating a warehouse. Some companies prefer to have warehouses in every state of the country to avoid local taxation while transporting from one location to another. With the implementation of GST, logistics companies can restructure their warehouse locations and can have one central warehouse or can go for warehouses at specific locations or can adopt

In the new warehousing dynamic, customer satisfaction is seen as a major corporate objective and differentiator. Processes driven by customer need are playing a more important role in operations, with more automated packing, staging, loading and shipping functions taking advantage of load optimisation, real-time performance monitoring, reverse logistics and technology-enhanced traceability and accountability solutions.

A wide variety of IT solutions are poised to help warehouse personnel provide outbound material handling operations that maximise efficiency, reduce costs and enhance customer

50 CargoConnect - september 2017

By readily embracing advancements in integrated automated systems, manufacturers and distributors can stay competitive while meeting customer demands.

GSTified warehousing

a hub and spoke model. With GST the local state taxes are eliminated and there will be only one Goods and Services Tax across the entire country. This enables the companies to achieve cost efficiency in their operations and thereby transferring this cost benefit to the end consumer in the supply chain. Advantages on warehousing with respect to GST is that companies can consolidate stock at their warehouses. Demand variation at a particular warehouse can also be reduced. This in turn improves demand planning and improved inventory management. Disadvantages of GST with respect to warehousing is that companies face challenges during route planning while having to deal with deliveries across a bigger geography. Location of warehousing and network optimisation to reach the consumer is driven more by tax reasons rather than optimisation and efficiency driven reasons.

With the GST, this will change substantially and there will be centralised warehouse.

Their unique features would be: 1) Fewer and larger strategically placed Distributions Centres along with smaller warehouse for last mile delivery. This will however be sector-dependent and will need to take the replenishment cycle in mind.

2) Emergence of modern warehouse with focus on operational efficiencies and safety standards. Modern storage and retrieval systems with moderate to high levels of automation.

3) Higher levels of value addition like light assembly, kitting, packaging in these modern warehouses will be the order of the day.

4) Increased visibility and tracking provided by the use of technology.

5) Consolidated multi-client multi user warehouse will emerge in key hubs owned and operated by logistics service providers. Shared facility with infrastructure and technology will bring in efficiency.

Interconnected systems will enable seamless and real-time flow of data.

India’s most comprehensive handbooks on Warehousing and Air Cargo, packed with information, data, trends, projections, views and articles by senior industry professionals, alongwith columns by leading research companies in an easy to read, hardbound and aesthetically designed format.

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feature

Proliferating services across the country: E-Commerce Logistics

52 CargoConnect - september 2017

E-Commerce is experiencing a boom presently and it has brought a new dawn in e-retail logistics.

With the onset of GST and technological innovations, India is at the brim of a drastic metamorphosis.

Sheena Sachdeva brings forth various views from industry leaders on the E-Commerce and its potential avenues in the forthcoming years.

feature

T

he E-Commerce retail market is among India’s exciting and fastest growing markets. This industry has come a long way since its inception and is continuously gaining momentum and value.

At present, the country’s logistics industry is worth $300 billion, according to the ‘Logistics Market in India 2015-2020’ by market researcher Novonous . In fact, the report states that Indian logistics market itself is estimated to grow at a CAGR of 12.17 per cent by 2020. Innovations are very important in this sector, as the demand is always for more reach and faster shipping at lower costs. Yet, the companies will need to invest in automation, while utilising existing resources well. While India has an internet user base second only to China, only 14 per cent of the total internet users shop online in India, as compared to 30 to 35 per cent in Brazil and Russia and 55 per cent in China.

Understanding the Indian E-Commerce Logistics

Logistics is a key enabler for growth of the E-Commerce retail industry and is increasingly emerging as a differentiator in terms of customer service and satisfaction.

Logistics in E-Commerce retail is evolving with growing business requirements and is acting as an important lever for business growth. The logistics sector specific to E-Commerce retailing in India was valued at USD 0.46 billion in 2016 and is projected to witness a CAGR of 48 per cent in the upcoming five years to reach USD 2.2 billion by 2020. While many E-Commerce retailers have partnered with logistic service providers to fulfil their business requirements, some players have The logistics sector specific to also invested in building in-house logistics capabilities. While a large share (as much as 50 per cent) of the E-Commerce logistics market is commanded by inE-Commerce retailing in India was house logistics players, the other 50 per cent is controlled by third-party logistics valued at USD 0.46 billion in 2016 (3PLs) service providers including traditional Logistics Service Providers (LSPs), E-Commerce focussed logistics providers and India Post. However, apart from and is projected to witness a CAGR increasing competition and the rising demand from tier-III and remote locations, of 48 per cent in the upcoming an addressable market is expected to be about 45 per cent of the total, which could five years to reach USD 2.2 billion be close to USD 1 billion in 2020. Also, the focus is now shifting from standard to specialised deliveries, which requires 3PLs to invest in new capabilities and by 2020. building infrastructure.

Bhavik Chinai, Founder and CEO, Vamaship, an E-Commerce logistics based startup adds, “As mobile penetration increases in smaller towns and speed through internet increases, there are going to be first hand shoppers in these cities. From a company perspective, everyone is coming up with very innovative business models attempting to crowd source deliveries, in a way they enable the grocery stores to deliver instead of setting up of their own infrastructure in these smaller towns. As the mobile penetration increases, we believe that a lot of new avenues of logistics to fulfill the last mile deliveries be created. Increase in demand for E-Commerce players wherein stores are able to serve more orders from the supply side as well.”

Pratish Sanghvi, Founder, Grab, a logistics based startup further opines, “Given the current scenario, E-Commerce transactions in India has seen a humungous growth due to the increased internet penetration especially, in tier two and three cities. As demand from consumers in distant and rural regions increases, dependency on infrastructure of logistics companies shall only see a drastic increase. Secondly, as more and more consumers are going online to make purchases of FMCG products, the logistics companies shall need to cater to on demand and one day delivery models.”

According to the NASSCOM and Akamai Technologies report titled, The Future of Internet in India (August 2016), the number of internet users in India is expected to grow to 730 Mn by 2020 and rural India will account for 75 per cent of the new internet user growth. Therefore, the non-metro cities offer a huge growth potential for many ecommerce companies.

TA Krishnan, CEO and Co-Founder, Ecom Express Private Limited which is one of the pioneer in E-Commerce added, “E-Commerce in India is at an inflection point, thanks to the robust growth in consumer

54 CargoConnect - september 2017

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feature TA Krishnan CEO and Co-Founder, Ecom Express Private Limited

"E-Commerce in India is at an inflection point, thanks to the robust growth in consumer demand. The key drivers of the sector and growth has increased internet penetration, growing acceptability of online payments and an increase in per capita income."

demand. The key drivers of the sector and growth has increased internet penetration, growing acceptability of online payments and an increase in per capita income. Favourable government policies and improving infrastructure have also contributed in connecting consumers and sellers across the country. The rapid growth of smartphones and internet connectivity across the country in the recent years, especially in tier-II and III cities, has led to the growth of online retailers.”

Due to these factors, E-Commerce is expected to grow manifold in the next few years, largely driven by non-metro and rural markets.

Ecom Express, as a logistics partner to various E-Commerce firms, has a fundamental faith in the growth potential of Tier IV and rural areas of the country as Krishnan opines , “We believe that the next generation of buyers will come from there. The company has opened new markets and continues to drive the growth of online retail industry by offering delivery service solutions in far-flung areas in the country’s map. We currently offer our services in 17100+ postal codes, across 1600+ towns and cities with the capability to reach a population base of 750 Mn in India.”

Challenges A consumer orders a product through an online marketplace and anticipates the delivery with 24 hours. The major challenges is about the education about the work guarantee about the services provided, which is further communicated to the customers. Here, the mindset comes through the monopolised market trend of various big E-Commerce logistics players. The need for speed and consistency in E-Commerce distribution, driven largely by E-Commerce players’ promise to consumers, leads to

56 CargoConnect - september 2017

growing challenges at the last mile delivery.

As the shift from brick and mortar to online retail continues, the difficulties of managing last mile E-Commerce delivery grows.

Challenges faced include ease of identification of addresses, constantly evolving end-

with its integrated services. But, still they face challenges. In this context, Sanghvi from Grab said, “While the proportion of rejections when delivering an e-commerce product is reducing, one of the larger challenges for logistics companies still lies in curbing these returns to

The major challenges is about the education about the work guarantee about the services provided which is further communicated to their customers. Here the mindset comes through the monopolised market trend of various big ECommerce logistics players.

customer expectations regarding time for delivery, customisation at point of delivery, delivery experience and open communication are forcing service providers to invest in new technological solutions to manage their delivery operations. However, these challenges are being tackled by enhanced investments in supply chain technologies that not only help to cater to E-Commerce consumers’ expectations but reduce the high pressure on achieving faster turnaround times and also to provide customisable and scalable solutions to minimize operational hassles.

Grab as a logistics counterpart to its clients has been gearing up in the market

under five to ten per cent. This can be curbed by better data analytics on consumer trends of a specific pin codes and allowing technology to assert delivery times and schedules with the customer.”

E-Commerce logistics companies get over 75 per cent of the deliveries from tier II and beyond towns and cities. The contribution of these cities in coming years is set to become even larger due to the key growth factors elaborated earlier. E-Commerce companies have high potential, but to cater the untapped rural markets, companies are launching the ambitious full-state coverage programme i.e. to cover 100 per cent of all postal codes

feature Anil Mantri Director, Sealair Freighters International Pvt Ltd

"In my opinion the complete automation of the business and their complete supply chain process is the key and critical and that can eliminate most of the issues and problems at hand."

(including all villages) in a state. Ecom Express has commenced its pilot for the fullstate coverage programme in Haryana, a state with a population of around 28 Mn. While making inroads into the remotest locations, they are trying to solve the challenges of last mile deliveries therein. Our project enabled the generation of high demand and spurred the growth of E-Commerce in these areas through consumers who were earlier unable to experience the benefits of online shopping. As per the estimation, the annual GMV generated for the ecommerce industry was US$ 300Mn. After Haryana, Ecom Express extended the full-state coverage to the states of Delhi,

freight corridors, this move is bound to be beneficial for the logistics sector. To establish our network beyond the metro and Tier-1 cities, at Ecom Express our approach has been based on creating a strong and dedicated surface network with focus on reach and reliability without compromising on the transit time at any point. The strategic positioning of hubs at locations that fit within the broader logistics chain has been instrumental in creating the much needed network for E-Commerce companies to make further inroads into the country. With Ecom Express’ 50 long-haul and over 180 short-haul services, the company is able to handle 90 per

mode including Aadhar enabled payment systems, UPI, debit cards and net banking or Paytm. Although everyone in the ecosystem, including the E-Commerce companies and the logistics firms would prefer digital transactions, the transition ultimately has to happen at the consumer end, who is the decision maker.

Ecom Express handles about 75-80 per cent of the total orders through the Cashon-Delivery payment mode and that leads to handling a lot of cash which are securely handled, accounted for and remitted to customers. Also, to lead the change in the digital era, we do offer electronic payment

`

Goa, Tamil Nadu, Telangana, Karnataka and Andhra Pradesh in the year 2016 and recently added the states of Punjab, Gujarat, Maharashtra, Bihar and West Bengal to the programme.

“At present, physical infrastructure in certain locations are being stretched to perform beyond their capabilities. However, with the government’s keen focus on infrastructure development with special focus on creating logistics parks, improvements in road transport and highways, dedicated

58 CargoConnect - september 2017

cent of its entire volume of shipments by its own network.” says Krishnan.

But still, there is skepticism among Indian customers when it comes to E-payments due to the factors of trust and security. Also, payment modes like credit cards has not penetrated beyond the top 40-50 cities in the country. This makes Cash-on-Delivery (COD) as the preferred payment mode for consumers. However, with the digitisation wave in the country, consumers are gradually opening up to payment through online

options at the point of delivery for consumers.

Anil Mantri, Director, Sealair Freighters International Pvt Ltd, another organisation handling E-Commerce says, “The main challenges while providing services to E-Commerce companies these days are service prepositions, service levels as per the delivery standards set for these tier II and tier III cities, at times the human resource acts as the biggest challenge. In my opinion the complete automation of the business and their complete supply chain process is the key

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feature Bhavik Chinai Founder and CEO, Vamaship

"With increase in a lot of new avenues of logistics to fulfill the last mile deliveries be created. Increase in demand for E-Commerce players wherein stores are able to serve more orders from the supply side as well."

Commerce Operator (Operator) is called a person who, directly or indirectly, owns, operates or manages an electronic platform Cash on delivery which is engaged in facilitating Typical Indian customer wants to inspect the product before paying the supply of any goods and/or services. Also, a person providing any information or any other Free delivery To compete with retailers, free and quick delivery is a must services incidental to or in Need for optimised logistics cost connection with such supply of goods and services through Return/exchange electronic platform would be Consumers expect an easy return/exchange process considered as an Operator. A Demands strong reverse logistics process person supplying goods/services on his own account, however, Insurance cover would not be considered as an Products stored in the warehouse are insured Operator. Under the GST Act, both the E-Commerce operator and operator both are liable to file Existing concerns Increasing order returns, fake address issues and increased GST. The E-Commerce operator costs for cash on delivery services is required to collect (i.e. deduct) an considered amount paid or payable to the actual supplier of goods or and critical and that can eliminate most of the services in respect of supplies of goods and/ issues and problems at hand.” or services made through such operator. The amount so deducted/collected is called as Tax Impact of GST on E-Commerce GST is impacting almost all the service Collection at Source (TCS).

It will incredibly positive, where we see industries across the country, E-Commerce logistics. Further, India is poised to become the huge metros to get affected with companies world’s second-largest Internet market after like E-Commerce, Delhivery, where they China. A huge proportion of the population, already have beautiful last mile delivery. For especially millennials, are leapfrogging example, Ecom Express in India, for about the computer era and directly embracing 18000 postal codes, have their own vehicles, smartphones. “Digital is changing the rules fulfilment centres etc and similar is the case of customer engagement in India as the with Delhivery. Once GST comes in, a lot of availability of affordable smartphones and non-E-Commerce players in a way traditional wireless Internet is fostering the growth business are going to change their entire of a new breed of digital-savvy consumers supply chain strategies. Today, you need to who demand personalised and seamless have big warehouses in every state due to the regulation systems and tax planning. But experiences”, added an official from PWC. E-Commerce operator or Electronic now you can work with a mother warehouse,

Major e-retail market trends that require efficient logistics

60 CargoConnect - september 2017

for example in Nagpur and then have hubs in these smaller towns which can work as distribution centres. Companies which have ready infrastructure, but are not into E-Commerce, will have new leverage and whole new different avenues just because of a better taxation system.

The fundamental benefit is that these companies have their own infrastructure which fit well with this taxation systems .

