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india warehousing HandBook 2017

Warehouse

SPG ENTERPRISES

Warehousing Hub in Eastern India SPG Enterprises is one of the largest Transporter & Operational Agent of petroleum products especially in Bulk & Packed Bitumen, Emulsion in Eastern India with HPC & IOC Ltd., operating as Rahul Roadways Pvt. Ltd. Jamshedpur, Jharkhand

SERVICES AVAILABLE

• Our property at Jamshedpur with an area of 10 lac sq.ft is available on lease and can be given partly also. • C & F (Agent Work) for steel & FMCG products. • C&F or Logistics related support. • Security, Power and Water Facility etc are available 24x7. • The Warehouse space is available for all types of Industries like Cold Storage, Perishable products (food), logistics and constructions • The Warehouses can be improvised according to the re quirements of our clients from any sector like FMCG, Steel, Pharma, etc. • Access to the best Transport Services are also available through our company Rahul Roadways Pvt. Ltd. • The Warehouses of Ranchi and Jamshedpur are within a range of 200 Kms from Haldia Port. • Jamshedpur and Ranchi is the central place for the state of Jharkhand, Bihar, Orissa and Bengal.

• 10 Lac sq.ft. available in Jamshedpur at NH-33, on 4 lane highway, centrally located feeding four states Jharkhand, Bihar, West Bengal & Orissa. • 5 Lac sq. ft. available in Ranchi on NH-33, parallel to 4 lane highway. • 1 Lac sq. ft. commercial building at Jaipur in Rajasthan

• Our existing customers 1. Food Corporation of India Ltd (Taken space to store 15,000 metric tons of food grains) 2. Praxair India Pvt Ltd. 3. Shreyi Finance 4. Brakes India Pvt Ltd 5. Subham Freight Carriers India Pvt. Ltd ( Amron Batteries) 6. Exide Ltd 7. Toll (India) Logistics Pvt Ltd.,etc.

REGISTERED OFFICE: 18, Azad Market, Telco, Jamshedpur-831004, Jharkhand, India Phone: 91-657-2286104/2286401/2286906, Fax: 91-657-2286906, Email: sanjaypalsania8299@yahoo.co.in, Website: www.spgenterprises.co.in BRANCHES: Varanasi, Ranchi, Raipur, Patna & Kolkata. Based in Jamshedpur, Jharkhand since last 40 years.

Dedicated to

Indiaâ&#x20AC;&#x2122;s Booming Logistics Industry

From the Editor The warehousing industry in India is at a tipping point where modern technology is transforming the structure and role of warehousing. The most innovative carriers are now data-driven businesses that are responding dynamically to market changes, using cloud, sensors, analytics and digital business. Warehouses of the future will be equipped with automation, IoT, computer-monitored forklift, tracking system and many more state-of-the-art technologies. India has set for itself an ambitious target of increasing the contribution of manufacturing output to 25 per cent of gross domestic product (GDP) by 2025, from the 16 per cent at present. According to a report by Mckinsey & Company, Indiaâ&#x20AC;&#x2122;s manufacturing sector could touch US$ 1 trillion by 2025. Investments, including Foreign Direct Investment (FDI) are likely to increase and many multinationals are placing their bets on India. Implementation of GST regime has lifted the hopes even further for the corporate sector, especially those engaged in the cargo logistics industry. Many Indian and multinational companies are coming together to reinvent the warehousing industry to suit the new challenges facing the supply chains. This includes building large warehouses equipped with the latest automated technology in nodal points and also in interior areas, developed infrastructure, updated tracking system, efficient usage of space and shelves, pickup and delivery systems accelerated to a fast speed, efficient inventory to track the status of goods, return policy and trained staff. A major issue in the global warehousing sector is the sustainability and usage of renewable energy sources. This is gaining importance in international scenario, but is still in a nascent stage in India. There is a need for the Indian warehousing industrialists to understand this concept clearly and to begin acting on it. We have brought together different components, be it the policies that govern the working of this industry, challenges that need to be addressed immediately and vision that the warehousing industry has set for itself. We hope that our ardent efforts in engaging with the intricacies of the warehousing sector would bear the fruits of global development and pave the way for a burgeoning industry.

Smiti Suri (Editor)

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Assistant Editor Archana Verma Feature Writers Tariq Ahmed Gaurav Dubey Sheena Sachdeva Deepashree Banerjee Director Ajeet Kumar Marketing Manager Niti Chauhan Assistant Manager Marketing Asad Mohammad Marketing Executive Mehuli Choudhury Administration Vipin Marwah Accounts and Administration Poonam Gupta

46 ing s u o h e r a W afety

Editor Smiti Suri

Sr Designer & Visualiser Shaique Ahmad

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Designer & Visualiser Mayank Bhatnagar All material printed in this publication is the sole property of India Warehousing Handbook. 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. India Aircargo Handbook 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.

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Upfront “India’s GDP will continue to expand at the fastest pace among major economies, with growth forecast at 7.6% in 2016 – 2017.” The IMF World Economic Outlook

“Now companies could opt for a hub-based warehouse system instead of having warehouses in all major consumer states.” Nitin Gadkari, Minister of Road Transport and Highways of India after implementation of GST

“Concor has been planning to increase warehousing space by more than three times to nearly 15 million square feet over three-four years from the present 4 million square feet. It is developing nine facilities on the East Coast. There is a plan to expand the number of warehouses to 100 by 2020 from the present 72 with all gateways connected.”

The warehousing industry in India is forecasted to grow at a CAGR of 10% during the period of 2016-2022.

“MoCA has taken several steps to fasten cargo processing time and to restrict the use of cargo terminals as a storage depot at the place of processing facility. Less cargo processing time will augment the capacity of warehouses and it would eventually lead to overall growth in air cargo throughput.”

V Kalyana Rama, Chairman and MD, CONCOR Ramesh Mamidala,

In the post-GST scenario, the concept of a mother warehousing hub for a region supplemented by spokes is expected to become more popular. 8

india WAREHOUSING handbook - 2017

CEO, Celebi Delhi Cargo Terminal Management India Private Ltd

“GST would not only reduce the cascading tax burden it would also accelerate seamless cargo movement supported by a robust warehousing and distribution mechanism.” Samir J Shah, Chairman, Federation of Freight Forwarders’ Associations in India

“The implementation of GST would impart much-needed competitiveness to Indian exports with initial hiccups. The spinoff effect on economy particularly on the logistics sector would also help both manufacturing and exports. The refund mechanism through an electronic platform will reduce transaction cost.” Ganesh Kumar Gupta President, Federation of Indian Export Organisations (FIEO) “In the post-GST scenario, companies could plan their manufacturing and distribution locations more strategically. It allows consolidation of warehouses into bigger spaces, as well as enables better Infrastructure and technology that provide economies of scale and efficiency.” Rajesh Jaggi Managing Partner, Everstone Real Estate

In the wake of warehouse automation, there is a need to develop Cobots – Collaborative Robots which are designed to work alongside human workers in warehouses.

Warehousing facilities have evolved from mere godowns to sohisticated stockrooms equipped with state of the art equipment.

According to the survey done by CBRE South Asia, the most likely strategy for warehousing portfolios in the post GST era is that of consolidation followed by expansion. Close to 28% of respondents said they would consolidate, while 23% stated that they would further expand their operations across the country. 2017 - india WAREHOUSING handbook

Current Scenario 10 india WAREHOUSING handbook - 2017

intratch

a s

INDUSTRY

The size of the Indian warehousing industry (across commodities and modes) is pegged at about INR 560 billion (excluding inventory carrying costs, which amount to another `4,340 billion). The industry is growing at over 10% annually. The total warehousing space requirement in India is expected to grow at a CAGR of 9 per cent from 919 million sqft in 2014 to 1,439 million sqft by 2019. Real estate players are nowadays beginning to focus on warehousing, pinning high hopes on implementation of the Goods and Services Tax (GST), boom in the E-Commerce industry and a spurt in manufacturing activities on account of the recently launched â&#x20AC;&#x2DC;Make in Indiaâ&#x20AC;&#x2122; campaign.

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he Indian warehousing and logistics sector is at the threshold of major transformation. However, in the real estate frontier, logistics and warehousing apparently seem to be an under-invested area. As a result, as compared to advanced countries, our warehousing sector remains at a relatively modest stage, largely dominated by unorganised players who account for 85 per cent of the overall market. Traditionally, Indian companies have considered warehousing activity as an unavoidable cost and the objective was always to reduce this cost as much as possible. However, the scenario is changing rapidly. Increasing competition and introduction of global best practices by multinationals are compelling Indian businesses to re-think on the importance of warehousing and resultant benefits of managing an efficient supply chain. Warehousing at present accounts for about 20 per cent of the Indian logistics market and is expected to grow at a fast pace. With the Indian Government’s renewed focus on manufactur ing and infrastructure development, the warehousing sector has shown a tremendous traction in the last couple of years. The boom in the E-tail sector has also added to this. With GST round the horizon, an organised industry for warehouses is expected to develop soon. Again, in the last few months, some big names in the realty sector have shown their interest towards warehousing. Experts predict that this sector is going to experience a sea changein terms of structure and will open up huge opportunities for real estate players in the years to come.

Warehousing capacity (in Mn Sq. Ft.) 2,500

2,000

1,722

1,600

1,852

1,993

1,500

1,000

500

2011-12

2012-13

2013-14

2014-15

Source: CRISIL report on warehousing

Precursor India always had extremely limited supply of high-quality industrial and logistics-related real estate. Anshul Singhal, CEO, Embassy Industrial Parks points out, “Land acquisition, lack of experienced industrial real-estate development professionals, and access to long-term capital are some of the major challenges faced by warehouse developers in India currently.” On the other hand, Binaifer Jehani, Director-Industry and Customised Research, CRISIL believes that land banks possessed by real estate builders can

really help develop an organised industry for warehouses in near future. “Many developers hold huge land parcels in the peripheral regions of major cities. With sluggishness in the residential real estate segment, they are diversifying into warehousing development, which has witnessed good traction in recent times. Many a times, these land parcels are situated in faroff locations and are therefore not rewarding for residential/commercial projects. Such land parcels are ideal for large-scale centralised warehouses. Also, given the fact that developers typically hold 2017 - india WAREHOUSING handbook 13

“LAND ACQUISITION, LACK OF EXPERIENCED INDUSTRIAL REALESTATE DEVELOPMENT PROFESSIONALS AND ACCESS TO LONGTERM CAPITAL ARE SOME OF THE MAJOR CHALLENGES FACED BY WAREHOUSE DEVELOPERS IN INDIA CURRENTLY.” Anshul Singhal, CEO, Embassy Industrial Parks land parcels across geographies, it becomes easy for E-Commerce players to enter into agreements at the pan-India level for development of highquality/built-to-suit warehouses. In terms of cost benefits, developers who bought land parcels in the past at low rates will gain from demand for such warehousing space,” informs Jehani. Shouvik Mandal, Assistant Director, Finance, Apeejay Surrendra Management Services Pvt Ltd also agrees that real estate developers can play an important role to develop land banks into logistics activity hubs. According to him, “The developers who had been in the market for long are already having land banks and they have taken this opportunity to convert the land into warehouses. This will give them ease to handle finance pressure till the real estate market improves. With India getting more and more into manufacturing and trading activities, the demand for warehouses will increase definitely. This sector is going to change in the next five years with big warehousing giants and PE funds entering the business in India.” Jaideep Ghosh, Partner, National Head, Transport, Leisure and Sports Sector, KPMG in India says, “The upcoming Indian warehouses being developed are much more organised and well-planned with a shift to usage of high

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quality Grade A and B. In 2014, the cumulative warehousing supply (Grade A and B) across eight Indian cities was about 80 million sq. ft. this grew at 20 per cent to reach 96 million sq ft in 2015 and is expected to continue growing at the same

The entry of multiple global brands may help raise the existing technological know-how in the field here to global standards, and create more employment opportunities in the warehousing sector.

pace to 115 million sq ft in 2016. With industrial corridors like Delhi-Mumbai Industrial Corridor (DMIC) and the expansion and improvement of regulatory framework, things are indeed looking

up for the real estate sector to move investments in industrial and logistics parks’ development.” The Paradigm Shift Warehousing has always been an unorganised and fragmented sector in India; but of late, the demand for high-quality benchmarked warehouses has grown considerably. Also, changing business dynamics and entry of global 3PLs has led to the re-modelling of the logistics and warehousing services in India. Jehani adds from the researcher’s viewpoint, “CRISIL Research expects the overall industrial warehousing demand to grow at eight to ten per cent CAGR in square feet terms over 2014-15 to 2017-18. The organised industrial warehousing (high-quality warehouses) segment is expected to grow even faster–at 13-18 per cent CAGR during this period, driven by a rise in outsourcing of logistics activities, increasing penetration of third-party logistics (3PL) players, and greater focus on improving efficiencies and value-added services.” Mandal has a similar tale to tell, “Warehousing all these years has been like a so called ‘dabba’ where you can keep only the goods. Now, warehouses are converted to value-added zones, where not only goods are kept in bulk but also, it is converted to smaller units by way of improved packaging. E-Commerce and electronic/chemical/pharma warehousing needs built-to-suit spaces (commonly called BTS) which is attracting investments from developers and even PE funds. As such, the warehousing sector is getting more organised with specialised business skill. These are also functioning as logistics hubs which are in great demand.”

Over time, warehousing in India has evolved from godowns to value-added warehousing with various activities such as picking, packing, sorting, E-Fulfilment centres etc. which is driving demand for large warehouses which are at par with global standards. Today, companies are trying to create a supply chain network which gives them competitive advantage, which is driving the demand for integrated logistics parks with railway access, multimodal logistics hubs (MMLH) to enable lowering of costs, time savings, optimum asset utilisation, faster regulatory clearances and greater security.â&#x20AC;? The Growth Drivers As told earlier, the Indian logistics sector is on the brink of a massive transformation with huge investments coming in. In the last couple of years, we have seen a spurt in action from reputed developers who are focusing on warehousing as the next big thing. For example, Embassy, which was formed as a $250 million joint venture with global private equity player Warburg Pincus late last year, is looking to procure land parcels between 50 acres and 200 acres in Sanand near Ahmedabad, Chakan near Pune and Hoskote in Bengaluru to set up warehouses. Singhal reiterates, â&#x20AC;&#x153;Today, investments into the warehousing business is also slowly gaining momentum in India as businesses expect a revolution in the logistics arena and Embassy Industrial Parks has been formed to address the demand for modern, high-grade industrial and warehousing spaces in India. It was primarily formed to address the challenges

“IMPLEMENTATION OF GST WOULD IMPROVE SUPPLY CHAIN EFFECTIVENESS BECAUSE OF THE CONSOLIDATION OF WAREHOUSES AT STRATEGIC LOCATIONS THROUGH THE HUB-AND-SPOKE MODEL.”

Binaifer Jehani, Director Industry and Customised Research, CRISIL of companies grappling with building and managing industrial and warehousing spaces in a large, diverse and geographically distributed market like India.” Today, the Indian logistics sector is at the threshold of a major transformation largely driven by the booming e-commerce industry in the country. While, brick-and-mortar stores still lead in terms of warehousing space stock

foreign direct investment (FDI) in warehousing and increased demand for food storage facilities have acted as the catalyst for this partnership. Thus, more and more realtors are beginning to focus on warehousing and the entire warehousing boom has therefore set to revive the real estate demand in India. The industrial and logistics sector in India has significant growth potential, especially with

at 31 million sqft, the E-Commerce segment contributes about five million sqft Add to this, impending implementation of GST, rise in Import-Exports and the ‘Make in India’ campaign has given a major impetus push to the overall industry. Moreover, the conducive policy environment that allows for 100 per cent

the entry of several major global firms alongside domestic players in this arena, in the wake of E-Commerce and start-up firms flourishing in the country. Sector players in this space have not only established themselves in the top tier cities, but have spread to tier II locations as well. The sector, moreover, has been attracting

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considerable private equity investments in recent times. Increased levels of foreign investments would be welcome for the government’s recently launched ‘Make in India’ initiative as well. To this end, the passage of the pending Goods and Services Tax (GST) Bill is of critical importance. Once the long due GST Bill is passed and key infrastructure projects delivered, it will spell an even better innings for the sector. Infrastructure development is the backbone of growth and without government initiatives, it might not work as desired or expected. In the light of all these factors, there is a lot of interest among domestic and international developers, as well as from developers backed by Private Equity (PE) firms to develop world class industrial and logistics parks in the country. Ghosh could not agree more that the obvious reasons for rejuvenation of the warehousing sector is the increasing demand from the E-Commerce industry, nearing implementation of GST, growing EXIM trade, government thrust on manufacturing through the ‘Make in India’ initiative and increasing investments in infrastructure development; he adds, “All this is expected to fuel the demand for modern industrial and warehousing spaces and is estimated to touch about 125 million sqft in the next five years. E-Commerce today accounts for about 25 per cent of the new warehousing absorption and is expected to be a key driver considering additional investments of USD two to three billion in warehousing by leading E-Commerce players. GST is expected to be another major driver as it seeks to abolish multiple taxes and transform the

country into one single common market. It can potentially replace the current model of small multi-state warehousing with large, centralised warehousing and is expected to change the warehousing and logistics landscape. All the above factors are driving real estate players to focus on the warehousing sector.” He continues, “Under the ‘Make in India’ initiative, states have come up with newer policies, which can enable industrial growth and drive the need for setting up logistics and business parks. While this was set in motion in 2015, we expect real action to start this year. Coupled with GST, we believe organised warehousing is set for a quantum leap in the coming years.” E-Commerce now accounts for about 25 per cent of the overall warehousing absorption. This industry, led by Amazon, Flipkart and Snapdeal, is expected to invest additionally $2 billion to $3 billion in warehousing over the next two-three years. In an optimistic tone, Jehani stresses, “We have seen rapid growth in the warehousing and logistics segments in the last couple of years, thanks to the boom in E-Commerce. We foresee good traction on the GST front as well. And given the fact that many reputed developers already hold huge land parcels, they also have an advantage in terms of cost and timely execution.” GST: The Game Changer for Real Estate and Warehousing With the recent roll-out of GST, logistics has become all the more important, challenging and interesting. Jehani asserts, “At present, companies employ a multiple warehouse strategy

“IN 2014, CUMULATIVE WAREHOUSING SUPPLY ACROSS EIGHT INDIAN CITIES WAS ABOUT 80 MN SQFT THIS GREW AT 20 PER CENT TO REACH 96 MILLION SQ FT IN 2015, AND IS EXPECTED TO CONTINUE GROWING AT SAME PACE TO 115 MILLION SQ FT IN 2016.” Jaideep Ghosh, Partner, National Head, Transport, Leisure & Sports Sector, KPMG India

to lower the impact of taxation (which varies across states). We believe that once GST comes into effect, the concept of differential taxation will vanish. This, in turn, will make centralised

There is a lot of interest among domestic and international developers, as well as from developers backed by Private Equity (PE) firms to develop world class industrial and logistics parks in the country. warehousing more lucrative and benefit real estate players who already hold huge land parcels in the peripheral regions of major cities.” A unified GST would allow industry players to

surmount regulatory restrictions and focus on consolidation of industrial and warehousing space for maximum operational efficiencies. GST is expected multiple taxes at different levels and transform the country into one single common market, without any state borders. This will reduce the need for companies to establish small warehouses in every state; they do so now to lower the impact of taxes. The multiple warehouse strategy will be replaced by centralised, large warehouses. Ghosh feels, “In the last two decades there has been a change in the approach related to network design planning in the supply chain i.e., centralised vs. decentralised warehouses. Compared to the decentralised network, a centralised network is advantageous to the entire ecosystem. He also points out the nuances, “For real estate developers, it helps in generating steady income for relatively lower investments, demonstrating their design and developing capabilities by installing state of the art facilities. For the service provider, it helps in reducing overhead costs, manpower costs, opex and capex, improving productivity and storage utilisation. For the manufacturer/trader, it helps in operating at optimised inventory levels with higher fill rates 2017 - india WAREHOUSING handbook 17

“E-COMMERCE /ELECTRONIC/ CHEMICAL/ PHARMA WAREHOUSING NEEDS BUILT-TO SUIT SPACES, WHICH ARE ATTR ACTING IN V ESTMEN TS F ROM DEV ELOPER S A ND PE F UNDS. THE WAREHOUSING SECTOR IS GETTING MORE ORGANISED.” Shouvik Mandal, Assistant Director, Finance, Apeejay Surrendra Management Services Private Limited and accommodate higher variety of products. For the end-user, the delivery is more reliable thereby reducing the need to hold higher inventories. There can also be significant cost benefits in

terms of handling/unit and storage/unit owing to the efficiency and the reliability which the system is expected to bring about and hoping to be shared within all. This should excite real estate developers in spite of challenges related

18 india WAREHOUSING handbook - 2017

to land acquisition and regulatory approvals.” Mandal hints that the implementation of proposed GST Bill will definitely ease the business of trading and says, “However, whether central warehousing will prevail over small fragmented warehouses is yet to be seen. Being growing as developing economy, consumers’ satisfaction is the most important need of the hour. They need faster delivery and quality packaging to ensure safety of the goods purchased. This may tend to continue with regional central warehousing instead of a fully so called central one. Real estate players are across the country and in all states, and most of them are having land banks. Hence, there will be a close competition if central warehousing happens and this may lead to over-supply and will pull down the return from the business. Hence, they need to come together with a definite plan to extract the maximum which the sector will now give and to sustain it for a longer period.” As real estate and construction costs are rising, it has become important for warehouse operators to maximise utilisation of each available square feet space and also to build economical structures. Singhal specifies another angle to

this aspect, “I think supply chain efficiency is going to become the single biggest differentiator in the e-commerce space as organisations strive to make same day delivery a cost-effective reality. Modern warehousing facilities that allow for consolidation of distribution hubs will be a vital component in making this a reality. The advent of GST will lead to more consolidation in the warehousing sector that should provide the ideal platform for the emergence of large scale nationwide players.” Conclusion Old-school ‘godowns’ have come a long way to become the backbone of the manufacturing and burgeoning E-Commerce industry. Presently, organised warehousing, although in its nascent stage, has whipped up huge demand i.e., nearly 340 million sq ft is needed by 2015, according to property consultancy firm Jones Lang LaSalle Meghraj (JLLM). With international companies venturing, warehousing is set to change from old-fashioned storage sheds to planned hubs that are designed to serve as inventory management and storage spaces for retail chains. Developers admit that strategic partnerships with global warehousing companies are the best way to go about changing business dynamics. Given the interest shown by several developers and landowners, analysts say that the future of warehousing seems to be bright, but long-term success would depend on many factors. With increased participation from stakeholders and big players in the real estate sector, warehousing industry is bound to play a larger role in the growth of the Indian economy in the near future.

CELEBI DELHI CARGO TERMINAL MANAGEMENT INDIA PVT. LTD. 2017 - india WAREHOUSING handbook 19 Room no. C.E. – 05, First Floor, Import 2 Building, International Cargo Terminal, IGI Airport, New Delhi – 110037 | Phone: +91- 11 - 25601310 | Fax : +91 - 11 - 25601320

Guest column

GST to Change the Face of Warehousing

Akash Bansal

Head Logistics, Om Logistics Ltd.

20 india WAREHOUSING handbook - 2017

The Goods and Services Tax (GST), which came into force on 1st of July 2017 and aims to transform the nation into an integrated market for the first time since Independence, is certainly going to change the face of the Warehousing Industry in India forever. Neatly stacked, air conditioned warehouses with higher levels of automation are set to replace small and often ill-equipped storage space in the country as India ushers in the biggest tax reforms since 1947. Now that GST has been rolled out, there will obviously be some amalgamation in warehousing requirements, as customers will not consider having state-wise warehouse setups for taxation purpose. Hence central/zonal warehouse requirements will increase and difference will be confined to the size of warehouses that would be needed and all operations activities will be in line with the current requirements. Such consolidation will be a cost saving model for the warehousing professionals as they would be saving on administrative cost of managing multiple warehouses and moreover, will lead to better controls and inventory management. This would further facilitate business operations and a transparent business model for everyone in the value chain. To say that all warehouses would be consolidated will not be a right statement, as this would be a business driven model and every industry/company will plan their own model considering their business requirements and criticalities. I feel that with the abolition of state borders, we would be in a position to cut down on inefficiencies related to turnaround time of vehicles on any specific route. This would in turn help us saving some cost for our customers. We would be in a position

Our Warehousing Facilitiesâ&#x20AC;&#x2122; Footprint Across India

to have the maximum output from a machine, which was not optimally utilised on grounds of such inefficiencies. Further, state borders were one of the major challenges for a trucking organisation in India. It was creating issue of wastage of time and money that I feel would be a breather for Indian economy and organised players in the industry. We understand the need for warehousing and are well equipped to provide unified services for better streamlining of warehousing needs in the post GST period. With our Warehouse and Distribution Network Services, we manage supply chain with integrated pool distribution, cross docking, warehousing and transportation solutions. We manage more than 20 million sqft of warehouse space across the country. Our warehouse services firm provides custom integrated transportation solutions. Our warehouses incorporate a blend of work-to-suit, committed and multi-client stockrooms. Our system runs on a structured process flow for each sub operation and tracking metrics. Our Warehouse and Distribution Network Services offer short-term and long-term options as well as customised solutions. Clients also get benefit of co-op delivery system that utilizes shared routes which drastically reduce transportation expenses and the savings are passed directly on to customers. Our group is developing world-class warehousing facilities at key industrial hubs across India. 2017 - india WAREHOUSING handbook 21

Logistics is now an emerging and increasingly attractive market in India. Here we define the

Scales Up in Logistics 22 india WAREHOUSING handbook - 2017

background of Indian logistics, marking the crucial points that have paved the way of success in the logistics sector in the country.

ndia is steadily gaining prominence in the Logistics Attractiveness Index list of countries; with a good blend of FDI policies, investments and great advancements in technology. The growth in this sector is primarily dependent on the growth of goods across different sectors within the country and goods traded with other countries. In 2016, World Bank ranked India 46th among 155 countries in the logistics performance index ranking. India has a long way to go in terms of achieving global standards, which would include exceptional infrastructure and a highly technology driven as well as seamlessly integrated supply chain. However, India is ranked second in road network, by spanning a total of 4.7 million kilometres. Roads offer a logistics lifeline to the economy, accounting for 60 per cent of total goods movement and 85 per cent of total passenger traffic in the country. According to the National Highways Authority of India (NHAI), national highways make up about 2 per cent of the network but account for 40 per cent of road traffic. The index factors comprise of ranking markets on the basis of attractiveness of their logistics investment and deployment opportunities, based on a number of macro, energy market and technology specific indicators; including logistics imperative, policy stability, as well as routes to market.

