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ACFI L OO K S AT C H A L L ENGES FACED B Y AIR CARGO B U SINESS Volume III n No 2

c a r g o

April 2014 I `60

l o g i s t i c s

HUB DREAMS

We have tried for more than 60 years to establish a genuine air cargo hub in the country but it is only now that the dream is nearing fulfillment – thanks largely to efforts from proactive private airport operators.

Priorities for air cargo

Des Vertannes, IATA Global Head of Cargo details the agenda for air cargo in 2014

Fred’s warning

FedEx’s Fred Smith is all for lowering of protective barriers in international trade

EDITOR's NOTE

Let’s move–in the right direction he cargo and logistics industry is in difficult times. Indeed, that was the message that came out loud and clear at the recent World Cargo Symposium in Los Angeles. And Des Vertannes, Cargo head of IATA, could not be more direct when he said: “Game-changers are definitely needed, because the commercial stagnation of our industry since 2008 is real. Our yields are falling for the third year in a row. Between 2010 and 2013, the tonnage of freight we moved increased by less than a million tonnes, while our revenues fell from a high of $67 billion to $60 billion, with no definitive sign of improvement this year (Extracts from Vertannes’ speech is elsewhere in this issue of C & L).” There is little chance of the situation improving. A major reason for the prolonged problems of the air cargo sector is the standoff in Ukraine with the West on one side and Russia on the other. Carriers from West European nations depend on the trade with Russia and if the situation remains on the boil, the trade flows will be hampered – air cargo could slow down or stopped. That will put an end to the mutual agreement between Russia and the West on overflying and fifth freedom rights that came through recently. Take the case of Russia: its major cargo carrier AirBridge Cargo flies to the USA through Frankfurt and Amsterdam. Similarly, German carrier Lufthansa overflies Russia. All these flights would be at stake. And, if the European Union were to impose sanctions on Russia, the air cargo industry can say goodbye to better health. Even if we were to keep the air cargo business aside, the Ukraine crisis will also affect plane manufacturer Boeing that has around a 100 orders from Russia. To top it all, Russian SSMPO-Avisma corporation, the world’s largest titanium producer, has strong business links with Boeing. What will happen to that? Additionally, what will happen to the work of the more than a thousand Russian engineers work who are involved in the designs of the 787 Dreamliner and the 777X at Moscow? As for logistics, the situation is more promising. The country’s $7-billion strong logistics sector is reportedly growing at 15 per cent per annum. Even so, it is still ranked 46th according to the Global Annual Logistics Performance Index. The only way out for the logistics industry is to think out of the box; only then can the sector emerge at the top of the chart. To come out of such a situation, we need to be proactive and

not reactive. Quite some time ago, the Civil Aviation Economic Advisory Council (CAEAC) thought out of the box and decided to bring changes in the air cargo set up. It set up a Working Group on Air Cargo and Express Service Industry to recommend policy initiatives. The group was tasked to assess the growth potential of air cargo in the country while identifying areas that required improvements to seize the emerging opportunities in international trade and in the context of faster pace of economic growth in India. The working group held meetings with stakeholders comprising civil aviation and airline officials, cargo carriers, aircraft manufacturers and airports and came out with a 120-page report that carried in-depth analyses of issues and comprehensive coverage of key aspects of the air cargo business that would lead to specific actionable points with timelines for implementation. Other than the privately-managed airports in the country taking a lead to enhance facilities for air cargo, precious little has been done. It is no wonder that Des Vertannes said: “There are indications that consumer confidence picked up towards the end of last year, and the figures for January, showing 4.5 per cent growth, are encouraging. But are we really ready to seize the moment? We face challenges in efficiency, security, and sustainability. Are we committed to putting the right tools in place to benefit from any upturn?” The magazine will analyse the developments and opportunities across road, rail, air, ports and water, as well as warehouses. We have chalked out extensive plans to ensure that the Cargo and Logistics industry gets its due respect but our efforts would be futile if you readers do not support us. Let’s begin a fresh chapter. We would like your feedback to help us improve regular issues of C&L – be it in design or in content -- that you will see from the next issue. On our part we have put together a comprehensive package on every spectrum of the industry. The danger of such an ambitious attempt is sometimes one can package too much fact, figures and interesting material to chew upon. But our point is that it is better to package too much rather than too little. We had a wonderful time putting this pilot issue of C&L together. It was exciting and rewarding. Hope you feel the same way when you go through the pages…. Enjoy…

April 2014

Cargo & Logistics articles news views edits interviews clippings profiles news digest STATISTICS COLUMNS

contents

C&L

Volume III n No 2

Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH Consulting Editor Nandu manjeshwar Senior Sub-Editor-cum-Reporter punit mishra

Cover Story

p24

Why hasn’t India been able to create an aviation hub since its independence? Aviation industry and air cargo experts talk in detail about the key challenges and the regulatory hurdles that have stymied the rise of a genuine hub in the country.

PERISCOPE

p10

The International Air Transport Association January performance report shows strong rise in air freight growth.

WCS

Sr. Proof Reader Rajesh Vaid Correspondents anjana tanwar, naveed anjum Chief Visualiser ajay negi Designers Mohit kansal, nagender dubey Picture Editor Pradeep chandra Photo Editor HC Tiwari Staff Photographer Hemant rawat Director (Admin & Corporate Affairs) Rajiv Singh

Des Vertannes, Global Head of Cargo, International Air Transport Association on highlighting priorities for air cargo in 2014.

SPOTLIGHT

p16

Emirates SkyCargo cruised ahead in 2013 and Vice President Nabil Sultan is confident about India operations and growth.

April 2014

NEWS IN BRIEF

While the port sector has seen investments of `21,000 crores in five years, railway cargo traffic is expected to go down. Plus: A stable outlook for logistics and detailed statistics on air cargo.

Vice President (Business Development) Vinod kaul Subscription Geeta jena, juhi rohilla Distribution Pankaj Kumar, bhusan kumar, sandeep kumar Executive Director renu mittal For advertising and sales enquiries, please contact:

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Branc

Cargo & Logistics just in time

Logistics industry hopes for a better 2014

rowth opportunities offered by emerging markets outweigh concerns about the political and economic turmoil that rattled some developing countries in 2013, according to the annual Agility Emerging Markets Logistics Index – a survey of global logistics and trade executives shows. Seventy-four per cent of logistics professionals view prospects for emerging markets as “good” or “very good” for 2014, according to the index. Respondents remain optimistic despite signs that growth is slowing in China, stalled in Brazil and India, and uncertain in other countries that could suffer if the United States reins in monetary stimulus, as expected. The logistics industry’s optimism comes despite moves by the International Monetary Fund and the Organisation for Economic Cooperation and Development to cut 2013-2014 global growth forecasts, citing concerns about emerging markets. Emerging markets currencies and financial markets came under pressure in 2013 amid worries of a possible ripple effect from tighter US monetary policy.

The survey of more than 800 industry executives is part of the 2014 Index that ranks 45 major emerging markets and identifies factors that make them attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution companies. The Index and survey provide a basis to compare countries, weigh their progress and look at their nearterm prospects. China, Brazil and India – three of the so-called BRIC countries, along with Russia – dominate most discussions about emerging markets because of their size. They rank at the top of the Index again this year, but all three experienced erosion in their raw Index scores, suggesting that they need to take steps to improve their business climate and make additional investment in infrastructure. Despite a troubled economy, Brazil knocked India out of the No. 2 spot. India fell to No. 4, below Saudi Arabia, amid concern about chronic economic problems, lack of clear direction on the economy and a weaker rupee.

Air Cargo industry must act now to avoid leadership crisis

task force led by The International Air Cargo Association (TIACA) with active participation from the International Air Transport Association (IATA), the International Civil Aviation Organization (ICAO) and the International Federation of Freight Forwarder Associations (FIATA) has published the results of a twoyear research project. The research project focused on identifying educational needs for the next generation of managers for the worldwide air cargo industry. The final report and accompanying educational demands matrix has been made available through the respective websites of the participating organisations. The task force has concluded that managers must not only possess basic skills and detailed operational knowledge, but also the so called “higher-skills”, which include leadership, team-building as well as market and financial analysis techniques. While numerous training programmes are available to teach the fundamental skills, the availability of air cargo-focused programmes that teach these higher-level skills is limited. The researchers agreed

April 2014

that the industry as a whole must address this deficiency to ensure it maintains its long history of innovation, quality service provision and financial robust performance. The potential for the creation of a certificated and preferably accredited programme may assist in this goal. As part of its effort, the task force compiled a comprehensive educational matrix identifying existing courses and areas of deficiency. The report stressed that without access to such programmes, the air cargo industry faced the additional difficulty of attracting and equipping qualified talent to successfully lead the industry through future challenges. Another consequent risk without such an offering is the loss of rising managers to other sectors of the logistics industry or to other industries completely as workforce dynamics become more fluid. Both situations would put the air cargo industry at a competitive leadership disadvantage. As implications and task force recommendations are reviewed by the four organisations, a series of next steps would be established including the creation of focused courses as part of a comprehensive programme.