Bhavik says, “When we speak about the full truck load, the organised players will face challenges to comply with E-Way Bill tools and do their compliance on time, for them to file innumerable registrations in many states while travelling so many times in a month.

Even the technology has to be integrated.

Now they would have to add many other things along with transportation of goods.

For the unorganised sector, there will be a lot of handholding that will be required. Further, the unorganised sector will take around six months to fully understand how the GST bill works, slabs and the compliance required by them to work. What we are seeing is that a lot of industry collaborations with GSTN, Suvidha providers are being made which basically help the unorganised segment to understand the. It may take a while, but will be positive for in the long run. In our opinion there will be some short term impact on all the industries of entire logistics. So the unorganised sector is not ready to understand the ERPs of the company.”

GST has to be filed by both the aggregator and the service providers. Adding to this, Krishnan from Ecom Express says, “The GST implementation will enable favourable conditions to the E-Commerce industry and complete ecosystem with India becoming a unified market. All the hurdles and

feature Pratish Sanghvi Founder, Grab

"As demand from consumers in distant and rural regions increases, dependency on infrastructure of logistics companies shall only see a drastic increase. Secondly, as more and more consumers are going online to make purchases of FMCG products, the logistics companies shall need to cater to on demand and one day delivery models."

complexities in the supply chain track will be dismantled, thereby increasing the efficiency and turnaround times and creating a multiplier effect on growth. The logistics space which acts as catalyst to the E-Commerce industry, will stand to gain, as it will bring ease and simplicity in

inter-state goods movement, simplifying the current fragmented tax system challenge and be beneficial to the E-Commerce logistics players including Ecom Express. However, increased state level compliance needs, on the part of E-Commerce logistics service providers like us in contrast to the current central administration of Service Tax for entire network, shall dilute the benefit and purpose of GST introduction, if rules are not framed keeping in view our nature of services.�

GST is considered to be one of the biggest reforms, simplifying the logistics and supply chain as a whole. Sanghvi from Grab said, “GST will remove processorial bottlenecks.

A recent study revealed that out of the total transit time taken by a truck, it remains idle for 40 per cent of the time due to

62 CargoConnect - september 2017

border checks for Octroi and other entry barriers. After removal of this hurdle, quicker movement of goods and increased number of deliveries will ensure operational efficiencies.

Also, an estimated cost of 25 per cent can be saved, which is incurred due to stoppages and idleness. GST, which focuses on the objective

Although everyone in the ecosystem, including the E-Commerce companies and the logistics firms would prefer digital transactions, the transition ultimately has to happen at the consumer end, who is the decision maker. of one nation, one taxation, will safeguard the free movement of goods across states.

Future of E-Commerce Logistics Penetration of internet and development of internet services across the country at very cheap rates have enabled the consumers to come online easily. Further, digital payments

is still a concern along with swift last mile movements across country. In order to curb some of the issues, Grab has tech solutions that allow customers to change their decision of paying digitally at the doorstep, even though they choose COD during product purchase. Due to this, there has been increase in percentage of orders which are converted from COD to pay digitally at the doorstep, especially post demonetization. When it comes to making payments online, there is still a large population that is not comfortable using technology to pay for transactions.

Logistics is a crucial enabler and differentiator for E-Commerce companies to create customer stickiness through service, innovation and satisfaction. According to a joint ASSOCHAM-Forrester study paper, India and E-Commerce revenue is expected to jump from $30 billion in 2016 to $120 billion in 2020, growing at an annual rate of 51 per cent, the highest in the world, being driven by a young demographic profile, increasing internet penetration and relative better economic performance.

The logistics needs of the industry are evolving rapidly with the changing business requirements. The industry has been witnessing a rapid scale-up in service orientation and complexity with an ever-increasing emphasis on service levels, increased penetration in tier-II and tier-III cities, Cash on Delivery (COD) services, geographic penetration and supply chain security requirements. Startups coming up with various innovative ideas and business models along with implementation of GST will surely bring up haul in the industry.

The massive growth of E-Commerce sector is only going to increase the need for quality logistics, which will in turn spur the growth of the logistics sector.

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feature

Rising freight competition between rail and road Robust network of railways and roadways is essential for freight movement in a country like India. Research companies have an estimate that freight movement through both mode of transportation would grow by six to eight per cent in the year 2017-2018.

Railways and roadways both have their advantage and disadvantages in terms of freight movement. However, increase in competition will make services more efficient, fast and reliable which will ultimately benefit the end users. Gaurav Dubey, with the help of industry leaders, tries to figure out reasons for this increased competition and its positive impact on the Indian economy.

64 CargoConnect - september september 2017 2017

feature

R

ail and road are the dominant mode of transportation since time immemorial. Railways witnessed rapid growth in freight and passenger movement in the nineteenth century and displaced road as a mode of transportation. This was especially in the case for long-distance travel before and in the early days of the internal combustion engine. However, in the early years of the twentieth century, motorisation set in and travelling by road gained popularity over the railways.

Then volumes of traffic on the rail and road modes grew significantly, with the latter often showing a greater increase than the former as it could more readily meet the demand for transport among different sections of the population. While it is also true that the road mode has inherent advantages of convenience, flexibility and adaptability in fact in many cases it is qualitatively superior to the rail mode.

The market determined split between rail and road may be corrected through internalisation of the external costs of transport such as resulting from pollution and accidents. The policy-makers must find ways to internalise these external costs in order to ensure desirable mode of choice in transport.

CargoConnect with an understanding of the certain factors tries to determine the reason of increasing competition in the freight movement between rail and road and its overall advantage over Indian economy.

Proper rail-road coordination is recommended on the following grounds (a) Huge investment in the fixed assets of railways should be utilised optimally for gaining maximum return (b) Lack of proper co-ordination between road and rail transport leads to the establishment of dual system of competitive transportation leading to huge wastage (c) Rail-road co-ordination is an important prerequisite for all-round development of the country (d) Rail-road co-ordination is very important for the development of new projects such as construction of river bridges, new railway lines, etc.

CargoConnect interacted with the industry leaders and took their views on the issue of rising competition and need for freight balance between rail and road mode of transportation in India. Industry players seem positive over rising ‘healthy’ competition between railways and roadways and hold that strong rail and road network will be required to meet growth led demand for freight traffic in the years to come.

Opinions from DP World Importance of robust rail-road network for the movement of freight Rajat Duneja, Chief Operating Officer, DP World Intermodal opines, A robust rail-road network will be definitely essential to meet growth-led demand for freight traffic in the years to come as India’s export and import trade has been increasing at much faster pace than other countries of Asia and developed West. To maintain this growth rate, there would be need for a robust hinterland network consisting

66 CargoConnect - september 2017

Road sector enjoys following advantages over railways Flexibility of time table of road transport as compared to railways

Facilitating door to door service by road transport which the railways could not provide

Time consuming system of booking and other formalities in railway which the road transport system is not adopting

Higher operational cost of railways due to increasing expenditure on overheads as compared to lower operational cost of road transport

Increasing involvement of railways in social welfare programmes leading to higher overhead cost as compared to lower overhead cost of road transportation Increasing facility of route changing both for passenger and freight traffic under road transport as compared to railways

of not only rail and road but also a strong network of inland waterways in the country. This will enhance the connectivity between the vast hinterland and the ports which dot India’s 7,500-km long coastline.

The Sagarmala Project is a good initiative of the Government of India for port led development as it envisages the movement of cargo to the hinterland by rail, road and inland waterways to and from the ports.

Possible reason behind increasing freight transport competition between Rail and Road The surface transport sector is heavily oriented towards exports and imports, primarily from the country’s ports. In the process of movement of goods from the manufacturer to the end-user, the logistics supply chain forms a substantial cost component.

In the present scenario, shippers and consignees are constantly monitoring and looking at saving cost for every movement as the trade is fast becoming more aware of the need for cost-saving measures in the supply chain cycle. This is further causing an increase in competition between different modes of surface transport. Both rail and road transport modes have their own advantages and disadvantages, but both vie for the shipper’s purse. This causes overland freight rates to become fiercely competitive.

feature “Rail and road sector can work in a complementary manner towards moving cargo but for this, there needs to be a standardisation of cost for a customer, it can be achieved by creating an independent regulatory body” Rajat Duneja, Chief Operating Officer, DP World Intermodal

Role of Ro-Ro in establishing synergetic relationship between Railways and Roadways In India, Chennai has been able to establish itself as the country’s top Ro-Ro port, though some other ports are now planning parking yards and dedicated Ro-Ro berths for seagoing car carriers. The point being, cars for export have to be moved from manufacturing units to the ports before they can embark on seagoing car carriers which has to be done by multimodal means, and so, provides equal opportunities for road-using car carriers and car-carrying trains.

Measures to develop healthy competition between Railways and Roadways in terms of freight movement Both sectors can work in a complementary manner towards moving cargo from the hinterland to the ports. But for this, there needs to be a standardisation of cost for a customer from his premises to the port and vice versa by either mode, which can be done by creating an independent regulatory body which will have both rail and road costs under its purview in order to maintain an equilibrium. The customers would then have an option to select the most suitable mode

68 CargoConnect - september 2017

of transport for their export/import cargo movements which will in turn create a winwin situation for all.

“As per the study, rail freight would increase by six to eight per cent in 2017-18, in terms of billion ton/km”

Opinions from Pristine Logistics Importance of robust rail-road network for the movement of freight Amit Kumar, Promoter and Director, Pristine Logistics says, “Both modes of transportation carry their own importance in terms of freight movement. However, I would like to focus more on the role of Railways. At the same time, we

cannot also ignore role of roads as it plays an important role in the Indian economy.

“As India has long geographical boundaries – there are long leads between production and consumption catchment, so logistics solution providers just cannot ignore railways. There are challenges which arise out of the bureaucratic structure, essentially, non-commercial approach of the Indian Railways. But every incremental improvement in the Railways has quantum ramifications on account of the fact that the Railways is, by far, the single largest logistics service provider carrying approximately 1,100 million MTs per annum.”

Another senior executive Rajnish Kumar, Promoter and Director, Pristine Logistics says, “Let us not forget that the Railways will face demand challenges with the commissioning of huge capacities, specially, the two DFCs and this would, both, propel and compel the Railways to attract more volumes – this is not a compulsion right now.”

Possible reason behind increasing freight transport competition between Rail and Road Amit Kumar says, “Containerisation, itself, has an immense potential and as a mode, has much more to offer than can ever be done by the road sector. The story is being unraveled and we need to see how the Government looks at both the modes from the futuristic point of view.”

Rajnish Kumar sees no competition between both the modes and says, “Well, right now, there is hardly any competition.

The Railway has its own universe. And, that universe has enough traffic and reasonable growth. It all depends on LSPs that how they would harness the power of Railway solutions in our service products because there is a lot of traffic that moves on road which can be better served by Railways.”

Role of Ro-Ro in establishing synergetic relationship between Railways and Roadways

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feature “There is no unhealthy competition between road and rail. There will be a natural evolution of both the sectors and certain logistics requirements will turn out to be better served by railways while some other requirements by roadways.”

Amit Kumar, Director and Promotor, Pristine Logistics

On the role of Ro-Ro, Amit Kumar holds a very positive view. He said, “It’s a win-winwin step – the third ‘win’ is of people living in Delhi NCR. Despite massive investment in the road infrastructure in and around Delhi over the period 10-15 years, we are lagging behind on multiple parameters and environmental friendliness is one of the crucial parameters.

However, the Railways and Roadways should not be seen at loggerheads which are wresting each other’s market share. There are several complementarities between both the modes and especially if work is done in syncing their respective strengths to create a blended logistics solution.”

“On the same lines, road freight is expected to grow by six to eight per cent in 201718, decelerating from seven to nine per cent in 2016-17”

both modes of transportation. There will be a natural evolution of both the sectors and certain logistics requirements will turn out to be better served by railways while some other requirements by roadways.”

Rajnish Kumar said, “Our logistics cost is already high; we require a healthy competition to curtail it. This would help both the sectors to innovate and evolve, leading to lower cost and better services to end customer.

One of the leading research companies of India – CRISIL

According to Rajnish Kumar, “An ideal growth strategy has to create a mesh of solutions – pretty much like how a city plans a multi-modal solution for commuting. As long as there is growth, inter-modal battles will evolve into multi-modal synergies.”

Binaifer Jehani, Director, CRISIL Research says, “Even though freight transporters in road and rail compete for higher market share, the type of commodities catered to by these players is different. Freight transportation through railways is preferred due to speed and low cost of transport. However, for the first and last mile connectivity, road connectivity is vital.” On the other point she says -

Measures to develop healthy competition between Railways and Roadways in terms of freight movement Amit Kumar, Director and Promoter, Pristine Logistics says, “I reckon there is no unhealthy competition between road and rail. We discussed about synergy between

Importance of robust rail-road network for the movement of freight Rail freight and road freight accounted for about 90 per cent of domestic freight transportation in India in 2015-16. Hence, robust rail and road networks are required for seamless connectivity and freight

70 CargoConnect - september 2017

transportation across India. CRISIL Research expects rail freight would increase by six to eight per cent in 2017-18, in terms of billion ton/km (BTKM), driven by demand from core sectors, increased agricultural output.

As per the estimate, in 2016-17, rail freight has declined by five to seven per cent in a year due to weak freight demand from coal, impact of demonetisation on cement and a 19 per cent increase in freight rates.

Road freight is expected to grow by six to eight per cent in 2017-18, decelerating from seven to nine per cent in 2016-17. Moreover, road transporters provide end-to-end logistics unlike rail. Thus, road transporters have an advantage in the non-bulk segment of freight, which currently accounts for 76 per cent share of the country’s total freight. Slow capacity expansion of the rail network, congestion and rise in freight demand has resulted in investment share shifting towards roads.

CRISIL Research estimates investment of `6.7 trillion by the railways during 2015-16 to 2019-20; this would include investment for the development of 2,300-2,400 kms of new lines. Also, `3.9 trillion of investments are expected during 2017-18 to 2021-22 towards the development of 24,500-24,600kms of road (only national highways). This is expected to increase the rail-road network in India

feature “Ro-Ro is a win-win for roads and railways in terms of saving cost on diesel, manpower and reducing pollution level. The future of such a tie-up will depend on the availability of capacity with railways post allocation to commodities under priority” Binaifer Jehani, Director, CRISIL Research

to meet the freight demand which typically grows by about 1.2x GDP. Moreover, the Dedicated Freight Corridors (DFCs) are expected to significantly increase rail freight traffic, and thereby the segment’s share from 27.7 per cent in 2015-16 to 28.2 per cent in 2020-21. Over the period, rail freight is

“Freight costs in India are very high this could be a result of low rail share which stood at 25 per cent of freight transportation in India in 2015-16” forecast to increase at seven–nine per cent CAGR, marginally higher than road freight traffic at six-eight per cent due to initiatives such as the DFCs. Possible reason behind increasing freight transport competition between Rail and Road Even though freight transporters in road and rail compete for higher market share, the type of commodities catered to by these players are different.