New Investments Pumped in Logistics Sector Talking about investments, the falling oil prices have been a major boost to Indiaâ&#x20AC;&#x2122;s public finance, as they helped the government save about USD 1.7 billion in subsidy bills. Strong economic growth prospects coupled with the implementation of the unified tax system would increase the fiscal headspace for infrastructure investment. Foreign Direct Investment (FDI) policy of Government

of India has introduced key reforms to the FDI policy, to help attract further investments. With the governmentâ&#x20AC;&#x2122;s reform agenda aimed at strengthening business as well as economic conditions, domestic deals are expected to accelerate further; sectors related to e-commerce, internet and mobile technology would continue to remain attractive. As for the outbound flows, Indian firms have invested USD 2.28 billion overseas in October 2015, with pharmaceuticals, IT and telecom sectors accounting for a majority of that investment. More than 90 per cent of PPP projects in India are in the road sector. A pentagon of industrial corridors is being envisaged to facilitate manufacturing and to project India as a global manufacturing destination. As investments look good on paper, the government strives to materialise them in the future, as economic growth of a country is directly proportional to the development of its infrastructure. Following that principle, the Indian Government allocates funds to sectors and encourages private participation through the PPP route to push

Roads offer a

logistics lifeline to the economy, accounting for 60 per cent of total goods

movement and 85 per cent of

total passenger traffic in the country.

2017 - india WAREHOUSING handbook 23

for infrastructure developments. It has announced a National Investment and Infrastructure Fund (NIIF) with an expected initial corpus of USD 6.2 billion to bridge the investment gap. Additionally, to make the infrastructure sector investor-friendly and easier to administer, the government, with the help of the Kelkar Committee, is reviewing the overall PPP policy. The government plans to focus on the following five major areas for infrastructure development–Railways, Roads, Sagarmala Project (for ports and coastal development), Housing for Alland Inland waterways. With the necessary growth, the logistics industry in India will look most attractive in the years to come.

Government Extends Its Powerful Arm The Indian government is aiming to target higher investments through resource mobilisation, prioritise decongestion of heavy haul routes and speed up trains. Providing better amenities for passengers, ensuring their safety and improving railways’ systems through sustainable measures would also be the focus area. As per the project outlay, the railway ministry has earmarked an investment of USD 133.5 billion toward development of the railways sector over the next five years. Foreign Direct Investment of upto 100 per cent under the automatic route is allowed for support services to road transport, cargo handling, construction and maintenance of roads, bridges, and construction and maintenance of roads and highways that will prove beneficial. The major initiatives taken to upgrade and strengthen highways and expressways are: • The Eastern Peripheral Expressway—a 135 kms long, six-lane expressway with a total project cost

24 india WAREHOUSING handbook - 2017

Foreign Direct Investment of upto 100 per cent under the automatic route is allowed for support services to road transport, cargo handling, construction and maintenance of roads, bridges and construction and maintenance of roads and highways that will prove beneficial. of USD 750 million that would decongest Delhi traffic. An agreement has been signed regarding the same and the expected project cost (EPC) is — USD 3.7 billion. • The Delhi–Meerut Expressway— a 150 kms project with a total project cost of USD 1 billion) • Vadodara–Mumbai Expressway—a 473 km sexpressway with a total project cost of USD 4.3 billion would provide faster access to the economic hubs of Mumbai, Vadodara and Ahmedabad.

The value of roadways and bridge infrastructure in India is expected to grow at 17.4 per cent CAGR until 2017, to reach USD 10 billion. Roads are deemed to be the arteries of the Indian logistics network. The objective of the investment is to develop new road infrastructure and modernise the existing road network, in addition to developing interstate highways or expressways. In the project outlay, the government has earmarked an investment of USD 32.4 billion during the twelfth Five Year Plan (FYP) for the development of roads in the period 2012-17. When the pros and cons of these investments are weighed to understand its impact on the traditional utility business models, they can be perceived as a good move bringing about overall improvement in the structure. Afterall, the liberalised FDI norms under “Make in India” initiative, which include defence, insurance, railways infrastructure etc., have resulted in a surge of proposals and investments that the country received in FY 2015-16.

The Interesting Growth Curve The timeline shows an interesting growth curve for the logistics industry. Today, India has overtaken Brazil and Indonesia and ranked third in an emerging markets logistics index for 2016, which rates countries based on business environment. The rise can be attributed to the country’s new leadership. Doing substantially well in the past one year, India has come up from position five to three. It is the fastest growing economy and just needs more structural reforms. The clarity in rules, taxes and investments coming into infrastructure have a major role to play in it. India’s economy is expected to grow by 7.3 per cent.

Why Is Logistics In India Ranked Attractive? The sector allows for 100 per cent FDI under the automatic route.

Japan is expected to sign

Project Nilgiri (Wi-Fi services at stations)

This includes: construction, operation and maintenance of suburban

a MoU to develop 400

Indian railways has partnered with Google to

corridor projects, high-speed train projects, dedicated freight lines,

stations and assist in zero-

set-up Wi-Fi hotspots in 400 stations in its first

railway electrification and signalling systems, freight and passenger

accident mission of the

phase, while the second phase would involve

terminals and Mass Rapid Transit Systems (MRTS).

Indian Government.

providing Wi-Fi connection on running trains.

The index conducts a survey of over 1,200 global logistics and supply chain executives, who say that the logistics industry has to brace up for more uncertainty and volatility in emerging markets in 2016. Sixty-one per cent of those surveyed said they are unclear on the direction of the world economy and expect more turbulence, stating their top concerns to be China’s economic health, oil prices and the direction of the US economy.

The 2016 country rankings are as follows: 1. China 7.91—8.09 2. UAE 7.00—6.63 3. India 6.76—6.66 4. Malaysia 6.66—6.36 5. Saudi Arabia 6.62—6.76 6. Brazil 6.40—6.71 7. Indonesia 6.36—6.70 8. Mexico 6.17—6.30 9. Russia 6.16—6.57 10. Turkey 5.95—6.06 Back in 2007, Indian business world was seen as strongly expanding businesses across the world, but when it came to cross-border transportation of

26 india WAREHOUSING handbook - 2017

goods, the country was ranked below a number of other major economies such as the US, UK and China. India held the 54th position in 2016 on the Logistics Performance Index (LPI) that is based on the ability to transport goods reliably and in a costeffective manner to and from a country. However, the country has found a place higher than as many as 111 nations including Saudi Arabia, Poland, Qatar, Cyprus, Pakistan, Bangladesh and Sri Lanka. In terms of timeliness, India was ranked at the 47th place while China is at the 34th position. On a

scale of one to five, India scored 3.07 points on LPI reflecting parameters like customs, infrastructure, international shipments, logistics competence, tracking and tracing of shipments, domestic logistics costs and timeliness. According to the World Bank study, “Connecting to compete: Trade logistics in the global economy” report, countries that top the LPI ranking are typically key players in the logistics industry, while those at the bottom are often trapped in a vicious circle of over-regulation, poor quality services, and under-investment. Among developing countries, logistics over-achievers are also those experiencing economic growth led by manufactured exports. On July 15, 2012, an article stated that India’s ranking slipped to 46th in the 2012 World Bank’s Logistics Performance Index. Five years ago, India was ranked 39. The drop in ranking became a matter of concern for the country, which was expecting a lot of foreign investment across sectors that require an efficient logistics system; whereas China improved its rank from 30 in 2007 to 26 in 2012; Brazil from 61 to 45; and Russia from 99 to 95. A detailed evaluation of the performance by

India - world’s fastest-growing large economy

1.0 0.6

Japan IMF forecast (%)

2015

1.6 1.5

Euro-zone

2.2 2.5

U.K. -0.6

-3.8

2016

2.3 2.6

u.s.

Russia 6.3 6.8

China

7.5 7.3

India -3.8 -5.0

-3.8

Brazil 0.0

Source: IMF World Economic Outlook, October 2015

27 india WAREHOUSING handbook - 2017

5.0

10.0

category revealed that India’s ratings on logistics infrastructure, international shipments, logistics quality and competence declined significantly. This indicated that the scale and pace of development of logistics infrastructure had seriously lagged behind the required pace and standards and that growth in international trade shipments had also been below the expected levels. Severe congestion at major seaports resulting in significant delays in cargo clearance as well as vessel turnaround times were also considered as reasons for slower growth of export-import (EXIM) volumes. Nevertheless, the 2013 Emerging Market Survey, conducted by Transport Intelligence, ranked India as the second most attractive logistics market in the future after China. Still, in 2014, despite a phenomenal rise in the volume of freight traffic movement over the last decade, the country’s logistics infrastructure was lagging behind and continues to be characterised by concerns around costs, profitability, availability of trained manpower and adoption of technology, according to a report by Deloitte and the Indian Chamber of Commerce. India’s rank in the LPI fell from 39 in 2007 to 46 in 2012. The country lagged behind other major markets such as Brazil (41), China (26), US (9) and Germany (4). Based on quality of trade and transport-related infrastructure, one of the six criterions for measuring performance, the rank deteriorated from 47 in 2010 to 56 in 2012. The fall in ranking indicated congestion witnessed on roads and ports, longer dwell times in ports, longer overall transit times and overloading of trucks leading to faster deterioration of road infrastructure. In the 2014, India secured 54th position out of the total 160 countries covered. In terms of infrastructure quality, it was ranked 58th.

The Big Players Chant the “We can’t stop, we won’t stop” Mantra Overcoming hurdles at every step, India’s logistics market has grown powerful and attractive by joining hands with technology. Road transport may have emerged as the dominant segment in India’s transportation sector but it faces numerous challenges like the unreliability and unaccountability of logistics trucks, which often do not report on time at the destination, resulting in a cascading effect on the operations. Moreover, there is a severe shortage of trained manpower in our transportation and logistics sector. With no requisite skills to handle the entire supply chain, the industry becomes unorganised with nonstandardised operating procedures. With so many prevailing issues, technology plays an imperative role in solving some of these challenges and leveraging its convenience to the driver, the customer, as well as the business owners, thereby helping the sector leapfrog. It has the ability to facilitate delivering global business solutions to local geographies. As we concentrate on the attractive areas of the logistics industry in the country, there are also shortcomings that affect its ranking, such as compensation and incentives, when we come to analyse it. Transportation and logistics companies pay lower wages than companies in many other industries. Nevertheless, transportation and storage salaries are 42 per cent lower than in the best paying industry. According to the PWC “Transportation and Logistics 2030” report data, in the important benefits guaranteed to the workforce in logistics industry in the world, the current status shows that America is better than Asia and Europe, wherein

28 india WAREHOUSING handbook - 2017

America’s Expense reimbursement is 64per cent, Asia’s Variable cash bonus is 50 per cent and Europe’s Pension plans are at 57 per cent. In the same order of countries, healthcare benefits are 56 per cent, transport allowance is 51 per cent and expense reimbursement are 42 per cent respectively. Hence, India has to focus on internal growth, while simultaneously managing the outbound one.

The Wide Angle Fortunately, the scope of investments will offer our country a wider window for development. The enormous contribution of USD 655 million by the World Bank for the development of five existing national waterways will facilitate new logistics parks and lead to development of road and rail connectivity around

the region. The Sagarmala project aims to involve the widening and deepening of channels to accommodate large vessels. Considering that dredging activities constitute at least five per cent of the port development costs, the sector is expected to add an additional revenue of USD78 million every year. The tourism sector will also flourish with the development of marinas and modern jetties along the coastal tourist circuits, which in turn is expected to increase the scope of tourism activities, such as luxury yachting and holiday cruises. Coastline development will boost ship building and related MRO activities across the country. Foreign participation would play a key role here. Skill development centres such as maritime institutes would benefit from this program, since there will

be a greater need for skilled manpower to operate modern infrastructure. Organisations these days have started looking at the transportation and logistics function as crucial rather than considering it as merely business-enabling. While the superior players with abundant financial resources have made investments in this function, the smaller or proprietor-driven firms in India are yet to make considerable investments in technology and talent. Moreover, given the global demand for an ideal delivery, technology enables a smarter logistics function. However, its primary objective is to manage operations with improved efficiency.

Keeping it Tech-Savvy Technology intervention can benefit the logistics and transportation companies in dramatically improving their productivity, end-to-end visibility, warehouse and yard management, fleet management, escalating their customer account management, relationship and accessibility, assimilating the off-road and on-road movement of their consignments and vehicle, ensuring real-time tracking and tracing, condensing labour, fuel and sales management and increasing the transparency and accountability within their organisation. Advancements in technology are shrinking

the world day by day, which is also increasing the customers’ expectations, resulting in companies becoming prone to a more uncertain environment. New technologies are influencing the way the world is communicating and the combination of these new technologies in supply chain management has provided important advances in the methods used by the logistics and transportation companies. The good news is India is rapidly catching up with the rest of the world by executing the latest technology solutions available for the Transportation and Logistics sector through its comprehensible vision, strong planning and technical approach to progress. Progressing by leaps and bounds, India is now considered the world’s fastest-growing large economy. The International Monetary Fund (IMF) has predicted that India would retain the status of fastest growing economy until 2020. The developments in lucrative power projects in the north eastern region are expected to generate cargo movements of about 50 to100 million metric tons over a period of 20 years, where IWT could complement the cargo transportation needs. Yet, to be attractive also means to be responsible in one’s operations. Utilising domestic shipping to one’s full advantage over road and rail transport will help reduce fuel consumption for every tonne per km of freight shipped upto 15 per cent, instead of 54 per cent, consumed by road and rail respectively, with comparably less emissions. Therefore, once the investments are materialised and when development of railway infrastructure takes place, it would lead to considerable development in logistics. It would allow easy and quick transport of coal to the power market, thus greatly helping in meeting the country’s electricity needs. 2017 - india WAREHOUSING handbook 29

Logistics Park in India is still an emerging concept. We hardly have two to three per cent of storage share of Logistics Parks in comparison to the overall storage. We bring a report to explore this concept further:

30 india WAREHOUSING handbook - 2017

AVAILABLE

Built-to-Suit Warehouse on lease basis

ANTARIKSH G

Largest PEB sheds Warehouse available in Bhiwandi

From 25,000 Sq. Ft. to 25 Lakh Sq. Ft. NH3 & Bhiwandi

Antariksh Logistics Park 55 Kms approx. from Mumbai Airport and JNPT

Strategically located on Mumbai â&#x20AC;&#x201C; Nashik Highway

Outside Octroi & LBT Limit and Highway Connectivity

24*7 secured premises, power supply, Internet & Wifi connectivity, Wide road

Ideal for 3PL, FMCG, Retail / Furniture, E-Commerce, Electronics, Pharma, Automobile, Electrical Companies & also for other Industries and Corporates

Contact Person: Raj Baldewa 09764442260 Corporate Office: S7/8, 2nd Floor, Eternity Mall, Teen Haath Naka, Thane West-400604 2017 - india WAREHOUSING handbook 31 E-mail: leasingantariksh@gmail.com | Web: www.antarikshgrp.com

s logistics parks are being set up along e-ways, the physical distance and time between the Logistics Service Provider (LSP) and end-user is marginally decreasing and business relationships between them are getting strengthened. The INR 30,000 crore plan of setting up logistics parks along e-ways aims to reduce 50 per cent of trucks. But, will logistics industry incur any loss by eliminating trucks in the process? If yes, should it have any alternative plans to compensate for the loss? Investments in logistics parks will definitely be profitable in long term. However, elimination of high capacity trucks can be ruled out in near future. The dealer trucks will go to depots from one park to another. If distribution is required in the city, there’ll be a secondary kind of transport. But then, some industries like cement where logistics cost is 70 per cent of the total cost of goods sold, were already setting up warehouses closer to the railway stations. While this is a good proposition, the challenge will be in terms of space, as habitations typically crop up closer to railways and roadways. The entire setup needs to be demolished amicably to set up these parks. We are not eliminating trucks here. Rather, trucks do not need to enter the cities, thereby reducing congestion. We are shifting to smaller vehicles for movement of goods from the city to the logistics parks. If we look at the cost per ton, it is higher for smaller vehicles. So, operationally, the cost will increase. Such parks are operational in USA/Europe for many decades. We are sure that a feasible model could be created for India. Yes, to some extent long-haul trucking revenue may go down, but short haul within city transportation will multiply. The overall revenue of Road Transportation

32 india WAREHOUSING handbook - 2017

Mumbai Suburbs

Logistics Park

10 ton truck

10 ton 30 ton truck

Mumbai

truck

Delhi

Thane

Delhi

Multi-modal logistics parks to connect 15 cities with highest freight movement

Gurgaon Bigger trucks can operate between major connecting cities, reducing logistics cost

Railways Noida

JNPT

Locations for logistics parks:

Delhi-NCR, Mumbai, North & South Gujarat, Hyderabad, North & South Punjab, Jaipur, Kandla, Bangalore, Pune, Vijayawada, Cochin, Chennai & Nagpur

sector will remain the same or higher. But, there will definitely be a modal shift for revenue, from longhaul to short haul and for the consumer, tangible and intangible benefits will be immense. Investment in warehousing and various material handling equipment will be very viable with a break-even within a time period of six

We are shifting to smaller vehicles for movement of goods from the city to the logistics parks.

years. Once, Goods and Services Tax Bill (GST) is rolled out, many cities across the country located

Smaller trucks will transport goods from the logistics parks to nearby cities

logistically on e-highways will be constantly buzzing with such activities. Earlier last year, Union Minister for Road Transport, Highways and Shipping Minister Nitin Gadkari recently announced that while the two peripheral expressways currently under construction will take nearly 50 per cent of vehicles off Delhi roads, there is a plan to set up ‘logistics’ parks along these corridors so that warehouses and godowns located inside the city can move out. This way, entry of thousands of heavily loaded polluting trucks into Delhi everyday could end in the next couple of years. Gadkari said, “Road work involving around `30,000 crore is underway around Delhi. Completion of these will improve traffic flow. I have already discussed the issue of logistics

Viren Thakkar

Owner, Logistics Park Pvt Ltd

Investment in warehousing and various materialhandling equipments will be very viable with a breakeven within a time period of six years.

hubs with Chief Minister Arvind Kejriwal. Once we have these hubs, godowns will move out and number of trucks entering Delhi will reduce. There will be less traffic and pollution.” Calling it a win-win proposition for all, he pointed out that since construction dust was a major pollutant, there would be a number of yards for making pre-cast concrete slabs. Once these are used in major infrastructure projects, the need for on-site mixing and the resultant dust will reduce. The cost of projects will come down too. Quite a few of these 250 yards planned by the government will come up in the NCR. While stating that the AAP government was cooperating to deal with congestion and pollution crisis, the minister said his Ministry’s budget would be used to improve and build new roads that would make travel better in Delhi. “Suo motu I have taken up building eight elevated corridors giving direct connectivity from Ring Road to the two peripheral expressways,” Gadkari said.

THE CHEAPER, THE BETTER Peripheral Yards for precast Cutting Clutter Panipat Eastern Expressway (EPE) concrete slabs Logistics parks in India are still Plan to decongest Delhi Some of the precast an emerging concept. We hardly roads and reduce pollution concrete yards to be located around Delhi to EASY ENTRY & EXIT have two to three per cent of reduce dust pollution Bahadurgarh storage share of logistics parks 8 elevated Hapur Ring Ghaziabad planned, Road in India in terms of the overall roads Logistics hubs along e-ways Western connecting Dhaula Proposal discussed Peripheral storage. Renting a space in Ring Road Noida Kuan with Delhi govt, Union Eastern Expressway transport ministry (WPE) logistics parks may or may not be a with Peripheral appointing a consultant Gurgaon Expressway cheaper, but to a consumer, when To help shifting warehouses (EPE) & Western Manesar from Delhi to outskirts Faridabad all cost variables of logistics are Peripheral Expressway added up, the cost may be lower. Tender for pilot (WPE) Metrino project to be Yamuna waterway Nitin Gadkari, recently said that awarded in June Palla in Haryana to Wazirabad Barrage Work for EPE& WPE renting logistics parks’ space under way, to take to become a waterway in 3 months Work on for widening New barrage planned would be cheaper for traders. around a year to finish Delhi-Hapur stretch of NH-24 near Kalindi Kunj to Decongestion of Dhaula Kuan stretch with With the coming of GST Bill, we maintain draft for defence providing necessary land navigation have to build big warehouses; the way the industry is moving, the traders are for toll on KMP expressway. However, later heavy outsourcing their warehousing activity to logistics vehicles will have to pay `4.5 per km, just for the player. But, the main constraint in the city is the stretch and not the entire corridor. Although, they costly process of maintaining logistics connectivity. will have to travel 10 km extra just to avoid trafWhen we move it outside the city, there’ll be more fic in Delhi. The challenge is that the plan is not logistics connectivity, being considerably cheaper controlled by one agency. There are many agenand there’ll be big warehouses to do value- cies involved, such as Central government, state addition. All these benefits will be passed onto government and local government. The primary the customers. In India, renting a space works out objective of the government is to build a socially cheaper than owning it. So, though it will work out developing economy through revenue collection. to be cheaper, there will be a potential loss to the When they pursue the revenue collection path, the government exchequer as bigger trucks will not government authorities in this system want to milk enter the cities, and hence, will not be subjected everybody involved and increase the cost; so much to toll tax. so that it becomes unviable. If we knew that there’s Also, the terms and conditions of renting reasonable cost and they adhere to it, then the logistics parks’ space needs to be evaluated on a system compliance won’t be unrealistic, which’ll make it viable. If we keep on adding some comholistic basis. pliance issues, they keep on taxing people or start MORE MILES TO COVER collecting some other revenue, thus rendering the For the first two months, users don’t have to pay plan unviable KMP expressway has taken ages to 2017 - india WAREHOUSING handbook 33

India’s exports have the potential to rise by 40%, if the logistics cost is brought down to 13-14%,

reach its final destination. Highway authorsays Nitin Gadkari. ities and private partners responsible for it have incurred huge losses. Putting up a toll means a big mess for transportation, leading to wastage of time and sometimes vehicle seizure for no reasons. Hassle-free drive to compensate the extra kilometers run and fuel lost, is the immediate need. THEMED CITIES GALORE A series of theme cities have been planned around e-ways to push economic activities. The idea is good but any city needs careful planning. Infrastructure will be the key in terms of electricity, water and other basic needs. Are we in a position to take this additional load? Yes, potential investments will drive economic growth provided we plan it well. Also, there needs to be an incentive on why people should move here and what does the future promise for them. A CHALLENGING LONG RUN The very plan of logistics parks sound ideal and favourable that would provide a fillip to Indian logistics. But, how far it can survive in the longer

34 india WAREHOUSING handbook - 2017

run? What kind of challenges will pop up in the process? The government is controlling other issues, like in this case, it is pollution and revenue collection. Then, in the mode of revenue collection, the whole of this facility where the cost should come out from its user becomes the friction point between user and the government. So, if the cost goes up, definitely people will again see the cost advantage for using KMP expressway. We were in the forefront to forward this policy. In the last year’s convention, when Nitin Gadkari, the Transport Minister had attended, there he had announced in response to our request for having logistics parks outside the

The very plan of logistics parks sound ideal and favourable that would provide a fillip to Indian logistics.

big cities, especially on KMP in Delhi. There, he agreed and we worked with him on this policy. So, this is the outcome of that moment, which will actually help LSPs. If more and more companies join the logistics parks, the costs will come down. The challenge is to convince the companies to be part of the initiative. Also, how the share of rakes will work in case of restricted region movement remains a challenge. What needs to be questioned is that are our roads sufficiently wider to handle this load? In the long run, as long as there is coordination and cooperation among the various stakeholders, this will survive.

FOR A CLEANER FUTURE Road Transport and Shipping ministry plans to move the automobile sector towards less consumption of diesel. But, is it really possible? How would it impact the logistics industry? They have already driven all the buses and everything else into using CNG. But, there’s no technology as such available for the heavy truck cargo movement. Again, they’ve tried electrical buses, which isn’t suitable for heavy load. For the moving passenger vehicles, alternative fuel has been devised by the ministry, where it is doing quite a lot of good work. Hence, automatically it’ll reduce diesel consumption in vehicles. In India, diesel is still cheaper than petrol though it needs more maintenance and pollutes more. Though the diesel variant of vehicles cost more than the petrol variant, if you will travel 70-90 km a day or more, you will prefer a diesel variant. But, if you will travel 20-25 km, you will pick the petrol variant. Though petrol vehicles are more power-efficient, these can be used only for limited running, as they deliver lesser fuel efficiency, leading to high running expenditure. FINAL IMPRESSION Packed with world-class amenities and security systems, logistics parks will be far better than big godowns. Let us not compare chalk and cheese assuming both are white objects. As few prominent names in the field of logistics such as SIAM, TCI, AITWA evaluate the arena to increase operational efficiency and put their best foot forward in the world, there will be an interesting shift in the years to come, for us to acknowledge, learn and evolve yet again.

Guest column

Industry Specific Logistics Park and 3PL Services

ogistics Park is a node having more concentration of construction significant impact is expected on the Supply Chain function. GST will and development specifically for logistics functional activities. impact supply chain at various touch points and activities: warehousing, The rationale behind such concentrated and focused park is distribution, inventory, manufacturing and sourcing. In new scenario improvement in logistics efficiency, reduction in transit and warehouse location selection will be based on cost efficiencies and processing time, optimisation of logistics cost and improvement in flow customer service level leading to substantial consolidation of warehouses. of business services processing. Key functions in a logistics park include For example, as of now a consumer electronics company operate with warehousing, distribution center, transportation hub facilities, transport approx 28 warehouse location, pharma company with 30 warehouse organisation Management Center and logistics information center. In location and FMCG company with 36 warehouse location. Post GST, easier terms we can say it as convergence point of logistics activities, these numbers will be between 12 to 20. These large and efficient warehouses will deliver economies of scale, optimized inventory and operations and transportation. reduced primary transportation cost. Spent on logistics and supply chain in India With emerging changes in market landscape, requirements of is at 13-14% of GDP, which is substantially integrated logistics, transportation hub and value added services is going higher than developed countries. Indian to increase many fold. Such requirement will be fulfilled by organized logistics market is highly fragmented, Still its sector as the transformation will be technology and capital driven for the dominated by large number of unorganized logistics sector. Some of the industries having unique nature will require players. As per a report by Cygnus Consulting industry specific warehouses, transportation and allied services. which the size of the warehousing component of may lead to evolution of industry specific logistics park. Pharmaceuticals logistics is estimated at 9% of overall logistics and food are the sectors whose distribution process is a cycle of complex cost, while transportation account for approx 35% activities that require highest hygiene, safety, security, consistency of logistics and supply chain cost in India. In this standards and constant information sharing. Keeping full control over the space of logistics, unorganised players account for system, and having insight into even the smallest part determines approx 75% of the warehousing market and more the quality and efficiency of logistics. While as of now than 90% of road transportation market. Low domestic distribution of pharma and food is managed by level of organized structure leads to small C&F and unorganized transporters, by and large weak management, poor quality of who have no mechanism for quality and efficiency of infrastructure and poor processes, logistics. which in turn increases As a case analysis, we have identified critical issues inventories, waste, losses and in managing pharma and food supply chain as follow: overall cost of supply chain. â&#x20AC;˘ Operational excellence in terms of cost-effective With the introduction of GST, Vikash Khatri, Director, Aviral Consulting Pvt Ltd development and faster lead-times which is primarily a tax reform,

36 india WAREHOUSING handbook - 2017

• Inventory costs in the Food and pharma sector are substantial and are Optimised estimated to be around 10%-18% of cost net revenues Alignment to Specific Skill • Last mile visibility Set business • Determining optimal inventory levels due to the involvement of various stochastic variables Industry focused logistics park • Reverse Logistic for expired medicines And 3PI services and edibles and disposal mechanism Operation End to end of them expertise solution • Managing perishable products supply chain • Degradation of the food and medicines as they move along the supply chain Specialised Specilized Customised Customized which results in allowing substandard Transportainfrastrcture infrastruction ture products to reach in hands of customer • Maintaining temperature control across the chain • Complex distribution network with fast On analysing the above issues in detail replenishment we find that most of above issues arise due to • Controlling wide supply chain with huge following reasons: Stock Keeping Units • Fragmented Supply chain • Poor training and education of supply chain • Infrastructure gaps on ground staff. • Poor Automation and data sharing • Integration of domestic and international • Poor processes businesses. • Shortcut on quality & regulatory matters • Inability to forecast accurately, lack of • Skill set gap incentives for maintaining stocks Solution to these industry specific issue • Inefficient distribution systems and pilferage and developing industry expertise will bring • Implementation of e-business practices better efficiency in terms of operations and cost such as lack of consistency and poor data both along with reduced time to replicate such offering to maximum customers. For which 3Pl quality and global nature of suppliers. • Demand for certain items overshoot service provider needs to integrate backward with the industry specific logistics park, suddenly, creating inventory issues.

which can provide quick access to ecosystem required for the specific set of customers. We can categories the requirement for such targeted offerings in four broad categories • Infrastructure: warehousing and transportation • Automation • Skill development • Value creation within the logistics solution Infrastructure is the physical asset part of industry specific logistics services, enabling the smooth flow and efficiency. Such park will have build to suit structure for the industry specific needs i.e warehouses, cold chain, CFS, MHE, racking etc. On the transportation side availability of customized services, which are focused for the industry needs and catering to targeted customers of the industry, will enhance the service level. For example a dedicated milk run service with customized vehicle can substantially reduce contamination and damages in last mile. Complex nature of supply chain can be efficiently managed and controlled through automation. Automation will include WMS, TMS, robotics, ASRS system, business intelligence tools etc. These automation tools have industry specific customization. Logistics service provider for a specific industry vertical can develop higher degree of expertise as a unique value add to their customer and also optimize the cost through economies of scale. In a nutshell such industry specific logistics park and integrated service providers can offer an ecosystem supportive to growth of industry. 2017 - india WAREHOUSING handbook 37

Cold Storage in Warehousing Necessity for Improvement Indiaâ&#x20AC;&#x2122;s cold chain sector is a combination of surface storage and refrigerated transport. The industry has been growing at a Compound Annual Growth Rate of 20 per cent for the last three years. The cold chain market in India is anticipated to reach INR 624 billion (US$ 13 billion) by 2017. Cold stores are the major revenue contributors of the Indian cold chain industry. We bring you detailed overview of the current scenario of infrastructure of cold storages in India and the scope of development they carry with themselves.