Cargo & Logistics event

a Call to gear up

April 2014

RAPT ATTENTION: A section of the air cargo stakeholders who attended the symposium

hc tiwari

uffeted by the downtrend around the world and under its own pressures, the air cargo industry in the country has become pro-active. In a move that can have far-reaching implications, the Air Cargo Forum India (ACFI is an association of all stakeholders in the air logistics industry) joined hands with the Air Cargo Agents Association of India (ACAAI, the only national association representing the air cargo industry in the country) to discuss and debate the obstacles facing the air cargo sector. The aim of the two associations is to develop air cargo, serve the aspirations of the export-import trade of the country and to compete gainfully with the world. As a part of their efforts to promote air cargo logistics in India and work with all the stakeholders, ACFI and ACAAI recently organised a symposium on “Progressing Air Cargo - Challenges and Opportunities”. The speakers – all experts in their respective fields -- touched upon the future outlook of the air cargo business, the current challenges being faced by the air cargo supply chain and opportunities available to the business. The focus was on how the regulatory regime could provide a favourable platform to the industry for growth while keeping in mind the industry’s expectations from them. As Pradeep Panicker, President, ACFI

hc tiwari

Experts outlined air cargo’s challenges and opportunities at the recent symposium organised by two apex bodies, ACAAI and ACFI. Amidst the optimistic outlook for 2014, speakers pointed out that a lot more needed to be done

SETTING THE TONE: ACAAI’s S L Sharma and ACFI’s Pradeep Panicker at the start of the symposium

underlined in his welcome address, the timing of the symposium was apt. Air cargo, he said, was “on a rebound” with ten per cent growth having been recorded across the country’s airports. He also said that the recent stockmarket gains emphasized the conducive conditions in the country vis-àvis the economy and only pointed to “what

is to come” in the form of growth. He was also quick to add that there was scope for improvement. As an example, he said that export consignments took at least 36 hours to clear while imports continued to hover in the 5-6 days period. Exhorting the air cargo stakeholders, Panicker told them, “We need to be geared.”

hc tiwari

event

POSITIVE STEP: (L-R) Pradeep Panicker, President, ACFI, Ajay Sahai, Federation of Indian Export Organisation (FIEO) Director General, S L Sharma, President, ACAAI, Rafeeque Ahmed, President, FIEO, M Kannan, Economic Adviser, Ministry of Civil Aviation, J K Dadoo, Joint Secretary (Standing Committee on Promotion of Exports - SCOPE), Ministry of Commerce and Prof G Raghuram, IIM (Ahmedabad) pose for a photograph before the symposium

The ACFI President also mentioned that new opportunities had come up over the last few years – the most important among them being e-commerce which was seeing a growth of 25-30 per cent every year. What was, perhaps, most important for the air cargo community in the country was the fact that China was slowly becoming a consumer and therefore, another possible opportunity. The intent of the symposium was to take stock and find out the ways to simplify the air cargo logistics business like eliminating paper and bringing in more technology and innovationg that would foster growth in future. Setting the symposium’s tenor, KPMG’s Amber Dubey, Partner and Head – Aerospace and Defence outlined the present scenario where seven airports were

handling more cargo than the 124 other airports in the country. He posed a pertinent question: “Are we feeding the growth or are we feeding off the growth?” Providing the government perspective, M Kannan, Economic Adviser, Ministry of Civil Aviation, was optimistic about the air cargo sector in the country since the economic outlook for 2014 was strong and the demand drivers continued to improve. Even so, he felt that there was scope for improvement especially in making the Indian Customs EDI System (ICES) include regulatory bodies like the Drug Controller, etc. Additionally, the whole system would be put on fast track if off-airport cargo operations were initialized like setting up of Air Freight Stations. J K Dadoo, Joint Secretary (Standing Committee on Promotion

of Exports - SCOPE), Ministry of Commerce, detailed the efforts from SCOPE to smoothen the air cargo trade. Speaking from the customer’s perspective, Rafeeque Ahmed, President, Federation of Indian Export Organisation (FIEO), projected that exports would reach the $750 billion mark in five years and air cargo could look for opportunities in China, Africa and the ASEAN nations. While the symposium has set the trend, a lot remains to be done on the ground if the Indian air cargo sector has to compete in the international market. With ACAAI and ACFI taking the lead to put air cargo in a position where it is considered an important element in the country’s economic growth, air cargo stakeholders can only expect better times. April 2014

Cargo & Logistics periscope

Air cargo makes a strong start IATA pushes for efficiency, security and reliability while releasing January 2014 performance figures he International Air Transport Association (IATA) released in January performance data showing a strong rise in air freight growth compared to a year ago. Global freight tonne kilometers (FTKs) rose 4.5 per cent in January compared to January 2013. This is a significant acceleration on the 2.2 per cent year-onyear growth rate recorded in December, and is well above the 1.4 per cent full-year growth reported for 2013 as compared to 2012. Growth was solid across all regions, with Middle Eastern carriers growing the fastest (10.7 per cent). European airlines

April 2014

continued to benefit from Europe’s recovery from recession, posting 6.0 per cent growth. Carriers based in the Asia-Pacific region, which account for nearly 40 per cent of the global air freight market, reported 3.8 per cent growth. This represents a major improvement over the 1.0 per cent contraction in 2013. “The improvement in demand is good news. It is a step-up in pace from the mild strengthening that we saw towards the second half of 2013. And in real terms, volumes are similar to the 2010 post-recession peak. But there is also ample reason to be cautious. Protectionist measures are part of

the reason for a slower expansion of world trade than we would expect from current levels of industrial production. Companies continue to re-organize supply chains in their efforts to move manufacturing onshore,” said Tony Tyler, IATA’s Director General and CEO. “The key objective for this year must be for cargo airlines, shippers and freight forwarders to seize opportunities to improve the industry’s value proposition. They can do this by investing in new quality procedures to improve the efficiency, security and reliability of air freight. The e-Freight programme for paperless shipments is es-

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Cargo & Logistics periscope

Steady growth in Asia Pacific region reliminary traffic figures for the month of January released recently by the Association of Asia Pacific Airlines (AAPA) showed a continuation of steady growth in international passenger traffic, whilst air cargo markets were also relatively firm in the lead up to the Chinese New Year holidays. International air cargo demand in freight tonne kilometre (FTK) terms registered a 3.9 per cent increase compared to the same month in 2013, slightly boosted by the earlier timing of the Chinese New Year holidays. Offered freight capacity expanded by 5.3 per cent, resulting in a 0.7 percentage point decline in the average international freight load factor to 61.3 per cent. Collectively, the region’s airlines carried 21.1 million international passengers in January, 8.7 per cent more than the same month in 2013. In revenue passenger kilometre (RPK) terms, international passenger traffic grew by 8.1 per cent, reflecting particularly strong regional demand. Combined with a 7.2 per cent expansion in available seat capacity, the average international passenger load factor edged 0.7 percentage points higher to 79.0 per cent for the month. Commenting on the results, Andrew Herdman, AAPA Director General said, “The year started on an encouraging note for Asian carriers, with solid increases in passenger numbers maintaining the established growth trend. Nevertheless, Asian carriers face a number of headwinds including recent stock market and currency volatility in emerging markets, and widespread competitive pressures holding down yields. Furthermore, the situation in the air cargo market remains quite difficult, with little evidence of any sustained pickup in demand given sluggish international trade growth, whilst freight rates remain pressured by an overhang of excess freighter capacity.” Herdman added, “Despite these challenges, the outlook for the year ahead remains broadly positive given expectations of further improvements in the global economy that should help underpin further increases in both business and leisure travel demand.” n

sential for that, and the new quality benchmarking process is vital for improving quality across the board,” said Tyler.