Freight transportation through railways is preferred due to speed and low cost of transport. However, for the first and last mile linkages, road connectivity is vital.

While railways are more suitable for bulk

transportation, the sector has been unable to increase its market share on account of capacity constraints in the network, thereby shifting the load to roads.

Indian Railway’s share in bulk commodity transport is expected to improve to around 46.9 per cent in fiscal 2021 from the current 45.7 per cent. Rail is preferred to transport bulk commodities as larger rakes help faster evacuation, freight rates are lower, lead distances are higher and rail sidings are present. Hence, rail freight accounts for a high market share of bulk commodities such as coal, fertilisers, cement, etc. Freight transportation by road is preferred for nonbulk commodities that account for 76 per cent of freight demand due to benefits such as end-to-end connectivity.

Moreover, for lead distances above 500600 Km (long haul), railways are more economical compared to roads, thereby providing a pricing advantage for longer distances. Also, competition from rail is set to increase even for non-bulk commodities and medium haul especially on DFC routes once they are commissioned as these routes give higher priority to freight, thereby increasing reliability and speed of transit.

Role of Ro-Ro in establishing synergetic relationship between Railways and Roadways To enable synergies in freight transportation and increase the share of rail freight, Indian

Railways has started a Roll on Roll off (RoRo) service at a few locations in India. As per the service, railways will carry loaded trucks on goods trains from the origin to the destination. The trucks will provide end-toend connectivity, while railways will provide intermediate transportation. Presently, this service is being used only on short routes such as Gurugram to Saharanpur in Uttar Pradesh.

Ro-Ro is a win-win for roads and railways in terms of saving cost on diesel, manpower and reducing pollution level. While this could bring synergies in road and rail freight transportation, the future of such a tie-up will depend on availability of capacity with railways post allocation to commodities under priority.

Measures to develop healthy competition between Railways and Roadways in terms of freight movement Freight costs in India are very high compared to other countries. This could be a result of low rail share which stood at 25 per cent of freight transportation in India in 2015-16.

Although both rail and road compete for higher market share in freight transportation, they have their own distinct advantages.

The category of transport chosen by the suppliers depends on the type of commodity to be transported, as cost of freight transportation is a key factor for some commodities, whereas last mile connectivity for prompt delivery key for others. While both segments have already created their own priorities, tie-ups between the players either through Roll on – Roll off or multimodal hub and spoke to provide cost-effective transportation will benefit both the players in increasing their network and utilisation. Ro-Ro is currently being used for shorter distances, however, in the long term, it could be used for longer distances, similar to the developed countries.

september 2017 - CargoConnect 71

feature

Air Cargo in Africa

on a fast forward mode Recently, a world class air cargo terminal was inaugurated in Ethiopia. Also, meanwhile, a meeting was organised

by ICAO (International Civil Aviation Organisation) which discussed about air cargo developments in Africa. Giving a brief about the major incidents, Sheena Sachdeva further talks about the hidden potentials in this continent along with its forthcoming benefits.

E

thiopian Airlines, primarily servicing Ethiopia, a rugged land locked country, is well-known for serving its people with best possible resources. Further, the airlines has come a step further to provide world class services to its passengers.

Comprising of world class technology and cargo facilities along with modern fleet

Hailemariam Dessalegn Prime Minister of Ethiopia

aircrafts, Ethiopia has launched Africa’s most modern cargo terminal. Having the largest cargo terminal with new generation, highperformance aircraft reflects the commitment in expanding and supporting the exponentially

72 CargoConnect - september 2017

growing imports and exports of the country in particular and the African continent in general.

Inaugurated by the Ethiopian Prime Minister Hailemariam Dessalegn on the sidelines of the second International Civil Aviation Organisation’s (ICAO) Meeting on Air Cargo Development in Africa, the cargo terminal is built at the Addis Ababa Bole International Airport on a 150,000sqm plot. It has the capacity to handle 600,000 tonnes of cargo per annum, while the existing cargo terminal has

the capacity to handle 350,000 tonnes of cargo yearly. On June 29, 2017, Ethiopian Airlines inaugurated a state-of-the-art cargo terminal built at a cost of 110 million Euros.

Manpreet Singh Dahri, Regional Manager – Cargo, Namaste Aviation (GSA for Ethiopian Airlines Cargo - North India) informs, “The new terminal built by Africa’s largest and fastest growing airlines, will help boost Ethiopia’s footwear, leather and pharmaceuticals export. Covering a total

feature “With modern B777 freighter aircraft, each with a hauling capacity of 100 tonnes of cargo and a state-of-the art cargo terminal with a capacity to accommodate close to one million tonnes of cargo, we are now globally competitive.”

Fistum Abady, Managing Director, Ethiopian Cargo area of 150,000 sq m area of land, the new Cargo Terminal includes facilities such as Dry Cargo terminal warehouse, Perishable Cargo Terminal with Cool Chain Storage, fully automated with latest technology ETV (Elevating Transport Vehicle), G+2 office building, apron area which accommodates five additional big freighter aircraft.”

Ethiopian Airlines Group CEO, Tewolde Gebremariam claims that the new cargo terminal is not only the largest in Africa but it is one of the best in world. He said that it is comparable with the cargo terminals in Schiphol Airport of Amsterdam, Changi Airport of Singapore and Hong Kong International Airport. He says, “With this large and modern terminal, Africa can position itself in the global competitive market.”

Special Cargo The new Cargo Terminal is also fitted with different climate chambers for storage and handling of temperature sensitive products such as f resh ag r icult ura l products, pharmaceuticals, life science products etc. The premier airlines called on other African Airlines to join hands with Ethiopian so as to address problems of the air cargo industry in the continent.

Since the new cargo terminal, which is the largest in Africa, will put Ethiopian among the world’s ten best airlines in cargo and logistics services. Built on 40,000 sq m of land, the new cargo terminal has facilities such as dry cargo terminal warehouse, perishable cargo terminal with cool chain

storage, office building, apron area which accommodates five additional big freighter aircraft and sufficient truck parking apron. It is also fitted with different climate chambers for storage and handling of temperature sensitive products such as fresh agricultural products, pharmaceuticals, life science products, among others. The new terminal will raise Ethiopian Cargo’s logistics services an annual uplift to one million tonnes. At present, Ethiopian Cargo and Logistics Services operate eight dedicated freighters to 39 global freighter destinations in Africa, the Gulf, the Middle East, Asia and Europe.

“This milestone will make Ethiopian Cargo and Logistics Services one of the world’s

Ethiopian inaugurated the first expansion of the cargo terminal in 2006 and is now planning to launch the third expansion project terminal III with the capacity of accommodating additional 600,000 tonnes of cargo. The French Development Bank, AFD, financed the construction of the cargo terminal while the German Export Credit Agency KFW financed the electro mechanical work.

Sanjeev Gadhia, founder and CEO of Astral Aviation, expressed his concerns over the competition of African carriers with the Middle Eastern carriers. He highlighted the need for African carriers to increase cooperation amongst each other to withstand competition against the Middle Eastern carriers. Considering that pharmaceuticals represent a major segment for Africa, Gadhia expressed, “There is lack of cooling infrastructure for pharma air shipments in the primary African airports. We need to work on improving infrastructure to handle this temperature sensitive commodity efficiently.”

Further, a meeting held at Addis Abbas in the month of July (organised by ICAO in cooperation with the Ethiopian Civil

“The new terminal built by Africa’s largest and fastest growing airlines, will help boost Ethiopia’s footwear, leather and pharmaceuticals export.

Covering a total area of 150,000 sq m area of land” Manpreet Singh Dahri, Regional Manager – Cargo, Namaste Aviation largest cargo terminals comparable with cargo terminals in Amsterdam Schiphol, Singapore Changi or Hong Kong. Recently, Ethiopian has won ‘Cargo Airline Award for Network Development’ at Brussels, ‘African Cargo Airline of the Year’ and many more.

Ever since the first cargo charter operation was launched to Nairobi in 1946 and with the boom of agricultural export products out of Ethiopia, Ethiopian’s cargo service has been steadily growing since the early 1970.

Ethiopian Cargo and Logistics Service is now one of the seven strategic business units of the Ethiopian Airlines Group established under the Vision 2025, the national carrier’s 15 year growth strategic road-map launched in 2010.

With eight dedicated freighter aircraft (six B777 and two B757), Ethiopian Cargo has a daily uplift capacity of 8,672 tonnes that makes it the largest cargo operator in Africa.

Aviation Authority, Ethiopian Airlines and The International Air Cargo Association) on ‘Air Cargo Development in Africa’ was opened by Getachew Mengiste, State Minister, Ministry of Public Enterprises of Ethiopia. It was attended by 247 participants representing 21 states, seven international organisations, and industry stakeholders from Africa, Asia-Pacific, the Caribbean, the Middle East, Europe and North America. The meeting cited the revival of hidden potential in this part of the world require a serious attention. Enhanced investments in technology and infrastructure as well as creating a favourable regulatory environment, will be the key drivers of growth in Africa.

The three day event was attended by shippers, airlines, airports, freight forwarders, regulatory authorities, mainly the key stakeholders of the aviation sector to discuss sustainable solutions to revive the air cargo community in Africa.

september 2017 - CargoConnect 73

Interview

Vancouver International Airport: Taking Canada to the World 74 CargoConnect - september 2017

Vancouver International Airport acts as a hub for Asia and the Americas with easy access to North American highways and its proximity to the Vancouver Harbour. How do you make the most out of it in terms of cargo operations?

Vancouver International Airport has a significant market reach to destinations around the world. It is also a major hub for Global Air Connections. It is the closest major North American city to Asia and has easy reach to markets in Europe. It is facilitated by a strong logistics community backed by top global freight forwarders operating at the airport and supported by carriers serving airto-truck movements.

Scott Norris, Vice President, Commercial Development, Vancouver International Airport, Canada, in an exclusive interview with Tariq Ahmed, talks about the airport’s cargo operations, growth and its Cargo Village. He also highlighted the role of Canadian Border Security Agency (CBSA).

As Vancouver International Airport (IATA Code: YVR) builds on its strategy of becoming a worldclass connecting hub between Asia and the Americas, we have continued to experience record-breaking passenger traffic through 2016 and into 2017. The increased capacity and activity has resulted in positive growth and an increase to cargo activity at YVR. In addition to Air Canada’s many services to the Asia Pacific, YVR is the only airport in the Americas or Europe with services from six mainland China carriers. These connections contribute significantly to the positive growth we have seen in cargo tonnage processed through YVR. Additionally, integrators such as UPS, Canada Post/ Purolator, FedEx and DHL are all showing increased activities this year. We have also maintained great relationships with other transportation organisations, such as Translink, to ensure the transport network that links the airport with the wider city and border crossings is well maintained and planned for growth.

Give us an overview of YVR’s Cargo Village.

How do you ensure coordination between air carriers, freight forwarders, customs brokers, trucking and courier companies?

We continue to seek out innovative ways to improve our cargo operation with the support of our tenants, business partners and the logistics community.

In 2014, Vancouver Airport Authority established Vancouver Airport Property Management (VAPM) and acquired the buildings in the airport’s Cargo Village. We have set up a team in Cargo Village to manage and redevelop facilities and to work closely with our tenants and business partners to facilitate and grow our cargo gateway strategy. Through VAPM, we have established direct relationship with over 100 tenants in the logistics and cargo industry, which we previously didn’t have.

Have you implemented a single window interface for all the custom requirements of the shippers and freight forwarders?

What steps have you taken to cut down on the paper trail?

Customs requirements in Canada are controlled through Canadian Border Security Agency (CBSA).

CBSA have instituted an electronic data exchange system (EDI) to allow importers and exporters the option of filing their documentation electronically 24/7. This system allows CBSA to quickly process low-risk goods and works in conjunction with

Accelerated Commercial Release Operations Support System (ACROSS) and Customs Self Assessment (CSA) to further streamline the overall cargo approval at YVR and ports of entry.

Talking about the share of air cargo in Canada, what are the percentages of goods transported through air in terms of value and in terms of volume? What are the steps taken by the Canadian Government to boost air cargo in the country?

In 2016, YVR handled 281 tonnes of cargo, with the total value of goods estimated to be in excess of $30 billion annually. YVR and Canada are working towards removing physical, economic, policy and regulatory barriers in order to make YVR and the whole of the Asia Pacific gateway and corridor the most attractive choice for cargo movements on the west coast of North America.

“We have set up a team in Cargo Village to manage and redevelop facilities and to work closely with our tenants and business partners to facilitate and grow our cargo gateway strategy.”

Given the fact that small deviations in temperatures can have an impact on the quality of pharma products, how do you maintain a standard to keep a check in terms of risk-free supply chain systems for pharmaceuticals?

YVR has been working to reduced ramp time through initiatives such as developing a controlled Fin to Fin cargo transfer area and airlock systems. YVR’s Cargo Village is also located close to the airside gate to all aprons, which helps facilitate last minute deliveries to the cargo operators to minimise exposure. We have also seen a significant investment in coolers by the cargo operators and the use of Environtainers for extra sensitive products.

What unique technological advancements have you implemented at YVR for a seamless supply chain network? Outline some of your projects in the pipeline.

Recognising CBSA’s essential role in the flow of goods in and out of the Vancouver area, YVR is currently developing plans to expand and upgrade the CBSA facility at the airport to ensure our facilities meet the growing needs of the industry.

september 2017 - CargoConnect 75

Interview

“We look forward to an evercloser relationship with India�

Reportedly, the Ukraine-headquartered Antonov Airlines recently established a new office at London Stansted Airport, and has appointed a General Sales Agent in Japan, Australia and now in India.

Oleg Orlov, Vice President, Antonov Company, in this exclusive interview talks about how he sees India and how they plan to tap the potential of the uncharted territory of project cargo and much more.

- By Deepashree Banerjee

76 CargoConnect - september 2017

What is the current state of supply chain security of air cargo? Are there any new developments?

For airport to airport service such as ours, there is a high bar to begin with and there are ongoing efforts to raise standards even more. One example is the “ACC3” compliance requirement for cargo entering Europe.

These were designed for scheduled carriers on fixed routes, whereby specific airports outside Europe are properly vetted to ensure cargo securing, screening etc. reaches certain standards.

For an ad-hoc charter operator such as us that can fly into Europe from pretty much any airport, we meet such requirements by ensuring we have access (where necessary) to properly “RA3” qualified screening companies.

What, according to you, is the need of the hour to improve and advance air cargo sector across the globe to a higher level?

For us, one important issue is lead time for permits to certain countries. As a world-wide ad-hoc charter operator, we apply for permits for each flight. Whereas many countries can approve permits in a few days, there are some countries that can take one to two weeks. Continued efforts by those countries to reduce application processing time are always welcomed by us and our customers.

For certain cargoes requiring diplomatic channels, the lead time can be even longer.

So again, efforts to streamline this process are also welcomed by us.