38 india WAREHOUSING handbook - 2017

cold-chain is an environmentally controlled chain of logistics activities, which conditions and maintains the goods (produce or product) within a stipulated range of parametres that include temperature, humidity, atmosphere, packaging and other conditions. Importantly, coldchain is all about end-to-end connectivity and hence, above all, be market linked. Depending upon the handling requirements, a typical coldchain flow may be understood separately for harvested fresh horticultural produce (fruits and vegetables) and processed products (manufactured food items). The holding life of majority of the fresh horticultural and floriculture produce, even when in the cold-chain, ranges from just a few days to a few weeks only. Currently, India has 6,300 cold storage facilities unevenly spread across the country, with an installed capacity of 30.11 million metric tonne. These are mostly used for storing potatoes. However, the market is gradually getting organised and focus towards multi-purpose cold storages is rising. India is one of the largest producers of agricultural products and one of the global leaders in the pharmaceutical sector. Yet, it is known to have a fledgling cold chain, which results in supply chain losses of food and other resources. These losses have been stated to be as high as US$8 to 15 billion per annum from the agriculture sector alone. To address this concern, the government had earlier constituted a National Task Force on Cold Chain in 2008.

How cold storage is affected by poor move to arrest temperature fluctuations.” One of the main reasons for galloping rate of food infrastructure? India is the largest producer of fruits and the second largest producer of vegetables in the world. But contrary to this, the food inflation rate gallops high in India on a daily basis. One of the major reasons for this inflation is wastage of fruits and vegetable products due to inadequate facilities of cold storage in our country. Gubba Deepthi, Head Communications, Gubba Cold Storage says,

inflation in India is the lack of supply chain for food, in which cold chain plays an integral part. Robust cold chain is the need of the day to benefit from larger production capacity and passing it on to consumers in the form of reduced prices as well as producers in terms of reduced wastage. Shedding light into the food inflation rate issue, PSS Prasad, President, Apollo LogiSolu-

“Primary gap is in the maintenance of cold chain to ensure that the food remain fresh at every point of collection and distribution. It is crucial to maintain the temperatures in the cold room according to the specifications of the product. Wastage of the product and in turn inflation can be controlled when the safety of the product is assured. Introduction of tamper proof data loggers in the cold storages is a brave

tions said, “There is a lot that needs to be done to augment the cold storage facilities in the Indian warehousing sector. These have a direct correlation with the food inflation rates in India and in effect the economy. According to a report by PwC titled ‘Building Warehousing Competitiveness,’ integrated cold storage warehousing has huge potential in India. The cold storage system, when supplemented with temperature-con2017 - india WAREHOUSING handbook 39

Gubba Deepthi, Head Communications, Gubba Cold Storage

Yes, the government has been supportive to encourage cold chain business through monetary grants as well as educative support for technology and training. With growing population and increasing food needs of the world, preservation through cold chain is the need of the hour. The state governments are also seen to be a step ahead in identifying the individual gaps and granting extra support.

The major components that need to be developed for effective integration of the cold-chain sector are

Static Infrastructure – Immobile infrastructure at farm-gate (modern pack-houses with pre-coolers, value adding units), term based storage (Bulk cold warehouses), and Cold distribution Hubs (Cold stores for last mile access to markets). Mobile Infrastructure – Transport units for connecting the static infrastructure - designed for logistical load factors (small volume transit and long haul transits). Additionally, cold-chain extends to last mile retail or point of sale at merchandising platforms. Standards and Protocols – To define a ommon glossary and procedures for handling a wide array of raw produce and finished products. Skilled Resources – Human resources to implement all above aspects trolled transportation connecting farm-level storage facilities, processing units and distribution outlets will not only improve efficiency but will also solve our problem of wastage of agricultural products. The cold chain market is dominated by private players despite the presence of stateowned players.” Talking about how the poor infrastructure causes inflation, Rajesh Goyal, Secretary, Federation of Cold Storage Associations of India says, “Central and state governments should promote and give more subsidies for construction of multi-chamber and multi product cold storages in those areas where there is lack of storage

40 india WAREHOUSING handbook - 2017

facilities in comparison to Production Awareness Programmes should be organised for imparting knowledge regarding storage techniques of various fruits and vegetables. Semi processing, processing and packaging of agricultural products to be promoted at farm levels to avoid damage of products in farms. New designs of cold storages are required to be constructed to store various types of fruits and vegetables.” The absence of cold storage facilities also forces farmers to sell goods at lower prices while consumers are forced to pay more for low quality produce. Rahul Agarwal, Director, Kool-Ex Cold Chain Ltd holds the view, “The Ministry of Food Processing, Government of India has earlier stated that there is wastage of more than 25 per cent of fresh produce in India due to improper storage and transportation networks, especially in the cold chain. The government is also offering subsides to the private sector to push the growth of such Infrastructure.” The need of the hour is to create economically viable cold chain solutions linking production centres to consumption centres, thereby reducing physical wastage of perishable commodities and in turn leading to the development of processed food industry.

Rajesh Goyal, Hony. Secretary, Federation of Cold Storage Associations of India

We welcome the decision of Finance Ministry to cut down the import duty rates to promote reefer vans but a lot of work still remains to be done for favourable results. The farmer and trader should be well aware of technical and financial importance of use of reefer vans. To get the things started, the logistics fares of reefer vans should be kept at par with normal vans.

Cold storage essential for medicines Pharma industry needs a lot of support in warehousing. Ramesh Mamidala, CEO, Çelebi Delhi Cargo Terminal, too feels that a lot still needs to be done to overcome the challenges that this industry is currently facing. He puts forth his point by saying, “Most of the major airports in the country are doing well in developing dedicated pharma processing facilities. We as Çelebi Delhi Cargo Terminal have gone a long way in creating a state-of-the-art Pharma Logistics Centre with 200 MT per day processing capacity. Our facility is also GDP certified, which certifies that we follow the most stringent norms while handling pharmaceutical products. The need of the hour is to develop similar world class facilities across all the airports in the country which is still lacking. Secondly, for a critical product like pharma which deals with human life, there is a need of increased awareness about the criticality of the product amongst all stakeholders. It is very much important, as despite having suitable infrastructure, the supply chain is vulnerable to excursion due to negligence of few stakeholders. Thirdly, regulatory approvals need to be much faster, for which regulatory authorities are rigorously working which will surely bring a significant change in processing times.”

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Rahul Agarwal, Director, Kool-Ex Cold Chain Ltd

The Ministry of Food Processing, Govt. of India has earlier stated that there is wastage of more than 25 per cent of fresh produce in India due to improper storage and transportation networks, especially in the cold chain. The government is also offering subsides to the private sector to push the growth of such Infrastructure.

Currently, India has 6,300 cold storage facilities unevenly spread across the country, with an installed capacity of 30.11 million metric tonne.

Talking on the same lines, Henrik Ambak, Emirates Senior Vice President, Cargo Operations Worldwide explained about the newly introduced Emirates SkyPharmaa new purpose-built facility dedicated exclusively to the timely and secure transport of temperature sensitive pharmaceutical shipments at Dubai International Airport (DXB). He said, “It is part of the new 11,000 square metre extension of Emirates SkyCentral terminal at Dubai International Airport and offers 4,000 square metres of space dedicated to pharmaceutical cargo. The SkyPharma facility features two temperature controlled zones (2-8 degree Celsius and 15-25 degree Celsius), 88 temperature controlled (2-8 degree Celsius and 15-25 degree Celsius) individual positions in the automated ULD (aircraft pallet) handling system as well as five temperature controlled acceptance and delivery truck docks in the dedicated handling facility.”

The Right Push for Development For private players the high level of initial capital required to construct a cold chain

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unit continues to be the biggest challenge. But if the government pitches in with a clear plan and promotes more PPP initiatives in this field, we could see a momentum growth in the cold chain industry in India. Gubba rightfully asserts, “With growing population and increasing food needs of the world, preservation through cold chain is the need of the hour. The state governments are also seen to be a step ahead in identifying the individual gaps and granting extra support.” Goyal feels about pharma storage, “NCCD, NHM, NABARD and NHB all have supported a lot in the last 15 years and so a sizeable storage capacity is there all over India. Now, we need their support in modernising and upgrading of existing cold storages so that they can survive in global arena. Advanced studies and researches of storing methods according to our requirements is the need of the hour.” The main objectives of the NHB are to improve integrated development of horticulture industry and to help in coordinating, sustaining the production and processing of fruits and vegetables.

PSS Prasad, President, Apollo LogiSolutions

Solar powered cold storage is a new concept in the Indian market but is slowly gaining credence and usage. The application of this natural energy source, on account of it being renewable and being a never ending energy supply source, makes it very cost effective and highly energy efficient.

Cold Storage becomes Solar In a bid to boost the use of solar powered cold storages, the Ministry of New and Renewable Energy has extended its subsidy scheme to solar refrigeration units as well. Most solar powered items, including solar lamps and solar heating systems, enjoy a 30 per cent subsidy under different MNRE programmes. There are barely ten solar cold storages being used in the country so far, the first having been installed about three years ago. Costing around INR 3040 lakhs, they are manufactured by a handful of private companies such as Ecozen Solutions and Promethean Power Systems. Taking about the integration of solar power in cold chains, Prasad has a very interesting point to make. He said, “According to various estimates, in India, 30-40 per cent of the harvest produce is lost due to lack of cold storage facilities from the point of produce to consumption. These, and even the available mobile cold storage units, are power intensive giving rise to higher prices of agri products when they reach the end consumer. Solar powered cold storage is a new concept in the Indian market but is slowly gaining credence and usage. The potential up-

Key Features of the Pharma Logistics Centre Different Temperature Controlled Chambers are as below Pharma Exports

• • • • • • •

Area (In Sq. Mts.)

Current Capacity

Temp. Range

Chamber – 1

215

15 Pallets LD or MD & Loose Cargo

+15°C to +25°C

Chamber – 2

115

12 Pallets LD or MD & Loose Cargo

+2°C to +8°C

Chamber – 3

Loose Cargo

+2°C to +8°C

Chamber – 4

Loose Cargo

-4°C to -20°C

Temperature Controlled Examination Zone (+15°C to +25°C) Unitisation in Temperature Controlled zone Humidity control to prevent moisture damage X-Ray Machines & Weighing Machines Temperature Monitoring System with real time alert for temperature excursions Roller Bed & Ball Deck Rollers Cool Dolly: Refrigerated dolly on wheels which can carry one complete aircraft pallet/container both to and from aircraft to maintain integrity of the cool chain on ramp/tarmac.

take of solar powered cold storage can be expected to be high among the primary users, i.e., farmers and other stakeholders in the agri-supply chain thus bringing down costs.” Talking about the same, Pandey says, “Ecofrost Technologies has developed an innovative solar powered cold room system called Ecofrost for storage of fruits, vegetables, flowers and other perishables. Ecofrost incorporated several breakthroughs, patent pending technologies

that made this product suitable for a reliable operation in the field. Ecofrost harnesses solar energy from PV panels which is fed directly to the compressor via a drive that works on algorithms developed by us. The innovative thermal storage technology provides backup up to 30 hours during non-sunshine hours. The passive thermal storage design that we used allows for efficiency close to 100 per cent and works on radiant cooling than forced convection alone. The 2017 - india WAREHOUSING handbook 43

Ramesh Mamidala, CEO, Çelebi Delhi Cargo Terminal

The need of the hour is to develop similar world class facilities across all the airports in the country which is still lacking. Secondly, for a critical product like pharma which deals with human life, there is a need of increased awareness about the criticality of the product amongst all stakeholders.

system is completely portable and can be shifted from one location to another with great ease.” On the other hand, Arora feels, “India’s cold chain is at a very nascent but fast growing phase and international players with large investment appetite and gestation period can play a pivotal role in developing modern infrastructure for the Indian market. This initiative is really beneficial as it can operate at temperatures as low as -40°Celsius and cuts energy cold stores costs by at least 75 per cent with solar power energy in combination with LED lighting cold storage. There are barely ten solar cold storages being used in the country so far, the first having been installed about three years ago. Government support should enable many more to be set up.” Goyal, on the other hand, said, “Putting up solar power projects in cold storages is discussed in every meeting. We are waiting for effective solar power policy by both central and state government. The project cost still seems to be high despite

44 india WAREHOUSING handbook - 2017

The holding life of majority of the fresh horticultural and floriculture produce, even when in the cold-chain, ranges from just a few days to a few weeks only. of the prices going down considerably in the last six months. We are also hoping for the best appropriate and specific design for cold storages.” Speaking in a positive tone, Agarwal says, “We are currently running four cold rooms on solar power since 2013. While there is an initial capital investment, the life of the solar plant can go up to 25 years thereby giving a payback in seven to eight years and onward ROI.” Meanwhile Gubba is of the view that, “Installation of solar power in cold storages is anywhere between INR 20-

Henrik Ambak, Emirates Senior Vice President, Cargo Operations Worldwide

The SkyPharma facility features two temperature controlled zones (2-8 degree Celsius and 15-25 degree Celsius), 88 temperature controlled individual positions (2-8 degree Celsius and 15-25 degree Celsius) in the automated ULD (aircraft pallet) handling system as well as five temperature controlled acceptance and delivery truck docks in the dedicated handling facility.

The gaps in cold storage infrastructure can be ideally filled up by

• Mapping the areas of concentration of growth • Mapping the seasonal supply/availability of such commodities • The optimum capacities required to manage the same • To build required infrastructure to support the same 30 lakhs. Considering the shelf life of a solar powered cold storage is around 15 years, the return on investment is achieved in around 10 years. India definitely needs to optimise its cold chain efficiency. Government here needs to step up by educating about its grants and subsidies to the cold chain players and encourage in choosing solar power by giving better opportunities.”

The Way Forward Globally, cold chains have now become an integral part of supply chain management for

the storage and transportation of temperature-sensitive goods. The focus has now shifted from increasing production to better cold storages and transportation of food produce. The utilisation of cold chain logistics includes both cold storages and refrigerated transportation and is used to increase the shelf life of food produce. With 35-40 per cent of agricultural produce in India being wasted due to lack of proper cold storage facilities, it is immensely important that a focused effort is required on part of the government to encourage the use of cold chain among market participants. The key factor that will decide how the cold chain sector grows over the next few years would be how strong and how sustainable the investment flowing into the sector is. Increasing investments from large business houses to create a backup for their interests in the retail sector, as well as increasing willingness on the part of consumers to pay a premium for higher quality of food products; and thus helping in equitable distribution of the cost of a strong cold chain infrastructure, will drive the growth of the industry. 2017 - india WAREHOUSING handbook 45

Demand & Supply

Hi-tech Logistics Infrastructure Project Features

Spread over 100 acres of land, Total warehousing capacity- 14 lac sq. ft., Built up facility- 7 lac sq. ft., Construction in full swing- 1 lac sq. ft., Ample truck and car parking area, Firefighting and fire prevention systems, Direct access to National Highway, Distance from Highway- 0.5 km, Distance from Airport- 7 km, Distance from MIHAN- 1 km, 24 x 7 operational hours, 24 x 7 CCTV monitoring, 24 hrs common security, 24 hr sufficient light and water with drainage., High compound wall for safety., Infrastructure of international standards., 80 feet primary cemented road., 60 feet secondary tar road.

Warehouse SpeciďŹ cations

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

Site: Khasra No. 80, 81 & 82, Shivmandka, Village- Gumgaon, Tahsil, Hingna, District, Nagpur (MS), India Office: Sheikh Fida Ali Sultan Ali, Lahaoli, Itwari, Nagpur (MS) - 440002, Tel: 0712- 2763079 Contact us at: Najumuddin Fidvi: +91-9373102959; najmuddin52@gmail.com Shabbir Husain: +91-9373101873; shahidrules@yahoo.co.in, Shabbir Poonawala: +91-7387095152; shabbir@oclp.in

GST

using o h e r a W n i orward F p e t S t n a i AG Warehousing industry will feel the impact of GST as the need to build warehouse in each state would be almost over and this will lead to better organised warehouses and ultimately, enhancing the overall efficiency. The abolition of various federal tax barriers and formation of a common market will improve supply chain efficiency and attract more FDI. Deepashree Banerjee talks to industry experts and research professionals and discusses the major premises warehousing sector will be optimised to a greater deal.

48 india WAREHOUSING handbook - 2017

ecently, in an exclusive interview Nitin Gadkari, Minister of Road Transport and Highways of India revealed that according to the back-of-the-envelope calculations, logistics costs would come down by at least 20 per cent as a result of GST. He also explains how. “Companies could do this with a hub-based warehouse system instead of having warehouses in all major consumer states. The check posts at state borders have already been brought down. Karnataka, Andhra Pradesh and Tamil Nadu, along with 20 more states, have dismantled border checkposts, reducing hassles for trucks. Several others are in the process (of doing so). The border check posts have been removed even as states await electronic way bills, which will make truck movement easier,” he shares. For the past few years the distribution and warehousing strategies have been very much tax oriented, which restricts effective utilisation of available resources. Usually, we have seen companies build warehouses in each state to avoid taxes. However, it is not a good practice as far as logistics efficiency is concerned; even the existing warehousing infrastructure is yet to be organised. Additionally, a substantial amount of time is spent in transporting goods due to multiple tax rates at the state and city level. But, with Goods and

Services Tax (GST) coming to the fore and because of its simplified and uniform approach, there is likely to be a more positive impact of it on warehousing in India. A recent research shows that on the warehousing front, savings can be expected in cement companies too as they would shift from multiple small warehouses to fewer large ones. It will be a gradual process though since companies usually have lease contract for warehouses. “Currently, cement players selling cement manufactured in one state to other normally set up warehouses in the state of sale. This is done in order to

avoid higher taxes as branch transfer is exempt from central sales tax (CST). In the GST era, there won’t be any CST. Furthermore, service quality i.e. time taken to dispatch cement to dealers, would be a key variable players would keep in mind while making decision on

consolidation of warehouses,” explains one Crisil Research Analyst. Therefore, the impact on companies will vary depending upon diversity in markets and the pruning of logistics costs, on account of larger scale. The GST will make doing business in India tax neutral, irrespective of the location. For a warehousing operator, investment decisions will no longer be dictated by the comparative tax advantages of various states, thereby enabling them to make decisions based on supply chain dynamics. To better understand the impact of the GST on the warehousing sector in India, CBRE Research conducted a survey of leading warehousing space occupiers to gauge their views on the new taxation regime; understand their strategies in the post GST era; and ascertain the impact of the GST on their overall business and operating costs. Survey respondents included leading corporate organisations in sectors such as third party logistics (3PLs), E-Commerce, engineering and manufacturing, fast moving consumer durables and non-durables, pharmaceuticals and retail. Approximately, 63 per cent of respondents were domestic corporates, while the remainder were headquartered abroad. According to a recent CBRE South Asia report, unlike most reforms that

Cyrus Katgara Managing Director Jeena & Company

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

2017 - india WAREHOUSING handbook 49

Sandeep Chatterjee Associate Director, KPMG Advisory Services Private Limited

“With GST, companies do not get advantage by maintaining so many warehouses. There will be bigger, multiple commodity warehouses to achieve economies of scale. But, the point still remains that if there is consolidation of warehouses, what can be done with the existing warehouses.”

tend to meet a lot of resistance within the sector, most warehousing players view the implementation of GST as a positive move. While some may argue that the reform may prove to be detrimental for the smaller players, in our opinion it is likely to allow these smaller players to develop better quality assets or enter into joint ventures with larger players. “In line with our expectations, approximately 65 per cent of respondents felt that the implementation of the GST will be positive for their overall business operations in India,” says the report. They anticipate operating costs to decrease in the post-GST era, which will enable them to consolidate their smaller facilities into larger ones and expand their footprint around major consumption centres. The report examines how these companies have been operating in India to date, their preferred locations for warehousing operations and their likely strategies after the implementation of the GST. The exponential growth of the E-Commerce sector and strong demand from 3PL companies has resulted in large space take-ups by these players across cities. The survey found that approximately 58 per cent of respondents had a warehousing space portfolio of more than 500,000 sqft, spread across various states in India. Approximately, 42 per cent of 3PL operators covered in the survey had a portfolio of more than one million sq ft across the country.

50 india WAREHOUSING handbook - 2017

Direct impact on the number of warehouses in a supply chain Design of warehouses have been of concern to the logistics professionals. Sandeep Chatterjee, Associate Director, KPMG Advisory Services Private Limited explains that historically, all the warehouses in India were designed on the basis of tax structure and not on supply chain synergies. Chatterjee cites an example in this regard. If a company wanted to do business in 29 states, it went ahead and opened one warehouse in each state to save on taxes. Consequently, there were smaller and sub-optimal warehouses. “With GST (one tax across the country), companies do not get advantage by maintaining so many warehouses. There will be bigger, multiple commodity warehouses to achieve economies of scale. But, the point still remains that if there is consolidation of warehouses, what can be done with the

existing warehouses,” Chatterjee raises a potent question. Prof G Raghuram, Director, IIM Bangalore agrees that GST will have a direct impact on total count of warehouses across the country. “The secondary distribution from a warehouse will be governed more by logistical considerations than state boundaries. This will take away the need to build warehouses in each state, leading to better logistical efficiency. It is possible that warehouses could be better organised if warehouse service providers come together in the form of logistics parks. Such parks would serve as aggregation centres, where larger and more organised warehouses could come about and serve as a node for efficient transportation both for the primary and the secondary movement,” says the veteran academician. This may however take time to evolve and stabilise after introduction of GST.

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Prof G Raghuram Director, IIM Bangalore

“It is possible that warehouses could be better organised if warehouse service providers come together in the form of logistics parks. Such parks would serve as aggregation centres, where larger and more organised warehouses could come about and serve as a node for efficient transportation both for the primary and the secondary movement.”