Regional analysis in depth Asia-Pacific carriers grew by 3.8 per cent compared to January last year. Trade volumes in the region have rebounded as demand from Europe and North America for Asian manufactured goods improves. However, latest indicators show that the Chinese economy could be slowing down, which would impact air cargo in the coming months. In addition, with Chinese New Year falling on January 31, there could be some impact on February volumes. Capacity grew considerably faster than demand, at 9.7 per cent. European airlines, responsible for 22.5 per cent of air freight, continued the momentum established in the second half of 2013, recording a 6.0 per cent rise in FTKs compared to the previous January. Surveys of business activity in the Eurozone show the strongest rate of increase in two-and-a-half years. If these feed through into trade volume growth, then it should be positive for European air cargo in the coming months. Capacity was up just 3.8 per cent , leading to a strengthening in the load factor to 45.6 per cent. North American airlines reported

April 2014

the weakest rise in volumes, just 0.7 per cent, reflecting subdued January business activity. However, the underlying trend of manufacturing in the US is positive, which should lead to an increase in exports. Capacity fell 0.9 per cent. Middle Eastern carriers once again grew the fastest, by 10.7 per cent yearon-year. Volumes grew on the back of the growth in Europe and other regions. In addition, carriers in the region continue to expand their networks and capacity. Capacity growth, though, remained broadly in line with demand, increasing 11.5 per cent. Latin American carriers recorded solid growth of 6.8 per cent compared to January last year, an improvement after the slow growth of 2.4 per cent in 2013. Expected growth in trade volumes should underpin further cargo expansion. But, weakness in Brazil, Latin America’s largest economy, could dampen the growth potential in the region. Capacity fell 0.6 per cent. African airlines also grew ahead of the average trend in 2013, reporting a 4.1 per cent rise in FTKs compared to a year ago. With signs of growth slowing in South Africa and other major regional economies, freight growth could still be sluggish over the next few months. Capacity grew almost in line with demand, expanding 3.9 per cent compared to January 2013. n

policy

Chennai awaits upgrade Exports from Chennai airport could stop from July 1, 2014 if scanning of air cargo as prescribed by the European Union is not carried out. A report

he disappearance of the Malaysian Airlines aircraft has once again brought security to the fore. In a recent move, the Central Industrial Security Force (CISF), which provides security to nine major cargo terminals in the country, has now made a specific request to be allowed to take a look at consignments landing at the airports. For the moment, these consignments are X-rayed by private security personnel of cargo companies before being allowed to go out of the airports. CISF’s Additional Director General (Airport) O P Singh at Delhi, the major reason the CISF was given the responsibility

of the cargo terminals was primarily because “there was a perceived terror threat” received from intelligence sources. In addition, the screening was necessary to prevent forwarders from under reporting weights. “We should be allowed to screen the shipments to be fully assured of the contents inside,” said Singh. In the cargo terminals, the CISF use sniffer dogs to check the consignments that land at the airport and is nothing in comparison to the security regime followed in the passenger section, where the CISF personnel frisk every flier and X-ray each piece of luggage before allowing entry into aircraft. The absence of proper security arrange-

ments at cargo terminals could put an end to exports from the south Indian city of Chennai from July 1, 2014 when the new security rules prescribed by the European Union kicks in. Chennai airport is managed and operated by the state-run Airports Authority of India and has undergone massive expansion and modernization recently but it has yet to comply with the EU new air cargo security standards. Termed the ACC3 or “air cargo or mail carrier operating into the Union from a third country airport”, it is obligatory for Chennai airport to get cargo or mail security-checked by an EU certified regulator. At least 30 per cent of the export cargo April 2014

Cargo & Logistics POLICY

EU security requirements for air cargo In response to October 2010 incidents and the risk of explosive devices being introduced in the supply chain, the EU Commission reviewed its aviation security legislation. In August 2011, new regulations were adopted for the security of incoming air cargo and mail. The new regulations applicable since February 2012 are focused on air carriers as opposed to foreign states. They require air carriers flying cargo and mail into the EU from non-EU countries to: • Ensure that certain standards for security are met prior to the loading of an aircraft bound for the EU • Be designated as an “Air Cargo or Mail Carrier operating into the Union from a Third Country Airport” (ACC3) Obtaining the ACC3 status: To obtain ACC3 status, the air carrier must deliver a “Declaration of Commitments” setting out how it has its aviation security responsibilities to the civil aviation authorities of an EU member state to whom it flies cargo and/or mail. The template for the Declaration of Commitments is set out in the EU Regulations. The Declaration of Commitments must cover every non-EU airport from

April 2014

which cargo or mail is flown to the EU, with one exception: air carriers flying cargo or mail direct from a “Green” listed country into the EU. The Green list is set down in the regulations and available to air carriers on request to their EU member state of reference. Independent validators: ACC3s are obliged to ensure that cargo and mail destined for the EU is screened or comes from a secure supply chain (this can be evidenced with a Consignment Security Declaration). Until 30 June 2014, the security standards foreseen by ICAO as a minimum must apply. From July 1, 2014, the EU regulations state that ACC3’s must be in possession of security verifications of their cargo and mail operations at the relevant non-EU airports. This verification activity must be undertaken by an independent validator, certified by an EU regulator. If the ACC3 wishes to have the security controls applied by a business partner such as Known Consignors, Regulated Agents or Ground Handlers at non-EU airports, these entities will also have to undergo independent validation. Source: IATA

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AAI authorities have assured the air cargo stakeholders that the airport would be able to comply with the EU directives from July 2014

handled by Chennai goes to the EU and to the US through airports in the EU. J Krishnan, Chairman, Logistics Committee, Madras Chamber of Commerce and Industry, and a leading freight forwarder pointed out that while privately-run airports in south India — Bengaluru and Hyderabad — as well as other international airports had complied with the EU directives and installed the new security regime, Chennai had lagged behind. He gave the example of X-ray machines. The ones at Chennai could not scan the top and bottom of cargo consignments. Though AAI authorities have assured the air cargo stakeholders that the airport would be able to comply with the EU directives from July, Krishnan is not very sure that will happen and even if new machines were ordered, they would take at least 3-4 months to be delivered and installed, he said. To top it all, there weren’t enough certifying agents from the EU. If the inevitable happens in Chennai, most of the cargo will have to be sent out through Bengaluru or Hyderabad or via any of the airports in the Middle East. The major reasons for the delay in the upgradation of the cargo facilities at Chennai is because the airport is in the midst of a privatization move and all capital expenditure have been put on hold. For the next few months – at least till May 2014 – nothing will be done since the country will be going through a general election that has already been announced. In the interim period, no major infrastructure decisions can be taken by the government because the model code of conduct of the Election Commission of India is in force and any expense could be construed as gratification by a political party to garner votes. n

spotlight

SkyCargo builds

on success

mirates SkyCargo had a successful 2013, even as the world economy stabilised. In the year, it expanded its network and range of destination options for its customers by launching four new cargo-only destinations: Hanoi, Chicago, Kano and Quito. It also began services to Warsaw, Algiers, Haneda, Stockholm Clark, Conakry, Sialkot and Kabul – with the launch of passenger services offering belly-hold capacity to these eight destinations. To support its network growth, Emirates’ SkyCargo expanded its fleet during 2013 by adding three new Boeing 777 freighters. It now operates 12 freighters, ten B777 Fs and two B747-400 ERFs which currently serve 43 destinations around the world. Looking forward to

2014, Emirates SkyCargo operations will move to Dubai World Central Al Maktoum International Airport which is set to become the home of its freighter operations from April 2014. Upon completion of the first phase, followed by the installation of the cargo handling system and the fitment of the interior by April 2014 and full completion by mid-September, the terminal will be equipped to handle 700,000 tonnes of cargo and can be further expanded by an additional 300,000 tonnes in the second phase. In India, Emirates SkyCargo added two accolades to its impressive list of industry awards: the ‘International Cargo Airline of the Year’ from the STAT Trade media group and the ‘Top Cargo Handling Airline of Cochin 2013’ by the Customs

Emirates SkyCargo is looking ahead – having set a crushing pace for itself in 2013 – to more tonnages in the coming year

Department at the International Customs Day Celebration in Kochi. The airline carries over 1,400 tonnes of weekly cargo combined from Chennai, Hyderabad, Bengaluru, Kochi, Thiruvananthapuram and Kozhikode. Additionally, it operates two weekly freighters with a capacity of over 200 tonnes payload on the Dubai–Mumbai-Dubai route as well as the Dubai-Chennai-Hong Kong–Dubai route. India imported over US$28 billion worth of goods from the UAE in 2011, while exports to the UAE stood at nearly US$10 billion. The trade volume between the two countries reached over US$52 billion. This demonstrates the strong trade ties between the two countries and the country’s increasing importance for Emirates’ operations. n April 2014

Cargo & Logistics SPOTLIGHT

“2014 will be a little better” Nabil Sultan, Emirates Divisional Senior Vice President, Cargo, speaks about operations in India and points out to growth in core markets in this conversation with C&L

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We continually look to boost our network and connect local businesses in the region to opportunities across Emirates SkyCargo global network of more than 140 destinations in Europe, United States, Australia and the Middle East.