Considering that perishables and temperature sensitive shipments pose a high risk of damages due to even the slightest deviations in temperature, how do you ensure a timely delivery of such products?

We do not normally carry perishables.

However, for other temperature sensitive cargoes, we can control the pressure and temperature inside our cargo cabin. We will always advise the customer in advance of the level of control we can provide. With proper pre-planning, we can usually find solutions for securing suitable environments for sensitive cargoes. Satellite movements are an excellent example whereby our engineers worked with the engineers of satellite companies to ensure satellite containers integrated properly with our aircraft. Detailed procedures exist now on moving such satellites, and this has become a significant part of AN-124 flying.

The world is moving towards IoT. Its applications are diverse and its opportunities are endless. So, how have you implemented IoT in order to better streamline your products and services?

At present, we are not focusing on IoT at large. However, Antonov Company has been undergoing some fundamental improvements. Antonov Company has 13,500 employees spread across four divisions (Design and Development, Production, Flight Test and Antonov Airlines). The political situation between Ukraine and Russia has meant that all divisions of Antonov Company have been working to replace Russian components with alternative components from Ukraine and world-wide. This includes components for new airframes such as AN132m etc. as well as components in the AN124 and AN-225. As the design authority, we are fortunate to have the know-how and technical data to expedite this transition in an efficient manner. We have carried out a 20-year life extension programme to our entire fleet of seven AN-124s and one AN-225.

“Antonov Airlines combined with Flywell Aviation is an excellent match for the Indian market. Flywell does have a long track record of moving project cargo by air using the AN-124 aircraft type.”

In addition to this, we are the only AN-124 operator to have increased the payload of the AN-124 from 120T to 150T. So far two of our AN-124s have had this payload upgrade and we are working to complete the upgrade on the remaining five airframes.

Antonov Airlines has appointed New Delhi based Flywell Aviation as its General Sales Agent (GSA) in India as part of its ongoing growth strategy.

How do you perceive this step to push the overall business of the company?

Where do you see the graph moving in the coming years?

Antonov Airlines combined with Flywell Aviation is an excellent match for the Indian market. Flywell does have a long track record of moving project cargo by air using the AN124 aircraft type. So, they bring a wealth of experience to local customers. Together, we can offer with confidence our service to

sectors such as aerospace and defence along with oil and gas, power-generation and other industrial sectors. For certain circumstances, the overall project cost can be lower by moving project cargo by air instead of sea.

Single pieces in the 120T to 200T range can be flown only using the Antonov Airlines fleet.

As a producer of a wide range of project cargo, India is an excellent market for the Antonov Airlines-Flywell team to pro-actively raise awareness of our capabilities. So, we do see the graph moving up.

Please share your thoughts on expanding the cargo arm of the airline in the years to come.

As has been widely publicised, Antonov Airlines, from January 1, 2017, left a joint venture and resumed independent worldwide air charter sales for our fleet. We currently offer one AN-225 (250T), seven AN-124s (120T to 150T) and one AN-22 (60T).

Antonov Airlines is head-quartered in Kyiv, Ukraine. We established Antonov Airlines’ UK Office at the start of this year and have since appointed GSAs in Japan, Australia and most recently India. We are planning to open offices this year in USA and far-east Asia.

We are very pleased with our progress so far. We have taken some incredible steps forward in a short period of time. Technically, our fleet has a secure, enhanced and extended future through the various programmes already mentioned. We are expanding our sales teams and representatives to meet growing demand. We will continue to assess options and expand our presence moving forwards.

Early this year, the first Deputy Prime Minister of Ukraine, Stepan Kubiv visited India and appreciated India’s strong support for the unity and the integrity of Ukraine and for not supporting annexation of Crimea by Russia. How do you think the sociopolitical factors influence the bilateral relations regarding the cargo handling between both the countries?

India and Ukraine have historically had an excellent relationship, and it is very good to see this continuing. With such a stable backdrop, all parties from our countries involved in air cargo can freely discuss ideas and the most cost-effective solutions. Antonov Airlines (and indeed Antonov Company as a whole) looks forward to an ever-closer relationship with our friends in India.

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Interview

Recently appointed at AAICLAS (AAI Cargo Logistics and Allied Services Company Limited), a subsidiary of Airport Authority of India incorporated in August 2016, Keku Bomi Gazder, Chief Executive Officer, AAICLAS, has immense experience in air cargo across various verticals in international airlines. In an exclusive conversation with Sheena Sachdeva, he further highlights the role of the subsidiary organisation and its prospective future plans.

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You have been a part of an important industr y which affects the whole economy not only domestic but i n t e r n a t i o n a l l y. W h a t s p e c i f i c transformations have guided the way for air cargo industry all these years?

Which areas still need improvement?

As the role of technology in air cargo management shifts from being a driver of efficiency to an enabler of fundamental innovation and disruption, digital platforms will play an increasingly transformative role in the global air cargo ecosystem.

In the era of digitalisation, the speed of change is so dramatic that you have to be aware about finding the right partners, with whom you are willing to collaborate. The shipment of goods via air is vital to the health of the world economy. A more efficient air cargo ecosystem could improve profitability for carriers but also enhance transparency and predictability across the supply chain.

The challenge is that the air cargo industry is still affected by outdated technology, poor quality data handling systems, e-way bill and limited information sharing. This impacts the financial performance of carriers, creates unnecessary complexity across the supply chain, and drives up costs for customers. It’s time for fundamental change.

What led to the formation of AAICLAS? What are the key takeaways for the industr y from this subsidiar y but independent arm of AAI? What challenges are being faced by the organisation and how are you planning to cope up with it?

The new entity has been set up with a vision to become one of the foremost integrated logistics network operators in the country with the primary focus on handling air cargo and allied services, air cargo handling and related value added services. The subsidiary, though fully owned by AAI, will be functionally and administratively independent. It will provide ground handling, documentation, transport services for carriage of bonded and non-bonded cargo and screening services and related value added services at airports in India and abroad.

The new company hopes to achieve a turnover of around INR 380 crore in the next financial year. The new entity will try to woo cargo users currently using the Railways and the road network as potential new clients, as no longer are the rail or road, the most economical.

According to some experts, air cargo infrastructure in India is woefully

inadequate and overloaded. What is your take on this? Do you believe the existing procedures have not yet been aligned with the technological progress which has become international best practices?

In order to nurture the growth of air cargo in the country, airport infrastructure is steadily improving. It is good that India is looking seriously at its cargo infrastructure upgrade.

Air cargo companies in India are hopeful that improvement in infrastructure and facilities will boost growth as the Indian market offers a good balance of import-export cargo. The biggest challenge for growth of air cargo is infrastructure.

At AAICLAS, we have already modernised the Chennai and Kolkata Air Cargo Terminals with state-of-the-art infrastructure and the similar facilities are also made available at improved stage at AAICLAS managed cargo terminals at Jaipur, Coimbatore, Amritsar, Lucknow, Varanasi, Indore, Lucknow, Mangalore and Trichy airports and the pace of development is continuous.

AAICLAS has a vision to become one of the foremost integrated logistics network operators in the country with the primary focus on handling air cargo and allied services and related value added services.

As the key person of AAICLAS, what have been your priorities in the organisation?

AAICLAS is a 100 per cent subsidiary of AAI. The vision of our Chairman, Shri Guruprasad Mohapatra, IAS and that of the Board at AAICLAS is very clear. My priority will be to focus on cargo handling, security and documentation handling, supply chain, transshipment facility provider, Airport Free Zones Developer and project logistics. We would also work as multi-modal interface linking air, surface and water transport as well as connecting to hinterland points in India, thus, becoming the largest networked and fastest growing logistics solution provider in India. We are going to benchmark ourselves on best practices worldwide and on the Ease of Doing Business index. We are at 2017 and now we need to plan as where we want to reach by 2022. This five-year vision document with details on our verticals, a blueprint on how and where the company will go forward along with timelines is being currently worked on.

What strategies are you adopting at AAICLAS for its marketing? Further, it is heard that the organisation shall seek investments across the globe.

How are you planning that?

We will be heavily investing on our facilities and training and development of manpower.

Although the figures cannot be disclosed at this moment, we will make a significant investment. A private organisation will do business where it is profitable. But, it is our duty as a government agency to facilitate the building of infrastructure even where there is less commercial viability keeping in mind its national obligations.

The company would enter into strategic partnerships based on business demand at airports within the country and abroad. For the first time, we will be open to investment outside India. We will invest in other airports and facilities worldwide. Our collective expertise and knowledge in managing domestic facilities for over five decades gives us a strong edge over other operators.

Which specific initiatives are already functional and which are in pipeline?

AAICLAS, in accordance to the road-map prepared by AAI for the development of common user Domestic Cargo Terminals (CUDCTs) at 24 AAI airports, have been taking forward the air cargo movements at AAI airports in a phased manner and commissioned the cargo facilities during the FY 2016-17 at the following airports:Domestic Cargo Facilities: Ranchi, Goa and Srinagar (interim) Airports.

International Cargo Facilities: Indore and Bhubaneswar Airports.

International Courier Facilities: Kolkata and Chennai Airports AAICLAS is planning to launch CUDCTs during the FY 2017-18 at Pune, Guwahati, Tirupati, Lucknow, Trivandrum, Varanasi, Amritsar and Srinagar and Vijayawada. We are also planning to undertake international cargo handling operations at Pune (commissioned on 29.06.2017), Jaipur, Aurangabad, Vizag, Madurai and Trichy (Intl. Courier operations).

AAICLAS has taken the lead in the Ministry of Civil Aviation’s initiative of forming a National Air Cargo Community System (ACS), a single window system for uniform interface between all the stakeholders of air cargo community using international standards. A common information technology platform will be there to connect various stakeholders to streamline country’s air cargo industry on one common platform.

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Interview

Leaving behind old practices is a need of the hour Glyn Hughes has been associated with air cargo for over 30 years now. He started his career with British Caledonian in the UK. Notably, he joined International Air Transport Association (IATA) in 1991. In June 2014, he was appointed as IATA’s Global Head of Cargo, and has been entrusted with the responsibility to ensure IATA delivers on the agenda agreed by the Cargo Committee to support the Air Cargo industry.

In an exclusive interview with Tariq Ahmed, he talks about his journey and shares valuable insights about the global Air Cargo Industry.

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You joined IATA back in 1991 and contributed towards enhancing and expanding the Cargo Accounts Settlement Service, growing it from 35 to nearly 100 operations. Now, you are the Global Head of Cargo. How has been the journey so far?

Amazing is the best word I could use to describe the time I have had in this great industry since I joined back in the late 1980s. Over the past 30 years, we have seen the growth of globalisation and off shore manufacturing of which air cargo has been a critical enabler.

We have seen new aircraft, new models, and growth, sadly though we have also seen tragedy, contraction and familiar names of pioneering people and organisations disappear. We have seen air cargo at its best, saving lives, delivering humanitarian relief and saving Christmas supporting SantaClaus in his global logistical issues. We see air cargo enabling Valentine’s Day and ensuring the Formula One global spectacle runs smoothly. Some commodities transported when I joined the industry are now confined to museums replaced by modern high tech phones and gadgets. So change has been an ever present state.

However, throughout this entire journey, there have been a few other ever present factors… the incredible ability for the industry to adapt. [sic.] Air Cargo is over 100 years old and yet can still run faster and think quicker than ever before. But it’s also important to note that whatever technology comes into the industry, it’s still about the people. I have been incredibly fortunate to have encountered some of the greatest innovators, pioneers and passionate experts from across the entire supply chain.

Recently, IATA released data for global air freight markets showing that demand grew by 10.4 per cent in the first-half of 2017 compared to the first-half of 2016.

To what would you like to attribute this burgeoning growth in demand?

Yes, demand is growing at a faster pace than at any time since the Global Financial Crisis. That’s great news after many years of stagnation. This sustained growth in air freight demand is consistent with an improvement in global trade, with new global export orders remaining close to a six-year high.

What, according to you, are the major constraints that the air cargo industry is facing in the current times?

Whilst I have mentioned previously about the

great ability of the air cargo industry to adapt to changing realities, today’s progressive global economic picture requires that pace of adaption to accelerate even more.

Technology can no longer be looked at as something nice to have as a support tool.

It has to be embraced as a critical enabler of business success. Digitalised information sharing, operational efficiency, customer transparency and service quality will need to be the cornerstones upon which future industry success is built. So the question we all have to ask ourselves is are we prepared to look at what we have done in the past but in a completely different way now, as the world in which we live has changed and will continue to change rapidly.

So I see the biggest challenge is breaking free from past practices.

How do you foresee the contribution of the Indian subcontinent in the coming years in terms of global air trade?

Countries that have better air connections also engage in more trade. According to a recent IATA study, a 1 per cent increase in air cargo

“Technology can no longer be looked at as something nice to have as a support tool. It has to be embraced as a critical enabler of business success.” connectivity is associated with a 6.3 per cent increase in trade. But good air connections explain only part of the picture. Efficient customs processes also play an important role in supporting better trade performance.

To measure effectiveness of customs processes, IATA developed the Air Trade Facilitation Index (ATFI). The index combines air cargo specific elements of the customs capabilities database of the Global Express Association and the trade facilitation indicators of the OECD. To evaluate the enabling policy environment, it looks at ratification of relevant international conventions, such as MC99 and WTO TFA. The study found that a 1 per cent point increase in the ATFI is associated with a 2.3 per cent increase in the value of trade as well as higher integration into global value chains.

India is ranked 51st out of 123 countries assessed on the ATFI. The ATFI reveals that there are two mutually reinforcing areas of improvement that would improve India’s performance in customs processes. One would

be to improve on its ranking in the customs capabilities database of the Global Express Association. This can be done by strengthening the ability of Customs to accept and process data electronically, streamline inspections and allow for full time (24/7) automated processing at the main customs ports. The other is to move swiftly with full implementation of the air cargo related provisions of the Bali Trade Facilitation agreement, including implementing “single window” processing, putting in place processes to approve release of shipments in advance of their actual arrival and facilitation of electronic processing, through eAWB and eFreight.

India’s National Civil Aviation Policy of 2016 recognises the critical role that air cargo plays in realising the ambitious agenda of the “Make in India” campaign to support India to move to higher value added trade and integrate into global value chains. India’s air cargo and Customs infrastructure modernisation program offers an opportunity to unlock exports in higher value added sectors as well as enable Indian based manufacturers to source their production components more efficiently, making India a more attractive place for business. The combination of well-developed air cargo connections and good quality Customs services are key elements for strengthening India’s trade competitiveness.

IATA’s 73rd Annual General Meeting adopted a resolution to accelerate the modernisation and transformation of the air cargo industry. Kindly shed some light onto this resolution.

The resolution was a commitment by the air cargo industry to accelerate the modernisation and transformation of the industry. Specifically by digitising the supply chain to improve efficiency, adopting modern and harmonised standards to ensure safe, secure and efficient operations, using enhanced technology to provide customers with responsive services based on intelligent systems able to selfmonitor and harnessing the power of data to drive quality improvements.