Cost Benefits According to Prof Raghuram, due to an efficiency-oriented approach rather than the tax saving approach, there would be savings in logistics costs. In a competitive environment, these benefits would be passed on to the customers. Chatterjee echoes Raghuram on this aspect and says that now that the tax angle is gone with GST, there will be consolidation of warehouses based on cost savings and supply chain synergies. “Another fundamental shift is that earlier, the states offered rebates if one produces and sells in the same state. GST being a destination driven tax, the focus will now be more on optimising the supply chain network from a profit and cost optimisation perspective. Another trend which is likely to come is that of warehouse-on-demand, whereby there will be specialised players who will be able to trade on warehouse space. This works well for the E-Commerce, where the demand is highly variable and we cannot predict the warehouse space needed each day. With supply chain costs going down, the cost of distribution will come down, some of which will be passed on to the customer. This is an exciting time for supply chain professionals in India. Cyrus Katgara, Managing Director at Jeena & Company holds a slightly different opinion. “GST is great for Manufacturing Industry and a disaster for Service Industry,” he says. According to him the

52 india WAREHOUSING handbook - 2017

“There will be bigger, multiple commodity warehouses to achieve economies of scale. But the point still remains that if there is consolidation of GST should have warehouses, what should be been only impledone with the existing mented for manuwarehouses.” facturing of goods. “Service tax payers were very happy with the existing structure as it was paid at one single source. Hence, Service Tax as a collection grew fastest due to the ease of payment. Now, GST has completely complicated and has lost its way on simplified and ease of doing business for Service Industry,” he added. The government has proposed to implement the Goods and Services Tax (GST), which promises to integrate India’s multi-layered indirect tax system into a single unified one, unshackling India from its bureaucratic web and improving the ease of doing business. Too many slabs, too many registrations and too many filings per month can definitely not be part of doing business “with ease”, says Katgara. The government may still segregate manufacturing industry from Service Industry for the purpose of GST,

he reveals. The new tax regime will force many companies to restructure their operations. The companies will now insist vendors and suppliers to furnish invoices as GST will make it impossible for firms to evade taxes. The new tax regime will force many companies to restructure their operations. The companies will now insist vendors and suppliers to furnish invoices as GST will make it impossible for firms to evade taxes. A sizeable number of economists in the country also forecast inflation to come down as GST rates for most goods have been fixed at a lower rate. Hopefully, with the introduction of GST, India will become a seamless market without any difference between inter-state or intra-state sales. It is estimated that after GST, logistics time will be saved to a great extent due to the abolition of multiple trade barriers such

as octroi, local body taxes entry taxes and other hurdles. Various tax barriers such as check posts and toll plazas lead to a lot of wastage for perishable items being transported, a loss that translated into major costs through higher need of buffer stocks and warehousing costs as well. A single taxation system could eliminate this roadblock for them and will reduce overall turnaround time of the vehicles. The changes in the proposed indirect tax system could reduce transportation cycle times, enhance supply chain decisions, lead to consolidation of warehouses etc. As a corollary, the overall transport cost will get reduced; and eventually it will reduce the cost of goods and services. Modes of operation and leasing strategy of the existing companies The Delhi-National Capital Region (Delhi-NCR) has substantial warehousing operations, witnessing an average annual take-up of 2.5 million sqft of space for the past three years. Bangalore in the South and Mumbai in the West are other key markets for warehousing operations. In recent years, leasing activity in Bangalore has been driven by 3PL and E-Commerce companies, which collectively accounted for close to 35 per cent share of the one million sqft of

space leased in the city during 2016. Elsewhere, Bhiwandi, in the Mumbai Metropolitan Region (MMR) has been favoured by occupiers owing to its proximity to the Jawaharlal Nehru Port and easy connectivity to residential hubs in Mumbai, Thane city and surrounding regions. State wise analysis revealed that survey respondents had a relatively larger presence in Maharashtra, Karnataka, Tamil Nadu, Delhi and Andhra Pradesh, all of which are the countryâ&#x20AC;&#x2122;s biggest manufacturing and consumption hubs and possess relatively developed infrastructure networks. The first quarter of CBRE research survey threw up a number of interesting results. The trend of built-to-suit warehousing is still at a nascent stage in India. Most of the companies prefer to lease modern warehousing space to save costs and minimise exposure to regulatory issues. Utilising a 3PL player to manage non-core operations is the second most preferred mode of operation. The expertise and resources of a 3PL operator can help companies improve their flexibility and efficiency. Most 3PL services in India are currently provided by domestic companies. 3PL companiesâ&#x20AC;&#x2122; share of overall warehousing space take-up has increased from an average of 15 per cent during 2012 and 2013 to an average of 28 per cent during 2015 and 2016. Approximately 45 per cent said that their cost of warehousing operations is likely to decline once the GST comes into play, while around 25 per cent were cautious and felt that it is too early to assess the actual impact. However, the majority of respondents said that they are already prepared for the introduction of the GST and would be able to align their business to the new regulations. The survey found that approximately 65 per cent of respond-

ents believe that they will need a minimum of three to twelve months to align their existing business strategies with the new tax structure. Among the respondents, the location of the warehouse currently is the most important factor for consideration when leasing warehousing space. This is followed by the real estate cost of leasing space in a particular state or city. While currently location decisions may also be influenced by tax-incidence, after the implementation of the GST, most warehousing occupiers are expected to take decisions purely on the basis of reach to market, quality and size requirements. Monstrous growth potential and investments galore There would be indirect impact of GST on warehousing in India, as IT costs of deploying Enterprise resource planning (ERP) systems at smaller warehousing locations would be eradicated. While cramped, ill-equipped storage units will make way for sprawling, high-tech and air conditioned facilities, the metamorphosis driven by the much-awaited roll out of the GST Act is set to augur a new order in the industry dynamics. Analysts also predict that it will ensure improved service levels at lower cost in overall supply chain. To Conclude A recent analysis reveals that there is an estimated growth of around 18 per cent in warehousing until 2017, which will be above 20 per cent in the coming years with GSTâ&#x20AC;&#x2122;s implementation. There is still an uncertainty about quantum of impact of GST on balance sheets. As every perfect narrative demands a stunning climax, similarly, the success of the warehousing sector depends largely on the seamless implementation of the GST. 2017 - india WAREHOUSING handbook 53

54 india WAREHOUSING handbook - 2017

Demand for warehousing and office space picked up in 2014 on the back of growth in E-Commerce

E-Commerce Warehousing on the rise...

segment, which also led to increased leasing by E-tailers. With various consultancies and researchers predicting a high growth for the warehousing sector in India as a result of proliferation in the E-Commerce space, we delve into the subject and take matters and dig in for more information with inputs from industry experts.

2017 - india WAREHOUSING handbook 55

he boom in the E-Commerce segment has undoubtedly resulted in an increase in demand for warehouse space. The E-Commerce industry may not need retail space, but it definitely drives the commercial real estate industry by picking up giant warehouses and also super-sized corporate offices which house their large teams comprising

customer support, tech, analytics and marketing. The warehouse industry in India is estimated to be at INR 560 billion and is growing to be at 10 per cent every year. The growth in Indian warehouse industry is primarily driven by growing manufacturing activity, rise in domestic consumption, increasing international trade, growing organised retail in the country and increasing private and foreign

investments in infrastructure. While the growing E-Commerce market poses such challenges to logistics companies, it also provides opportunities for developing smarter supply chain solutions to keep pace with the consumer demand.

The warehouse industry in India is estimated to

be at INR 560 billion and is growing to be at 10 per cent every year. E-Commerce fulfilment demands flexibility and efficiency. Companies strive to go beyond conventional boundaries in terms of space utilisation, technology tools and material handling methods, to address these opportunities. The E-Commerce segment has now opened gates to increase the number of warehouses in close proximity. The increased demand in this segment will now result in many hyper-efficient and data-driven warehouses, also increasing the need for an ideal location to be able to deliver the products faster.

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

56 india WAREHOUSING handbook - 2017

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The great Indian e-commerce and real estate E-Com Company

Corporate office(sq ft)

Warehouse (sq ft)

Proposed Warehouse space (sq ft)

Proposed spend on warehouse (Rs cr)

AMAZON

3,50,000

5,00,000

6,00,000

400

FLIPKART

5,00,000

9,50,000

5,00,000

410

MYNTRA

2,40,000

4,00,000

2,00,000

JABONG

2,00,000

3,50,000

1,00,000

SNAPDEAL

3,00,000

4,25,000

5,00,000

350

58 india WAREHOUSING handbook - 2017

factor to sustain as a warehouse for an E-Commerce segment is to be quick, efficient and cost-effective because the customer always expects speedy delivery (24-48 hours). Here, the mandatory value addition that the E-Commerce clients look forward to is the closest proximity of warehouses to their area of operations. However, warehouses in India now need to completely re-conceive how they operate to stay competitive. This means that customers should be able to get the product they want, when they want it, leading to decreased customer loyalty and customer retention. Therefore, some other valueadded services should include: 1. Industry-specific facilities: Warehousing providers work directly with customers for meeting the specific product-related requirements. Some industries with specific requirements of valueadded services are: • Consumer electronics: Reverse logistics, date/lot code/serial number • CPG: Display builds, retailer compliance, lot capture/recall management • Food and beverage: Temperature-controlled facilities, ISO Quality Management System, lot control/recall management, third-party food distribution standards (AIB/ASI), GMP certification • Healthcare: FDA validated WMS, labeling and packaging registered with FDA, VerifiedAccredited Wholesale • Distributors’ (VAWD) accreditation, state device and drug licenses • Retail/apparel: Omni-channel WMS support, foreign trade zone operations, small parcel solutions/sortation

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2. Consulting services: Strategic engagements for warehousing services always include consultative services to ensure that the warehousing service provider is optimising assets to support the shippers’ ideal scenarios for their supply chain. Usually, it is a part of the service that is offered for larger opportunities and the consultations in most cases are complementary. E-Commerce giants are making it big with innovative strategies in logistics and supply chain management backed by ample investments. The only question is, will this factor be a hindrance for the start-ups coming up in the space?

Moving Beyond the Traditional Approach For decades, consumer products have been distributed to retail stores in bulk, via pallet loads and cases. Now, online ordering is pushing brick-and-mortar retailers beyond this traditional supply chain infrastructure. Traditional fulfilment encompassing receiving, putaway/storage, picking, transport through the distribution centre (DC), sortation, value added services, packing and shipping is a poor option for handling the needs of E-Commerce. To compete in this virtual arena, picking, packing and shipping single items and small volume orders to consumers is the name of the game. Orders require delivery to customers—not weekly or bi-weekly as with retail stores, but typically within 24 to 48 hours. E-Commerce compared

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VsyhQksu ua0% 26566107, 26967712 QSDl% 26518031, 26967712

E-mail: warehouse@nic.in {®=h; dk;kZy;%

website: www.cewacor.nic.in

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to traditional logistics need to be faster and cost effective. With the kind of competition E-Commerce is facing today, there is no way that it can lag behind. Nowadays, E-retail has multi-echelon distribution

E-Commerce giants are making it big with innovative strategies in logistics and supply chain management backed by ample investments. 60 india WAREHOUSING handbook - 2017

centre model and ships the item directly from the warehouse to the customer without maintaining any of the facilities and having to bear overheads. From the moment the online order is placed to when it is picked, packed and shipped, every step in the process must be handled efficiently, consistently and cost-effectively. In E-Commerce, the distribution centre provides much of the customer experience. Simply delivering the goods is no longer an adequate mission for the fulfilment centre—customer satisfaction has to be a critical priority. The typical E-Commerce consumer expects a wide selection of SKU offerings, mobile-site ordering capability, order accuracy, fast and free delivery, and free returns.

How Will GST and 100% FDI Be Beneficial? GST will simplify India’s tax structure by broadening

the tax base, and transform India into a uniform tax market. This will lead to increase in India’s Taxto-GDP ratio. Also, as per the National Council of Applied Economic Research report, it is expected to increase economic growth by 0.9 to 1.7 per cent. Also, there will be rise in exports by 3.2 to 6.3 per cent. The average tax burden on Indian corporate sector will fall with the implementation of GST. Many foreign retailers that already had presence in retail (cash and carry business) in India before the announcement of 100 per cent FDI in E-Commerce have started investing in various activities areas such as: • Training and development, so that skilled labour is available when needed • Building the backend infrastructure by setting up warehouses by making land available at reasonable rates • Engaging in private-public partnerships Multiple tax structure has encouraged decentralised warehouse networks spread across smaller facilities in the outskirts of the city. With the introduction of GST, these arrangements are likely to undergo change. Distribution centres can be put up in close proximity to the place of demand. Production cost reduction will make exporters more competitive. It will add about two per cent to India’s GDP growth. Manufacturing companies can now strategise about changing their current business plan and look for better opportunities to cut down costs, such as placing BOO (build-ownoperate) or leasing space in warehouse. With 100 per cent FDI, there is a scope of increasing market space and support services like warehousing, logistics, order fulfilment etc., which need to be on the edge. It is going to significantly drive demand

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

Conclusion

and investment for warehouses. The demand of warehousing business has been slowly picking up in India, as companies expect a surge in business in

With 100% FDI, there is a scope of increasing market space and support services like warehousing, logistics, order fulfilment etc. the logistics space with the roll-out of GST, as it will help in removing many indirect taxes and replace them with a single tax at national level. There will be more simplified work and efficient integration. Definitely, warehousing business has got a way

to pop out of a nutshell and grow fruitfully. The network of E-Commerce fulfilment centres is not about tax-efficiency, but the ability to respond to end-customer expectation of quicker turnaround times. Multiple centres could be set up to maintain service levels rather than looking at storage costs.

Role of Technology Increasing adoption of technology in operations is essential to keep up customers’ satisfaction. Technology solutions can range from robotic stock picking require to software which enables workers to maximize space availability through narrower aisle widths as well as more effective staff deployment. Costly warehouse automation will continue to improve popularity in order to achieve maximum efficiency. A report by Deloitte highlighted how technology will be the building blocks for the future of the retail industry. The

Knight Frank estimates that demand for warehousing in India will rise to 132.8 million square metres by 2019, at a compound annual growth rate of 9 per cent from 2014. The last few years saw the segment becoming a new addition to the mix of major office space demand drivers in India, as online retailers increased their footprints for front-end as well as back-end requirements. India’s online retail sector saw exponential growth as a number of local market-specific services such as cash on delivery (COD), multiple payment options, and EMI options–assisted in developing the growth curve of E-Commerce in the country. Online retail as a sector is still at a nascent stage in India, as leading players try to establish a strong foothold and consumers get accustomed to this new medium of shopping. With E-Commerce showing no signs of slowing down, experts believe that the future looks buoyant as this sector emerges as one of the strongest demand drivers for the real estate space. The sector will also play a major role in the evolution of existing logistics providers and development of logistics infrastructure in the country. 2017 - india WAREHOUSING handbook 61

Guest column

E-commerce Raising the Bar for Warehousing Space Demand reach $1 trillion in 2020, up from $539 billion in 2016.

Rajesh Jaggi

Managing Partner, Real Estate, Everstone Group

An update on E-Commerce Industry E-Commerce is one of the fastest growing shopping industry in the world. With $681 billion in online retail sales in 2016, China is the largest market for E-Commerce globally, followed by the US; and the fastest growing one is India. According to a new study by Forrester Research, approximately a fifth of total retail sales will take place online by 2021 in Asia Pacific, with 78 percent of that coming from mobile, up from 63 percent in 2016. The study adds that online retail via mobile will grow at a CAGR of 15.6 per cent, to

62 india WAREHOUSING handbook - 2017

Warehouses now store more diverse kinds of products. Many organisations have evolved new innovative systems that facilitate storage and shipping. One of these is the chaotic storage system, where new items are placed on any available shelf to save time. The

3. Better tracking ability: Everything in warehouses can be tracked faster because of developed technology. At any given time, almost anyone in the organisation can find out where a specific product is. This improved tracking avoids product loss

Warehouses: How Important for E-Commerce? Warehouses have been used for a long time by the retailers, manufacturers, suppliers and many other types of businesses. As a place to store and WAREHOUSING SPACE REQUIREMENT IN INDIA’S TOP SEVEN MARKETS (MN SQ FT) ship the goods, however, Warehousing space they’re greatly influenced Annual additional Total additional space requirement space required from CAGR* required from by the changes in pro2016–2020 2016–2020 2016 2020E ductivity, efficiency and overall operations of the Manufacturing 487 656 8% 169 42 E-Commerce business. Brick-and-mortar retail 120 154 6% 34 8 Warehouses are abso- E-tail 14 29 19% 14.4 3.6 lutely essential for the Total 621 839 8% 218 54 E-Commerce business * Compounded Annual Growth Rate Note: The top seven markets include Mumbai, NCR, Bengaluru, Chennai, Pune, Hyderabad and Ahmedabad and hence, they have Source: Knight Frank Research constantly responded to floor layout that seems to show no Expected Growth in Warehousing the needs of the expanding E-Comlogical scheme, but the products A research by Knight Frank shows merce industry. Because of this, can be tracked technologically. E-Commerce is driving the warehousthat while the requirement from es to upgrade, for greater reliability, 2. Better software: There are many in- traditional brick and mortar retail higher efficiency and a better suitabilventory-management software sys- will continue to grow at a steady ity for customers’ demands. tems available, from basic barcoding pace, requirement from the E-tail systems, to advanced, real-time da- segment will more than double Types of warehousing needed for ta-streaming systems that connect from 14 mnsqft in 2016 to 29 E-Commerce everything from initial supply to mnsqft by 2020, resulting in an annual growth rate of 19 per cent. shipment in the warehouse. 1. Innovative storage and shipping:

The total warehousing space requirement in the countryâ&#x20AC;&#x2122;s top seven markets is expected to grow from 621 mnsqft in 2016 to 839 mnsqft by 2020 A massive 218 mnsqft needs to be added within the next 4 years in the top seven warehousing markets of India The warehousing requirements of the E-tail segment will more than double from 14 mnsqft in 2016 to 29 mnsqft in 2020 Currently, 17 mnsqft of space is transacted annually in the top seven warehousing markets of the country Source: Knight Frank Research, 2016

How IndoSpace brings Warehousing Solutions 1) IndoSpace builds its warehouses and light industrial parks at multiple strategic locations all over India, such that last mile delivery and distribution is easy where a hub and spoke model can be followed by the E-Commerce players. E-Commerce players need multiple locations to expand as they grow. It helps that IndoSpace is the largest owner-developer-manager of light industrial and warehousing, logistics facilities across India and has a pan-Indian presence. It has well-established land banks across the country. 2) Due to its sheer size, IndoSpace has a pipeline for expansion that can help E-Commerce to plan

IndoSpace parks integrate the most innovative and superior technology available to best serve their clients.

expansion for the next 5-7 years. Scalability is very easily available due to the large size of land parcels and development plans. 3) IndoSpace builds big boxes, which is what the E-Commerce industry needs, sizes ranging from twoâ&#x20AC;&#x201C;five lakh sqft. Because of the sheer volume, E-Commerce players prefer having large boxes to manage their inventories, pick and pack and send for last mile deliveries. 4 Because of sheer volume, E-Commerce industry needs fire suppressant infrastructure and IndoSpace builds the best in class fire management systems not only within, but also the best in class high side infrastructure. IndoSpace has the distinction of building an FM global approved fire sprinkler system including in-rack sprinklers for Adidas managed by DHL and built-to-suit green building for Swedish telecom giant Ericsson. This 200,000 sqft features skylights, solar powered common areas, insulated glass and natural ventilation. 5) All their parks have wide internal roads offering greater turning radius to trucks. Hence, IndoSpace enhances the daily operation, cutting down the loading and unloading time and reducing the total TAT.

Also, ample truck parking is available within the IndoSpace parks. All IndoSpace parks are well connected to major highways, railways, airports and seaports with access to skilled labour supply. 6) E-Commerce players need heights within their warehouse infrastructure. IndoSpace standard buildings are of 10-12 metres to manage multi level racking systems. 7) IndoSpace offers global standard facilities and value added services, space optimisation, safety compliances, innovative initiatives in technology implementation. Both ready and built to suit facilities are available, helping them to address different needs of clients and potential tenants. It has most experienced and largest development team across India with around 120 number of professionals. IndoSpace is a joint venture between the Everstone Group and Realterm. The Everstone Group is a premier India and South East Asia focused private equity and real estate investment firm with assets under management of approximately US $4 billion. Realterm is an industrial real estate firm that manages over $2.5 billion across over 300 operating and development properties in North America, Europe and India. 2017 - india WAREHOUSING handbook 63

64 india WAREHOUSING handbook - 2017

Bright Days Ahead for

Warehouse Leasing Demand for warehousing space rose by nearly 40 per cent during last year to an all-time high of about 10 million sq ft driven by demand from logistics, FMCG, E-Commerce and engineering and manufacturing firms, according to property consultant CBRE. The consultant said that a strong leasing activity was witnessed from traditional demand drivers such as third-party logistics players, engineering and manufacturing firms, Fast Moving Consumer Goods (FMCG) companies along with large sized space take-ups from E-Commerce and retail operators. Fresh supply of modern warehousing and industrial parks is anticipated to rise over the next couple of years to meet the growing demand. According to the report, Delhi-NCR and Mumbai witnessed bulk of the leasing activity and constituted close to 50 per cent of the total space absorption in 2015. Logistics and E-Commerce players remained the dominant drivers of demand in these two micro-markets.

2017 - india WAREHOUSING handbook 65

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

66 india WAREHOUSING handbook - 2017

“In the last five years, warehousing business has had a CAGR of 18-20 per cent, front-ended heavily by a huge spurt in E-Commerce driven businesses.” VIKRAM MANSUKHANI

Head of 3PL services, DIESL

compelled manufacturers to maintain a separate warehouse in each state in order to avoid a higher tax outgo.

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

The momentum stays strong: Demand for warehousing space continued to remain upbeat across most cities as close to five million square feet was leased during H1 2016, thus indicating a growth of approximately 37 per cent compared to H2 2015. Leasing activity was driven by large-sized space takeups from E-Commerce and Third Party Logistics (3PL) companies. Collectively, companies from these two sectors leased more than 50 per cent of warehousing space during the review period. Besides the leading urban centres of the National Capital Region (NCR), Mumbai and Bangalore, E-Commerce players leased medium to large-sized space across Hyderabad, Chennai and Kolkata as part of their next phase of growth. Engineering and manufacturing sector companies, electronic retailers and Fast Moving Consumer Goods (FMCG) players were the other prominent sectors driving the demand for warehousing during H1 2016. Large-sized investments into industrial and logistics space by foreign companies was another significant

development during the current review period. Close to 140 acres was transacted by companies such as the Swedish furniture retailer, IKEA, the Japanese Mitsui Logistics and a leading Danish manufacturer of wind turbines. Investments by domestic companies such as Blue Star at Sri City near Chennai further contributed to the strong take off of industrial space in the country.

COMPLETE STORAGE SOLUTION PROVIDER

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

New warehousing units, then most of them are being made as per the new standards. But, modern warehousing units have still not reached a matured stage as old warehousing units are still to be replaced. months. During H1 2016, rental value growth was strongest at ten per cent in locations such as Dhulagarh, Sankrial and Uluberia along NH-6 in Kolkata, followed by Bhiwandi in Mumbai at eight per cent when compared to H2 2015. Delhi at six per cent, the East Corridor in Bangalore at three per cent, and the Northern Corridor in Hyderabad at five per cent were the other micromarkets to witness rental growth during the review period. Aslali in Ahmedabad also witnessed an increase in rental values by three per cent over H2 2015. Strong and sustained demand levels amid limited availability of good quality warehouses for immediate

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

Former Head of Supply Chain Management, Patanjali Ayurved

Warehouses in India As a sector 8% Organised

92% Un Organised

WMS Initiatives Opertional Cost on Account of Warehousing

Pickup & Put away as % of Warehousing Cost

50%

30%

36%

Fails

Time

Operational Expenses

Inventory Reduced by

Delayed

42% Within Budget

What it Takes

Expectation from WMS

People & Infro Reduced by 36%

WMS A Quick Stats

27%

3-4 Yrs

Payback Period

40% 50%

Software Cost

60%

Intangibles Cost Like Training , AMOs** & Consulting

Cost

Source: Total Logistics Solutions Inc.

Focus On

SOP’s*

LOA**

possession led to rental value appreciation in these micro-markets. Across Chennai, rental values were largely stable during the review period along the Western Industrial Belt and South Chennai. Issue of Quality lingers: The quantitative growth in the warehousing space has been quite commendable in the last

68 india WAREHOUSING handbook - 2017

Visibility on Inflow/ Outflow

KPI* Def & Monitoring

five to ten years. Yet, we are still lagging in terms of quality. Several factors, both known and unknown, are acting as impediments for us in reaching that high-end efficiency where the storage and distribution process truly becomes seamless. Industry experts are of the view that Indian warehouses are in a transitional phase – from dark, dingy, closed spaces of yesteryears where everything was manually conducted to

modern and scientifically built units. But, this transitional journey is still far off from reaching a stage of maturity. Balbir Singh Khalsa, National Director, Industrial, Knight and Frank India, stresses, “If you refer to new warehousing units, then most of them are being made as per the new standards. But, modern warehousing units have still not reached a matured stage as old warehousing units are still to be replaced.” Around May last year, Patanjali Ayurved made a strategic decision to shift finished products from manufacturing centres to dealers and franchise operators all across the country into a typical 3PL (third party logistics) model wherein it will be taking warehousing space on lease at different strategic locations in the country with the assistance of logistics operators. Since then, it has been occupying the warehousing space in all its capacity – 11 lakh square feet of space in the last four months in 20 different cities. They plan to double this size in the next one year. But, finding the right product mix as per its specification has been an issue. Sanjeev Khanna, Former Head of Supply Chain Management, Patanjali Ayurved pointed out, “In Himachal, we were looking for a space size of around 50,000 square feet and had to settle for a 30,000 square feet unit since we could not find anything matching our specification. While in places around metros, it’s much easier to find quality warehouses; this is a challenge even around state capitals. You may stumble upon some standalone units but there the owners may ask for premium rentals.” Most of the large warehouses have come up around the metros only, as these are large consumption centres. Supply overtaking demand was a reality till

2014 when E-Commerce hit the market and now most of the Grade A supply across metros has been consumed. However, due to rising consumerism, increasing purchasing power and renewed focus on reducing the overall logistics cost, companies are now keenly considering large warehousing options outside of these three main urban centers. This has created immense opportunity for warehousing in cities such as Ahmedabad, Hyderabad, Chennai and Pune. During H1 2016, these cities have witnessed space consumption from companies such as Snapdeal (75,000 sqft) at Kandlakoya in Hyderabad and leasing of approximately 250,000 sqft by a global E-Commerce

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

BALBIR SINGH KHALSA,

National Director, Industrial,Knight Frank India

player at Karanodai and Periyapalyam in Chennai. In Ahmedabad, close to 70,000 sqft was leased by Asian Paints at Aslali and 60,000 sqft by Onida Electronics at Aslali - Extension.

The Dynamics: Warehousing, no doubt, has increasingly become a focus area, not only for logistics and 3PL operators but also for companies – either manufacturing specific industrial goods or consumer products. This trend has accelerated in the last ten years. The sudden explosion of the E-Commerce sector has been a big catalyst in the last two years since the demand now is to deliver humungous amounts of goods with a time-bound commitment – something that did not exist at all until recently. No stakeholder in the production and distribution value chain has any issue on the quantitative growth of warehousing units in the country. They have come up and mushroomed in the last ten years at a modest speed. There also have been patches within this spell when their growth trajectory has been very high. If earlier, godowns or warehouses were supposed to serve an important role in the manufacturing value chain; now the advent of modern retail in its varied forms has meant a decisive consumption centric push to the business. Not surprisingly, the major warehousing clusters are mostly around big metros. 2017 - india WAREHOUSING handbook 69

Guest column

GST to Boost Warehousing Hubs in the Country

Sanjay Gupta, MD, AVG Logistics Pvt Ltd.

The government has proposed to implement the Goods and Services Tax (GST), which promises to integrate India’s multi-layered indirect tax system into a single unified one, unshackling India from its bureaucratic web and improving the ease of doing business. The new tax regime will force many companies to restructure their operations. Companies will now insist vendors and suppliers to furnish invoices as GST will make it impossible for firms to evade taxes. We expect lower GST rates alongside elimination of tax cascading impact and seamless credit shall all con-

70 india WAREHOUSING handbook - 2017

tribute to decline in inflation. With the introduction of GST, India will become a seamless market without any difference between inter-state or intra-state sales. AVG as a logistics company, is trying to see favourable and adverse impact on the logistics industry. We all are aware that basic purpose of the GST is one nation and one tax which will make the country a unified common market. It is estimated that after the implementation of GST, logistics time would be saved to a great extent due to abolition of multiple trade barriers such as octroi, local body taxes, entry taxes and other hurdles. Various tax barriers such as check posts and toll plazas lead to a lot of wastage for perishable items being transported, a loss that translated into major costs through higher need of buffer stocks and warehousing costs as well. A single taxation system could eliminate this roadblock for them and will reduce overall turnaround time of the vehicles. The changes in the proposed indirect tax system could reduce transportation cycle times,

enhance supply chain decisions, lead to consolidation of warehouses, etc. As a corollary, overall transport cost would get reduced, eventually it would reduce the cost of goods and services. Implementation of the GST is probably the biggest way of emerging new warehousing hubs in India. World’s largest logistics companies are investing a big amount of money in increasing its warehousing space in the country. As we have seen in the past that companies build warehouses in each state to evade taxes which really is not a good practice but when GST would be rolled out overall inventory cost would get reduced because of uniformity in imposed taxes. This will not only save logistics cost but these benefits would be passed to the customers also. AVG had embarked upon warehouse building sector in the year 2014 and since then has achieved noteworthy landmarks. Regarding the Goa warehouse, it is a state of the art warehouse spread

over 80,000 square feet area and it’s a master piece that showcases AVG’s capability in building warehouses. The same has been customised to customers need with high degree of automation including racking, picking and packing operations. We want to engage with our customers on long term basis and provide that customised solutions with high degree of modern automation. In fact, we are building customised warehouse across the country as per user requirement especially for FMCG and pharma clients. With introduction of GST, we will provide our services for performing well with selected group of distinguished clients flooded with lucrative offers in the backdrop of GST. It has been acknowledged as one of the best warehousing facilities globally by the CMD of German based company, Rosenberger. AVG has been recently awarded as the Emerging 3PL company by Economic Times Global Logistics show 2017. (The author is MD, AVG Logistics Pvt Ltd.)