The last year has been a remarkable year for Emirates SkyCargo. When most carriers were reducing capacity, how was Emirates finding the cargo to fill freighters and bellyholds, considering the fact that Emirates SkyCargo has been expanding operations in the Indian Subcontinent? The 2012-13 financial year has been a strong one for Emirates SkyCargo defying the industry trend. For the first time Emirates SkyCargo reported a revenue over AED 10 billion reaching AED 10.3 billion (US$ 2.8 billion) mark, an 8 per cent increase over the last year. This has been made possible by highly-qualified staff, the very latest information technology, the most efficient aircraft for its expanding route network and the finest ground handling facilities and equipment. We continually look to boost our network and connect local businesses in the region to opportunities across Emirates SkyCargo global network of more than 140 destinations, particularly

April 2014

spotlight in Europe, United States, Australia and the Middle East. Emirates SkyCargo offers a weekly capacity into and out of the region of 10,900 tonnes.

Has the uncertain global economic environment affected Emirates’ strategy at all? Emirates has a long-term strategic plan, in which we employ real-time financial analysis tools to monitor our performance against objectives and to take rapid corrective action if needed. We watch our routeby-route performance daily, to ensure that we are on the right track — and continually adapt our business plans accordingly. This way we keep our costs in check while continuing to provide a high level of customer service.

At one point of time, not so long ago, everyone spoke about Africa. How much has the African connections helped Emirates SkyCargo? Emirates currently flies to 25 destinations in Africa, four of which are freighter only destinations. Emirates has seen substantial growth in throughput to the Africa continent, imports and exports saw growth on our network of 45 per cent in the full year 2012 vs 2011. We are receiving more and more enquiries today not only about sectors that we serve online but increasingly enquiries about offline sectors which we shall

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Skycargo operates two weekly freighters with a capacity of over 200 tonnes payload on the Dubai-Mumbai-Dubai route as well as the DubaiChennai-Hong Kong-Dubai route continue to explore as our Africa reach expands.

Tell us about your business in India? India continues to be a very important market for Emirates SkyCargo. We have introduced a few unique products for the Indian customers and deployed freighters to serve markets better. Recognising the importance of Pharma as a key vertical, Emirates was one of the first airlines to offer special cool chain solutions in India which is designed for the movement of temperature-sensitive commodities such as pharmaceuticals, vaccines and perishable goods. In addition, the use of e-freight by Emirates SkyCargo has made it more efficient for agents as well as customers to deliver and receive cargo on time. The airline carries over 1,400 tonnes of weekly cargo combined from Chennai, Hyderabad, Bangalore, Kochi, Trivandrum

and Kozhikode. Additionally, we operate two weekly freighters with a capacity of over 200 tonnes payload on the Dubai– Mumbai-Dubai route as well as the DubaiChennai-Hong Kong–Dubai route. Overall, the airline carries more than 3,000 tonnes of cargo from India to various points across the world every week. We are a customer-oriented carrier and if there is a need for more capacity, we will present a value proposition to support our customers’ needs.

Do you have plans to fly to more destinations in India? Emirates currently serves 10 destinations in India including Mumbai, Delhi, Ahmedabad, Hyderabad, Chennai, Thiruvananthapuram, Kozhikode, Kolkata, Bangalore and Kochi.In recent years, we have continuously expanded our capacities out of this market, but currently we don’t have an immediate plan to announce a new route in India.

What kind of technological upgrade have you undertaken for growth? Emirates SkyCargo has become a significant force in the global air cargo industry reflecting Emirates’ overall policy of excellence in every area of operation. We ensure to continually offer the very latest information technology, the most efficient aircraft for its expanding route network and the finest ground handling facilities and equipment to maintain our world-leading position in the aviation industry. We are fully committed to provide our customers with award-winning solutions to help them grow their business.

How do you see 2014 playing out? Though air cargo is on a slow rise, IATA chief Tony Tyler says that Asia will lag behind? We have not seen definite signs of a total recovery yet but we are seeing growth in core markets, and hope that 2014 will be a little better as there are some encouraging indications. We are currently seeing positive signs out of the Gulf, Middle East and Africa regions where some markets have been robust. Europe remains soft but we are carrying reasonable export volumes and the US market is recovering. Asia-Pacific is up and down but the volumes have started to pick up. n April 2014

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Call for cut in transit times IATA Cargo Head Des Vertannes sets out the agenda for 2014 to counter the challenges of efficiency, security and sustainability before his retirement from the Association

t the recent World Cargo Symposium in Los Angeles, the International Air Transport Association (IATA) gave a call for the average end-toend transit time to be cut by up to 48 hours by the end of the decade. “In this FIFA World Cup year, we need to move the goal-posts for customer expectations. Cutting average transit times by up to 48 hours by 2020 would make a huge difference to our value proposition, and enable the industry to arrest modal shift, and drive new efficiencies for the business,” said Des Vertannes, IATA’s Global Head of Cargo in his keynote address. This set the tone for a symposium focused on “Transformation through innovation”. Currently the average end-to-end time for consignments is around 6-7 days – a schedule that has not improved since the 1960s. “Game-changing innovation is surely needed in air cargo. Our industry has been mostly stagnant since 2008. We face signif-

April 2014

icant challenges in the areas of efficiency, security and sustainability, and the entire industry needs to commit to new innovative processes if we are to benefit from any economic upturn,” said Vertannes. He set out an agenda for value-enhancement for 2014, with the focus on increasing the penetration of e-commerce, and on raising the quality of the air cargo business. “Our customers pay a premium price to ship by air – they deserve to receive a premium service,” he said. Among the key objectives for 2014 are: A goal to reach 22 per cent electronic air-waybill (e-AWB) global penetration. A Facilities Matrix, developed by the Cargo Operations Advisory Group. The matrix will begin its first pilot in 2014, with the aim to iron out inconsistencies in the provision of cargo handling infrastructure worldwide, such as cool-chain facilities. The Cargo 2000 Master Operating Plan (MOP) will be extended over the entire cargo supply chain, not just the airport-to-airport element.

The MOP will be the basis of a common platform that measures quality standards, based on neutral milestones. The 2014 work programme builds on an existing cargo agenda embracing safety, e-Freight, security, and sustainability. Of particular note is the adoption by the Cargo Services Conference of a common methodology for calculating the carbon emissions of air cargo. This will help to harmonise efforts to measure emissions and is in line with the industry goal for carbon-neutral growth from 2020. “One big reason trade is no longer growing rapidly is the rise of protectionism,” said FedEx Chairman and CEO Frederick W. Smith in his address at the International Air Transport Association (IATA) World Cargo Symposium. “History shows protectionism – whatever the justification – stifles competitiveness, innovation and consumer choice.” In his analysis of the global air express industry, the FedEx chief detailed how fuel efficiency in modern aircraft, along with the Internet marketplace, has changed the airport-to-airport air cargo market. While shipments of smaller packages and light freight continues to grow, he noted, “most national customs systems are far behind the needs of this market and will impede its growth if systems are not modernized”. Given that the overall picture for world trade is a concern in the short-term, there is much potential for streamlining regulations, and improving economic growth and job creation with upcoming trade initiatives, like the Trans-Pacific Partnership (TPP) with Pacific Rim countries, and the Transatlantic Trade and Investment Partnership (TTIP) with Europe. n

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“Time to move our

goal-posts”

Des Vertannes, Global Head of Cargo, International Air Transport Association (IATA), outlined the priorities for air cargo in 2014. Excerpts from his speech:

014 is a special year in the history of our business. 100 years ago, the commercial aviation passenger industry as we know it, was born. A single paying passenger, Mr Abram Pheil, took off on a scheduled flight across Tampa Bay in Florida. From that one passenger on one route in 1914, we have grown to serve over 3 billion passengers in 2014. We transport more than 50 million tonnes of freight, equivalent to one-third of all the traded goods by value on this planet. It has been an amazing century of growth and transformation. Air connectivity has revolutionised business, culture, tourism, trade and technology. However, while the passenger side of aviation has gone through major changes in recent decades, I wonder if those of us in air cargo can honestly point to a similar transformation in our businesses? Not that air cargo has been entirely resting on its laurels. We have certainly introduced new types of containers that have helped widen the range of goods we can transport. And some handling facilities have been built that offer an incredible level of automation and quality control. But in terms of processes, we are in the same world that marvelled at the electric typewriter. And our transit times are no faster than in the 1960s. Only in the field of express delivery have we seen genuine game-changing innovation over the last 40 years, primarily by our friends the integrators. That is why it was so important to hear Fred’s (Smith) account of what was needed, and why he invested his own reputation to focus on time-definite deliveries. Game-changers are definitely needed, because the commercial stagnation