The resolution also called on governments to support the industry’s modernisation process by rapidly implementing the World Trade Organisation’s (WTO’s) Trade Facilitation Agreement (TFA) so that its substantial benefits such as harmonised rules for expediting the movement, release and clearance of goods crossing borders and the acceptance of e-payments and electronic documentation can be realised.

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Interview

Emphasising the Importance of Air Cargo and Forging Alliances 82 CargoConnect - september 2017

What are the main challenges that the air cargo community is facing globally? What steps have been taken to overcome those challenges?

with E-Freight along with other electronic elements among the people involved in trade. Where has the process reached till date?

One of the main issues for the air cargo industry is that it’s lagging behind its passenger counterpart. It’s especially noticeable in the documentation and digitisation fields. One of the key reasons, in my view, is that at the level of the top decision-makers the air cargo has never become a priority item and it’s still unlikely to attract much attention. To rectify these issues, we need to find a way to increase the level of awareness about the usefulness and importance of the air With The TIACA’s cargo amongst those who Executive Summit decide on strategy of the 2017 around enterprises. the corner, And, it’s not only within Vladimir Zubkov, the air cargo industry.

Secretary The governmental and General, TIACA economic development in an exclusive institutions need to know interview with in the first place how much Sheena Sachdeva the trade – local, regional talks about the and global-depends on the challenges faced movement of air cargo. In and strategies the countries where this opted by the trade awareness is high, the body to further infrastructure projects strengthen the air are properly financed and cargo community implemented. One of the globally. Former most recent examples is the introduction of the new Vice president air cargo terminal in Addis of Volga-Dnepr Ababa, Ethiopia. I was Group, Zubkov, there because of the two has been a back-to-back conferences member of which were preceding TIACA’s board the inauguration of the since 2011 and terminal, and I witnessed has more than 20 the synergy between the years’ experience Ethiopian Airlines, the Civil at ICAO. Aviation Authorities, the Ministry of Transport and the users. I believe that was the underlying reason for success.

The scale and the quality of this air cargo terminal is such that any city and any country in the world would be proud to have this most modern piece of know-how and engineering.

TIACA has been sharing examples of good practices and good management through its publications, conferences and direct contacts with the civil aviation authorities, with international organisations and other interested parties.

It’s not only the people involved in trade who need to be associated with these themes. My most recent contacts have been with those who represent very important integral parts of the air cargo supply chain: Customs and the security officials. I will mention, just as an example, two events where the E-Commerce and E-Freight had been scrutinised and practical solutions had been reviewed. The first one was the WCO IT conference in Tbilisi, Georgia in early June and the second one was the WCA global E-Commerce conference in Miami in early July.

Both of them have demonstrated several trends which are going to be very important for advancement of E-Commerce and E-Freight, like movement from a single reference node (backbone) to a distributed way of working. This means they are contemplating both a platform (Backbone) and fully distributed way (Blockchain type) and interestingly, they agree conceptually that there is room for both and the right tools can facilitate both.

My discussions with the security officials in several country administrations show their interest in working together with the industry. I believe that we can make progress much faster if we meet in a more organised way and more frequently with the objective of resolving the current problems.

We are going to have a candid discussion at our Executive Summit, from October 18-October 20 this year in Miami with both Security and Customs representatives, and the E-Commerce with E-Freight will take its rightful place in the discussions. And, we will try to come to some practical solutions.

While joining,you had a vision to embrace the theme of E-Commerce

In 2012, TIACA’s membership fees doubled and five per cent increase took place in 2016 as well. In the light of this statement, membership fees of TIACA have been increasing through the years. Shed some light into the matter.

Yes, TIACA did increase its annual membership dues for 2013 for the first time in over 20 years. Many organisations have to periodically step up their resources to support the important agenda and for new developments. TIACA’s unique value proposition – serving as the neutral platform for all parts of the industry to address policy issues, network and share knowledge

– is valued by regulators and industry stakeholders. Our growing success has also raised expectations from our members, media, and the industry.

The increase then allowed TIACA to continue to build more awareness of the importance of air cargo and forging closer relationships with government officials and regulatory bodies, to have a higher profile and to engage in all the pressing issues that impact our industry (i.e. security, E-Commerce, Customs reform and the environment etc).

What led to the theme of TIACA’s Executive Summit 2017 “Future Proofing Air Cargo”?

The term “Future Proofing” is widely used in logistics and business. Future-proofing is the process of anticipating the future and developing methods of minimising the effects of shocks and stresses on future events.

Future-proofing is used in industries such as electronics, medical industry, industrial design and more recently, in design for

“The governmental and economic development institutions need to know in the first place how much the trade– local, regional and global- depends on the movement of air cargo.” climate change. I think the best explanation lies in the Summit programme which you can find on TIACA’s website and also through the updates which we send weekly, and sometimes even more often.

ACF 2016 had garnered a lot of appreciation last year. What are your further plans for ACF 2018 to be held at Toronto?

We will be working with Multimodal Americas and CIFFA (Canadian International Freight Forwarder Association) for our 2018 ACF. Each group brings together a dynamic and crucial part of the supply chain.

Multimodal Americas brings in the ocean carriers, rail lines and additional trucking to the expo floor. CIFFA will be celebrating their 70th anniversary with a conference of their own on-site bringing in freight forwarders from all across Canada. We have been talking to the relevant Canadian associations and our traditional and new global partners. We have a strong intention to make the 2018 ACF further success for TIACA.

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Interview

Air India SATS Airport Services Pvt Ltd (AISATS) recently launched a mobile app to facilitate the cargo tracking process at AISATS Air Freight Terminal and at AISATS COOLPORT, located at Kempegowda International Airport (KIA), Bengaluru. In an exclusive interview, Mike Chew, CEO, AISATS talks about the growing importance of technology in the business.

-By Deepashree Banerjee

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Please throw some light on the process of cargo handling by AISATS at Kempegowda International Airport.

Air India SATS Airport Services Private Limited, provides world-class ground handling and cargo handling services at Kempegowda International Airport, Bengaluru. For its cargo handling services, AISATS has an award-winning Air Freight Terminal and India’s first integrated onairport perishable cargo handling centre - the AISATS COOLPORT. The Air Freight Terminal is TAPA (Transport Asset Protection Association) certified and the AISATS COOLPORT is GDP (Good Distribution Practices) and HACCP (Hazard Analysis and Critical Control Points) certified. Both the cargo facilities are IATA e-freight compliant.

For the ease of cargo movement, AISATS has in-house regulatory support at the Air Freight Terminal such as Customs, Document Management Services for Customs, Central Industrial Security Force (CISF), Office of Commercial Taxes, Drug Controller, Plant Quarantine, Animal Quarantine, Punjab National Bank and a Visvesvaraya Trade Promotion Centre (VTPC) counter (for issuing certificates of origin).

Export cargo handling starts with cargo acceptance along with its supporting documents. The cargo is weighed using calibrated flushed weighing scales and mechanised pallet-weighing scales available at the truck docks. Any discrepancies in weight and dimensions other than those declared in the supporting documents are highlighted to the concerned agents and airlines so that the requisite amendments can be made before the consignment is actually accepted.

After these checks, the cargo is stored in a non-sterile area of the Air Freight Terminal. In the cargo terminal, AISATS has technologically advanced equipments such as ASRS (Automated Storage Retrieval System), which works at high speeds to enable delivery/ acceptance of cargo within 45 seconds, and the VNA (Very Narrow Aisle), which can store and retrieve cargo vertically up to a height of 17 meters. On receiving the Let Export Order (LEO) from the Customs department, the cargo is screened and is transferred to the sterile area of the warehouse for build-up and for loading into ULDs. Additionally, Elevated Transfer Vehicles are used to actively track all the ULDs in the ETV queue lanes. These lanes have a capacity to store 360 ULDs. For imports, cargo is brought into the warehouse and the consignment details are cross verified with the import supporting documents/Freight Forwarding Message

(FFM) received into the system. The shipments are then stored into the ASRS and VNA of the imports section. Once the Custom clearance formalities are completed and the Customs department’s authorised bill-of-entry and outof-charge order are submitted along with the airline’s delivery order, the cargo is then released to the agents/consignee.

Technology is going to bring a revolution in the air cargo industry. How do you perceive the role of technology in the business?

What are the green initiatives taken by the AISATS cargo handling unit for an efficient and smoother cargo operations?

The Indian air freight market is expanding at a rapid pace and, with increase in international trade, is expected to reach 2.8 million tons by 2018. This projected increase underscores the need to revolutionise the cargo handling process through technology and digitisation.

The air cargo industry is in the process of reinventing itself and is moving towards becoming more efficient, cost effective and

“The Indian air freight market is expanding at a rapid pace and, with increase in international trade, is expected to reach 2.8 million tons by 2018.” transparent. It is imperative that cargo handlers adapt the latest technology to provide its customers with access to real-time information on cargo handled. This will enable customers to undertake long-term planning confidently and also respond appropriately to emerging conditions in a timely manner.

AISATS is also a strong advocate of green technology and is the first IATA e-Freight compliant Air Freight Terminal in India. This paperless cargo process enables the electronic exchange of data and messages, and thus brings cost effectiveness and operational efficiency to the cargo handling process by facilitating faster cargo processing and online shipment tracking.

Some of the prime features of this technology are e-Customs, e-Booking and e-Air Way Bill (AWB).

AISATS is the only air cargo operator in Bengaluru to develop a free on-the-go app to offer its customers cargo-tracking solutions. How do you believe the mobile app named AISATS Cargo is going to facilitate the cargo tracking process at AISATS Air Freight Terminal and at AISATS COOLPORT, located at Kempegowda

International Airport (KIA), Bengaluru?

The AISATS Cargo app has been developed with the aim of providing a hassle-free tracking mechanism for the cargo handled at AISATS Air Freight Terminal and at AISATS COOLPORT located at Kempegowda International Airport, Bengaluru. It picks up shipment data from COSYS and furnishes comprehensive consignment details to its users.

The app simplifies the tracking process by letting the user input the AWB number and retrieve real-time information on the shipment such as date and time of uplift/arrival, number of pieces, weight and the approval status of the delivery order through its e-DO feature.

The app has been introduced with the goal of increasing transparency in the supply chain, and to enable better time management by furnishing extensive details of the cargo at any point of time. The stakeholders involved can plan and relay all the relevant information to other members in the supply chain by accessing the app instead of checking multiple sources, thus making the process simpler and quicker.

Please brief us on the types of cargo handled by AISATS. Does that include priority cargo, odd dimensional cargo, and dense cargo as well?

AISATS possesses the requisite know-how and capability to handle all types of cargo including general cargo, perishable cargo, pharmaceutical and bio-technology cargo, heavy cargo such as machinery and helicopter, mail and courier cargo, express cargo, transshipment cargo as well as cargo requiring special attention such as live animals, dangerous goods and valuable cargo. It is equipped with dedicated infrastructure to fulfill the specific handling requirements for each type of cargo: two Dangerous Goods rooms covering 350 sq ft for Special Cargo and three strong rooms spread over 700 sq ft for Valuable Cargo.

In addition to this, AISATS has also developed India’s first integrated on-airport perishable handling centre, the AISATS COOLPORT, solely dedicated to handle perishable cargo such as fruits, vegetables, pharmaceuticals, poultry, seafood etc. This comprehensive facility is spread over an area of 11,000 sq m and has the ability to handle 40,000 tons of temperature-sensitive cargo per annum. This facility houses 17 dedicated cold storage rooms with temperatures ranging from -250C to 250C to cater to a wide variety of perishable products and has a Plant Quarantine Inspection and Certification facility, Drug Controller Lab Testing facility and in-house Custom Clearances.

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Shippers Speak

“Our Vision is to be Partners in Sustainable Business Solutions” How big is the Indian chemical industry and what are the trends in logistics and supply chain for your business?

Currently, the volume of traffic is one of the key factors causing the highest amount of greenhouse gas (GHG) emissions.

The big challenge for the industry is to handle the increasing amount of material flow and to reduce the GHG emissions and consumption of resources at the same time.”

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Dow India has a presence in technology development and application research in areas such as infrastructure, transportation, energy, consumer, lifestyle and agriculture.

Headquartered in Mumbai, the company has recently set-up an office in Dhaka, Bangladesh in order to enhance the presence in the Indian sub-continent as well. Alok Gautam, Country Logistics and Supply Chain Leader, Dow Chemical International Pvt Ltd at Dow India talks to Deepashree Banerjee about the best practices adopted by the organisation towards creating a sustainable seamless supply chain process.

Over the past decade, the major growth of global chemical industry (~ 3.4 per cent) has been driven

by Asia Pacific region (~7 per cent), led by SouthEast Asia. The Indian chemical industry too has contributed to the trend and is growing at a CAGR of seven per cent for the last five years. According to industry reports, the segment is likely to reach USD190 billion by FY18.

The key trends driving the logistics and supplychain for the industry are changing demand patterns and trade trends within countries, increase in logistics costs, and focus on Environment, Health and Safety (EHS). For example, imports for liquid chemicals are gradually coming from the whole of West Asia and now we have a focus on South-East Asia. The chemical manufacturing and trade activities are spread across the country today. This has given rise to the development of ports on the East-Coast of the country like Vizag, Paradip and Cuddalore.

Ever-improving road infrastructure, use of railroads to transport chemicals and better awareness and implementation of safety bestpractices in movement of hazardous goods are good signs for the industry. We also see in recent years a trend towards significant investments in high-end vehicles for road transportation by Logistics Service Partners (LSPs) to chemical companies. This is really helping in raising the bar on safety and sustainability of operations.

How do you ensure smooth and safe transportation of hazardous chemicals? Tell us about the best practices adopted by your organisation towards creating sustainable processes.

Procurement, storage and transportation of chemicals and dangerous goods rolled out in line with SOPs. Right from loading points, en-route transportation to unloading at customer locations, we have checks and balances across the entire chain. For hazardous goods specifically, we conduct Distribution Risk Review (DRR) and the entire route is mapped by experts for any new location. It also includes assessment of unloading facility and, if required, includes training to personnel at different nodes.

providers such as warehouse operators, packed and bulk transporters and customs house agent and ensure alignment to the company standards with respect to safety, pollution and environment.

This mutually beneficial initiative is designed to promote business growth and encourage sustainability excellence in DCIPL’s supply chain partners. It provides a specific framework to recognise our partners who exhibit exceptional performance.

Each year, through fair and transparent quarterly and yearly evaluations (which are based on pre-set measurements that are

We also have imposed restrictions on night driving and work with our partners to ensure that drivers are adequately rested on long journeys. GPS tracking of the vehicles is done by LSPs and reports are shared on daily basis to ensure their safe movement on the road.