Guest column

The Centrality of Continuous Cost Reduction in Responsive Supply Chain 1. A rapid fall in prices 2. Technological products quickly becoming mass market commodities with increasingly shorter lifecycle 3. Increase in usages of open standards-based technologies supported by rapid advancing multi-technologies interface application technologies Dr Lai Ving Kam

Continuous cost reduction (CCR) is envisaged to be managed as a competitive strategy to move forward the firmâ&#x20AC;&#x2122;s cost advantage and competitive positioning. To be cost competitive, many look upon their supply chain to be as efficient as possible with longer product and technology life cycles, but not within the control of their arms length. Sustainable cost effectiveness has always been the critical concern. Customers expected lower pricing yet responsive to changing technology and product trends. The market has three distinct phenomena:

Realising Strategic Fit in Volatile Business Environment Profitability of firm pivots on strategic fit between competitive strategy and supply chain strategy sharing common goals. Supply chain ranges from a focus on efficiency at the lowest possible cost to responsiveness to highly reactive adaptability to shifting business environment at higher cost. Not many firms have the aptitudes to take advantage of CCR strategy, let alone in the responsive supply chain setting. For those firms, which serve market responsively, where price is not yet a competitive strategy, they may

choose to outsource product and thus the cost reduction is through contracture agreement if they are diligence. However, if the market turns bad and becomes disruptive, those who used this strategy could suffer a fatal blow to their market position, if there are insufficient good legal escape clauses in contract agreement to protect firms from the eventuality. Cost is taken for granted as a critical determining element for product pricing strategy which in turn is the competitive factor in industry. Success or failure of the product hinges on its cost structure and CCR management strategies. Business environment and issues faced especially profitability and underlying cost structures are often not static and may be elusive. CCR, value improvements and receipts are commonly harvested by the business, but not optimally. This was evidenced with many fable firms dropped out of fashionable product market such as General Electric USA in all things

electrical and electronics, IBM from PCs and Motorola and Nokia in smart phone sector. Developing and executing a CCR management is a complex yet necessarily successive process. Current industry landscape revealed the immaturity in managing CCR where most firms seek refuge behind the myth that it is external driven and not controllable by operating firms within the industry. The incumbent marketers should answer themselves: is the emphasised CCR process then mainly a result of deliberate, carefully planned and managed competitive strategy in the operations in a responsive supply chain? Or is it just evolved through an incremental experiential process going through a sequent of stages towards more reliable cost reduction? Or cost reduction is just another utility in the responsive supply chain with little strategic value? This has to be tacked effictively. (The author is Associate Professor, Logistics and Supply Chain Management, Berjaya University College of Hospitality, Kuala Lumpur, Malaysia)

2017 - india WAREHOUSING handbook 71

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Warehousing industry undergoing metamorphic change

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The scenario of the warehousing industry is witnessing metamorphic change and warehouses of future would become more agile, dynamic and smart in three to five years from now. Automation of warehouses will help in eliminating human errors, reducing touch points, checking pilferage and much more. Gaurav Dubey explores the subject and take views of industry leaders to get a glimpse of what future warehouses might look like.

he warehousing industry has been undergoing a period of transition across the globe. Several evolution and innovations are taking place every day in the industry. Scene of a traditional warehouse staffed with workers manually stocking shelves, running from aisle to aisle and performing paperwork with pen and paper has started waning away. The future of warehouses will be driven by the technology such as drones whizzing around picking up items from their receptacles and delivering them to droids, waiting at sorting station will soon turn into reality. Several studies are being conducted on this subject and one of the studies reveals that at least 74 per cent of warehouse managers have plans to equip their staff with more and better technology that increases visibility of operations and automation of the tasks which were previously being performed manually. For example, barcoding and RFID tagging items that are traversing across the warehouse accurately helps staff in tracking their location and remaining stock, which in turn allows longer lead time before they have to be replenished. According to a survey, the top five technologies warehouse managers are most interested in including Internet of Things (IoT), barcoding, tablet computers, big data/analytics and automation. Wearable and RFID are also two sought after technologies in the warehousing industry. Compared with results for the 2015 vision study, only 40 per cent of warehouses surveyed were planning to adopt RFID then, but now the figure has grown two-fold in the latest survey.

With ergonomic wearable and handheld computers built for the enterprise environment, workers are enabled to scan and track items with faster speed, less effort and better accuracy. The use of mobile handheld computers and tablets with realtime access to warehouse management systems will double from 40 per cent in 2015 to 86 per cent in 2020. In the meantime, the use of pen and paper is expected to drop to 24 per cent in the next four years, down from 95 per cent just a few years ago. These technologies bring in numerous benefits: from increased productivity among workers, to faster delivery time, creating value for end-customers. Warehouse managers estimate that 50 hours spent on training for new staff should be slashed to 36 hours. This would increase 20 per cent productivity and help in achieving maximum level of output. To achieve this, the industry is adopting voice and screen directed inventory picking and replenishment in the next five years. In this scenario, operators would be equipped with 2017 - india WAREHOUSING handbook 75

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

a mobile device or voice dedicated terminal and a handset with microphone. Picking technology featuring voice commands is expected to be huge in the warehousing industry as 62 per cent of respondents planning to deploy both voice and screen picking by 2020. For providing better understanding of the future of the warehousing industry to its readers, CargoConnect has subdivided the subject under 6 heads and took the perspective of industry leaders under them – • Look of the Warehouses of Future • Role of Warehouse Automation in Business Growth • Type of Technology to be used in Future Warehouses • Role of Warehouse Automation in Value Creation for End Users • Use of Driverless Technology in Future Warehouses • Effect of Warehouse Automation on Employment Ryan Oliver, Assistant Vice President, Contract Logistics, Agility feels that investors and developers have begun to recognize the need to set up infrastructure that matches global standards.

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On the various sub heads Ryan says –

Look of the Warehouses of Future Radical improvement in the infrastructure of warehouses is undergoing in India with the infusion of global best practices and ever increasing customer demands. From being mere godowns and storage blocks, warehouse facilities are evolving into sophisticated stockrooms equipped with state of the art equipment. Investors and Developers have begun to recognise the need

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

Role of Warehouse Automation in Business Growth With the emergence and rapid acceptance of E-Commerce business, the TAT for order to delivery has now been crunched down to number of hours as against the earlier trend of day deferred delivery of product. Given a chance, customers would like to have product delivered at the click of a button. In order to meet this need for speed, it is important that warehousing facilities become fully automated and are able to cater to this ever growing demand. It is only through automation warehouse managers can churn out a higher throughput and help boost businesses in India.

Type of Technology to be used in Future Warehouse There is no denying the fact that with the fast evolving market conditions and need for customised operations, technology driven warehouses will always stay ahead of the curb in the future. Sturdy Warehouse Management System is considered as the backbone of a good warehouse. There are an array of relevant technologies available today and will certainly be implemented in the near future, some requiring low to medium investment, while others needing a higher investment budget. Technologies like Real Time Locating Systems and Radio-Frequency Identification (RFID) provide warehouse managers complete visibility of products stored and is a boon for large warehousing facilities.

The extreme growth of Direct-to-Consumer (D2C) has forced companies to rethink about the large, regional Distribution Center format. In the future, companies will be locating smaller, more flexible Distribution Centers near large population hubs so that Direct-to-Consumer orders can be fulfilled quicker and the delivery distance gets shortened – all to meet the growing demands of today’s consumers. - Kamal Jha Vice President, Honeywell Safety and Productivity Solutions (India)

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

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

floor, on the other hand there will be a need for skilled operators and system savvy resources. There is bound to be a shift from manual intervention to a more system and automated environment. With the use of technology and upgrade in skilled workforce, we can be rest assured of minimal and relatively error free operations. Kamal Jha, Vice President, Honeywell Safety and Productivity Solutions (India) says that initially companies used to set up a very few large Distribution Centres (DC) in a region and use these DCs to provide goods to stores in the case of grocery/retail or ship goods in a B2B fashion in that region. But extreme growth in D2C business has forced companies to rethink about the large, regional Distribution Centre format. Growth of warehousing in India

1,440

Use of Driverless Technology in Future Warehouses Robotic MHE’s and deployment of drones are prime examples of driverless technologies that can be used in a warehouse environment. As warehouses evolve from the normal G+6 to even higher racking solutions and aisle spaces shrink to optimize storage. Such technologies will play a key role in managing the business. Use of conveyor belts will mean faster movement of goods within the warehouse and obviously reduce the level of man power on the floor.

745

FY 2013 (E)

FY 2017 (E)

Source: ValueNotes Research

Effect of Warehouse Automation on Employment

Look of the Warehouses of Future

While on one hand the advent of automation will certainly help reduce some of the manpower on the

The warehouse of the future will certainly have a new look. The term “warehouse” in itself portrays 2017 - india WAREHOUSING handbook 77

The future warehouses will be better aesthetically designed, there would be ample height, so that vertical space could be used more efficiently, smoother flooring to enable greater load bearing capacity, grid structures to comply with international storage/binning requirements and wider setbacks for better traffic movement. Jasmine Singh Head Industrial and Logistics Services, India, CBRE South Asia Private Limited

an image of static products sitting on racks for a long period of time. That is why most facilities use the term “Distribution Centre” or “Fulfilment Centre” for these facilities now, as products or goods flow through them today at a much higher pace. Initially, companies used to set-up very large Distribution Centres in a region and used those Distribution Centres to provide goods to stores in the case of grocery/retail, or ship goods in a Business-to-Business (B2B) fashion in that region. While such shipments are still relevant, the extreme growth of Direct-to-Consumer (D2C) has forced companies to rethink about the large, regional Distribution Centre format. In the future, companies will be locating smaller, more flexible Distribution Centres near large population hubs so that Direct-toConsumer orders can be fulfilled quicker and the delivery distance shortened – all to meet the growing demands of today’s consumers. These ‘hub’ DCs will have the fastest moving Stock Keeping Units by demographics and their stocks will be replenished directly from the vendor or from the larger regional DCs. Companies that have brick and mortar stores

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and are also into E-Commerce will most likely deploy both types of DCs to handle the very different business models and requirements of each.

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

Type of Technology to be used in Future Warehouses DCs of the future will deploy different types of technology. Current technology, such as automated data capture, will continue to play a crucial role in DC success as the real-time capture of critical information to update supply chain execution systems (WMS, WCS etc.) will still be necessary. The use of hands-free technology and wearable solutions will continue to grow as they provide high level of accuracy and productivity and will be needed to support future demand spikes. Automated solutions and robotics will also continue to grow in DCs of the future as the labour pool will not be able to support or fulfill growing volumes. DCs will also operate within the supply network in a connected fashion through the use of sensor technology gathering information in an automated fashion and allowing

smart systems to make automated decisions based upon business algorithms developed by the company. The DC will become part of a greater ecosystem within the company and within the supply chain allowing for more automated movement of goods, visibility and

The warehousing, manufacturing and logistics industries are expected to derive the maximum gains from the GST rule. The new system is likely to lead to an up gradation in the warehousing infrastructure. While the existing eight metropolises are expected to retain their leading positions after GST, India will also experience the emergence of at least 12 new feeder/ warehousing spoke locations across the country. Sanjay Palsania Chairman, SPG Enterprise

regions where labour pools are limited. DC managers can assign workers to different zones and driverless vehicles can circulate in those areas bringing partiallyfilled pallets to an area where a worker adds to that pallet from the required goods in their zone and the vehicle then moves on to the next one to repeat the process. This can also be accomplished in each picking where a large bank of totes / cartons arrives and the workers add to them multiple orders from their zones. Travel by a worker is the most inefficient use

better operating efficiency of the building and all material handling equipment used within.

Role of Warehouse Automation in Value Creation for End Users The value to end users of more automated DCs will be the meeting of their demands. As consumers, we have created a ‘Get-It-Now’ society where we demand immediate access to goods and services. Being able to supply that demand is becoming extremely difficult in the traditional DC operating models. It is a three pronged problem. In the first step the order to fulfill the request comes to the DC from a vendor. The DC then performs the second step of fulfillment and ensures that the product reaches on time and is received by the vendor. The third step relies on the delivery company to make the shipment within the expected time window. If any of the three steps fail the whole process breaks down and the consumer get dissatisfied. So automation and visibility across the whole supply chain, not just in the DC, is critical to its success. The deployment of automated data capture solutions to gather information in real-time enables supply chain execution systems (WMS, WCS, TMS, etc.) to provide the efficiency and visibility to meet these ever increasing demands.

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The use of technical devices with real-time access to WMS will double from 40 per cent in 2015 to 86 per cent in 2020

Use of Driverless Technology in Future Warehouses “Driverless” technology has for some time been in use in many DCs, especially in those handling primarily pallet-in and pallet-out quantities. Automated Guided Vehicles (AGVs) move full pallets from receiving docks to automated storage/ retrieval system (AS/RS) where cranes put the products away. When needed, the cranes retrieve the products and place them on AGVs to move the pallets to shipping. While also deployed today in some DCs, driverless technology will become more prevalent in the future, especially in

of their time. With the average picking assignment requiring about 40 per cent travel, it is easy to see how moving the goods to stationary workers can add more efficiency. The only consideration is that the order volumes should be able to justify the cost of this type of automation.

Effect of Warehouse Automation on Employment It has always been a difficult question – will automation reduce the manpower needed and what becomes of the jobs that were once performed by manpower? In some regions of the world there is actually a shortage

Our company believes that there is a lot to be gained from automating physical processes, but also in automating data processes similarly. Tigerâ&#x20AC;&#x2122;s main logistics business is in multi-user facilities, with many customers having vastly different and often highly customised processes. Andrew Jillings Chief Executive Officer and Group Managing Director, Tiger Group

of manpower to perform the type of work needed in the supply-chain to handle the increasing volumes. There is a definite driver shortage in

the trucking industry and a lot of DC operations cannot hire enough manpower to effectively handle normal DC volumes let alone the

â&#x20AC;&#x153;The use of pen and paper is expected to drop to 24 per cent in the next four yearsâ&#x20AC;?

higher volumes in peak seasons. In such a scenario, automation is a necessity. In other parts of the world where population density provides sufficient labour force, it is still sometimes difficult to attract and retain enough staff to handle high work volumes, forcing companies to add some level of automation to make up for the difference. Even in regions where labour pool is not an issue, there is still a challenge in knowing the exact number of workers you safely add to the existing infrastructure to efficiently support the fulfilment of demand. By adding people in an operation where older process is in place (paperbased operations), are you not adding higher levels of inefficiencies, where productivity and accuracy will suffer, thereby compounding the problem? Jasmine Singh, Head Industrial and Logistics Services, India, CBRE South Asia Private Limited says that the warehouses of the future are likely to be better in terms of quality and several other respects. Some improvements that will be a natural progression in the future are:

Look of the Warehouses of Future Built-to-Suit warehouses, distribution centres, transportation hubs likely to be tailor-made to the client requirements. Apart from this, the structure of warehouses will also undergo vast change. The future warehouses will be better aesthetically designed. There would be ample height so that vertical space could be used more efficiently, smoother flooring to enable greater load bearing capacity, grid structures to comply with international storage/binning requirements and wider setbacks for better traffic movement. Some of the changes are listed below: a) Warehouses to go green with options of captive power generation wherever the project feasibility 2017 - india WAREHOUSING handbook 81

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

Top five technologies warehouse managers are most interested in Internet of Things (IOT), barcoding, tablet computers, big data/analytics and automation

700 Revenue

Shipments 600

$20,000 500 $15,000

400 300

$10,000

200 $5,000 100

and the economies of scale justify. b) Most of the larger parks will have STP / ETP. c) To provide better working environment including ambient temperature, better air circulation, more amenities for workers.

$ Source: Tractica

2016

2017

2018

Role of Warehouse Automation in Business Growth

Role of Warehouse Automation in Value Creation for End Users

With warehouses becoming automated and technologically advanced, the overall supply chain will become more efficient as there will bea) Less pilferage and damage b) Less reliance on erratic work force and labour union related issues c) Less space requirement, reducing storage rentals per unit d) Better customer service and efficient and accurate order handling leading to reduced cost of returns and replacement

With warehouses becoming more efficient and positively impacting the overall supply chain function, the end user is also expected to benefit as there will be better customer service and improved efficiency in handling transactions. Jahnavi Gokulakrishnan, Senior Research Analyst, Transportation and Logistics, Frost and Sullivan says warehousing sector is moving towards almost or completely automated warehouses called dark warehouses. The human intervention in such a warehouse will be negligible to none.

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2019

2020

2021

Look of the Warehouses of Future The warehousing sector is moving towards almost or completely automated warehouses called dark warehouses. The human intervention required in such warehouses will range from very minimal to none. The processes routinely undertaken within the warehouses such as picking-packing, palletisation-depalletisation, kitting-assembling and few others are automated among LSPs in the developed markets. The dark warehouses will include automated machines and robotic systems performing these tasks with centralised control systems that can be controlled via remote systems,

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which are located away from the warehouses. This will be achieved through a combination of automation and digital technology tools. Material handling systems manufacturers are the key industry participants in providing automation tools to the warehousing sector. Automated guided vehicles (AGVs), Automatic Identification and Data Collection (AIDC) devices, Warehouse Management Systems (WMS) and few others will be adopted in the warehouses in the future to render the warehouse free of human intervention.

Type of Technology to be used in Future etc. Some of the software products and service providers are focusing solely on the logistics sector Warehouses It is not a single technology that is disrupting the warehousing sector, but the combination of existing technologies that will lead to an efficient and effectively managed warehouses. Material Handling Systems providers are providing customised solutions for the logistics sector â&#x20AC;&#x201C; automatic storage and retrieval systems, automated guided vehicles, augmented reality tools, warehouse management systems that are integrated with the automation tools, data capture tools, report generation and others. AIDC devices will play a key role in effective usage of other technology tools. Until the industry achieves dark warehouses, augmented reality (AR) will be utilised

to provide the participants with requisite tools with sophisticated capabilities at lower costs.

Role of Warehouse Automation in Value Creation for End Users

Commerce especially the retail commerce is becoming increasingly omnichannel in nature. Speed, agility, visibility into the supply chain etc. are increasingly becoming the distinguishing factors and the source of competitive edge. Adopting automation in warehouse operations will enable Role of Warehouse Automation in Business Growth companies to achieve this competitive edge. From The tasks in the warehouses are repetitive, routine the perspective of warehouse users, automation will and rigorous in nature. Automation of such tasks help in achieving productivity gains by reducing leads to bottom-line savings, increase in speed of the process cycle times and reducing the tasks performed and fewer accidents the number of shift operations and and hence less damages. All these The dark warehouses will include automated machines errors in manual operations, improved advantages lead directly and indirectly and robotic systems performing these tasks with inventory accuracy and visibility, lower to higher savings and value delivered. centralised control systems that can be controlled via damages due to pilferage/manual Automation of the warehouse tasks errors/expiry issues etc. all of which will reduce the dependency on human remote systems, which will be located away from directly impact the bottom line. From the labour, thereby substantially reducing the warehouses. This will be achieved through a end-consumer perspective, warehouse the impact of the seasonal labour combination of automation and digital technology tools. shortages. Additionally, the automation Jahnavi Gokulakrishnan automation will lead to lower prices of tracking and tracing processes Senior Research Analyst, Transportation and Logistics, Frost and Sullivan and improved service quality. improves the planning and forecasting capabilities considerably since accurate data of to render warehouses paperless. AR tools will assist Use of Driverless Technology in Future Warehouses the shipment location leads to better planning. warehouse employees to locate shipments and Driverless technology includes developments such Also, the abundant data captured on day-to-day fasten the overall process of storage and retrieval as autonomous vehicles and drones that are relevant basis with little or no human effort leads to better without depending on hard copies of shipment in the field of logistics. Autonomous vehicles are forecasting at no additional cost. While most location information. Few other tools that are going expected to transform the transportation sector of the results of warehousing automation are to change the warehousing sector include cloud that will have a high level impact on the current quantifiable in terms of cost savings, there are computing for warehouse management systems, standards and processes followed by the logistics qualitative value- additions to the logistics value distributed order management systems, big data sector. Autonomous trucks will improve the fuel cost and analytics for inventory and demand forecasting savings and autonomous light commercial vehicles chain as well.

84 india WAREHOUSING handbook - 2017

are expected to bring about changes in the distribution and last-mile strategies. Autonomous technology is currently ready to be implemented in controlled environments. Some of the production and storage facilities in the developed market have implemented autonomous trucks for movement of products between their facilities under controlled temperature conditions.

Effect of Warehouse Automation on Employment Automation has to be coupled with shift in the skill sets of manpower. Taking an example, during the advent of industrial revolution when manual jobs were taken over by industrial machines, manpower did not become redundant but there was a shift in the skill sets. Similarly, in current scenario where the supply chain is increasingly becoming complex and integrated world over, automating activities in segments within the supply chain will trigger a need for skill shift in the existing manpower base. From managing day-to-day activities in the warehouse, manpower deployment will become more supervisory in nature within the warehouse. People will need to be trained in ‘managing’ the automation tools, gain knowledge about the intricacies of the tools and trouble shooting skills. Moreover, skills will also shift up the value chain towards understanding consumer needs and how processes in the warehouses that are controlled and managed by automation tools impact those needs. Andrew Jillings, Chief Executive Officer and Group Managing Director, Tiger Group gives the concluding remarks and says that his company believes that there is a lot to be gained from automating physical processes, but also in automating data processes similarly. Tigers’ main logistics business is in multiuser facilities, with many customers having vastly different and often highly customised processes. While physical automation is limited in Tiger’s warehouses, process automation is becoming increasingly common. An example of this would be Tiger’s Scan Pack that allows packers to scan and check the contents of an outbound parcel and print out the required documentation, perform or assist in value added service (add a free gift for example), and also select and contact the courier based on rules or rates. The next parcel to be worked can then follow a different pattern entirely.

As per 2015 vision study, only 40 per cent of warehouses surveyed were planning to adopt RFID then, but now the figure has grown twofold in the latest survey

2017 - india WAREHOUSING handbook 85

: T Io

d r o w z z u B g e n i s Th u o h e r a W r fo Today’s warehouse is far more than just a facility in which to store inventory. Leveraging the latest supply chain technology and the Internet of Things (IoT), a “smart warehouse” can now serve as a hub to boost efficiency and speed throughout the entire supply chain. From wearables on workers to sensors and smart equipment, internet-enabled devices and technology can profoundly change logistics management. Let’s dive right into the amazing world of IoT.

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he Internet of Things is the network of physical devices, vehicles, buildings and other items embedded with electronics, software, sensors, actuators and network connectivity that enable these objects to collect and exchange data. In 2013, the global standards initiatives on Internet of things defined the IoT as â&#x20AC;&#x153;the infrastructure of the information society.â&#x20AC;? The IoT allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration of the physical world into computer based systems and resulting in improved efficiency, accuracy and economic benefit. The IoT can assist in the integration of communications, control and information processing across various transportation systems. Application of the IoT extends to all the aspects of transportation systems (i.e. the vehicle, the infrastructure and the driver or user). Dynamic interaction between these components of a transport system enables inter and intra vehicular communication, smart traffic control, smart parking, electronic toll collection systems, logistics and fleet management, vehicle control and safety and road assistance. This will have a profound impact on the supply chain, making it hyper-connected, innovative and extremely smart. With its ever increasing demand for smarter supply chain management solutions, the logistics and transportation industry has been a key force behind the IoT upswing. The supply chain can gain the most

from IoT technology. Shipments can be traced throughout the delivery process, speeding up implementations. Equipment monitoring can also be used to predict when equipment needs service and maintenance. The Internet of Things (IoT) has tremendous potential to change the structure of the supply chain, from a linear, step-by-step process, to a seamless, data insight-driven stream. With the advent of IoT, internet connections now extend to physical objects that are not computers in the classic sense.

IoT is truly an automating technology. It depends on machine-to-machine communication which allows supply chain to operate in real-time.

IN-TRANSIT VISIBILITY One prominent role player in the future supply chain, which is impacted by IoT, is intransit visibility. The logistics ecosystem has many players and thus, many moving parts. Products are handled and transferred between the manufacturer, suppliers, the distribution center, retailer, and customer. These many nodes in the supply chain call for an agile and informed supply network in regard to product whereabouts and other specifications. We cannot manage what you cannot measure, and we cannot measure what we cannot see. This single quote summarises the fact that we cannot expect a streamlined, organised or well-managed supply chain without having able to see what is actually happening. In-transit visibility is achieved when every point of transaction in a business process can be quantified. Connecting RFID scanners, labels, computers, GPS, mobiles and 2017 - india WAREHOUSING handbook 87

M Ravindra,

Associate Director, Logistics, Panasonic India

From the logistics operator’s point of view, IoT will also allow to cut down time and deliver large orders without fear of rampant theft as it takes place now as a system backed by IoT will make all involved players more accountable.

many such other slivers of technologies into a singular system is when you start seeing almost everything on a single screen. There are several real use cases where the benefit of in-transit visibility reaps many sweet fruits for trucking companies, brokers, E-Commerce shippers and even the end customer. The hyper-connected world is today’s reality. Logistics companies need transparency of networks and assets are being used for on-going optimisation of efficiency and network utilisation. Visibility has become a requirement of Supply Chain Management (SCM) and it means visibility into the status of delivery merchandise and exact location of the vehicle carrying it. Trucks carrying merchandise these days are enabled with Global Positioning Systems (GPS). Through IoT, logistics providers will gain clear visibility of the movement of goods – meter by meter and second by second – as well as item-level condition monitoring to ensure that goods arrive in time, at the right place and intact. With IoT-enabled solutions, tagged parcels offer more visibility to the recipient on when their parcel is expected to arrive and whether a change in address is required. If a delivery is planned during the day, a customer could change the address to that of a neighbour who is at home or at a workplace in the vicinity. If it is unclear what a recipient’s schedule will be, smart home products with proximity sensors (e.g. smart lights) could sense if the recipient is at home and communicate to the delivery person ahead of time if a delivery is possible. A flexible delivery address service could also be initiated by the logistics provider. Applying predictive analytics to the

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recipient’s historical mobile device location data with the recipient’s opt-in to the service, the provider could request confirmation of the expected delivery window and location. M Ravindra, Associate Director, Logistics, Panasonic India elaborates, “To begin with, IoT is something that holds huge opportunities, but I would like to just point out that the infrastructure for it will take a long time for realisation. However, as and when that infrastructure – basic connectivity being a huge obstacle – is in place, we feel that supply chain management will become much more efficient as tracking will become much easier and real-time. Manufacturers, suppliers and retailers will all become part of a big system whereby enhanced GPS tracking with data going to cloud systems will mean that the many nodes that make-up a supply chain can be monitored constantly. This method of surveillance will allay the fears of theft and misplacement, but where we feel IoT will really help is data mining. With better systems to supply and gather data, players can constantly improve supply chains on a day-to-day basis. Real time visibility shall be the distinguisher in the logistics field as well as corporate war room.” Key to in-transit visibility is cloud-based GPS and Radio Frequency Identification (RFID) technology, which provide identity, location, and other tracking information. These are the backbone of IoT as it relates to the supply chain. Data gathered from GPS and RFID technologies not only allows supply chain professionals to automate shipping and delivery by exactly predicting the time of arrival; they can monitor important details

Benefits of In-Transit Visibility

The in-transit visibility benefits the overall supply chain process in a much greater way. Trucking companies benefit as they have higher control on their dispatch process and route assignments. Not only they can plan better but can flexibly change the route of an in-transit truck based on the latest traffic congestion information. Another example can be a telematics system within the truck which can alert about a possible breakdown and the logistics company can immediately respond to such an abrupt problem in real-time. This all can be achieved by IoT-ising the truck management system.