April 2014

of our industry since 2008 is real. Our yields are falling for the third year in a row. Between 2010 and 2013, the tonnage of freight we moved increased by less than a million tonnes, while our revenues fell from a high of $67 billion to $60 billion, with no definitive sign of improvement this year. There are indications that consumer confidence picked up towards the end of last year, and the figures for January, showing 4.5 per cent growth, are encouraging. But are we really ready to seize the moment? We face challenges in efficiency, security, and sustainability. Are we committed to putting

the right tools in place to benefit from any upturn? Let’s look at the evidence from 2013, starting with our long march to paperless processes. Last year, we set ourselves a target to reach 20 per cent penetration of the e-Air Waybill (e-AWB). We finished the year at about 12 per cent — nowhere near what we had hoped. Security is always a priority for air cargo, but the last year has seen some significant developments. I don’t have to tell you about the importance of the European Union’s ACC3 regulation. By July 1, carriers bringing goods into the EU from third

wcs countries will, with a few exceptions, have to demonstrate that they have independently validated the security of their supply chain. If they haven’t, they will not be allowed to import into the EU. This is a very significant deadline, and a year ago, the industry faced a crisis. Not only were there no independent validators, there wasn’t even an approved training course for putting any in place. Fortunately, that is not the case today. The IATA Center of Excellence for Independent Validators (CEIV) exists, with a training course approved by 11 EU member states. We have trained around 85 accredited Validators who are in the field now, and available to validate your security arrangements. Another security success was the approval of the electronic Consignment Security Declaration (e-CSD). We have held eight successful pilots, and the standard has now been incorporated into ICAO Annex 17 guidance material. The key with the e-CSD is to get a single, recognized global standard that everyone can implement. ICAO endorsement takes us a long way towards achieving that goal. Sustainability is important for all of us, and it is a particularly important issue in many of our largest markets. End-customers, and increasingly many of our shippers, are taking a close interest in the environmental impact of air-freighted goods. For some time, we have sought to harmonise a common methodology for calculating the carbon emissions of air cargo. It is a fiendishly difficult task. But I am pleased to say that the methodology was adopted by the Cargo Services Conference as a recommended practice. This will help airlines, freight forwarders, shippers, regulators and any other party to “speak the same language” and offer a consistency in measuring emissions. This is also in line with aviation’s commitment for Carbon Neutral Growth from 2020, and a cut in emissions of 50 per cent by 2050. So despite some significant challenges, and some setbacks, overall 2013 can be regarded as a success. We have made considerable progress in laying the foundations for continued strengthening of the air cargo business. And looking to 2014, I can see that there are plenty more value-enhancing projects on the way. ‘Quality’ should be our watchword for 2014. We have to improve the

reliability and consistency of our services. And we have two programs in particular that are aimed at enhancing our service promise. Firstly, our thanks are due to the Cargo Operations Advisory Group (COAG) which has helped develop a facilities matrix that enhances our global handling infrastructure. This is almost ready to start its first pilot. Ultimately, the matrix will help iron out the inconsistencies in the provision of cargo handling infrastructure worldwide. So, for example, we will know whether an airport’s claim to have 100 per cent cool-chain facilities is true, or not. Secondly, the use of the Cargo2000 Master Operating Plan now covers the entire cargo supply chain, not just the airport-to-airport element. The MOP will be the basis of a common platform that measures quality standards, based on neutral milestones. Our customers pay a premium price to ship by air — we need to provide them with a premium service. The MOP will enable service promises to be measured and compared, thereby driving best value for our customers. But above all, 2014 needs to be a year of action. We need to redouble our efforts to deliver that 22 per cent e-AWB target. We need to make sure we are ready for ACC3. And we need to embrace the quality agenda. We can do this most effectively through strong partnerships. IATA and FIATA together are taking the lead. The Global Air Cargo Advisory Group has also been active in unifying its positions on key topics that benefit our industry. The GACAG has been focused on four key policy areas, selected by the WCS delegates in Kuala Lumpur in 2012. These four are: Security, E-commerce, Trade Fa-

cilitation, and Sustainability. We are keen to ensure that these topics are still the right ones for GACAG to prioritize. But I will say that GACAG has been very successful in its focus, and that regulators are under no illusion that the industry is united in presenting its solutions and standards. I want to conclude with a reminder that, although our challenges are formidable, we have the answers at hand. For every blockage in our way, an innovative solution already exists. Whether it is the e-Freight programme for paperless shipments, or a new quality benchmarking system for driving up performance standards, the tools are there for us, and in partnership, they can be successfully implemented. I talked about game-changers to kick cargo growth out of its stagnant period. But perhaps what I am really saying is that we need to move the goal-posts – an appropriate aim in a World Cup year! So let’s set ourselves a challenging goal. Let’s commit to cutting up to 48 hours off the average end-to-end time of a consignment. That would really make a difference to our value proposition. Faster delivery times, coupled with competitive quality benchmarking and more efficient processes, will enable air cargo to compete and win new friends and business. By using the tools at our disposal, I am certain we can meet this goal by the end of this decade. It will not be easy. But as we set out on our journey, let us remember the words of Percy Fansler, the entrepreneur who started that first airline across Tampa Bay: “What was impossible yesterday is an accomplishment of today, while tomorrow heralds the unbelievable.” n April 2014

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‘Winds unfavourable for double digit growth’ In his keynote address at the WCS, FedEx Chairman and CEO Frederick W Smith exhorted air cargo stakeholders to emphasise to their respective governments to lower the protective barriers for international trade to flourish. Extracts from his presentation:

ransformation through Innovation is a great theme for this symposium because today the air cargo industry is in the midst of a profound transformation that requires new ways of thinking about our future. However, that future is unlikely to be analogous to the industry’s Golden Age of the 1990s and early 21st century. To understand where we’re going, it’s important to review the macroeconomic and technological factors that led to air cargo’s spectacular growth. The growth of trade and air cargo Surveying the devastation of World War II, American leaders like Secretary of State Cordell Hull believed the integration of world markets would be essential to rebuild countries ravaged by the war. • The General Agreement on Tariffs and Trade, or GATT, was the result, and America’s opening its markets was a key element in the recovery of Germany and Japan, in the emergence of a strong European economy, and in the rise of the Four Tigers of Asia —Hong Kong, Taiwan, Singapore, and Korea — where significant investments in manufacturing in the 60s, 70s and 80s lifted tens of millions out of poverty. Trans-Pacific and Asia-to-Europe air shipments of electronics and auto parts were integral to the development of sprawling supply chains throughout the world. The backbone of these networks was the Boeing 747F, introduced in 1971, with economics that were a quantum jump over previous generations of air freighters. It’s important to note that America’s post-World War II embrace of free trade

April 2014

was based on geopolitical considerations as much as commercial calculations. • Accordingly, the United States’ relatively open markets were often sacrificed to more mercantile practices of some trading partners. • As normalised relations were restored with China, and the GATT morphed into the WTO, the stage was set for the most phenomenal economic transformation in the modern era—the export-driven rise of China and its accession in 2001 to the WTO. • Hundreds of millions of people were brought out of poverty in China and other nations such as India and Brazil that embraced more liberal global trade in the 1990s and early 21st century. • High value-added products—particularly electronics—saw air cargo grow on average at two and a half times the rate of world GDP for two decades. Post-recession realities Unfortunately, a number of factors that produced this success story have reversed since the Great Recession of 2008. • China’s fantastic economic growth has spawned significant wage increases that dampen exports, and China has adopted an Indigenous Innovation policy which favours local companies over foreign competitors despite WTO prohibitions to the contrary. • Partly as a result, China’s logistics costs are about 20 per cent of GDP versus 9 to 9.5 per cent in the US. Such inefficiencies make it hard for the Chinese economy to evolve to a more consumer-driven economy versus their current

model based on exports and infrastructure investment. • One big reason trade is no longer growing rapidly is the rise of protectionism, not just in China but around the world. Over the last few years almost every trading nation has instituted policies that permit greater regulatory intervention in the trade processes—often justified by overzealous security considerations. Unfortunately, in many other cases, the protectionism is overt and politically-driven. History shows that protectionism — whatever the justification — stifles competitiveness, innovation and consumer choice. • The result of all these factors is that exports have been declining with most major trading partners since CY 2010. • Another unique factor in the air cargo sector is the miniaturisation of electronics which represents about half the tonnage transported by air. Not only is there less weight being transported, but price reductions driven by technology have reduced the value-per-pound. New product introductions that require large main-deck freighters have slowed considerably as the market for electronic devices has been satiated. Perhaps most important, over the past decade fuel prices have increased fourfold, substantially raising air transportation vs. ocean shipping costs. At the same time, low interest rates have reduced the carrying costs for inventory on sea voyages, while ultra-large container ships have reduced unit costs. And at the same time, ocean transport has become more reliable with more sailing frequencies per lane offered by carrier alliances.