To counter the menace of pilferage on bulk movement, we are taking steps to share properties of chemicals being transported at loading stations, ensuring the info sheets are with drivers. Today, Dow India transports all hazardous material only in ISO tanks, reducing safety risk on the road

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considerably. We were the first to introduce ADR (formally, the European Agreement concerning the International Carriage of Dangerous Goods by Road) in the country for hazardous chemicals transportation.

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

Yes, over the last five years, the quantum of our bulk movement has increased almost 2.5 times. We have significantly ramped-up our logistics infrastructure to take products seamlessly into the market. Our process safety programme is focused on the wellbeing of our community, employees and the production systems and we make use of only leading systems and technologies for safe operation. Our vision is to be partners in sustainable business solutions.

Besides chalking-out the supply chain models, enhancing warehouses capacities, terminals, storage-tanks and lining-up C&F agents, identifying hub locations, we have launched the Dow India S4TAR programme in 2013, to improve performance of service

communicated to our partners), the S4TAR awards is presented to the Best Carrier, Best Warehouse and Best Freight Forwarding Service. As we progress, the performance goals will be raised year by year to keep pace with the highest standards in the industry.

By sharing the best practices with our supply chain partners, we hope to achieve performance and sustainability excellence.

At Dow India, we are proud to be one of the leading companies for Responsible Care® standard in chemical industry and supporting initiatives such as Nicer Globe® that aim to reform the transportation of chemicals in the country.

Can you talk to us about the Nicer Globe initiative?

Nicer Globe is an initiative on transportation safety under the Responsible Care® by Indian Chemical Council. This voluntary chemical community initiative is fostering collaboration on transport distribution safety, emergency response and transport security. It also routinely evaluates and improves transport safety capabilities while

sharing the best-practices in the industry.

Why is reducing carbon footprint in chemical supply chain important for sustainable business?

Nowadays, the scale of operations of chemical plants is becoming bigger. This means that globally, the demand is met from fewer plants around the world. This has obviously led to rapid increase in the amount of material flow worldwide and therefore, the volume of traffic as well.

Currently, the volume of traffic is one of the key factors causing the highest amount of greenhouse gas (GHG) emissions. The big challenge of the industry is to handle the increasing amount of material flow and to reduce the GHG emissions and consumption of resources at the same time. The regulations around emissions are becoming stringent day by day and it has become very important for companies to find new ways to remain compliant and cost effective to make their business more sustainable.

While maintaining the upmost standards for responsiveness towards avoiding any spillage or accidents at Dow India, we are also very serious about reducing our carbon foot print. For example, we use multi-modal operations i.e. Road-Rail-Road where the first and the last link in the supply chain

Over the last five years, the quantum of our bulk movement has increased almost 2.5 times. We have significantly ramped-up our logistics infrastructure to take products seamlessly into the market. is road and majority of the movement happens through rail. This leads to lesser GHG emissions as compared to direct road movements.

Another initiative for reducing the GHG emission is use of bigger capacity vehicles.

With infrastructure development and widened roads, many of the service providers have started providing higher capacity vehicles and this helps in reducing the number of deliveries. Earlier the deliveries used to happen in 9MT truck load for packed cargo and now-a-days the capacity has increased to 16MT and soon this will increase to 21MT as we have started using them at multiple locations.

september 2017 - CargoConnect 87

Shippers Speak

Close Coordination Is Key How important is the role of logistics for the smartphone manufacturing industry?

Logistics and distribution play a crucial role from operations perspective in the smartphone manufacturing industry. Our end-customers are spread across all metros, tier I and tier II cities besides small towns and villages across India. Our efficient logistics and distribution network helps us to make our products available through 1,200 plus distributors and 1.2 lakh retail outlets to our customers across the country. Hence, a well-organised supply chain and logistics operations are essential to us to ensure a seamless customer experience.

According to a Cyber Media Research (CMR) study last year, LAVA is one of the top mobile handset brands used in India. It has become one of the more popular Indian mobile handset brands in Tamil Nadu, Gujarat, Rajasthan and J&K, reveals the study. The company has an aggressive plan towards strengthening its manufacturing in India to cater to both domestic and international markets.

Nikhil Jain, Chief Strategy Officer, Lava International Limited talks to Deepashree Banerjee about their seamless supply chain, present challenges and much more. Here are the excerpts:

88 CargoConnect - september 2017

Most of our logistics and last-mile delivery is managed by around 50 3PL partners working with us as per standard operating procedure. We ensure simple processes for each activity so that each person’s role is clearly defined.�

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

Majority of our semi-knocked kits (SKDs) are procured from vendors in India and China for manufacturing finished goods at our facility in Noida. Close coordination with suppliers is done by sharing a few months rolling forecast with a sequence of activities. We perform adequate quality checks before SKDs are sent to India and we also engage with air and sea freight forwarders for imports.

The finished goods are stored at a central warehouse and then moved to various locations across the country. We have 32 fulfillment centres which disburse stocks to distributors. The role of all teams in the supply chain is clearly defined. Seamless coordination optimises stock position.

What strategies do you adopt to ensure adequate supplies of products?

Our team measures turnaround time of various activities like imports from China, unloading a vehicle at the central warehouse, delivery to distributors etc. We use an Enterprise Resource Planning (ERP) tool for inventory management and scan International Mobile Equipment Identity (IMEI) to track mobile handsets. We regularly monitor inventory levels at various locations.

How do you manage back-end supply?

We manage our back-end supply internally.

Our team based in China ensures timely and adequate supply of SKD kits.

How much of lo gis tic s wor k is outsourced?

Most of our logistics and last-mile delivery is managed by around 50 3PL partners working with us as per standard operating procedure.

We ensure simple processes for each activity so that each person’s role is clearly defined.

What are the primary challenges faced by you and how do you tackle those challenges?

Delay in shipments, theft and damage to products are some of the common challenges faced during the transit of products. To avoid such instances, we engage logistics providers with a strong local network and support.

We retain partners which perform well on our metrics. We try to increase inventories at fulfillment centres to avoid stock-out situations. Goods in transit are tracked till a shipment reaches its destination.

How do you manage your supply chain during peak times such as festivals and promotional sales?

In a business model like ours, the key is planning in advance to ensure that there is no shortage of supply if there is a surge in demand. We plan for inventories well in advance and surging sales are matched with stocks in the pipeline. We use data analytics to forecast demand from certain regions or during festivals and promotional events.

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guest column

Blockchain in the Supply Chain Industry

B

lockchain is a distributed database that holds records of digital data or events in a way that makes them tamper-resistant. While many users may access, inspect, or add to the data, they can’t change or delete it. The original information stays put, leaving a permanent and public information trail, or chain, of transactions.

The structure of these ledgers are decentralised and highly secure, which can’t be edited of changed. It is said that blockchain are not hackable and the cryptography-based and immutable nature of the transactions makes rare probability of compromise with the ledger. In the complete chain no single stakeholder can keep the complete ownership of ledger.

In supply chain, every time a product changes hands from raw material to the final products in the hands of end consumer, which can span across the globe for a single product. Its very hard to track the complete chain, currently there are very limited ways to track any illicit activity with the supply chain. For a counterfeit product customer cant track history of product and even manufacturer face a lot of constraint in investigation. The transaction could be documented, creating a permanent history of a product, from manufacture to sale through the block chain technology. In blockchain a record of every transaction would be recordrd which can identify the parties involved, as well as the date, location, quality, price and state of the product and any other relevant information. This could dramatically reduce time delays, added costs, and human error that plague transactions today. Using digital records and blockchain can reduce costs as well.

This technology can do multiple task as follow • Recording the quantity and transfer of assets - like pallets, containers, etc. - as they move between supply chain nodes from one point to other • Tracking purchase orders, changes, dispatch, receipts, shipment notifications, or other trade-related documents • Assigning or verifying certifications or certain properties of physical products; • Linking physical goods to serial numbers or IOT, bar codes, digital tags like RFID, etc.

• Sharing information about manufacturing process, assembly,

90 CargoConnect - september 2017

By Vikash Khatri

delivery, and maintenance of products with various stakeholders Global tech giant IBM has already rolled out a service for complex supply chain domain, which allows customers to test blockchains in a secure cloud Global shipping line Maersk and IBM are developing blockchain solution built on the Hyperledger Fabric for logistics industry. Which can manage and track the trails of tens of millions of containers across the globe by digitising the supply chain process to enhance transparency and the highly secure sharing of information among trading partners.

Blockchain technology is showing great benefits for supply chain. These benefits are as follows: • Transparancy: In blockchain each and every touch point is recorded, which removes opaque nature of supply chain and increases the trust.

• Accountability and integrity: Since every touch point and every activity is recorded on real time basis and can’t be altered, It brings accountability with each stakeholder engaged in transactions.

• Scalability: In any block chain environment, any number of participants can access the process. In the process every node should be defined for access.

• Cost and time reduction: Blockchains can greatly reduce transaction fees and transaction time. Multiple channels, multiple stakholder can manage workflow on same ledger, without any ambiguity or coordination challenge.

• Claim management: Claims are direct cost for supply chain companies, in case of any service failure. Blockchain can be helpful in root cause analysis of service failure and avoid repetition.

In India more than a dozen startups or tech companies are working on this technology, most of them are started in fintech domain. Some of the players like Psi Phi Global or Sofocle have started offering services in supply chain domain.

In a nutshell we can predict that blockchain will become a new operating system of supply chain in coming days. At this moment there is no packaged blockchain solutions for supply chain use, this might take three to five years to be off the shelf.

(The writer is the Founder of Aviral Consulting Pvt Ltd)

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news

Indian logistics industry to experience higher investments

Govt plans setting up of mega bulk drug parks

The Government of India’s strong emphasis on manufacturing and initiatives such as “Make in India” is boosting domestic production, which is bolstering the logistics industry. Logistics companies are making concerted efforts to keep pace with this growth in demand by digitising their solutions and offering online freight services. These services will provide visibility across the supply chain and transform it into an organised industry. Some of the advanced technologies adopted include automated storage and retrieval systems (ASRS) in warehouse and transportation, radio frequency identification (RFID) in place of bar codes, and GPS for real-time tracking.

“In addition to riding the digital wave, logistics companies in India are strategising for the transition from indirect taxation to goods and service tax (GST). The simplified tax structure will benefit the warehousing industry and reduce logistics costs by upto 2.5 per cent,” said Senthil Kumar Subbiah, Research Analyst, Supply Chain and Logistics Transformation Practice, Frost & Sullivan. “This tax reform, along with land and labor market reforms, will improve the efficiency of both transportation and freight forwarding,” he added.

In a bid to revive India’s active pharmaceutical ingredient (API) and bulk drug market, the government is contemplating restrictions on the import of APIs and has suggested setting up of mega bulk drug parks, a move that is expected to boost domestic production.

In the draft pharmaceutical policy framed by the department of pharmaceuticals under the ministry of chemicals and fertilisers, the centre has proposed “peak customs duty” for all APIs that can be indigenously manufactured. Bulk drugs or APIs are the active raw materials used in a drug that give it the therapeutic effect.

“All active pharmaceutical ingredients (APIs) which can be indigenously manufactured should be imported at peak customs duty,” said the draft policy.

The government has also proposed that formulations produced from indigenous API and its intermediates (the raw material for manufacturing API) be given preference in government procurements. The move gains significance given India’s dependence on China for bulk drugs. More than 75 per cent of India’s bulk drug imports come from China, according to the department of pharmaceuticals. “It has a direct bearing on the drug security of the nation as a whole,” said the draft.

News

TVS Logistics targets $1 bn revenues from India operation

Amazon is all set ahead of the festive season

Buoyant by the opportunities postGST implementation, TVS Logistics Services, the Indian multinational 3PL logistics service provider operates in nearly 14 countries globally. The company has announced its aggressive growth plans and targeting $1 billion in revenues over the next 3 years from the Indian markets.

But its India business will not contribute more than 40 percent as the company’s overseas business will continue to grow. Going forward TVS Logistics expects the overseas business to grow organically by 10-15 per cent while the India business is likely to grow by 35-40 per cent.

Speaking of the opportunities in Indian, R Dinesh, MD, TVS Logistics Services said, “With our global revenues already crossing the $1 billion mark, our focus now is firmly on India operation. We have been growing by CAGR of 30 per cent over the last five years and aims higher growth over the next three years to achieve our target of $1 billion revenues from our local operations.” He further added, “Due to GST, we now can become supply chain partner to our customers. With many capabilities available to us globally which can bring them to India to leverage our domestic business.”

Amazon is gearing up ahead of the festive season in India. As per the filings with the Registrar of Companies, Amazon Transportation Services Pvt Ltd, the logistics arm of e-commerce firm Amazon India, is set to receive `400 crore ($62.75 million). The identity of the investor remains undisclosed. However, Amazon India typically does not rely on external sources for funding.

According to reports, the decision to raise this sum, which will be used to expand business operations, was taken via a board resolution on July 7. It was accompanied by an increase in the company’s authorised share capital from `475 crore to `800 crore.

Previous RoC filings show that Amazon’s logistics arm received `207 crore in March this year and `67 crore in September 2016. Amazon is also adding 14 new fulfilment centres in India this year to expand its storage capacity.

news

Indian Railways develops High Capacity Parcel Vans

India to put Chabahar rail link on fast track

Keeping in view the demand of full vehicle load perishable traffic and the challenges being faced in transporting perishable goods, Indian Railways has developed High Capacity Parcel Vans (VPs) with a capacity of 23 Tonnes. These vans are attached to passenger carrying trains subject to availability of room in train and operational feasibility. To facilitate transportation of milk through Rail, specially designed High Capacity Milk Tankers having capacity of 44.66 KL are run as Special trains. At present 3 milk tanker trains are being run of which 2 trains are run by Gujarat Corporative Milk Marketing Federation Ltd (GCMMFL) from Palanpur to Bhim Sen and other by Mother Dairy from Daund to Baraut, Ministry of Railways said in a statement. In addition to this, Indian Railways also run special parcel train consisting of High Capacity Parcel Vans for transportation of fruits in bulk like Mango, Banana, Orange etc. on demand, on a fixed path between specific origin-destination stations.

Railways supply rakes for transportation of fruits on indent basis.

Questioning the seriousness of India’s intent, Iran has sought a firm commitment from New Delhi that the construction of the $1.6 billion rail link from Chabahar port will be taken up expeditiously, two people aware of the development said.

India has promised to remove hurdles to fast track the project, which will connect the port on the southern coast of the Gulf nation to the eastern city of Zahedan on the border with Afghanistan.

The issue came up for discussion during the visit of minister for road transport and highways and shipping Nitin Gadkari to Iran for the swearing-in ceremony of Iranian President Hassan Rouhani, the two people said, requesting anonymity.

“The minister has ordered to take up the matter with IRCON (IRCON International Ltd, the state-run company to which the contract was given) on priority and sort out the matter,” an Indian government official, one of the two cited above said.