Asset Tracking and Utilisation Optimising

Assets for a trucking company are their trucks, for 3PL companies it can be warehouses and other equipment for loading and unloading the shipments. For E-Commerce companies it is their own shipments out for deliveries. With a comprehensive IoT solution in place to trace and track each of these assets almost without help of any manual entry from a human enables every stakeholder to assess their assets and obtain information that would help them optimise for lower operation cost.

Automation and Productivity

Automation is directly proportional to productivity and it stands almost true for any business. IoT is truly automated technology. It depends on machine-to-machine communication which allows supply chain to operate in real-time. A load is matched with a carrier almost instantly, the dispatch information is received immediately and the transaction starts at the earliest which overall creates more revenue from the same resources, hence making it productive and profitable too.

Inventory Intelligence

IoT without a question generate volume and variety of data. Any business needs data to gain insights and IoT happens to supply more of it from the nook and crooks of the supply chain that were never available before. The companies are now able to predict demands, deduce inventory flow pattern and its dependability on economic conditions or consumer behaviour, and understand reasons behind damaged inventory.

Value Added Services

With IoT, specialised supply chain of medicine, chemicals, perishable food etc. are now easier and cheaper to manage. These shipments in-transit can be monitored and regulated for temperature, humidity, oxygen level and many such other factors. These shipments are environment sensitive and need a great amount of effort and IoT happens to be the boon for supply chains moving such hazardous and volatile products.

Customer Experience

Everything is about the overall experience that your end customer has with your brand. The best example is an E-Commerce business delivering package to the end consumer. IoT can turn the customersâ&#x20AC;&#x2122; mobile into a product or barcode scanner that would allow them to search online catalogues much faster, initiate reverse logistics just by scanning the barcode of the package received. This reduces friction for end customer and delivers better experience.

2017 - india WAREHOUSING handbook 89

like temperature control, which impact the quality of a product in-transit.

Reduction in Asset Loss IoT is transforming everyday physical objects that surround us into a connected system of assets which generate information designed to enrich our lives. This value will come from five primary drivers: innovation and revenue, asset utilisation, supply chain and logistics, employee productivity improvements and enhanced customer and citizen experience. Supply chain and logistics alone are estimated to provide $1.9 trillion in value, which is a promising indication of the untapped potential and profits to gain from utilising IoT in the logistics industry. Cargo theft is always a big worry for all logistics companies. Placing sensors within the vehicles enables them in finding a stolen vehicle in a very short time. But the IoT makes this even more proactive. The optimal routes suggested for each vehicle should be communicated to the central server. The ETA for each vehicle can also be calculated and updated at each point along the route. If a vehicle deviates from the pre-decided route or if there is an inexplicable delay between two points, an alarm can be instantly triggered, alerting the company as well as local authorities. This prevents thefts and also ensures that accidents are noted immediately. Continuing with the same theme, in case parts of consignments are under risk of being pilfered, small but powerful tracking devices can be fit inside individual packages being transported for theft detection. This helps

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IoT is transforming everyday physical objects into a connected system of assets which generate information designed to enrich our lives. the logistics players in having a better hold on the assets. Ravindra makes a point here by saying, “Imagine if you could track your goods like you track your Uber driver? Thanks to IoT we have access to every traffic signal on the route that the package is taking. Every time the package passes one of these lights, we get realtime data on the natural conditions, conditions of the package and the traffic time. It would cut down travel time by effectively looking at blockages well in advance and also reassure the customer who is looking at his package at

almost every single node. From the logistics operator’s point of view, it will also allow to cut down time and deliver large orders without fear of rampant theft as it takes place now as a system, backed by IoT that will make all involved players more accountable.” Speaking on the similar lines, Jain asserts, “Supply chain is an asset-intensive industry and to reduce the loss or breakdown of their business asset is one of their primary challenges. An IoT solution for logistics operator would allow connecting the telematics system of the vehicle to the Vehicle Management System that would in turn

An IoT solution for logistics operator would allow connecting the telematics system of the vehicle to the Vehicle Management System that would in turn improve asset tracking and theft prevention improve asset tracking and theft prevention of both their asset and the shipment it is delivering for the partner shippers. Smart door locks – With help of IoT, the system can be programmed to keep the trailer truck door locked until it reaches a particular location. Geo-fencing – The asset can be geo-fenced so that if the truck or shipment moves out of the allowed area, an alert is raised and reactive measures can be carried out. Self-servicing assets – The exact time, location and in-transit status can be recorded when a high-value product is damaged in logistics using sensors inside the packages. With IoT in picture, many such incidents of damaged goods, truck breakdown and false claims by

customers can be verified in clear light.”

Digital India – Road to IoT Digital India is a campaign launched by the Government of India to ensure that government services are made available to citizens electronically by improving online infrastructure and by increasing Internet connectivity or by making the country digitally empowered in the field of technology. ‘Make in India’ embodies the manufacturing led and trade-export-growth model. As a result, global supply chains or global value chains have become more complex, less visible and highly risky. The ones who adapt to cloud-mobile technology would remain profitable and stay successful in the long-run.

Even though Digital India Initiative is not directly aimed at IoT as technology or logistics as a sector, there is an overall positive impact that the sector will receive indirectly. Digital India aims at connecting the rural digitally and modernising the existing infrastructure. E-Commerce industry is betting highly on this initiative as the Tier-two and Tier-three will get more access to online stores and Tier-four towns will be penetrated for the first time. Both assetbased logistics provider and logistics brokers cannot expect to continue doing business in hi-tech industry with no-tech or low-tech policy for itself. It is always a right time to leverage any new technology to stay ahead in the competition and scale up as rapidly as the overall sector booms. Ravindra invokes another thought by saying, “The government has provided the platform via the initiative, but where we need to actively work in conjunction with the government and between ourselves is to provide the framework that would entail as part of IoT and the base, i.e. infrastructure, to make sure we can capitalise on the humongous potential of IoT which would definitely seep down to logistics. In essence, this is the right time, but if we work in haste, then it could lead to disastrous results where the system isn’t equipped to handle the stress which will inevitably be brought in by huge demand.”

Sensing and Sense Making IoT in the world of logistics would be certainly about ‘sensing’ (monitoring of different assets within a supply chain) and ‘sense making’ 2017 - india WAREHOUSING handbook 91

(handling of data). Here Ravindra asserts, â&#x20AC;&#x153;If we again look at issues and trace back from there, then one big advantage I can see is with sensing how smuggling can be deterred. If monitoring can happen more real-time and across the many nodes, then systems can be put in place whereby smugglers can be caught trying to manipulate the system. It can also be a deterrent to corruption in customs, as constant tracking and sending information will mean that sense making will allow all this data to be processed much quicker and much more efficiently.â&#x20AC;? The sensing layer collects various data points from different physical objects like the trucks, shipments, warehouse conveyor belts, RFID scanner of the delivery person, etc that is collaborated by next generation data processing technology such as big data. Big data analytics is even robust with cloud computing since the traditional relational databases cost more and take too much time for analysis. To analyse the large data sets that vary in volume, variety and velocity in real-time, a platform like hadoop is required to store these data sets into form of different clusters that are distributed across the cloud platform. Mapreduce is used to combine and process these data sets from multiple clusters in a coordinated manner. The communication layer is to provide seamless connectivity both on wired or non-wired networks for a reliable transmission of information. The sense making of data is delivered by using multiple technologies such as cloud computing, data processing and analytics, business intelligence tools, etc. There are many usage models that can be derived using these multiple set of data

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Data gathered from GPS and RFID technologies not only allows supply chain professionals to automate shipping and delivery by exactly predicting the time of arrival; they can monitor important details like temperature control, which impact the quality of a product in-transit.

clusters, business logics and algorithms and introduced as an application to the logistics industry. Some of these are â&#x20AC;&#x201C; Remote Monitoring and Management - The connected supply chain will provide greater efficiency as the different supply chain owners, stakeholders and physical objects become accessible from anywhere at any given time. There are many sub-services that can be derived further. For example, automated fuel saving recommendation for fleets based on route plan and current fuel price, system recommended inventory management based on the statistical data available from flow patterns for shippers and system-triggered journey updates from the shipment only. Improved Safety - In-vehicle web cameras can be accessed for security of both driver and the

IoT in the world of logistics would be about ‘sensing’ (monitoring of different assets within a supply chain) and ‘sense making’ (handling of data).

the shippers and the logistics partners can coordinate the dispatch and delivery of the order without the need to pick up a phone or drop an email. Everything is triggered with the order generated at the consumption end. IoT in the world of logistics will be about ‘sensing and sense making.’ Sensing is the monitoring of different assets within a supply chain through different technologies and mediums. Sense making is concerned with handling vast amount of data sets that are generated as a result and then turning this data into insights that drive new solutions. Monitoring of equipment and people to increase safety and security is another main value proposition of IoT.

Final Words

consignment. The door of the trailers can be configured to open electronically based on the rules set by the shipper or logistics team. The driving pattern of the drivers can be continuously monitored for potential deviation from the set speed limits. The truck can be geo-fenced such that when it deviates from the planned route, an alert is sent to both the vehicle owner and service centre. These services are all aimed at improving the safety of drivers, shipments and the vehicle too. Preventive and Self-Servicing - The telematics system of the truck can pick up signs of potential breakdown before the actual incident and recommend for services. In-transit can raise an alert for the driver and the system can navigate

to closest service shops and intimate the central fleet administrator too. The system can also automate the complete process of raising work order for maintenance for scheduled services. The inventory management systems become proactive by the use of IoT with self-servicing shelves that replenish the products based on the demand pattern for that month. Conveniences - The connected system brings transparency and relevant information available even without being requested for. The logistics company can plan the driver’s route even for fuel stops and water breaks to reign in the idle times and at the same time providing convenience to the drivers. The retail shops in real-time can order for more inventories from

While connected sensors are not new, technological advances are making IoT logistics more affordable and practical. Companies are able to connect better with people, processes, and data via devices and sensors to improve their supply chains, especially in the area of logistics, transportation management and retail. The combination of IoT logistics technology, such as GPS on trucks and prescriptive analytics, which is focused on finding the best way to do something for a certain situation, can help companies route their vehicles better. The Internet of Things (IoT) in the last few years has been successful in increasing speed, decreasing waste and most importantly reducing costs. IoT works without human intervention and lets devices communicate with each other within an existing internet infrastructure. 2017 - india WAREHOUSING handbook 93

Choosing the right WMS Before selecting a warehouse management system (WMS), it’s important to know what drives your company so you can identify the key needs you want the solution to address. DO CONSIDER the following pointers to choose the right WMS for your warehouses.

Assess your business needs Know the problem you are trying to solve and match those requirements to the system’s functionalities. Identifying your company’s key business requirements plays an important role in WMS selection.

Assemble a cross-functional team Utilising a WMS is a decision that should involve both your business and IT teams. During implementation, your company’s business and IT teams should work together to ensure a smooth process.

Create a scalable system Make sure the system can address both the low-end and high-end requirements for each engagement.

Ensure interfacing capabilities Your WMS should have an open architecture and be able to interface with your enterprise resource planning system without incurring excessive costs. The WMS must also be able to integrate with your other materials handling equipment to improve warehouse efficiency.

Minimize modification costs Select a system that is configurable to support different business processes. Over time, business requirements change and the system must be able to flex with your shifting needs. Ensure the WMS you choose is adaptable. Configuration, not modification, is the key to success. 94 india WAREHOUSING handbook - 2017

Make data accessible Look for a WMS that allows for easy data retrieval. The ability to provide flexible reporting and online queries (business intelligence) is critical.

Insist on a user-friendly system If the system is not user-friendly, the operating staff will likely be unable to maximize its full benefits. Make sure you select a system that is easy to learn and use.

Examine implementation or deployment options Determine if your solution should be on-premises or a hosted, cloud, or Software as a Service solution. Also, decide if you should deploy it utilizing multiple methodologies.

Research vendor capabilities Support is critical. It is important to select a WMS vendor that offers a responsive customer service center and enough resources to provide ongoing support.

Select a WMS provider that shares a similar focus Choose a vendor that has a vision and values similar to your company. WMS implementations run more smoothly when you and your WMS provider work in lockstep. If you and your provider donâ&#x20AC;&#x2122;t have the same vision, values and work ethics, the project will likely fail. You are in it together for the long term. 2017 - india WAREHOUSING handbook 95

Pre-Engineered Buildings A Futuristic Warehousing Vision In todayâ&#x20AC;&#x2122;s era of automation across the world, warehouses have been in immense demand. But still, their proper construction in pre-engineered way is a concern. Sheena Sachdeva brings an extensive piece on the effect of pre-engineered building in logistics sector.

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pre-engineered building is a metal building that consists of light gauge metal standing seam roof panels on steel purling spanning between rigid frames with light gauge metal wall cladding. In other words, it has a much greater vertical and horizontal deflection. Pre-engineered buildings are generally low-rise buildings, which are ideal for offices, houses, showrooms, shop fronts etc. Time being the most important aspect, prefabricated steel structures are built in very short periods of time. Pre-engineered buildings are nothing but steel buildings in which excess steel is avoided by tapering the sections as per the bending momentâ&#x20AC;&#x2122;s requirement. In pre-engineered buildings, the total design is done in the factory and as per the design, members are prefabricated and then transported to the site where they are erected. Steel structures also have much better strengthto-weight ratios than RCC and they also can be easily dismantled. Pre-engineered buildings have bolted joints and hence, can also be reused after dismantling. Thus, preengineered buildings can be shifted and/or expanded as per the requirements in future. Foundation and anchor bolts are cast parallel with finished, ready for the site bolting. PEB can reduce total construction time of a project by at least 50 per cent. This also allows faster occupancy and earlier realisation of revenue. The secondary members and cladding nest together reduces transportation cost. Steel buildings that are properly insulated save natural resources, energy and money.

Dominance of PEBs Dr Sandeep Gupta, MD, Richa Industries Ltd says, â&#x20AC;&#x153;PEB owns great durability and in comparison to other materials, needs relatively low amounts of energy to produce. Hence, steel is the most preferable material in construction and nowadays widely used in industrial and commercial sectors and gradually picking up the residential sectors as well.â&#x20AC;? 2017 - india WAREHOUSING handbook 97

Applications of Pre Engineered Buildings (PEB)

R Shankar

WAREHOUSES

OFFICES

SHOWROOMS

SCHOOLS

OUTDOOR STADIUM CANOPIES

FACTORIES

GAS STATIONS

AIRCRAFT HANGARS

RECREATIONAL

BRIDGES

WORKSHOPS

VEHICLE PARKING SHEDS

METRO STATIONS

INDOOR STADIUM ROOFS

RAILWAY PLATFORM SHELTERS

CEO India, TVS Logistics Services Ltd

Pre-engineered building increases safety. It reduces the construction time upto 30 per cent along with flexibility.” He said, “The Indian market has witnessed a major shift from asbestos to galvanised and galvalume steel sheets. The use of galvanised steel and galvalume roofing make these buildings rust resistant which, as a matter of fact, minimises the maintenance cost and very soon residential sectors also will create great demand for steel. Government of India has already started focusing

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and exploring on steel construction methods for residential projects. Apart from complete PEB, roofing and cladding systems will also see great demand from the public facilities. The PEBs are extensively used in the commercial and industrial segment and gradually exploring and entering in residential sectors as well. Out of the total steel produced in India, two-thirds is utilised in construction segment. Apart from these properties steel buildings have many green characteristics.” As pre-engineered buildings have been considered

the pioneer material, Gautam Suri, Founder Director and CTO, Interarch Building Products Pvt Ltd said, “Pre-engineered steel buildings have now become the most favourable method for construction of factories and warehouse buildings in India. The penetration of pre-engineered building have increased substantially to an extent that more than 90 per cent of the construction of new factories and warehouses is being done using this technology.” Further, there are certain functional advantages of pre-engineered buildings over RCC

building due to which more architects, consultants and customers are inclined toward pre-engineered buildings; like earthquake resistant and compliant buildings etc for faster delivery and minimum 40 per cent of the time saving over RCC construction; and possibility of future expansion without disturbing the existing set-up. Approximate saving in steel with Pre-engineered Steel Building as compared to conventionally designed site fabricated steel Saving on account of use of custom made Built up sections.

2.5%

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

2.5%

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

1.5%

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

1.5%

No quality rejection / damage at site

0.5%

Total Saving in Quantity of steel consumption.

8 to 10%

source: Interarch Building Products Pvt Ltd

N Ramakrishna, General Manager, Marketing, Kribhco Infrastructure Ltd opines, “Pre-engineered steel buildings are those which are fully fabricated premises after designing, shipped to site in completely knocked down condition; and all components are assembled and erected at site with nut-bolts, thereby reducing the time of completion. The concept is designed to provide a complete building which is air tight, water-tight, optimum in weight and cost and designed to fit user requirement like a well fitted glove.” Steel is a preferred material for construction, due to its various advantages like quality, aesthetics, economy and environmental conditions. This concept has a lot of scope

in India and can actually fill up the critical shortage of housing, educational and healthcare institutions, airports, railway stations, industrial buildings and cold storages etc.

PEB: effective for warehouses? With the upsurge in warehousing sector, preengineered buildings setup is used mostly by all the companies for less time and cost. Dr Gupta informed, “Warehousing is an essential part of any supply chain and logistics industry. The demand of warehouses is huge. In a country like India, the logistics and warehousing industry is one of the predominant industries of the nation. Currently, the government initiative of implementing ‘Make in India’ concept and rise in domestic consumption is generating mammoth requirement for additional warehouses all across the country. This initiative of government emphasises on local manufacturing and it is generating a need for increasing storage capacities in the country. The huge demand of warehouse can be seen to fulfil the requirement of E-Commerce industry as well. To avoid the damage and to ensure proper storage of perishable food products and other commodities, quicker, advanced and economical warehouses are required and this is boosting the growth of logistics and warehousing industry in the country.” Additionally, as the concept of trading is expanded significantly in everyday life, distribution centres and warehouses turn out to be considerably more essential. In store network and co-ordinations part, stock keeping units are at sites as indicated by their accessibility and request of the items that are fabricated. Today, logistics and supply chain are the most important part of warehousing industry. Earlier problems of warehouses or distribution centres, which confronted various issues are gone now

Manish Garg President and Chief Executive-Steel Building Business, Everest Industries Limited

PEBs were adopted in warehousing segment very early and continue to rule the roost. Logistics companies have realised the potential and have continued to use PEBs to its fullest.” due to this effective PEB technology. Various properties like economical, fast delivery, time saving, more life span, variable sizes and many others make PEB the widely accepted technology among logistics warehousing industry. Ramakrishna asserted, “Warehousing’s demand is growing rapidly with im2017 - india WAREHOUSING handbook 99

Diagram of a peb

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

Pre - engine ere d ste el buildings have now become the most favourable method for construction of factories and warehouse buildings in India.” mense focus on innovation, cost, speed of delivery and versatility. With changing needs of the industry, it becomes imperative that the construction, management and maintenance of warehouses should be both cost effective and speedy. PEB over the last few years has emerged as the best possible solution for the sector.”

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PEB structures can play an important role tional advantages, but they are the most appropriate and in creating new warehousing infrastructure efficient for warehousing industry. The pre-engineered because of the following advantages: building design philosophy takes maximum advantage The frames of PEB are highly flexible and thus, they offer higher resistance to seismic forces. And for the same reason, the warehouses can easily be expanded in length, width and height. They can also be easily double-stacked. Warehouses constructed with PEBs are supplied with high quality paint systems for cladding and steel to suit ambient conditions at site, which results in long durability and low maintenance costs. They are also energy efficient and incorporate watertight roofing systems. They are hassle free and result in cleaner and unencumbered sites. As we are moving towards GST era, we would require huge warehouses in some locations. Gautam Suri added, “Interarch pre-engineered warehouses have not only proved to be beneficial due to func-

when used in warehousing and cargo space. Interarch’s efficient warehouses adapt to any kind of storage requirements and are virtually maintenance free. Interarch warehouses can be customised to any shape or size, be it a clear span of upto 100 metres or clear height of upto 40 metres.”

PEBs - favourable for goods Pre-engineered buildings are considered favourable for the goods and warehousing construction as the process used to construct such building is highly safe and viable. Dr Gupta said, “Pre-engineered buildings are considered eco-friendly and promotes green construction. PEB manufacturing is 100 per cent in-house, under controlled environment with strict quality specifications and

N Ramakrishna

General Manager - Sales and Marketing, Kribhco Infrastructure Ltd

hence, these buildings do not pollute environment and manufactured with high quality grade which prevent the damage of goods kept inside the buildings. P This has given colossal chance to strategic players to set up temperature-controlled stockrooms or cool stockpiles as the business is evaluated to develop quickly at 26 per cent aggravated yearly till 2017. This will give additional lift to the PEB innovation, as building some portion of these frosty stockpiles should be possible by this innovation.” Also, these buildings are constructed with 70 per cent recyclable material and various components of PEBs utilise the natural sunlight and natural wind for functioning. Additionally, the painting done on structure member is with standard DFT and galvanised cold form and galvalume sheets make these buildings weather and rust resistant which reduces the maintenance cost. Moreover, these buildings are more earthquake resistance as compared to RCC buildings and designed

as per IS or MBMA code, depending on the criticality of seismic zone and terrain category.” Ramakrishna stated, “As the construction of PEBs is air-tight and water-tight, chances of corrosion and material damage are highly reduced. The quality and shape of PEBs is ensured and it does not allow overheating of the storage area. PEBs are better resistant to earthquake and wind pressure and hence, protect the goods stored inside. They have enhanced durability and seismic reliability. It is safer and more secure to store goods in PEBs in hilly regions and other geographically difficult areas. PEBs are cleaner sites for storage of goods.” R Shankar, CEO, India at TVS Logistics Services Ltd said, “Pre-engineered building increases safety. It reduces the construction time upto 30 per cent along with flexibility, as it is extremely versatile and can be made modular, so that expansion can be on the basis of need. The only disadvantage could be durability in

The PEB concept is designed to provide a complete building which is air tight, water-tight, optimum in weight and cost, and designed to f it user requirement like a well fitted glove.” terms of very long life, which normally is what real estate and infra developers in India would look out for.” As the country is moving towards automation and development of the economy at the galloping pace, from buildings to people, PEBs will develop every sector of the country. 2017 - india WAREHOUSING handbook 101

Guest column

Warehousing in the Future

stock in warehouse ust like the way we work and the storage. Innovations way we shop, warehousing and like this make our logistics are changing. It’s all business better, more about managing customers’ exefficient and also acpectations, which are now higher than ever. Digital information countable. The supply can be stored in the Cloud, but physical chain must take into products can’t. No matter how sophistiaccount an inventory and tracking of stock, cated the tech gets, the need for space consistent quality conwon’t be easily resolved. As communications improve and technology develops, trol, delivery processspace continues to be at a premium. But ing and transportation Steve Woodhead, with ever more sophisticated warehouse logistics. Some of this Business Development Manager Boughey Distribution management systems, what will warehas become automathousing look like in 10 years’ time? ed and computerised, The warehousing, consolidation and distribu- while other tasks remain within the domain of tion sector has seen some major developments human resources. Boughey’s own in-house IT over the years, especially with the arrival of the is now responsible for the efficient day-to-day warehouse management system. These business running of its financial, warehouse and stock solutions provides extensive automated support management, order processing and reporting in the processing and movement of goods and systems. The team can also formulate, develop

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and implement bespoke customer solutions and is constantly on the lookout for ways to solve industry problems. The launch of BougheyNET, a 24/7 customer web portal delivering highly-accurate, real-time data on order status and stock levels, has made a solid impact on the business. Keeping up with the giant leaps forward in technology over the last 20 years is only half the challenge however. Managing customers’ expectations remains at the forefront of everything Boughey does. There are some aspects of the day-to-day business that will forever remain the same, as there is no shortcut to the storage and management of tangible products in a safe, navigable environment. The environment can be made safer, the transport methods more efficient, but at the end of the day, the whole process is only as efficient as the system and its operatives. As we continue to drive the company forward, we’re moving towards a future that’s geared to making business better.

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Expertise in Import Cargo Movement

Warehousing Safety 104 india WAREHOUSING handbook - 2017

BY TED NALS S U TR ATIO TIN MUL

TRUE VALUE SPACES

Logistic Parks & Warehouses

Warehouse Safety Principles

01 02 03

six key guidelines to keep your workplace safe

04 05 06

Warehouse safety How to minimise forklist accidents

20,000 people get seriously injured in forklift accidents every year

20,000 forklift related injuries result in lost workdays

The cost incurred because of forklift accidents is estimated to be above

People die in forflift - related accidents

$ 100 million

100 100% of forlifts related accdients could be avoided

2017 - india WAREHOUSING handbook 107

What causes forklift accidents?

Driver Complacency

Blind Spots Target Pressures

False Alarms

Key observations you should be making Accident Black Spots Where are they? What is in the area? Why this area?

Accident Causes

What was involved? How often do similar incidents occur? What was said and what was done? 108 india WAREHOUSING handbook - 2017

Habitual Offenders

Near Misses

Who are they? What they are doing wrong? What are they consistently getting it wrong?

Where are they happening? Why are they happening? What happens afterwards?

The future of safety systems

www.tripathlogistics.com

Real- time intelligient warnings Prevent accidents occuring Avoid false alarms and complacency Learn from the past

Tripath

Highlight dangerous areas Improve low performers Pause, rewind and replay accidents Identify the cause of an accident Avoid time consuming investigation

Warehousing and Distribution

Freight Management

Supply Chain Management

Ground Transportation

Customs Clearance

Project Logistics

Corporate Oﬃce: ‘Sri Venkateshwara Nilaya’ Muneshwara Block, Amruthnagar A Sector, Sahakaranagar Post, Bangalore - 560092

A SAFER ENVIRONMENT IS MORE PRODUCTIVE

Network

Afﬁliates

Tripath Logis�cs stands for the highest service quality. We are proud to hold the following cer�ﬁca�ons

Understanding

Dock Levelers In a loading dock, one problem to overcome is the problem of bridging the gap between a truck and the dock or warehouse floor. Not all trucks are the same height; and the height of the trailer floor within a truck can vary according to how heavily the truck is laden. Dock levelers are an important part of your dock equipment and material handling system. They are an essential element in the modern warehouses. We find out how dock levelers enhance safety and productivity by avoiding multiple handling of the loads in warehouse.