WCS The rapid growth of international air passenger traffic and modern efficient longrange twins such as the B777, A330, B787, A350 and the recently launched 777-8/9 have created an increasing amount of lowcost underbelly lift and more origin and destination pairs, particularly over the rapidly growing hub networks in the Middle East. • Finally, new fuel-efficient, twin-engine freighters in the form of the 777F and the A330F provide airlift with much lower unit costs than the 747-400 and MD11 freighters that were the workhorses of the air cargo Golden Age previously mentioned. • To give just one example, a 777 freighter flight from Hong Kong to Anchorage costs $30,000+ less than a 747-400F while carrying almost the same payload. Given all these factors, 43 Boeing 747400s are parked in the desert and six have been scrapped while 20 and 4 MD-11s respectively have met the same fate. Except for a brief spike in freight traffic in 2010 when post-recession inventories were finally replenished and electronic product introductions were accelerating, all these factors have put significant pressure on commodity airport–to-airport air cargo yields which have been declining in real terms for two decades. Current freighter capacity exceeds demand. When combined with 5-6 per cent underbelly capacity growth driven by increasing global passenger demand, further capacity reduction will be required to staunch yield declines for commodity air freight. On the other hand, given the integration of worldwide buyers and sellers due to the ubiquitous marketplace of the Internet, door-to-door shipments of smaller packages and light freight shipments continue to grow, and cross-border e-commerce is providing a boost to this sector. However, most national customs systems are far behind the needs of this market which will impede its growth if systems are not modernised to better handle this type of traffic. Door-to-door global small shipments are increasingly carried by the integrated networks of FedEx, DHL and UPS, which have dense and highly efficient pickup and delivery systems. Thus, the global air express business continues to grow as does

global sea trade, with both sectors gnawing at the traditional airport-to-airport air cargo market. Moreover, yields on this type of commodity traffic have been declining in real terms over 20 years making traditional freighter services’ profitability very challenging. It’s important to note that the express carriers use both indigenous aircraft and, for less urgent shipments, the prolific underbellies of passenger carriers. The future ain’t what it used to be The macroeconomic picture for world trade, regardless of shippers’ needs, however, is not good in the near term. As noted before, protectionism is on the rise. Last year, the top 20 world economies passed 23 per cent more protectionist measures than in 2009. A few examples: • Argentina has passed 168 measures since 2009. Could the recent crisis there be somewhat related? • Canadian interests recently opposed lifting de minimus clearance limits, perceiving such a change as injurious to their livelihood. • FedEx couldn’t ship pillows (in Febru-

ary 2014), which were in short supply, to Olympic athletes in Sochi because Russian customs restrictions would cause a six-week delay in delivery! This is indeed unfortunate as history shows innovation, investment, and larger markets have been the main drivers in improving living standards and reducing poverty around the world. In this regard, according to a 2012 analysis by economists Petri, Plummer and Zhai, the TPP has been estimated to add about $295 billion a year to the world economy. And the London-based Centre for Economic and Policy Research estimates the TTIP to add around $130.5 billion a year to the US economy alone. Also, if enacted, the agreements would create millions of jobs around the world in many sectors including ours. Over the last several years, trade growth has decelerated from two and a half times the world GDP in the first part of this century to much lower levels. It’s no surprise then that both global trade and air cargo have flat- lined. All of us may wish for a return of the halcyon days of double-digit air cargo growth, but we are creatures of much larger forces and the winds are not favourable. n April 2014

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Air cargo hubs are s

The country has not been able to create an aviation hub in all these years since its independence while next door neighbours, Dubai, Singapore, Bangkok and Hong Kong have taken away cargo and passengers from India. But now some of our international airports seem have got into the act with the single-minded desire to become hubs. A report from Tirthankar Ghosh

ur story begins sometime in December 2010 when the Civil Aviation Economic Advisory Council (CAEAC) decided to bring about changes in the air cargo set up. The industry had just weathered global recession and almost every aviation stakeholder had come to the realization that it was cargo that brought in the money – hence the emphasis on enhancing infrastructure for the sector. Keeping in view the projected rapid growth in air freight, the CAEAC set up a Working Group on Air Cargo and Express Service Industry to recommend a slew of policy initiatives. In fact, the terms of reference for the working group were clear: the group would assess the growth potential of air cargo in the country while identifying areas that require further improvements to seize the emerg-

April 2014

ing opportunities in international trade and in the context of faster pace of economic growth in India. Headed by M Kannan, Economic Advisor, Ministry of Civil Aviation, the working group held seven meetings through 2011 with stakeholders comprising civil aviation and airline officials, cargo carriers, aircraft manufacturers and airports. The 120-page report that was submitted carried in-depth analyses of issues and comprehensive coverage of key aspects of the air cargo business that would lead to specific actionable points with timelines for implementation. That the first of its kind report was a well-conceived exercise was pointed out by Tulsi N Mirchandaney, Managing Director, Blue Dart Aviation when she said that “it has highlighted the issues and aspirations of our sector. We look forward to an equally

aggressive implementation process.” The report detailed the key challenges – topping the list was, of course, infrastructure bottlenecks – and acknowledged that airports in the country were developed primarily from the passengers’ view; hence the requirement for development of cargo facilities was not taken seriously. “Cargo is generally the last part to be thought of and is relegated to that part of the airport, considered not important otherwise. This leaves the entire logistics of cargo – infrastructure and facility in a woefully inadequate and poorly managed area of the airport”, the report said. The report also pointed out that regulatory hurdles had not only stymied the growth of air cargo but impacted the industry spanning various departments and ministries. Reflecting the views of industry experts

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e still pipe dreams

Bird’s eye view of Hong Kong airport: A hub in the true sense of the word

that air cargo growth worldwide would be driven by Asia over the next two decades and that intra-Asia growth will be expected to dominate world air cargo growth, the working group advocated the need to create strong air cargo infrastructure at the gateway airports of the country. It also recommended the creation of transshipment cargo facilities since Indian airports were ideally located to act as transfer hubs for various intercontinental routes like Australia and Europe and South East Asia. These routes, at present are dominated by European, Middle Eastern and South Eastern Asian carriers. The working group felt that in spite of the geographical advantage of the country’s airports, India had not been able to successfully compete in the market to capture intercontinental traffic. The group put forward one of its ambitious deadlines of creating at least one cargo hub in the country while promoting key gateway airports as cargo transshipment hubs. In fact, in discussions with industry and trade representatives, the working group found out that at least four air cargo transshipment hubs in India could be developed by 2020. These cargo hubs could

easily capture 20-30 per cent of the existing traffic along the intercontinental routes, experts stated. One of the first airports on the way to fulfilling the hub criteria is Hyderabad’s Rajiv Gandhi International Airport (RGIA). Not too long ago, when it signed on its first client — Turbo Jet Engines — for the country’s first airport-based Free Trade Zone (FTZ), it took a step towards hub status. The Free Trade Zone at the airport was envisioned to fuel the growth of a strong airport-driven economy. It aims to provide compelling value proposition to players across the industry value chain by offering modern and integrated ecosystem that will bring down transportation costs and reduce the turnaround time for movement of goods. The FTZ would also provide facilities for servicing, distribution, trading, warehousing of goods and other value additions. All strong pointers to boosting air cargo growth. Top officials in the cargo division of the airport point out that the operations of Turbo Jet Engines would comprise repair and calibration of aircraft parts with original equipment manufacturers and air-

lines sending equipment from any part of the world to the facility at the FTZ. The facility will also derive synergies from the aircraft MRO located at the airport, besides supporting air cargo stakeholders such as airlines and logistics players, thus creating a multiplier effect and an integrated ecosystem. The development was significant considering that it would complement air cargo growth and boost product diversification at RGIA. Perhaps, what is most important is that it dovetails with the airport’s strategy to establish facilities to provide seamless facilitation of goods and services in line with its vision of making RGIA the ‘Logistics Hub of India’. Pushing the air cargo hub concept through, the airport management has taken a leaf out of successful airport stories being played out at Singapore, Dubai or Memphis, where there was little or no industrial activity. Today, the Hyderabad airport is not only thriving but unlike Memphis International Airport, its vision is to develop an aerotropolis around it; link the airport and businesses in the hinterland; offer quick efficient access to suppliers and customers April 2014

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Emirates’ planes lined up at Dubai hub: India should take lessons from Dubai, Hong Kong and Singapore

through the country and the world; attract investments, create jobs, boost economic growth around the airport and, of course, in the process develop an integrated Logistic Hub. To add muscle to the hub concept, RGIA has done some basic research comparing the UAE with India. While the UAE (Area: 83,600 sq km) with its GDP of $47,729 handled 16,951 MT of air cargo per billion dollars of GDP output, India with its 3,287,263 sq km area and a GDP of $3.694 handled only 516 MT of air cargo per billion dollars of GDP output. India, in fact, is nowhere near Hong Kong (12,883.4 MT/bn $ GDP) or Singapore (6,164.4 MT/ bn $ GDP). There is, therefore, potential for India to play a major role in the air cargo market. Said Hemanth D P, COO of GMR Airports Sector Hub Development: “Airline operators who come to the airport often joke and point out that the Hyderabad airport is the best kept secret in the world.” They are “stunned at the beautiful facility that has been created”. Yes, there is the classy terminal and manicured gardens all around but below all that is “a solid hardcore pyramid — the apex of which is a hub,” said Hemanth. “We are expanding.