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Cargo traffic at 12 major ports up by 4% in April-July

Tender-change demand dredges trouble for JNPT

The country’s 12 major ports saw their cargo traffic go up by 4.13 per cent to 221.95 million tonnes (MT) in April-July period of the ongoing fiscal, riding on the back of surge in demand, according to data from ports’ body IPA. These top ports, under the administrative control of the Centre, had handled 213.15 MT cargo in the April-July period of the last fiscal. Increased demand from sectors like iron ore, petroleum oil and lubricants (POL) and containers led to higher movement of cargo during the last four months, according to the Indian Ports Association (IPA). Iron ore traffic volumes moved up 32.28 per cent to 15.61 MT during April-July as against 11.80 MT in the same period a year ago, while those of POL rose 10.40 per cent to 75.18 MT. Container traffic rose 6.16 per cent to 44.06 MT. The Kandla port handled the highest traffic volume at 36.10 MT during April-July this year, followed by the Paradip port at 32.93 MT and JNPT at 21.84 MT, data showed.

‘Vasco da Gama’, a huge trailing suction hopper dredger owned by Belgium group Jan De Nul N V, will reach the shores of Mumbai on August 29 to start work on a €250-million contract to deepen and widen the channel of Jawaharlal Nehru Port Trust, India’s busiest container port, to help dock bigger ships.

But, the two-year contract, billed India’s biggest dredging work by value, slated to start on September 1, is in jeopardy due to some post tender changes sought by JNPT at the request of next door Mumbai Port Trust, both owned by the Central government. The contract involves deepening the channel to 15 metres from the existing 14 metres, widening the existing shipping channel from 370 metres to 450 metres for straight reach and extending the length from 33.5 kms to 35.5 km.

Of the estimated 40 million cubic metres of sand, silt, clay and rock to be dredged from the sea bed, some 1.73 million cubic metres will be rock dredging alone.

When completed, the project will enable JNPT to accommodate container ships that can carry as much as 12,500 twenty-foot equivalent units (TEUs). JNPT currently has a depth of 14 metres that enables container ships of 6,000 TEU ships to call with the help of tide.

Customs dept to do away with supervised sealing of containers Keen to reduce inspector raj from movement of India’s exports, the customs department is devising a plan that will allow goods to move from factory to ships without any checks. From October, consignments would not be required to be sealed in the presence of inspectors. Instead they will sport an RFID chip with details of the consignment that can be accessed by a reader.

“Supervised sealing of containers will be discontinued from October,” said a government official. Instead, electronic self-sealing with RFID chip will be introduced, the official added.

Only those consignments with perceived risk will be closely examined. This would enable cargo to move expeditiously and prevent unnecessary hold ups at ports bringing down transaction cost of exporters and also chances of corruption. The development follows the risk based assessment introduced by the Customs through SWIFT, or Single Window Interface for Facilitating Trade, in April this year. Self-sealing is available to a small category of exporters, but most do not opt for it as their containers are then opened at ports. Sealing in presence of excise inspector, despite the attendant issues, ensured that containers were not opened later.

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Facility for common cargo by Sept 15

Centre set to relax ship registration rules

The Airports Authority of India’s (AAI) Common User Domestic Cargo Terminal (CUDCT), a facility to take care of domestic cargo under one roof, will become operational by September 15 from the old domestic building of the Thiruvananthapuram international airport.

The CUDCT will help domestic carriers to handle cargo and process Customs clearance, security clearance and other regulatory requirements from the same building. All arrangements to make the facility operational have been completed.

It will be set up in 550 sq metres near the old arrival enclosure of the domestic terminal on Sanghumughom side. The facility will be managed by the AAI personnel. A INR35-lakh X-ray machine had been installed by the AAI to screen the cargo and offices have been provided to the domestic airlines set to move into the facility.

“We are awaiting the clearance of the Bureau of Civil Aviation Security (BCAS) for commissioning the facility as it is in the operational area of the airport. We plan to open the facility by September 15,” Airport Director George G. Tharakan was quoted as saying.

Domestic carriers like Indigo and Spicejet have not been handling domestic cargo from the airport as they do not have necessary facilities such as X-ray and manpower. The Airport Director said all domestic carriers have expressed interest to move to the CUDCT.

The Central government is set to ease registration rules for Indian flag ships by changing the ownership requirement for registration from ‘wholly-owned’ to ‘substantially-owned’ as part of a plan to boost Indian tonnage. The plan will be implemented through the new merchant shipping Bill, currently pending before Parliament, which also seeks to allow registration of ships purchased through a so-called bare-boat-charter-cum-demise (BBCD) route having a charter period of at least three years.

Indian Controlled Tonnage — a new scheme for ship acquisition introduced by the government — will also be brought under the revamped merchant shipping Act as a separate category. The aim behind the policy changes is to bring more ships under Indian tonnage which is hovering at about 12.268 million gross tonnage (GT) comprising 1,348 ships.

The Shipping Ministry has set an ambitious target to raise the country’s tonnage by four times to 43 million tonnes by 2020.

Lufthansa Cargo increases India flights to grow freight traffic share

DHL eCommerce gets FarEye on board

Lufthansa Cargo is increasing capacity to India and looking for partnerships with other airlines to grow its share in the fast growing market. Lufthansa Cargo has 10 per cent share of India’s international freight traffic and is seeing 9 per cent growth in the market in 2017, which is higher than its overall 6-7 per cent growth the cargo division is witnessing globally. It has increased weekly frequency to Mumbai to four from three flights earlier to cater to the growth. “We have a strong presence in India and we expect our market share to increase. India has been among one of our fastest growing markets this year,” said Peter Gerber, chief executive officer of Lufthansa Cargo.

In addition to its 10 weekly freighter flights to India covering Mumbai, Bengaluru, Chennai and Hyderabad, the airline offers belly space on passenger aircraft, which operate to India. Apart from increasing its flights, the airline is also focused on opening new customer segments, digitisation and expanding partnerships.

“We are always looking for partners and potential opportunities but at the moment there is nothing concrete,” Gerber said in response to query on partnerships with Indian carriers.

FarEye, a Logistics Management Solution became a partner of choice for DHL eCommerce to enhance its customer experience, optimise its resources and deliver its brand promise ‘real-time’. DHL eCommerce is a division of the world’s leading logistics company Deutsche Post DHL Group. The Group generated revenue of more than 57 billion euros in 2016.

DHL eCommerce provides international, standard parcel delivery for business customers. It supports business processes with mature e-commerce shipping solutions and technology platforms that help enable various online businesses. DHL eCommerce continuously invests in technology to improve processes and have better communication across all parties. FarEye’s platform became an apt fit as it seamlessly integrated with the organisation’s existing systems and made the IT infrastructure flexible and agile. Being a SaaS platform, FarEye gave DHL eCommerce the flexibility to scaleup and down depending on the demand levels, which gave them an edge to adapt quickly to any work environment.

september 2017 - CargoConnect 97

INTERNATIONAL CONNECT

India and the US on a Highway of Cooperation Since 2016, Indian government has been making efforts to work more closely with the US in the logistics sector. Archana Verma and Tariq Ahmed bring a report.

Indo-US cooperation in the vital infrastructure sector got a new impetus when Road Transport, Highways and

India, US working in synergy to boost maritime India and the United States had agreed in

The American Logistics Scenario

“Passenger and air freight carriers are capitalising on the dynamic opportunities that continue to arise in the Columbus Region, enabling our airports to offer additional travel options for passengers and strategic opportunities for businesses.”

Elaine Roberts, President and CEO of the Columbus Regional Airport Authority; also Overseeing Bolton Field Airport.

Shipping Minister Nitin Gadkari held official talks with his counter-part US Secretary of Transportation, Anthony Foxx in Washington in July last year, on a wide range of projects of mutual interest. The US has agreed to cooperate with India in making its roads safe by offering a range of innovative technology and software solutions in intelligent traffic management to reduce road accidents in the country, said Nitin Gadkari, Union minister for road and surface transport.

Cooperation for road transport US has promised full cooperation in the development of inland waterways. “They are ready to share all types of manuals, code and rules and regulations with us,” Gadkari said.

Rohit Kumar Singh, Joint Secretary, Ministry of Road Transport and Highways, highlighted specific investment opportunities in the highways. “India needs $1 trillion for developing new roads, ports, rail lines and airports over the next few years and US companies can provide the necessary expertise as well as capital to enable the robust growth of this sector,” Singh said.

98 CargoConnect - september 2017

July 2016 to cooperate in the maritime sector with American ports evincing keen interest in the comprehensive port-led development, especially with regard to the ambitious Sagarmala Project under which 150 projects have the potential of mobilising USD 50-

Pick up in Air Freight

60 billion of infrastructure investment and another USD 100 billion of promoting industrial growth.

According to the latest available data, the air freight industry within the NAFTA countries had a total market value of $16 billion in 2016.The Canada was the fastest growing country, with a CAGR of 1.7 percent over the 2012-16 period. Within the air freight industry, the US is the leading country among the NAFTA bloc, with market revenues of $14.4 billion in 2016. This was followed by Canada and Mexico, with a value of $1.2 billion and $473.7 million, respectively.

Miami International Airport is very important for the North American

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Advanced Markets

2015 – 54.5

2016 – 51.8

2017 – 54.4

Global markets

2015 – 53.5

2016 – 51.6

2017 – 54.0

Emerging Markets

2015 – 49.0

2016 – 51.6

2017 – 52.5

“The first five months i.e., Jan-May 2017 have been very good, with overall traffic growing 5.7 per cent year-todate. The total value of pharma imports transported through MIA increased by 394 per cent CYTD Jan-Apr by value and by 53 percent CYTD Jan-Apr by weight.”

Emir Pineda, Manager, Aviation Trade and Logistics Marketing Division, Miami-Dade Aviation Department

What is LEMOA?

cargo logistics sector. Emir Pineda, Manager, Aviation Trade and Logistics Marketing Division, Miami-Dade Aviation Department, operator of Miami International Airport, says that the airport’s international traffic grew 5.3 percent with over 820,620 tonnes flown.

And for Miami, the strength continues to be in perishables and pharma.

In a significant departure from its policy of not entering into a military agreement with any major power, India signed in 2016 the Logistics Exchange Memorandum of Agreement (LEMOA) with United States which will allow their militaries to work closely with the Indian military and use each other’s bases for repair and replenishment of supplies.

The LEMOA was signed at Washington DC between Defence Minister Manohar Parrikar and US counterpart Ashton Carter to facilitate opportunities for “practical engagement and exchange”.

The Indo-American Chamber of Commerce (IACC) has selected C.H. Robinson, a leading thirdparty logistics provider (3PL), for its Corporate Leader of the Year award, an honor specifically for U.S. based companies in India. C.H. Robinson received the award for its outstanding contribution to all spheres of the corporate ecosystem.

The announcement of the pact drew sharp criticism at home from the Congress which called it a “fundamental departure” from India’s time-tested policy of “strategic military neutrality.”

The CPM said the government had “compromised Indian sovereignty” and “surrendered strategic autonomy” by signing the pact.

“We have 800 employees, including 25 from India. They are looking at different aspects of building Hyperloop.”

Bibop G Gresta, Chairperson, Hyperloop Transportation Technologies, California

With a decreasing number of available projects and tightening schedules, logistics is playing an increasingly vital early role for worldwide energy industry technology and infrastructure provider CB&I, according to Jake Swanson, Director of Global Logistics for the Engineering and Construction Group of The Woodlands, Texas.

Swanson, as director of the New York Stock Exchange-listed company, is meeting challenges by deploying his experience with breakbulk/project carriers and learning from the U.S. Merchant Marine Academy and the University of Houston’s MBA program.

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APPOINTMENT

upcoming events

Alexander Kohnen completes executive board at time:matters Alexander Kohnen has been appointed the new Managing Director Strategy and Sales at time:matters Holding GmbH, effective November 15, 2017. Kohnen has held various management positions at Lufthansa Cargo since October 2000, most recently Senior Director Industry Development and Product Management and previously Director Nordic and Baltic Countries. “We are delighted to have Alexander Kohnen on board. He knows the industry inside out and has everything it takes to further establish time:matters as the leading specialist for sameday delivery and emergency logistics,” said Dr Alexis von Hoensbroech, Board Member Product and Sales at Lufthansa Cargo.

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

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

Kreutel to be Fraport AG’s new Sr VP for Cargo Development & Management As of October 1, Felix Kreutel will take over as head of Fraport AG’s Cargo Development and Management department. Commenting on his new task, Kreutel said: “The Air Cargo industry is currently undergoing enormous changes.

The rise of new technologies requires enhanced cooperation among all cargo partners to ensure our competitiveness on the global market.

Maintaining a close contact with our customers is therefore even more important than before. My team and I wish to be a reliable and transparent partner for the cargo community. Together, we want to take advantage of the opportunities offered by the new technologies to strengthen and expand our position as Europe’s largest freight airport and as the industry’s innovation leader.”

INMEX SMM India 2017 on October 3-5, 2017 at Bombay Exhibition Centre, Mumbai organised by Informa Exhibitions

11th Express Logistics and Supply Chain Conclave on October 4 and 5, 2017 at Taj Lands End, Mumbai organised by Kamikaze B2B Media

American Airlines Cargo appoints new MD – Global And Key Accounts American Airlines Cargo has announced the appointment of Lisa Oxentine as the new MD, Global and Key Accounts – Cargo Sales. She takes over Roger Samways’ previous position, after his promotion to VP of the Cargo Sales division earlier this year. Oxentine joined American Airlines in 1987 as a frontline customer service agent and brings a breadth of experience having held positions in a number of different departments including Passenger Service and Operations, Premium Services, Sales Support Operations etc. Most recently, she led the Customer Recovery team in the Customer Experience department, managing 47 systemwide managers who focused on ensuring a top-notch experience for customers across the entire American Airlines network.

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India Warehousing and Logistics Show 2017 on November 16-18, 2017 at Auto Cluster Exhibition Centre, Pune organised by Reed Manch Exhibitions

India Cold Chain Show 2017 on December 12-14, 2017 at the Bombay Exhibition Centre, Mumbai organised

by Reed Manch Exhibitions

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events

JSW Jaigarh Port inaugurates Edible Oil Terminal JSW Infrastructure’s flagship Jaigarh Port (Ratnagiri, Maharashtra), inaugurated its Edible oil terminal on August 17, 2017. The occasion also marked the maiden call of Edible Oil carrier MT Zao Galaxy. The strategic location of Jaigarh Port between two major ports of Mumbai and Goa gives it an advantage of servicing the vast hinterland of Maharashtra, Karnataka and Andhra Pradesh.

Jaigarh Port has partnered with West India Continental Oil and Fats Pvt Ltd (WICOF) and Narendra Forwarders Pvt Ltd for handling the first edible oil cargo at Jaigarh Port.

The maiden vessel MT Zao Galaxy, handymax vessel with LOA 159.03 m, beam 27.10m, carried a parcel of 3000 MT onboard from Padang, Indonesia. The vessel was berthed on arrival and cargo discharge operations were completed in 11 hours.