110 india WAREHOUSING handbook - 2017

ock levelers are used in loading dock or loading bay which is an area of a building where goods vehicles (usually road or rail) are loaded and unloaded. They are commonly found on commercial and industrial buildings and warehouses in particular. According to Rajesh Sikka, Managing Director, Metaflex Doors India Pvt Ltd, “In warehouses, dock levelers are used to facilitate the safe and efficient loading and unloading of materials. Dock leveler makes sure that vehicle height should reach to the height of platform and then its lip rest on the platform. This enables smooth and quick unloading and loading of material.

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

dock levelers, Sikka avows, “Metaflex offers majorly two types of dock levelers: swing lip and telescopic lip. Both are hydraulic levelers. The swing lip dock leveler is operated with only one push button. By keeping the push button pressed, the platform will go up from its rest position when the highest position is reached, the lip will move out. When the push button is released, the platform and lip will descend automatically to the level of the vehicle bed. During loading and unloading, the suspension of the vehicle is automatically followed by the leveler.” He continues, “Another type of leveler is telescopic lip, which is less prevalent in India in comparison to European markets. The telescopic lip is powered by a separate, double acting cylinder. The hydraulic system is completely closed and cannot be affected by dust or dirt, even in most extreme conditions.”

Rajesh Sikka

Managing Director, Metaflex Doors India Pvt Ltd

“IN WAREHOUSES, DOCK LEVELERS ARE USED TO FACILITATE THE SAFE AND EFFICIENT LOADING AND UNLOADING OF MATERIALS.”

Usability in Indian Markets Many multinational companies have started setting up plants and warehouses in India. They understand the necessity of automation in manufacturing unit and warehouses. Gandhi pinpoints the relevance of dock levelers and it’s prevalent in different sectors today. He says, “Loading and unloading of material from dock leveler can be done quickly. Lot of pharma companies and manufacturing units have understood the usefulness of dock levelers. Indian manufacturing companies also have understood the importance of dock leveler 2017 - india WAREHOUSING handbook 111

Key Features of Dock Levelers Kartik Gandhi

Director, Gandhi Automations Pvt Ltd

“INDIAN MANUFACTURING COMPANIES HAVE UNDERSTOOD THE IMPORTANCE OF DOCK LEVELER AND THE EFFICIENCY IT CAN PROVIDE FOR WAREHOUSE OPERATIONS.” and the efficiency it can provide for warehouse operations.” Adding more information on the Indian market scenario of dock levelers, Sikka avows, “The large chunk of demand comes from the organised market; there are a lot of logistics centres and infrastructural facilities coming up, which is further adding up to the market for complete dock solutions. Another fuelling of demand is coming from mega food parks and SEZs. This trend is still to be seen in unorganised market, but we are hopeful that the demand will rise for dock levelers, keeping in mind the rate at which market is growing and evolving.”

Safety First Safety is a major concern for warehouses in India and dock levelers ensure safety of the

112 india WAREHOUSING handbook - 2017

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

employees in the warehouse. Sikka shares on the kind of safety maintained by them. He says, “Metaflex Dock Levelers are designed in such a way that we keep safety as the most important design feature. The platforms and lips of our dock levelers are made of high quality tear plates. Depending on the width, the platform is reinforced with 8-10 profiles. These profiles allow the platform top to twist and compensate for vehicle tilt caused by offset loads within the vehicle. The lip will always remain in contact with the vehicle bed. The compact hydraulic power pack is positioned under the platform to prevent it from any possible damages. All these characteristics ensure a safe hydraulic system with a long life span and a minimum of maintenance. In our nine years of operations in the market, no accident has been reported so far.” Gandhi also shares his tale. He says, “Dock leveler acts as bridge between the loading bay area and container, if you are loading and unloading in traditional way or without a rigid support (which our dock levelers provide), there is always a danger of mishap. Gandhi Automations’ dock levelers are easy to operate and we follow international standards while manufacturing and installation of the same. Since it has firm base, goods can be loaded and unloaded easily and operation is so simple that even an unskilled labour can perform it easily.” Therefore, dock levelers add value in the warehousing system. It helps in the better, faster and smoother operations with effective results without compromising on the safety, stability and efficiency.

Guest column

Kelley India: Upgrading the Warehouses with Latest Technologies “Material handling equipment has seen a growth of 10 per cent, while we have been growing at over 40 per cent year-on-year on the back of the healthy expansion of the modern warehousing and E-Commerce Piush Goyal, MD sectors.” Kelley Material Handling Equipment India

diameter. A single 24 ft diameter fan can cover a manufacturing or a modern warehousing facility area of up to 30,000 sqft, depending upon site conditions, eliminating the need for a large number of wall-mounted noisy energy-consuming fans. A motor of up to 2 hp with the Variable Frequency Drive (VFD) allows the fans to operate almost noiselessly (below 55 dB) and very low energy consumption levels. The fan generates a breeze of 2-3 mph that can cause a fall in the perceived temperature by 4 degrees F to 7 degrees F, to keep employees comfortable.

Kelley Material Handling Equipment India makes high quality warehousing products such as dock levellers and HVLS (High Volume Low Speed) fans. Of late, They are witnessing the demand for HVLS grow the fastest for fans of size 8 ft to 24 ft

In India, Kelley Entrematic met the challenge of educating the customers about latest technologies in Dock Levelers. These technologies include – Lambda beam design Robotically welded chassis Single push button operation Easy clean pit Lug type hinges High density steel Chequered platforms with no joints in their dock leveller

DAIKIN FACILITY IN USA USING KELLEY EQUIPMENT ON 380 DOCKING STATIONS

“All these and more can enhance productivity and safety, especially when Kelley dock leveller is used in combination with a forklift, as well as boost reliability, operational ease and low maintenance

KELLEY HVLS FAN BEING USED IN MANUFACTURING FACILITY IN INDIA

resulting in low life cycle cost,” says Goyal, “Thereafter, we emphasise customer engagement with the Kelley team at the inception stage to ensure the customer installation is right the first time.” Kelley emphasises on customer engagement with the their team at the inception stage, to ensure the customer installation is right the first time… Kelley Material Handling Equipment India is a wholly owned subsidiary of Kelley Entrematic USA, the world’s largest manufacturer of dock levellers and HVLS Fans. Its major customer segments include warehousing, E-Commerce, offline retail, manufacturing, FMCG and the dairy sector, which present good demand for Kelley India’s line up of equipment including HVLS fans, dock levelers, vehicle restraints, dock seals, dock shelters and impact resistant overhead doors products. 2017 - india WAREHOUSING handbook 113

114 india WAREHOUSING handbook - 2017

Packaging Industry: The Next Big Wave of the Indian Logistics

India is expected to find a place among the top ten packaging consumers of the world. The organised retail sector and booming E-Commerce has been largely fueling of plastic packaging in India. The industry is expected to touch $73 billion mark in 2020 from $32 billion mark of the financial year 2015. Gaurav Dubey talks to the Industry players and a domain expert about their views. 2017 - india WAREHOUSING handbook 115

he growth of the industry is likely to be heavily influenced by changing demographics such as growing urbanisation and the rising proportion of middle class consumers. These changes drive the need for new packaging formats, such as different sizes, materials and strength. During the period of 2016-2021, the Soft Drinks and Food industries will be the highest packaging market share gainers (by units) with share growth of 3.4 per cent and 1.3 per cent respectively. The growing organised retail sector has been a significant driver of the growth of the food and beverage industries,

which in turn drives the growth of Indian packaging industry. In addition, innovations in the packaging industry, such as the development of lighter packaging with better barrier properties, add to the growth of packaging industry. In terms of packaging material, glass and rigid plastics will be among the major share gainers, with share growth of 0.7 per cent and 0.6 per cent respectively during 2016-2021. Flexible Packaging is the leading pack type in the Indian packaging industry and is expected to grow at a healthy CAGR of 8.9 per cent during 2016-2021, with major contributions from the food, household care and cosmetics and toiletries

INDIA IN THE GLOBAL PACKAGING MARKET US Japan China Germany France UK Italy Russia Canada Spain Brazil India Turkey South Korea Indonesia 0

20,000

116 india WAREHOUSING handbook - 2017

40,000 $ million

60,000

80,000 2012 2017

100,000

120,000 140,000

industries. This growth is largely driven by its low cost and flexibility to suit multiple shapes and sizes, convenience (zip-locks, plastic closures) and lowcarbon foot print on the environment as compared to rigid plastics. In addition, the increasing prominence of low-density flexible packs in high protein foods is expected to drive the growth in the future. Apart from these facts and figures, the Cargo Connect took the view of Industry players and experts to provide better understanding of the packaging Industry to its readers Shailender Anand, MD India and Director UAE, Pronk Multiservice India Pvt Ltd says that Pronk Multiservice has been operating since last 45 years in Europe and carries rich experience of Industrial packaging. Over the years, company has extended its services in Dubai and India as well. When we have started Pronk in India five years ago, we focused to deliver quality& economicalservices and to add value in the current market scenario of the country. There were not many professional companies in the Indian market, so Pronk Multiservice came up with technology, professionalism and commitment to provide complete packaging solution. Today we are operating from six major locations across India. We have also engaged technical professionals with B.Tech background and also professionals from The Indian Institute of Packaging for providing better services to our clients. In Pronk, we completely understand that packaging requirement changes with the change of mode of transportation. Sea cargo requires different kind of packaging in comparison to air cargo and road transportation. We consider all these factors while designing the packaging solutions for our clients. Pronk, in its expanding bid, will soon come

up with its production units in 4 different cities in a span of one year for spreading company’s business further in India.

Impact of organised retail and booming E-Commerce on the packaging industry – Organised retail and E-Commerce has provided a big scope to the packaging industry and given a major boost to the corrugation &soft packaging. The world is going

perspective as well as companies involved in online sales are also well aware of the need of environment conservation and follow government’s environment policies. So, it is catering both the need of businesses and environment as well. Girish Belwal, Deputy General Manager, Logistics, ISGEC Heavy Engineering Limited says contract packaging undoubtedly facilitates the growth of business. A contract packager helps to complete a project at the competitive cost aligned with scheduled time and assured quality. They have used the services of several packaging solution provider companies, but they found the services of Pronk Multiservice India Private Limited up to the mark. Pronk has excellent domain knowledge, experience, manpower and right equipment for the execution of the plans. Here are the some benefits of hiring a contract packager – 1. Increased flexibility 2. Meeting specific customer demands 3. Brings in fresh perspective when two minds meet. 4. Reduced cost 5. Value Added Services and Value addition in Process Good packaging of a product also plays an important

(Growth rate of Packaging industry)

Shailender Anand MD India and Director UAE, Pronk Multiservice India Pvt Ltd.

O rg a n i s e d ret a i l a n d e-commerce

has

provided a big scope to the packaging industry and given a major boost

Year

Compound Annual Growth Rate (CAGR)

16-2011

6.2 %

2021-2016

9.2 %

digital rapidly; and now people are even purchasing a pair of socks from E-Commerce platforms, like Amazon and Flipkart, this has given an entirely new dimension to the industry. It has also multiplied the volume and size of the packaging industry as different products require different kind of packaging. It is good from environmental

role in the transportation as it makes supply chain fast and efficient. If a product is packaged in an apt manner then chances of damage in goods in transits get reduced considerably. Productivity of logistics cycle also increases with the good packaging of the product and when a customer/client receives the product in the good condition

to the soft packaging. It has also multiplied the volume, size & innovations of the packaging industry as dif ferent pro duc t s require a different kind of packaging.” 2017 - india WAREHOUSING handbook 117

it also enhances the reputation of the packaging service provider company. Dr Tanweer Alam, Joint Director and Regional Head, Indian Institute of Packaging presented a holistic view of Indian packaging sector and spoke on various issues related to the industry ranging from low per capita consumption of packaging in India, volatility of Indian markets to the growth perspective of the packaging industry. Here are the views of Dr Alam,

Reason of low per capita packaging consumption Girish Belwal Deputy General Manager, Logistics, ISGEC Heavy Engineering Limited

G o o d p ackaging of a product also plays an imp or t ant role in the transportation as it makes supply chain fast and efficient. If a product is packaged in an apt manner, then chances of damage in goods in transits get reduced to a considerable extent.” 118 india WAREHOUSING handbook - 2017

Indian Packaging by Market Sector 50

Packaging is one of the fastest growing industries and stands at USD 700 billion globally. It has 0 grown higher than GDP in most of the countries. In a developing country like India, it grew at a CAGR of 16 per cent in the last five years and touched ~USD 32 Billion in FY 15. The Indian packaging industry constitutes 4 per cent of the global packaging industry. The per capita packaging consumption in India is low at 4.3 kg, compared to developed countries like Germany and Taiwan where it is 42 kg and 19 kg respectively. Packaging is among the high growth industries in India and developing at the good rate of 12-13 per cent per annum and becoming a preferred hub for packaging industry. Presently, the fifth largest sector of India’s economy, the industry has reported steady growth over past several years and shows high potential for much expansion, particularly in the export market. Costs of processing and packaging food can be up to 40 per cent lower than parts of Europe which, combined with India’s resources of skilled labour, make it an attractive venue for investment. A high degree of potential exists for almost all user segments which are expanding appreciablyprocessed foods, hard and soft drinks, fruit and marine products.

Processed Food Packaging – 48% Personal Care Packaging – 27% Pharmaceuticals – 6% Others – 19%

Growth potential in the Indian packaging market The Indian packaging industry has made a mark with its exports that comprise flattened cans, printed sheets and components, crown cork, lug caps, plastic film laminates, craft paper, paper board and packaging machinery, while the imports include tinplate, coating and lining compounds and others. In India, the fastest growing packaging segments are laminates and flexible packaging, especially PET and woven sacks. Over the last few years, packaging Industry has emerged as an important sector which is driving technology and innovation growth in the country and adding value to the various manufacturing sectors including agriculture and FMCG segments and E-Commerce segment. The global packaging industry has been developing and expanding by every passing day and the Indian packaging industry is also treading on the same path. This growth is primarily driven by factors like growing pharmaceutical, food processing, manufacturing industry, FMCG, healthcare sector and ancillary in the emerging economies like China, India, Brazil, Russia and few other East European countries.

Emerging trends and challenges The progression of packaging demand is influenced by a wide range of factors, from year to year and also factors with a much longer-term influence. While the economy plays a central role in influencing the size and growth of the market, there are a number of other factors which can be seen as having a direct or indirect influence on packaging demand or, at any rate, the nature of this demand, irrespective of the performance of the economy. These include: • The ageing of the world population • The trend towards smaller households • The increasing requirement for convenience among consumers • Rising health awareness among consumers • The trend towards ‘onthe-go’ lifestyles among increasingly time-poor consumers • Growing requirements for brand enhancement/ differentiation in an increasingly competitive environment • New packaging material development for ecommerce and consumer packaging • Increasing awareness of environmental issues, and the adoption of new regulatory requirements on packaging recycling.

Global packaging market is $839 billion and is increasing at the rate of 3.3 per cent and the market is projected to grow at the rate of 3.5 per cent per year till 2020. Challenges that foreign companies face in Indian markets Presently, global packaging market is $839 billion and is increasing at the rate of 3.3 per cent. The global packaging market is projected to grow at the rate of 3.5 per cent per year to 2020, with sales to reach $997 billion by 2020. The share of Asian Packaging market is accounted for 36 per cent followed North America and Western Europe totaled shares of 23 per cent and 22 per cent respectively. However,

there is further growth in Asian market which is predicted to represent over 40 per cent of global demand. Eastern Europe was the fourth largest consumer of packaging with a global share of 6 per cent, closely followed by South and Central America with five per cent. The West Asia represents 3 per cent of the global demand for packaging, while Africa and Australasia each have a two per cent share. The expected growth in the world packaging market, including technical developments, cost per package, sustainability initiatives and, perhaps most importantly, the growth of the consumer class in the Asia-Pacific, South and Central America and Eastern Europe. The growth of the global packaging industry is being driven by a number of trends, depending on various geographical regions. Growing urbanisation, investment in housing and construction, the development of retail chains and the burgeoning healthcare and cosmetics sectors are driving packaging demand in China, India, Brazil, Russia and other emerging economies. An increase in living standards and personal disposable income in the developing regions fuels consumption across a broad range of products, with subsequent growth in demand for the packaging of these goods.

Anticipated growth rate of the Indian packaging industry In terms of economically developed markets, a number of key social and market trends will have a major impact on developments in packaging over recent years. These include: the trends towards smaller households and accompanying rise in demand for more, smaller pack sizes, the increasing requirement for convenience among consumers and the growing number of consumer interested in health and beauty products. Apart from this, boom in the Indian E-Commerce sector will also certainly help the growth of the Indian packaging market.

Dr Tanweer Alam Joint Director and Regional Head, Indian Institute of Packaging

Packaging is one of the high growth industries in India and developing at the good rate of 1213 per cent per annum. Presently, the fifth largest sector of India’s economy, the industry has reported steady growth over past several years and shows high potential for much expansion, particularly in the export market.” 2017 - india WAREHOUSING handbook 119

Infographics

Air Freight Forwarders & Consolidaters

HO : 2 E & U, DCM Building, 16, Bharakhamba Road, Connaught Place, New Delhi-110001 T: + 91.11.47343502-16 F: +91.11.47343501 E: info@perfectexpress.in W: www.perfectexpress.in OUR BRANCHES: MUMBAI, CHENNAI, BENGALURU, HYDERABAD, KOLKATA, AHMEDABAD

TOWARDS A UNIFIED INDIA:

HOW ARE WAREHOUSING OCCUPIERS APPROACHING THE GST? UNDERSTANDING THE RESPONDENTS SECTORIAL REPRESENTATION 3PL

E-COMMERCE

ELECTRICALS

ENGINEERING & MANUFACTURING

FMCG

PHARMA

RETAIL

57%

01%

15%

05%

REGION OF ORIGIN

EXISTING WAREHOUSING FOOTPRINT OF LEADING OCCUPIERS

63%

DOMESTIC

The growth of e-Commerce and strong demand from 3PL companies has been driving demand for large sized space take-up. As per our findings, 58% of the respondents had more than 500,000 sq. ft. of warehousing portfolio while approximately 42% of the total 3PL operators that we surveyed had more than 1 million sq. ft. of warehousing space across the country.

Source: CBRE Research, January 2017

122 india WAREHOUSING handbook - 2017

11%

10%

16%

ASIA PACIFIC

DOMESTIC

EMEA

PREFERRED CITIES FOR WAREHOUSING OPERATIONS 47%

57%

NOIDA

KOLKATA

67%

MUMBAI CHENNAI

59% PUNE

62%

DELHI

57%

59%

86%

62%

GURGAON AHMEDABAD

BANGALORE HYDERABAD

PREFERRED MODE OF OPERATIONS AND REASONS FOR THE SAME

The trend of builtto-suit warehousing is still at a nascent stage in India. Most companies still prefer to lease modern warehousing space to save cost and elude regulatory challenges.

EMEA

LACK OF QUALITY SPACE

REGULATORY FACTORS

SUITABLE FOR BUSINESS MODEL AND LACK OF QUALITY SPACE

16%

18%

54%

EMEA

11% EMEA

EMEA

LACK OF BIG-BOX WAREHOUSE

SUITABLE FOR THE BUSINESS MODEL AND COST EFFECTIVE

SUITABLE FOR BUSINESS MODEL AND LACK BIGBOX AND QUALITY WAREHOUSING SPACES

BUILT-TO-SUIT INVOLVE A 3PL COMPANY LEASE BOTH LEASE SPACE AND INVOLVE A 3PL COMPANY BOTH BUILT-TO-SUIT AND INVOLVE A 3PL COMPANY BOTH BUILT-TO-SUIT AND LEASE

23% EMEA

EMEA

COST EFFECTIVE WAY TO OPERATE

SUITABLE FOR THE BUSINESS MODEL AND REGULATORY FACTORS

38% EMEA

EMEA

SUITABLE FOR THE BUSINESS MODEL

COST EFFECTIVE WAY TO OPERATE AND LACK OF BIG-BOX AND QUALITY WAREHOUSING SPACE

OTHER REASONS

2017 - india WAREHOUSING handbook 123

IMPACT POST THE GST

TIME REQUIRED TO ALIGN BUSINESS TO THE NEW STRUCTURE

IMPACT OF THE GST ON BUSINESS NOT SURE POSITIVE

63%

NO EFFECT

16%

NEGATIVE

13%

45% 10%

OVERALL IMPACT ON OPERATING COST TOO EARLY TO PREDICT

LIKELY TO INCREASE

LIKELY TO DECLINE

REMAIN THE SAME

124 india WAREHOUSING handbook - 2017

25%

20%

45%

20%

3 - 6 MONTHS

6 - 12 MONTHS

18% WITHIN 3 MONTHS

13%

NOT SURE

MORE THAN A YEAR

PAGES 108 INCLUSIVE OF COVER

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Warehousing at the Advent of

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MOST LIKELY STRATEGY FOR WAREHOUSING PORTFOLIO POST THE GST 29%

24%

CONSOLIDATION

DOWNSIZING

EXPANSION

20%

NOT SURE

BOTH EXPANSION

RELOCATION

BOTH DOWNSIZING

REMAIN THE SAME

AND CONSOLIDATION

EXPANSION, RELOCATION AND CONSOLIDATION

1% 1%

PREFERRED FORMAT OF OPERATIONS: PRE AND POST THE GST • Mother hub for a region supplemented by spokes • Mother hub in the city / state with urban fulfillment centers • Multiple warehousing facilities in one state / city • Only one warehousing facility in one state / city • Both multiple warehousing facilities in one state / city and

3% 5%

5% 3% 11%

PRE GST

28%

52% POST GST

33%

30%

mother hub for a region supplemented by spokes

• Mix of all • Both multiple warehousing facilities in one state / city and only one warehousing facility in one state / city

• Both mother hub for a region supplemented by spokes and only one warehousing facility in one state / city

126 india WAREHOUSING handbook - 2017

Source: CBRE Research, January 2017.

MAJOR STATES AND MAJOR ACTIONS POST GST

IMPACT POST THE GST LIKELY IMPACT OF THE GST ON COST COMPONENTS

120

DECREASE MODERATELY

DECREASE SHARPLY

43%

INCREASE MODERATELY

INCREASE SHARPLY

12%

10%

NO CHANGE

29%

100

Approximately 38% of respondents will continue to expand their footprint across states such as Tamil Nadu, Karnataka, Haryana and Maharashtra. Approximately 27% will consolidate their operations, while 26% are likely to retain their existing footprint; however, approximately 8% would downsize existing footprint in states such as West Bengal, Uttar Pradesh and Andhra Pradesh.

DIRECT TAXES 60

38%

10%

15%

10%

27%

INDIRECT TAXES 20

27%

19%

52%

0 CONSOLIDATE DOWNSIZE

LABOUR COSTS

EXPAND

REMAIN SAME

ANDHRA PRADESH DELHI

REAL ESTATE COST

29%

15%

47%

GUJARAT HARYANA KARNATAKA MAHARASHTRA TAMIL NADU TELANGANA UTTAR PRADESH WEST BENGAL

TRANSPORTATION COSTS

56%

17%

23%

OTHERS

Others include Goa, Madhya Pradesh, Kerala and Rajasthan

Source: CBRE Research, January 2017.

2017 - india WAREHOUSING handbook 127

SYNOPSIS OF THE GST

WHAT IS GST?

WHY IS IT IMPORTANT?

WHAT TAXES WILL BE COVERED?

WHAT WILL BE THE RATES?

The GST is an indirect tax on the consumption of goods and services in India. It will apply to all goods other than crude petroleum, motor spirits, diesel, aviation turbine fuel, natural gas, alcohol and all services barring a few which are yet to be speciﬁed. Due to the federal nature of the Indian economy, the GST will be levied by both the central and the state governments.

The IMF has stated that India's tax revenue-to-GDP remains considerably below its emerging market peers. The GST would be the most important reform, and would boost growth through the creation of a single Indian market. The GST will help in widening the tax base, improve tax compliance, remove existing state and central level taxes and increase revenues for the government.

It will cover taxes such as central excise duty as well as state level taxes including VAT or sales tax, entertainment tax, entry tax, purchase tax, luxury tax and octroi.

The GST Council has posited a four slab tax structure of 5 percent, 12 percent, 18 percent and 28 percent, with lower rates for essential items and higher rates for luxury goods.

5 HOW WILL STATES ADOPT TO THE NEW ‘ONE-TAX’ SYSTEM? The states will scrutinize and audit 90% of the companies with annual turnover up to INR 10.5 million, the balance 10% will be controlled by the centre; selection of assesses to be done on a random basis.

Tax revenues of companies with more than INR 10.5 million turnover, including those who pay Integrated GST, will be shared equally between the centre and states. States will have the right to tax economic activity up to 12 nautical miles in sea.

SELECT COUNTRIES THAT HAVE IMPLEMENTED GST Country

Year of Implementing GST

Initial Tax Rate

Current Tax Rate

Singapore

1st April, 1994

Australia

1st July, 2000

10%

Malaysia New Zealand

1st April, 2015

6% 10%

Source: CBRE Research, Q1 2017.

128 india WAREHOUSING handbook - 2017

1st October, 1986

15%

UNDERSTANDING SURVEY RESPONDENTS â&#x20AC;&#x201C; EXISTING FOOTPRINT, MODES OF OPERATION AND LEASING STRATEGY

Country Of Origin And India Warehousing Footprint Of Respondents

STATE LEVEL PRESENCE OF RESPONDENTS Andhra Pradesh

57%

Uttar pradesh

58%

61%

53% Telangana

10%

Delhi

West Bengal

Goa

39% 57%

57%

54%

Tamil Nadu 71%

16%

52% Rajasthan

63%

11%

Domestic Asia Pacific EMEA America

Gujarat

76%

Maharashtra

51%

87%

44%

Madhya Pradesh

Haryana

Karnataka Kerala

CITY LEVEL PRESENCE OF RESPONDENTS Bangalore Mumbai Chennai Delhi

41%

Hyderabad

more than 1 mn sq. ft. 500,001 - 1,000,000 sq. ft.

17%

upto 50,000 sq. ft.

20%

Pune Ahmedabad Gurgaon

100,001 - 300,000 sq. ft.

Kolkata

300,001 - 500,000 sq. ft.

Noida

50,001 - 100,000 sq. ft.

20%

40%

60%

80%

100%

2017 - india WAREHOUSING handbook 129

Source: CBRE Research, Q1 2017.

MARKETVIEW OTHER MARKETS State Punjab Rajasthan Bihar Assam

Odisha

Market Highlights Transaction activity continued to remain broadly in line with H1 2016, largely concerted in Mohali and Ludhiana. Rental values remained largely stable across investment grade stock.

Chhattisgarh

Rents

State

Market Highlights

Chhattisgarh

Raipur, the state capital of Chhattisgarh is the preferred warehousing markets due to its locational advantage and infrastructure.

Jaipur continued to be high on radar for logistics occupiers.

Locations such as Ring road 2, Ring road 3, Tatibandh, Kumhari offer strategic advantages in terms of low occupation and transportation costs and excellent connectivity.

Prime logistics centers such as Vishwakarma Industrial Area, Sitapura Industrial Area and Sikar Road witnessed sustained occupier focus.

Nagpur is a prominent warehousing market due its strategic location.