April 2014

We are going into the Aerospace Park, the Free Trade Zone, the SEZ, and the MRO. All of that fits in very well into that longterm plan to fulfill our vision to be the logistic hub for India and South Asia to start with. Then we will expand further,” he said. Indeed, RGIA has performed beyond expectations. In 2012-2013 (April 2012 March 2013), of a total of 83,994 tonnes that the airport handled, 33,588 tonnes was domestic and 50,406 tonnes was international. A year before, in 2011-2012 (April 2011 - March 2012), the airport handled 34,471 tonnes of domestic cargo and 47,004 tonnes of international air freight. What the airport is looking for is participation from more carriers. “This is the only airport that in the last two years which despite the recession has grown. All airports

around the world showed minus 10 per cent growth but last year we grew by 10 per cent,” claimed Hemanth. Even as a dedicated cargo team ventures into the hinterland to source business opportunities, the airport management on its part is in innovation mode at all times. This has seen the commissioning of the second or alternate runway capable of taking Code-E aircraft last year in September. Two months later, a dedicated upgraded cargo apron to accommodate Code-F (A380 type) aircraft was commissioned. Pitching itself as the “Pharma Hub” of the country, the dedicated cargo apron was essential to accommodate widebody planes. The move was aimed to boost and sustain the integrity of end-to-end cold chain from shippers’ premises to consignees. It was

“If the 490-odd CFSs have reached out to the export-import trade, why can’t some of them be converted into AFSs which is the immediate requirement for next few years?” Bharat Thakkar former President, ACAAI

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in the innovative mode that the apron was constructed after consultations with customers. Through its unique “VoC” (Voice of Customer) customer feedback initiative, it was decided to set up Code-F aircraft parking stands in close proximity to the terminal since that would ensure the cold chain integrity. These moves have enabled RGIA to provide world-class facilities. Said Carsten Hernig, Regional Director, South Asia & Middle East, Lufthansa Cargo, which flies in freighters to transport pharma products, “An excellent infrastructure is essential especially to transport temperature-sensitive goods.” The carrier was delighted with the facilities provided by Hyderabad airport, “which meets precisely all the necessary requirements. This,” said Hernig, “is another important step in the successful pharma hub

cooperation between Hyderabad Airport and Lufthansa Cargo.” While upgrading facilities for cargo movement is only one part of the RGIA story, the airport has chalked out carefully crafted out plans for development of the hub. There is the aerotropolis on 1,000 acres that Hemanth mentioned and one which received praise from London’s mayor Boris Johnson. The aerotropolis — a new urban concept that places an airport in the centre with a city growing up around it — will promote education, healthcare, entertainment, hospitality, commercial and logistics ports. The airport authorities have signed an agreement with the Apollo Group to set up a hospital. In addition, the airport has got in touch with international corporates to form joint venture partnerships on the proposed 1,000 acres. An aviation special economic zone spread over 250 acres is scheduled to be set up. The airport has also started some joint venture projects. In February 2010, a 5050 joint venture was signed with Malaysian Airlines for a maintenance, repair and overhaul (MRO) facility that has begun its operations. This is in addition to National Aviation Company of India Ltd (Nacil) setting up its airframe MRO facility on five acres of the airport land. There is also the world’s top aircraft engine maker, CFM International, that inaugurated its engine maintenance training centre at the Hyderabad Airport Aerospace Park. It is not that only the Hyderabad airport has geared itself up to become a hub. There are others too: nearby Bengaluru and Chennai are in the run-up to acquiring gateway status. In Bengaluru, for example, with the commencement of operations from the enlarged Terminal 1, things seem to have

“Airline operators who come to the airport often joke and point out that the Hyderabad airport is the best kept secret in the world.” HEMANTH D P COO, GMR Airports Sector Hub Development

Points of concern Even before the AFSs start, ways have to be found out to improve growth at international cargo terminals. As a user of facilities for cargo handling, Bharat Thakkar points out what can be done: Improve efficiency • Even if half of what is suggested to reduce dwell time is implemented, efficiency will improve • Improve the functioning of all the links. • Today there is no time-bound / time-determined operations; so, it is difficult to measure performance • There should also be training and orientation to the field formations to improve their performance and to make them understand the value of a customer Enhance facilities • Almost all major airport cargo terminals across the country have the problem of short supply: in equipment, manpower, storage capability and, of course, systems • The Ministry of Civil Aviation can do a thorough study on the ratio of volume to equipment/manpower requirement and set a mandatory standard to be followed by terminal operators Provide better procedures • Procedurally cargo is received, is processed and delivered (be it import or export). Even though this is a simple operation, in the absence of set procedures, it is always a novelty in operation • Air Terminal operators should split the entire activity in different components, fix responsibility for each activity, add a definite time frame for all activity and note all this in a document that has to be made available for all users to know the processes and procedures • Forwarders as well as terminal operators are in the dark if such a document exists. If such a study were to be done, forwarders will be readily available to be a part of the study April 2014

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“The Working Group on Air Cargo and Express Service Industry has highlighted the issues and aspirations of our sector. We look forward to an equally aggressive implementation process.” Tulsi N Mirchandaney Managing Director, Blue Dart Aviation

bhadra

moved into fast forward mode. The terminal has increased the passenger handling capacity from 11.6 mn to 17 mn by 2015. There are a whopping 83 check-in desks and 13 baggage carousels. There are a number of enhancements that have taken place. With all that, BIAL has gone a step closer to its vision of becoming the gateway to South India. As for passenger and cargo, figures have been going up. On the carrier front, Malaysia Airlines, Silk Air and AeroLogic Cargo increased their frequencies from the airport and the airport authorities are keen to get a domestic carrier that will

April 2014

make the airport its hub. Hari Marar, BIAL’s CEO said that “airline marketing is a part of our efforts… Anybody who is willing to operate is welcomed,” he said. The airport had indeed been talking to quite a few airlines around the world to come to Bengaluru. “I think the Australian market is greatly underserved. So is the Asia, Indonesia, China, Japan, Korea markets. Africa also has very poor connectivity. Some of the big airlines that we are talking to right now are in these areas, and we are telling them we need to launch flights to Bengaluru now.”

Bengaluru and Hyderabad’s ambitions apart, the country’s air cargo sector finds itself in a peculiar situation. While it has the potential to handle increased tonnages, it cannot do so because the infrastructure is still not up to it. On the other hand, those in the business cannot give it up. Stakeholders have been crying themselves hoarse for enhanced cargo infrastructure and when facilities are put up, the powers-that-be oppose it tooth and nail. Such is the case with Air Freight Stations (AFS). Launched with great gusto quite some time ago in Chennai and Mumbai, they are dying slow deaths with hardly any takers for the facilities provided at these stations. Built on the concept of the container freight stations (CFSs) developed by the maritime industry — that incidentally are performing admirably — the AFSs were supposed to decongest the airports. These CFSs are common user facilities and offer services for handling and temporary storage of import/export containers carried under Customs transit. All the activities related