The edible oil terminal has a tankage capacity of over 16,800 KL with a provision

of adding more tanks in future. The unloading rate of the terminal is around 400 MT per hour. The terminal has three pumps for tanker loading and two booster pumps having a capacity of 400 m3 per hour. The terminal has four tanker loading bays for evacuation of cargo to the hinterland.

Speaking on the occasion, Capt. BVJK Sharma, JMD and CEO, JSWIL said: “We are delighted to welcome WICOF’s edible oil

Schneider Electric’s Solar Energy Training Centre inaugurated in Cuttack Sri Sri Ravi Shankar, recently inaugurated Schneider Electric India Foundation’s Solar Energy Training Center at Sri Sri University in Cuttack, Odisha. The inauguration took place after a convocation ceremony at the Sri Sri University which was attended by Honourable Union Minister for Human Resource Development, Prakash Javadekar.

The Solar Energy Training Center has been set up by Schneider Electric India Foundation (SEIF) – the social commitment of Schneider Electric India – in partnership with Sri Sri Rural Development Programme (SSRDP) Trust.

The centre will educate and empower the youth to propel the growth of renewable energy sector in India by providing pool of skilled resources.

With this, Schneider Electric now has six functional Renewable Energy Training Centres across India, others being at Vizag, New Delhi, Bhubaneswar and Bangalore. SEIF plans to set up three more Renewable Energy Training Centers in the next few months at Jaipur, Lucknow and Bangalore.

Overall, the company has set up 251 training centres across India - including both – Basic Electrician Center as well as Renewable Energy Center – and has trained nearly 77,000 unemployed youth since the beginning of its electrician training programme in 2009.

vessel to the Jaigarh Port and to inaugurate our new edible oil terminal. The arrival of the MT Zao Galaxy is an indicator of Jaigarh Port’s continuous track record of operational excellence and diversification into liquid cargo space. We are continuously improving our liquid cargo handling facilities at Jaigarh Port and will be creating additional berths for handling Crude, POL and chemical cargos in near future.”

Upgraded Jammu Airport inaugurated by Mehbooba Mufti The upgraded passenger Terminal Building of Jammu Airport, Jammu was inaugurated by Ms. Mehbooba Mufti, Chief Minister of Jammu and Kashmir and Shri P Ashok Gajapathi Raju, Union Minister for Civil Aviation. Shri Jayant Sinha, Union Minister of State for Civil Aviation; Dr Jitendra Singh, Union Minister of State for Development of North Eastern Region, PMO, Personnel, Public Grievances and Pensions, Atomic Energy and Space; Dr. Nirmal Kumar Singh, Deputy Chief Minister of Jammu and Kashmir; Shri Kavinder Gupta, Speaker of J&K Legislative Assembly; Shri Jugal Kishore Sharma, Member of Parliament (Lok Sabha) and Shri Shamsher Singh Manhas, Member of Parliament (Rajya Sabha) along with Dr Guruprasad Mohapatra, Chairman, Airports Authority of India were the other esteemed guests who attended the inauguration ceremony.

Jammu is the gateway city for the State of Jammu and Kashmir and the winter capital of the State, is also popularly known as the ‘City of Temples.’ Bestowed with a rich heritage and cultural legacy, Jammu has promising tourism potential. The city is famous for religious tourism and the holy shrine of ‘Mata Vaishno Devi’ is 46 kms. from the city.

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Safexpress launches its 32nd ultra-modern Logistics Park in Hyderabad

Safexpress, India’s largest supply chain and logistics company, launched its ultramodern Logistics Park in Hyderabad recently.

Spanning over an area of 4,00,000 sq ft, this world-class facility is strategically located close to National Highway 44. This Logistics Park will help in augmenting economic growth in Telangana region. This enormous Logistics Park is one of India’s largest supply chain and logistics facilities.

Speaking at the launch ceremony, Rubal Jain, Managing Director, Safexpress said,

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“Hyderabad is one of the largest and most rapidly growing cities of Telangana, and is home to more than 1300 IT and ITES firms.

Over the years, Hyderabad has evolved itself from a traditional manufacturing city to a cosmopolitan business hub. Hyderabad is also a very crucial location from the point of view of logistics connectivity of Southern India with the rest of the country. Hyderabad and its suburbs contain the highest number of special economic zones amongst all Indian cities. With the development of Hyderabad

Logistics Park, we will be able to further boost our leadership position in the supply chain and logistics industry.”

Rubal Jain added, “The economy of Hyderabad is based on traditional manufacturing, the knowledge sector, and tourism. Hyderabad also accounts for approximately 20 per cent of India’s total pharma exports. Hyderabad has been a global trade center in multiple business domains.

However, despite the presence of many medium and large scale industries, Hyderabad does not have adequate warehousing and logistics infrastructure. Safexpress Logistics Park will help in bridging these infrastructure gaps. The Logistics Park is strategically located and will serve as the nodal point for supply chain and logistics across Telangana.”

Highlighting the USP of the Logistics Park at Hyderabad, Rubal Jain said, “This facility is a perfect mix of environmentfriendly initiatives and technology. We have invested in rainwater harvesting, developed a special green zone and robust IT systems to support operational efficiencies and inventory visibility. Located strategically close to National Highway 44, the Logistics Park will fulfill the warehousing needs of companies located in and around Telangana.”

Jain concluded by saying, “In the GST era, most companies are adopting newer business and supply chain models. We at Safexpress, offer our clients with pathbreaking innovations alongside customized services. Safexpress is leading the GST revolution and is helping numerous companies in scaling up their business faster than ever. Most companies are now resorting to outsourcing their supply chain and logistics needs to a GST compliant 3PL service provider like Safexpress, while keeping their own warehousing and hub infrastructure to minimal levels. Keeping these factors in mind, we have hugely augmented our 3PL network by creating 32 ultra-modern Logistics Parks spread over 13 million square feet. Hyderabad Logistics Park will be operational 24x7, 365 days in a year to provide time-definite deliveries. Due to our non-stop operations, we will be providing the fastest transit-time for deliveries from Hyderabad to all over India.”

events

Penta Freight moves into new Corporate Headquarters

As part of their upgradation and rebranding plans to commemorate their 25th year of business, the management team spearheaded by co-founders Shashi Kanchan and Prasanan Kurup of Penta Freight Pvt Ltd, a leading freight forwarder, moved their headquarters into a new office on the 9th floor of Times Square at Marol, Andheri Kurla road, Mumbai. The office was inaugurated by Peter Gerber, Chairman of the Executive Board and CEO - Lufthansa Cargo AG. on the 08th of August, 2017.

As a next step, Penta Freight a specialist service provider in Pharma and Chemicals logistics, is developing a state of the art transit warehouse and cross docking facility, with special temperature controlled zones and designated areas for hazardous cargo. This is in close vicinity of the Mumbai Air Cargo Complex. They are also growing their existing fleet of refrigerated trucks to further enhance their cold chain logistics and 3PL offering. They have recently added a domestic cargo division to the existing portfolio of services under the aegis of PentaXpress . The new division offers customised door to door multimodal solutions for domestic distribution for a diverse range of B2B products.

Skyways launches tree plantation drive across India Skyways Group, a leader in the field of global logistics has launched a tree plantation drive at all its offices in India and Germany. The plantation drive was initiated on the 8th of August’2017, which was also their 35th founder’s day.

Trees were planted in the headquarters in Delhi as well as all other branches across the country, wherein the Management and the team members took part in planting the trees. As a part of this drive, over 200 saplings were planted. Employees from each station participated in the drive. The plantation drive not only contributed to the well-being of the environment but also sensitized people about the importance of tree plantation and environmental conservation. All team members were requested to get more and more industry personnel, their family and friends also to take up the cause of planting trees across the world.

The Group has taken a pledge to plant 2020 trees by the year 2020.

Hansa Heavy Lift delivers 6 large Rtg Cranes from Japan to Turkey Hansa Heavy Lift has transported six rubber tyred gantry (RTG) cranes, each weighing 135 metric tonnes and measuring 28.9 by 11.3 by 26.6 m, from Japan to Turkey. All units were loaded onto the vessel HHL Kobe at the port of Saiki in southern Japan, with two of the cranes being discharged at the port of Gebze and the remaining four at the harbour of Gemlik, in Turkey.

“This was an unusually high number of RTGs being transported on a P2-800 vessel, compelling us to extend the deck as well as ensure there was sufficient space between the units, so that all cargo could be accommodated safely,” said Mohammad Abbas, Project Engineer, Hansa Heavy Lift. The project was carried out on behalf of Mitsui Engineering and Shipbuilding, with Yilport Konteyner Terminal Ve Liman Isletmeleri A.S. acting as the charterer.

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GreyOrange joins Countdown to Tokyo 2020 Olympics

Swiss WorldCargo hosted event to honour patrons

Leading automation and robotics company, GreyOrange has joined the Countdown to Tokyo 2020 Summer Olympics games. One of the first few Indian companies to participate in the countdown, GreyOrange will work on speeding up the installation of its robotics systems at several sites, including the warehouse for the Nitori Holdings Group (TSE 9843), Japan’s largest furniture and home furnishing chain with over 400 stores. Organisations across Japan have come together to work on preparations within this tight schedule to make the XXXII Olympics in 2020 a success, with infrastructure projects this year estimated to exceed ¥50 trillion.

Nalin Advani, CEO - APAC, GreyOrange Pte Ltd said, “Our customers in Japan have been far-sighted in planning well ahead of 2020. Business activities are expected to increase over the next two years, yet manpower constraints will continue to tighten in the lead up to the Olympics.

Many companies are looking for newer technologies and processes to ensure that they can cope with new demands to increase productivity.”

Swiss WorldCargo recently hosted a customer event followed by cocktail and dinner at Roseate Hotel, Aerocity, New Delhi. The aim was to recognise and award the top performers as well as thank and acknowledge the rest of the customers for their continued support. It was also an opportunity to introduce Alexander Arafa – Head of Cargo Area and Contribution Management who flew in from Zurich to the Delhi market.

Speaking on the occasion, Shankar Iyer – Head of Cargo for Africa, Middle East and India, stated that Delhi has an excellent infrastructure and it was his goal to increase special loads such CRT, CEL, Vac Q Tec etc. on LX flight DEL-ZRH. He once again thanked the customers for their unstinted support.

14 racehorses flown from Budapest Airport to China Fourteen racehorses bred in Hungary were flown to China last week, on board a Cargolux Boeing 747. The Friesian and Shagya Arabian horses, trained specifically for combined driving, took off from Budapest Airport in special freight containers, accompanied by a team of carers and vets, on their way to a new owner, via Luxembourg.

More than a dozen Hungarian racehorses were waiting to board in a ground handler’s warehouse at Budapest Airport, in special freight containers, prepared with great care for the long journey to Beijing and then to Wuhan. They were placed in the cargo hold of Cargolux’s modern Boeing 747-8F. From the Hungarian capital, they first made their way to Luxembourg, where they were prepared for the 12-hour flight to Beijing at the airline’s live animal station.

According to Hungarian equestrian website lovasok.hu, since the 2008 Olympics and the economic upturn, horseback riding has become increasingly popular in China, with more than half a million people riding on a regular basis per year. Demand for the sport, breading horses, and the market for importing horses are growing dynamically. Hungary received the required permit for the aerial transportation of horses at the beginning of 2016, and this was the first live horse shipment from Budapest Airport to China.

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time:matters Frankfurt celebrates its 10th anniversary time:matters, experts in worldwide special speed logistics, have been running their own Courier Terminal in Frankfurt Airport’s CargoCity North to ensure worldwide express and courier shipments are sent quickly and securely. Its terminal is celebrating ten successful years in business on August 1, 2017.

The Courier Terminal ensures that time-critical shipments that must quickly be transported from airport A to airport B are delivered, picked up or transferred extremely quickly and securely by plane. Direct access allows for the shortest import and export handling times of just an hour each.

Direct transfer from plane to plane on the apron ensures the shortest transit times. To guarantee the shipment is always under control, it is physically guarded by security personnel on the apron.

Irregularities can also be communicated in real time, and corrective action can then be taken. With its own Courier Terminal, time:matters is also able to respond even more explicitly to individual customer needs and provide specially tailored solutions.

events

FFFAI’s 10th EC Meeting held in New Delhi The Central Board of Excise and Customs (CBEC) is planning to unveil the new version of the earlier Customs Brokers Licensing Regulations (CBrLR) soon. Speaking at a special session on the occasion of 10th EC Meeting (for 2015-17) of the Federation of Freight Forwarders’ Associations in India (FFFAI) held on August 16 at Taj Mahal Hotel in New Delhi. Ananya Roy, Member (Customs) highlighted the importance of the new Regulations and invited industry feedback to the Draft Regulations. Ms Roy addressed some other pressing operational issues raised by FFFAI office bearers and EC members. Also present at this meet was Satya Srinivasa, Joint Secretary (Customs) to interact with the FFFAI members who attended the meet from across the country.

Lauding the vital role played by Indian Customs Brokers in facilitating India’s foreign trade, Ms Roy reiterated full support from the Government for safeguarding their interest at these changing times. She underscored the present partnership-relationship between Government and industry stakeholders. “I must compliment Indian Customs Brokers as well who played the critical role behind the successful implementation of GST on July 1, 2017,” Ms Roy added. Responding to Ms Roy, Samir Shah, Chairman, FFFAI said, “We are now treated as partner of the government in framing up the policy and successful implementation of the same.

Mutual respect is clearly visible in every steps and decision pertaining to customs clearance, trade facilitation and changing rules and regulations.”

ACCD organised gala night for members

Logistics Kart announces launch of its digital platform

The Air Cargo Club of Delhi (ACCD) organised a spectacular club night at Junkyard Cafe, Connaught Place, on August 19, 2017, for it’s members and their spouses. Members had a good time as the evening was filled with fun and frolic, accompanied by delectable food and cocktails. This event was very different from earlier events organised by ACCD.

Logistics Kart announces the launch of its digital platform which will revolutionise the way logistics services are procured in India.

Logistics Kart, is an online B2B e-commerce market place seeks to connect Importers and Exporters with Logistics service providers (nationwide), to secure logistics services in three simple steps: Klick. Konnect. Trade. Logistics Kart is being positioned as the “Trivago” of the Logistics Industry by providing registered clients the benefits of secure, transparent and competitive pricing, direct access etc.

Logistics Kart will enable MSME companies secure better rates, create more transparency and visibility on logistics cost while providing access to reliable logistics companies.

Correspondingly, Logistics service providers will gain a wider market reach and Pan India presence without having to incur sales and marketing expenses. The platform is currently free for registered users with additional incentives for both importer, exporters and service providers who transact on the portal.

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infographics

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@TheJSWGroup

www.jsw.in

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

Creating world-class maritime infrastructure to 200 MTPA by 2020

JSW Jaigarh Port is poised to service:

400,000 tonnes

350,000 tonnes

VAleMAx VeSSelS

Very lArGe Crude CArrIerS