Maharashtra

Patna continued to be the most preferred market for warehousing. Supply of modern warehousing was concentrated towards the Patna - Gaya Road. Guwahati, the state capital of Assam, continued to remain the preferred warehousing market. Locations such as Beltola, Lokhra- Pamohi, Gouripur and Changsari offered strategic advantages in terms of low occupation and transportation costs and excellent connectivity.

Maharashtra

Bhubaneswar and Cuttack continued to be considered as important warehousing markets due to locational advantages and connectivity. Bhubaneswar - Cuttack Road (NH - 5) especially Mancheswar Industrial Estate, Pahala and Phulnakhra were the most preferred warehousing zones.

Uttar Pradesh

Demand

Raipur, the state capital of Chhattisgarh is the preferred warehousing markets due to its locational advantage and infrastructure. Locations such as Ring road 2, Ring road 3, Tatibandh, Kumhari offer strategic advantages in terms of low occupation and transportation costs and excellent connectivity.

130 india WAREHOUSING handbook - 2017

Rents

Amravati road and Mihan are basically considered to be the Logistics / Industrial hub of Nagpur. With GST rolling out the market will see a boost in demand for warehousing MIDCâ&#x20AC;&#x2122;s in Aurangabad are mostly converting to residential and commercial hub There are large number of properties in Aurangabad that are up for Sale in the Market Industrial requirement for Nashik has dropped significantly Mumbai Nashik Highway has some warehousing and small scale industrial activities Ambad and Satpur located to the west of Nashik have ample supply and are seeing change of usage from industrial to commercial

Gujarat

Lucknow the capital city of the state of UP continued to be the most preferred market for logistics space. Location such as Nadarganj and Bijnor were the most preferred warehousing zone for large players as they offer great connectivity to the Airport and also to Kanpur (another key market in the state).

Demand

Bhilad / Vapi (Valsad District) bordering Mumbai, is ideally located to serve both Gujarat & Mumbai markets. Post GST, this location will increasingly finding favour with 3PLs players In the absence of any established warehousing hub, large build-to-suit requirements / captive warehousing units could be the preferred mode of acquisition

Andhra Pradesh

Vizag is emerging as a prominent business city / hub in Andhra Pradesh Port based logistics activity is primarily located around the existing Visakhapatnam Port Area; and other logistics activity is primarily located along NH-5, an arterial road bisecting Visakhapatnam City

Source: CBRE Research

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BUDGET FACTOR TO CONSIDER FOR COLD STORAGE WAREHOUSE Cold storage facility requires an advanced, detailed analysis during the design phase to achieve operational cost savings, Consider these key budget areas during your planning.

REFRIGERATION

The company, condenser, evaporator and air unit selection , variable frequency derives and premiumefficiency motors affect a refrigeration system’s efficiency. These must be carefully balanced with operational demands and return-on-investment criteria.

REFRIGERATION CONTROLS

Automation can greatly improve refrigeration efficiency and optimize energy use. Automation allows engineers to generate trend analyses, alarm logs, energy management data and runtime reports in real-time. These data allow them to make the necessary changes and modification to ensure the refrigeration system is running at optional efficiency.

ENERGY EFFICIENCY

Energy costs to operate cold storage facilities can reach tens of thousand of dollars each month. Under-floor heating systems, adjacent room temperatures and LED lighting are all factors that can influence and improve the energy efficiency. The building’s orientation can also improve energy efficiency: locate higher-temperature rooms at the southern end of the facility and lowertemperature rooms at the northern end of the facility.

ELECTRICAL UTILITIES Power loss in a cold storage facility can lead to significant financial losses. Design consideration for electrical utilities should include operational voltages, reliability and redundancy of supply, standby generation and machine and electrical room locations that provide optimal utility distribution.

THERMAL & ROOFING

It’s vital to construct a vapor barrier of uncompromising integrity. Consider insulation thickness for the floors, walls and roof, low-temperature door systems, and the use of insulated metal panels for adequate vapor seals. Roofing with a reflective white membrane can also reflect the sun’s rays for added energy efficiency.

132 india WAREHOUSING handbook - 2017

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INTERACTION

In Conversation With

Xavier Britto

S Xavier Britto, Chairman, Founder of Indev Group of Companies is a distinguished, dynamic and august personality with multi-faceted talents and credentials. His logistics arm, Indev Logistics, has over the years emerged as a leader in the world of logistics yet again after becoming the first ever logistics operator in India to have been awarded the AEO certification which is one of the best certifications today. In a conversation with Tariq Ahmed, he shares insight about the industry and much more.

134 india WAREHOUSING handbook - 2017

What motivated you to be a part of the logistics all reforms. The standardisation of taxes will certainly they try to outsource all the logistics activities to their industry? How has been your experience so far? reduce the time consumptions, as well as most of respective logistics operators. And when you want I would say it was somewhat accidental for me to join this industry. I had started my career as a professor. My parents had always wished me to be an IAS officer. My family was never into business. But, I have always wanted to do something of my own. That propelled me to start this company in 1984, with five or six people and a mere investment of `20,000. This is why I always live by my motto of creating everything from absolutely nothing.

How has the industry changed from the time you stepped in? What major transformations have you observed in the industry in terms of technology, manpower, practices etc.? There have been a lot of transformations since then. I have seen the most conventional and mediaeval period as well as the current period of supersonic growth. We did not have computers back then. We were required to keep physical records of everything, from A to Z. Cell phones were not common. Hence, the pace of work was slow. Containerisation itself started in 1982. Custom procedures were slow and cumbersome. Introduction of single window interface for these procedures have evidently taken the industry forward. Even lead time has significantly reduced. So, from my experience, I can say that we are way ahead of what had happened few years back. All thanks to technology and the attitude of our people who believe in adopting changes along with the changing world.

What trends can we expect to see in the coming days in the logistics sector? The roll out of GST is expected to be the mother of

the checkpoint problems. Transportation will be quicker. Moreover, large scale warehousing can be established. But most importantly, economies of scale will work out. Previously, fragmentation was really costly. But now, we will be grouping our activities at the important centres and from there ultimate distribution will take place. In the shipping sector, many mergers are already taking place and I have a feeling that in the coming years, there will be only around eight to ten shipping lines. These lines want to work with the economies of scale, in the sense that each of these lines are efficient in their core competency and along their desired routes. Shipping companies, in the wake of mergers, are consolidating their ships, their routes and their equipments; thereby trying to regularise their freight levels.

to work on zero level inventories, the entire supply chain system has to be absolutely efficient. In that connection, we need to gear up to reduce their overall lead time (which surmounts to cost saving) and thus have a significant impact on the final product pricing. So yes, it is a boon for both the parties.

What innovative and technological measures have you adopted at Indev Logistics in order to achieve the dream of a seamless supply chain network? We have already adopted the ERP systems, RFIDs in most of our transport vehicles and are also in the process of developing the latest WMS so that there is transparency. We are doing a lot of value additions presently by improving the technology. For example, for the automotive industry, we are trying to include semi assembly. So, Indev believes in taking the front seat when it comes to updating a technology or adopting a new technology, keeping in mind the present scenario.

In todayâ&#x20AC;&#x2122;s world, where we see an evident shift towards multimodal transportation, do you believe that consolidation services can be a boon for both the parties? Do you offer premium services to your clients for Yes, definitely. Today, each logistics operator will have time sensitive and temperature sensitive cargo? to offer a range of services to its clients under one roof. Unless you are a comprehensive operator, you will not be able to sustain in this stiff competitive market. Your operational efficiency will automatically come down. So, the need of the day is that we have to become holistic in our approach, in the sense that, we have to provide end to end solutions to our customers. This will help the customer to source his requirements from one particular vendor, which will not only give him better control, but also significantly reduce the lead time. Most of the manufacturing companies nowadays work on almost zero level inventories, which is why

Yes, of course. For air cargo, we try our best to ensure that we reduce the dwell time. Also sometimes, we send our own people with the consignments so that it reaches its destination safely and securely. That is why Indev is in the process of buying out a courier company to ensure last mile connectivity. Because when we are talking about E-Commerce or distribution, it ultimately requires last mile connectivity, for which courier companies are important. Thatâ&#x20AC;&#x2122;s why we are in the process of negotiating. We are also moving towards express cargo delivery viz., both intercity and intracity. So in 2017, we are concentrating on that. 2017 - india WAREHOUSING handbook 135

INTERACTION

Warehousing space provider should have tailor-made solutions to the problems Warehousing serves as a backbone of the supply chain system and it is considered as a centre stage activity for any organisation. Implementation of Goods and Service Tax (GST) act with the introduction of centralised warehousing would change the entire landscape of the Indian warehousing industry. Akkash Gupta, Head Global Sourcing and SCM, Intex Technologies (I) Ltd in an interview with Gaurav Dubey keeps his opinion on the changing warehousing scenario of the country. How important is warehousing for the overall scheme of your business? If we term warehousing as a backbone of the supply chain system then it wonâ&#x20AC;&#x2122;t be an exaggeration. Warehousing is a centre stage activity for the organisation as before dispatching the finished goods to the customer; the goods need to be stored in a warehouse. If a product reaches to the end customer in an excellent condition then it certainly creates a good reputation of the company involved in the handling of the product. Packaging also plays a important role as it gives first feel of the product to the customer.

What specific qualities do you look for in a warehousing space provider? We look into cer-

136 india WAREHOUSING handbook - 2017

tain qualities before choosing the services of a warehousing space provider. The warehousing space provider should have a professional and flexible approach towards working, the space provider should be flexible enough to make changes and adopt the systems as per the requirements of a customer. Quick response to a problem and the tailor-made solutions to it are also some of the essential qualities which we seek in a warehousing space provider. Apart from it, the network reach at the local level also plays an important role in establishing the LSPâ&#x20AC;&#x2122;s deliverables.

GST is going to change the entire landscape for warehous-

ing in India. What is your take on the concept of centralised warehousing? Certainly, the consolidation will happen and the logistics industry will move towards the concept of centralised warehousing but it will be primarily driven by the distribution channel or sales partner market requirement of the each organisation. We are also evaluating the same with all channel partners and would come up with final outcome before GST comes into the force. The centralised warehousing at certain strategic locations would support the complete distribution Value Chain and help to optimise the Supply Chain as well. How has the price for warehouse leasing / renting changed over the years? The price of warehousing services had seen a boom due to the scarcity of quality warehouses in the markets till 2000. The situation changed after the year 2000, as more modern warehouse started coming up in the market, but parallelly the rentals also started increasing due to the scarcity of quality warehouses in the market till the year 2010. However, from the last couple of years, it has been stagnant and also got reduced at many places. The warehouse rentals have become stagnant because of the entry of several new LSPs in the market, which created huge facility across all major cities. This has helped the organisation to move to these facilities wherein the complete cost of the value chain can be optimised.

â&#x20AC;&#x153;The warehousing space provider should have a professional and flexible approach towards working, the space provider should be flexible enough to make changes and adopt the systems as per the requirements of a customer.â&#x20AC;? What are the premium or value added services offered by warehousing companies in India? How do these services facilitate the growth of your business? Good warehousing companies with proper infrastructure are coming up with legal complaint warehouses. All laws related to statutory, government, safety and labour act are being taken care of by these reputed LSPs. Apart from it, the quality manpower,

transportation support, connectivity and hygiene are the services which support the overall business. The business gets the enhanced service levels with the confidence of proper storage. The business gets facilitated by shorter response time and by meeting customer expectations. Do warehousing companies hold accountability for losses incurred during the storage of goods in their warehouses? Tell us about most common problems faced by your company in storage of goods in a warehouse. Yes, good LSPs take complete responsibilities of any goods losses during the storage. They have placed all systems such as cameras, trained manpower, continuous checking and correcting to ensure that losses become negligible in the warehouses. If any case is reported, they take immediate action in terms of owing the 100 per cent accountability, to give confidence to the customers and take necessary actions to avoid these activities in future.

INTERACTION

â&#x20AC;&#x153;We choose services of a warehouse space provider only after we get completely satisfiedâ&#x20AC;?

Warehousing industry has evolved a lot with the growth in the logistics industry of the country. Now, companies before choosing the services of warehouse space providers meticulously check their service standards and then only come to any decision. Sanjeev Seth, Head Logistics and Strategic Sourcing, Jaquar and Company Private Limited in an exclusive interview to Gaurav Dubey speaks about changing preference of companies in the current scenario. industry charges around five per cent annual increase in the rental cost while entering into any agreement.

How important is warehousing for the overall scheme of your business? Undoubtedly, warehousing activity plays an essential role in the overall scheme of the business. Warehouses have different roles as per the requirement; finished goods are stored in huge quantity in central warehouses while a small number of goods are stored in regional warehouses, for serving the quick need of customers. What specific qualities do you look for in a warehousing space provider? We have a set criterion for the selection of a warehousing space provider. We do not choose the services of a warehousing space provider until and unless we completely get satisfied with their service providing standards. Some of the criterions are the past record of a service provider, current customer base, handling of the types of products, owned or leased space availability and capability of providing end to end solutions related to Customs clearance and transportation. GST is going to change the entire landscape for warehousing in India. What is your take on the concept of centralised warehousing? Yes, GST would be the game-changer for the

138 india WAREHOUSING handbook - 2017

warehousing industry of the country. The number of centralised and regional warehouses will increase as once the additional cost of two per cent Central Sales Tax will be abolished, there will be no benefit in keeping warehouses in each state. Further, warehouse stock transfers will attract GST which will drain huge cash flow of the company. How has the price for warehouse leasing/renting changed over the years? The warehouse renting space keeps on fluctuating but from last 2-3 years there have been no major increase in the renting cost of warehouses. As per the set standards, all major players of the warehousing

What are the premium or value added services offered by warehousing companies in India? How do these services facilitate the growth of your business? Warehousing companies offer several value added services to their service users. These companies perform packing, repacking, bundling promo schemes, secondary transportation, custom clearance, picking up defective product from customers and other activities. All these activities carry huge importance for the business and value to the business. Do warehousing companies hold accountability for losses incurred during the storage of goods in their warehouses? Tell us about most common problems faced by your company in storage of goods in a warehouse? Definitely, as warehousing service providers they are the custodian of goods, hence, they do take 100 per cent accountability of any shortages in the stock. We debit all shortages of net inventory error from the total amount. Other problems which are commonly faced are damages while handling goods and labour issues also keep on popping up from time to time.

PRES

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r u p g Na as

g n i g Emer housing e r a a W Hub

140 india WAREHOUSING handbook - 2017

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

agpur is an important industrial hub with more than 22,000 Micro, Small and Medium Enterprises (MSME) and is one of the fastest growing cities in Maharashtra because of its economic and political power. It is one of the biggest commercial and trading hubs in the Vidarbha region. Butibori is the largest industrial area in Asia, having two big thermal power stations and includes huge units like Indo Rama Synthetics, KEC, Hyundai, Unitech, and many more. Sitabuldi is the major commercial area of Nagpur. Nagpur is fast expanding to its north-west, north-east and southern regions. Vardhaman Nagar, Pratap Nagar and Surendra Nagar are one of the most sought-after areas with property rates ranging between `3,000 to `5,000 per sq. ft. A `400-crore integrated ‘Empress City’ is being built and will have a provision for a 400room 5-star hotel, shopping mall, multiplexes and 600 luxury apartments ranging from 1,000 to 1,500 square feet area. Locations like Wardha Road, Civil Lines, Godhani, Manewada, Manish Nagar and Takali have projects both in affordable and luxury sectors. Average property rates (residential) range between `2,100 to `5,600 per sqft, depending on the location. Tata Realty, Mahindra Life Spaces, DLF and Satyam Realities are some of the major realty players. In the commercial real estate segment, a logistics park is coming up on NH 7.With leading IT firms, management and medical institutions set to spring up in the city; the real estate market will grow at an exponential rate. Nagpur has taken up a major path of change in IT and

Nagpur has taken up a major path of change in IT and SEZ segment and will be a growing hub for employment generation in the coming years. Nagpur is fast expanding to its north-west, north-east and southern regions. SEZ segment and will be a growing hub for employment generation in the coming years. The city of Nagpur is well connected with Road and Rail networks. The country’s two largest National Highways, NH 6 and NH 7, cross each other in Nagpur city. The total distance of NH6 is 1949 kms and NH7 is 2369 kms.

Moreover a well-developed state highway network connects Nagpur to the other regions of Maharashtra, MP, Telangana and Chhattisgarh. Each and every train from Kashmir to Kanyakumari and from Okha to Puri pass through Nagpur. Some of the best logistics and transportation service providers in India like CONCOR, TCI, Gati, Blue Dart, FedEx and Safe Express are growing business operations in Nagpur, meaning that the crucial element of logistics i.e. quality transportation is easily available in Nagpur making it the logistics destination or a national distribution centre. Nagpur is all prepped up to be the next IT hub, with Infosys and TCS setting up their campuses in MIHAN. The Multi2017 - india WAREHOUSING handbook 141

m Five Star iu n n e l il M The ea Butibori â&#x20AC;&#x201C; In dustrial Adrustrial Development

In Maharashtra Industrial Area has everyy y b ed op el i ev or D IDC), Butib quired for anthe Corporation (Minfrastructural facility re ome one of conceivable d has the potential to bec in the country. industry an uclei for industrial growthn Dam, nearly 65 strongest n ity water from Wadgao bility of power are Potable qual al roads and good availa estate. Started in Kms of internhallmarks of this industrial already attracted some of the , this industrial area has and gives direct the year 1994 t of over `2400 crores Butibori developed an investmento around 7000 persons. erging as a textile employment tares of land, is rapidly em ile units such as on 2312 hec e presence of major textthe construction of zone with tha Synthetic (l) Ltd. With is expected that the Indoram cient Treatment Plant, it boost at Butibori. common effi dustry will receive furtherfive star industrial the Textile insuperior infrastructure, a ithin the Butibori To provide me up on 270 hectares w is sought to be zone has co rea. This five star zone Industrial A rther in future. expanded fu

142 india WAREHOUSING handbook - 2017

ai Nagpur E The lifeline fomb xpressway r co (named as Mah nnectivity Mumbai-Nag ar proposed 710 ashtra Samruddhi Mahpur Expressway Nagpur. The ex km expressway betwee amarg) is the Aurangabad, G pressway will connect Nagn Mumbai and It will be com hoti with Mumbai and w pur, Amravati, completed in apleted in a phased mann ill be six-laned. land acquisitio time-bound manner by 20er. It would be will be const n will be processed an 19. In phase I, as a concreteructed. In second phase, itdwa four-lane road and flyovers assix-lane road with servic ill be expanded this expressway part of the project. The roads, tunnels road passing th is projected to be Rs. 30e total cost for Nagpur will be rough Mumbai, Aurangab ,000 crore. The fibre and edu complete with installation ad, Nashik and expected to recational institutions. The of CCTV, optic Nagpur from 16 duce the travel time bet expressway is develop 22 dis hours to 8 hours, is also ween Mumbaiinclude a drou tricts, through which it w being evolved to ill pass, that w ght-hit region. ill

ENTS

tics the Logisat r o f t n e t rm con t relevantan easy to read fo s o m e h t g in Presentinstry professionals u ind

PRES

INDIA WAREHOUSING HANDBOOK 2018 A premium product for the warehousing industry, containing the most relevant articles , information, data, trends, projections and figures for the entire year, packed in an aesthetically designed, hardbound and jacketed superior quality coffee - table format.

Book your advertising space NOW! 15% Discount on space booking till 30th Sept 2017 10% Discount on space booking till 30th Oct 2017 Booking amount ` 25,000/INDIA WAREHOUSING HANDBOOK has always been a grand success and is considered an asset for the entire warehousing industry. The next edition is only going to get bigger and better. We invite you to be a part of this excellent media product, highly appreciated by the industry by booking your spot to place your advertisement message.

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

144 india WAREHOUSING handbook - 2017

Maharashtra Airport Development Company (MADC) for the development of MIHAN. The project is financed by the multiple Indian banks with total loan amount of INR 3,000 million along with investment from state government and Airports Authority of India. With a projected target of serving 14 million passengers and handle 0.87 million tons of cargo, this is one of the largest aviation project in India. The estimated capital cost of the project is INR 2581crores (by year 2035) and is supposed to generate revenues INR 5280 crores. The existing airport of 400 hectares would be expanded to 1364 hectares. The project consists of widening and

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

“The Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) is an airport project for Dr Babasaheb Ambedkar International Airport, Nagpur. It is the biggest economic development project currently underway in India in terms of investments.” Nitin Gadkari, Union Minister, Road Transport & Highways The ‘post GST’ scenario: With the GST regime, Nagpur can emerge as a national hub for imported cargo in the short run. Goods brought into the country can be stored in bonded warehouses and eventually distributed to various destinations. In a bonded warehouse, the customs duty can be paid as and when the goods are removed. For an importer, Nagpur can be an ideal location to cover the entire country. Gurgaon-based Distribution Logistics Infrastructure Private Limited (DLI), which has the first private inland container depot in the region, plans to set up bonded warehouses for imported goods near Nagpur. DLI had started off over a year ago with a logistics park at Borkhedi, 35kms away from the city. After dealing in domestic cargo, it will be flagging off its first train of imports. Going through DLI’s private railway siding, the rakes will join the main

railway network via Borkhedi railway station before going toward the ports. DLI Managing Director K Sathianathan said that there are plans to send almost 11 to 12 trains with foreign bound cargo in a month. The company is already sending around nine trains carrying 90 twenty-foot equivalent containers of domestic cargo. Adding foreign bound cargo is expected to take its turnover to `100 crore as against `40 crore at present, he said. DLI is already in talks with a couple of players to set up dedicated warehouses to store their imported goods. It is expected that the warehouses may be ready by the end of the financial year. The focus will also be on liquid cargo but not petroleum, on account of the hazards and regulations related to its transport. DLI has created the integrated logistics park in Nagpur

considering its geographical advantage. Nagpur is located almost at the centre of the country and is the natural choice for a logistics hub.

The Darker Picture: A month ago, Union Minister Nitin Gadkari created quite a stir by declaring that Patanjali was going to set up its manufacturing hub in 100 acres of MIHAN and offer employment to hundreds of local people. The truth was that Baba Ramdev had demanded land at `10 lakh per acre just outside SEZ area of MIHAN where current market rates are `1 crore per acre. (Now a tender is being floated for 230 acres of land to build a ‘Herbal Food Park’ where the base price will be kept at `25 lakhs per acre. The only interested party as of now is Patanjali, though they are trying to entice other players like Dabur and Himalaya also. This is also just 1/4th the market price, but MIHAN officials hastened to add that the land being offered is not ‘developed’ and hence can be offered cheap. In many meetings that followed, regarding MIHAN, both Chief Minister Devendra Fadnavis and Gadkari are trying hard to enthuse investors and build up and create a positive sentiment about this ‘multi-modal international cargo hub and airport’ which is an idea that had looked great on paper 20 years ago but lost its sheen during the long procedural delay and changed international scenario. In a series of interviews that Nitin Gadkari gave on completion of the new goverment’s two years in office, he was asked 2017 - india WAREHOUSING handbook 145

With the GST regime, Nagpur can emerge as a national hub for imported cargo in the short run. Goods brought into the country can be stored in bonded warehouses and eventually distributed to various destinations.

why MIHAN had not been able to fulfill its promise of creating 50,000 jobs annually as he had promised. His reply was that 13,000 jobs have been created and the situation is going to improve rapidly. The truth is that today 9,000 people are employed within and outside the SEZ; there has been an investment of Rs 7,000 crores and there are just one or two new projects in the pipeline. A real estate giant, who was supposed to build 15 software complexes, has completed just one and space

146 india WAREHOUSING handbook - 2017

in it still lies practically unsold. Many other factors add to the situation. The Nagpur Airport which was supposed to be at the heart of MIHAN has still not been privatised, though on paper this decision was taken many years ago. It is now being jointly managed by Airport Authority of India and MADC. Insiders opine that no private player is really interested in taking on this responsibility of making Nagpur an international hub. Meanwhile, newer designs

in commercial airlines ensure that they can do long hauls without having to land for fuel. So, Nagpur as an airport for refuelling is not relevant anymore. Political interference is another factor that slows down legitimate work. Industrialists and corporates approach Ministries directly and often rash promises are extracted that cannot be implemented. The IAS lobby, again sitting and meeting in Mumbai, often finds many such proposals untenable.

PCLL

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Inland Shipping:

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Warehousing at the Advent of

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Reaching for the Skies

Air Cargo

In Changing Times

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Akash Bansal, Head Logistics, Om Logistics Ltd

Andrew Jillings, Chief Executive Officer and Group Managing Director, Tiger Group

Anshul Singhal, CEO, Embassy Industrial Parks

Balbir Singh Khalsa, National Director, Industrial, Knight and Frank India

Binaifer Jehani, Director Industry and Customised Research, CRISIL

Cyrus Katgara, Managing Director, Jeena & Company

Dr Tanweer Alam, Joint Director and Regional Head, Institute of Packaging

Girish Belwal, Deputy General Manager, Logistics, ISGEC Heavy Engineering Limited

Gubba Deepthi, Head Communications, Gubba Cold Storage

Henrik Ambak, Emirates Senior Vice President, Cargo Operations Worldwide

Jaideep Ghosh, Partner, National Head â&#x20AC;&#x201C; Transport, Leisure & Sports Sector, KPMG India

Jasmine Singh, Head Industrial and Logistics Services, India, CBRE South Asia Private Limited

Kamal Jha, Vice President, Honeywell Safety and Productivity Solutions (India)

Kartik Gandhi, Director, Gandhi Automations Pvt Ltd

M Ravindra, Associate Director, Logistics, Panasonic India

Manish Garg, President & Chief Executive, Steel Building Business, Everest Industries Limited

N Ramakrishna, General Manager, Marketing, Kribhco Infrastructure Ltd

Piush GoyaL, MD, Kelley Material Handling Equipment India

Prof G Raghuram, Director, IIM Bangalore

PSS Prasad, President, Apollo LogiSolutions

R Shankar, CEO India, TVS Logistics Services Ltd

Rahul Agarwal, Director, Kool-Ex Cold Chain Ltd

Rajesh Goyal, Hony. Secretary, Federation of Cold Storage Associations of India

Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group

Ramesh Mamidala, CEO, Ă&#x2021;elebi Delhi Cargo Terminal

Ryan Oliver, Assistant Vice President, Contract Logistics, Agility

Sandeep Chatterjee, Associate Director, KPMG Advisory Services Private Limited

Sanjay Gupta, MD, AVG Logistics Pvt Ltd

Sanjay Palsania, Chairman, SPG Enterprise

Sanjeev Khanna, Former Head of Supply Chain Management, Patanjali Ayurved

Shailender Anand, MD India and Director UAE, Pronk Multiservice India Pvt Ltd

Shouvik Mandal, Assistant Director, Finance, Apeejay Surrendra Management Services Private Limited

Steve Woodhead, Business Development Manager Boughey Distribution

Vikash Khatri, Director, Aviral Consulting Pvt Ltd

Vikram Mansukhani, Head of 3PL services, DIESL

Viren Thakkar, Owner, Logistics Park Pvt Ltd

2017 - india WAREHOUSING handbook 151

“The amateurs discuss tactics; the professionals discuss logistics.” Napoleon Bonaparte

152 india WAREHOUSING handbook - 2017

“Behind every great leader, there was an even greater logistician.” M Cox

2017 - india WAREHOUSING handbook 153

CRWC

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