COVER STORY A signage at Nagpur shows how the hub is progressing with only arrows to show where the proposed sites will be

hc tiwari

to clearance of goods like warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export, transshipment, take place from such stations. These CFSs have, according to the freight forwarding community, been the key enablers for rapid maritime cargo growth in the country. The CFSs in Chennai are often cited as examples for the manner in which they have eased the processes of export and import. These off-port container facilities led to containerization and standardisation of cargo. In turn, that has played a significant role in the smooth and seamless multi-modal connectivity of the sea port with other modes of transportation. The consolidation of cargo through containerization has led to a reduction of transit time by more than two-thirds and brought down the cost of ocean freight by almost half. Container throughput at Chennai seaport is reported to have increased by five times to reach 15,00,000 containers in the last five years. The move to establish AFSs was prompted by the fact that the cargo sections of almost all airports in the country are severely congested. The major reason for the congestion is that traditionally almost all the activities related to the processing of air cargo (weighing, screening, Customs examination, ULD formation, etc.) have been done at cargo terminals in the airport area. The AFS – being off-site – were meant to reduce congestion at the airports, by carrying out the transfer of cargo to designated or Customs notified freight stations through bonded trucking operations. This brings in greater throughput efficiency, reduces dwell time, and maximizes the utilisation of installed capacity. A strong advocate of the AFS concept, G Raghu Sankar, member of the Managing Committee of the Air Cargo Agents Association of India (ACAAI), is now certain that the concept of the off-airport freight station has not been understood at all. Although, the AFS was set up in 2007 in Chennai, the civil aviation ministry, along with other stakeholders including the custodians of the air cargo terminals (many are held by the government-controlled Airports Authority of India or Air India), have not really found out the advantages of such facilities that

would enable customers to get their goods to destinations on time. Strangely, instead of the promised couple of days for delivery of goods, customers have to wait for a week. The major hindrance to the AFS not taking off has come from those who control air cargo operations at the airports: they feel there will be a loss of revenue. That has certainly not happened with the CFSs. The Chennai port, for example, has 33 private container terminals as well as government controlled ones spread around the city. But neither have lost revenue or control. Instead, the facilities have encouraged growth. The fears of the Airports Authority of India was recorded in the report from the Working Group (WG) — Air Cargo Logistics in India — set up by the Ministry of Civil Aviation. “A member of the WG representing Airports Authority of India is of the view that doubtlessly establishing AFS will reduce burden on Air Cargo terminals at airports but it will add to increase in dwell time as there are additional steps in shifting cargo to AFS. These additional steps according to him are, ‘Filing documents with Customs for approval, shifting import ULDs /individual packages to truck dock area, loading of ULDs and Individual packages of import cargo in trucks, bonding trucking from airport to AFS, documentation with customs and cargo custodian, offloading cargo from bonded trucks under customs of supervision and de-stuffing of cargo after tallying with documents’.”

In fact, when the AFS started, the AAI demanded payment for handling, transport and storage of cargo at the AFS. This did not go down well with the users. Later, the AAI reduced the charges but by then it was too late. This, despite the fact that the Customs gave the go-ahead for transport of container cargo and ULDs at the AFSs. Said Bharat Thakkar, past President of ACAAI, “If the 490-odd CFSs have reached out to the export-import trade, why can’t some of them be converted into AFSs which is the immediate requirement for next few years? This must not only be encouraged by privately-operated airports to decongest airports but by all stakeholders, inclduing airlines. Though this has been approved by the government and regulatory authorities, it is yet to kick off?” He went on to say that with the increase in volumes, what is needed is the urgent approval of Agents Bonded Terminals by the CBEC which has been a demand of forwarders for over three decades, since the Cargo Village concept, though announced, is still in its nascent stages. Whatever the reasons, the AFSs at Chennai would have set a trend that would have been taken up around the country and in the absence of cargo villages near major airports, these facilities would have helped reduced the congestion. Air cargo stakeholders hope that better sense will prevail and airport cargo custodians will encourage and start AFSs. n April 2014

Cargo & Logistics LOGISTICS

JIT, a nightmare!

tatamotors.com

few summers ago, I literally annoyed senior executives at Hyundai Motors India at Chennai and Fiat India Automobiles at Pune. Because I was simply not convinced of the efficacy of the Just In Time (JIT) practice. “How can you do this?” I kept demanding much to their consternation. For me, the no inventory or zero inventory game played out by manufacturers – need not be in the automotive domain only – is a R-I-S-K-Y proposition. JIT, for me, is a nightmare. Coming from a live broadcasting (news and current affairs) sphere, I dread the second or minute when the studio anchor anx-

April 2014

iously waits for the video or audio link with his correspondent from a remote location on a breaking story. You have built up the tempo, fuelled the curiosity of the invisible TV watcher wherever he/she is, and thundered that your man is the ONLY man on the news-breaking spot to share his firsthand impressions and then…the link does not work. You (the anchor) look stupid and mumble some inane excuses and proceed with the next item. Well, the live TV station anchor has the luxury of the ‘next item’ to prod on, but not the manufacturers depending on lean manufacturing and/or JIT. They enjoy no such luck. I watch and hear in horror as an inbound officer asks: “Tell me, what to do

when I am unable to trace the vehicle carrying some critical components for the past 24 hours? My existing stock position won’t last long. What if…” I mentally complete his ‘what if’ dilemma with this worst case scenario: Production will halt and he will be pulled up for not ‘escalating’ the crisis well in time(!). Given his seniority in the organisation, he may not be hauled over the burning coal, but sneered at and snide remarks made in hushed tones. Nobody is thick-sinned enough to ignore such pinpricks. If you are dealing with this kind of ticklish situation, you always have a Plan B. Did my man have one? Yes, indeed, he confirms. While he rushed out a

LOGISTICS

Ramesh Kumar takes a long, hard look at what manufacturers never wish to see even in their worst dreams. ‘search party’ to locate the missing vehicle and the stupid driver who had switched off his mobile so that not even his fleet owner can trace and track him, the 50-plus supply chain honcho – amidst incessantly biting and eating the non-existent finger nails – has rushed an alternate part to his own R&D requesting a quick clearance for the item as replacement in case the much-awaited component does not materialise. That’s his Plan B. “Without R&D approval, I have no authority to replace,” he confesses. His deputies keep running into the assembly lines to keep a close tab on the fast-emerging crisis and return at regular intervals to give a live update. Poor man! He reminds me of a 3PL senior executive at another automotive plant, whose spouse categorically told him to put in his

papers. Why? His blood pressure levels are travelling northwards due to his tension-filled job of satisfying his master (auto OEM) who wants his stock yard to be emptied as quickly as possible on the one hand and his inability to find a car carrier who is ready to load brand new models into his vehicle’s double decker belly and scoot out in double quick time because freight rates are the bottom most. This 3PL-er is cursing his fate for switching over from auto OEM stable to 3PL. He did not bargain for auto OEM’s JIT (zero finished vehicle syndrome) mindset! By and large, auto OEMs invariably go for one-component-one vendor (OCOV) format. Their logic is impeccable. Look, components are high technology-high investment zone. No Tier 1 vendor would be

willing to sink in huge dollops of money towards capital expenditure unless there is ‘total’ commitment. Remember, these vendors are still in SME bracket. Money is not available easily. A long term commitment in the form a signed and sealed contract and the promise that he/she is the only vendor for that particular component makes him/her sleep a bit easily at nights!” elaborates the senior production planning cell head at an auto OEM. Has he not run into hassles because of this one component-one vendor format at times? Yes, he does. But that does not deter him in pursuing that format. JIT coupled with OCOV is a perfect cocktail for perpetual migraine, insomnia and hypertension. Like Wanted (the 2010 Bollywood hit) Salman Khan’s “com-

April 2014

Cargo & Logistics LOGISTICS

scrapping the concept of just-in-time.” mitment” phobia or obsession, auto OEMs By the way, my friend called up 24 have learnt to live with the pitfalls of JIThours later to convey that his challenge was OCOV format. sorted out. How? I asked. “We managed to There is a lot of debate on the efficacy find the driver and the vehicle. His handof JIT across the globe in the wake of the phone ran out of battery and he was caught recent Japanese tsunami and Thai floods in a 12-hour traffic snarl among 200 vehithat choked production at various global cles, which our search party could not loauto OEMs. Commentators have time and cate.” All is well that ends well. again described JIT as a risky proposition, Still, I veto JIT. No matter whatever its though it is most cost-effective. Zero inglorious advantages are. Why? I prefer a ventory has become sexy so to say. Even good, undisturbed sleep at night. And OCOV practice has come under harsh no BP tension. What do you say? whipping. London-based Alex von But there are some dieStempel of Cool Logistics hard JIT advocates. Says The problem is the Resources offers a fresh Darren Dolcemascolo potential for a shortage perspective: “I think that of EMS Consulting: “I would respectfulof supply, particularly in growing fears about suply disagree with this cases where parts come ply chain vulnerability will eventually blunt our analysis. One pitfall from one supplier or expectations what Just in that we should always one region Time can actually offer. avoid when we encounter a Without wishing to take problem is that of jumping to all the guilt off the gingerbread at solutions. Instead, we should deonce, I think that JIT retains ‘aspirational’ fine the problem well and gain a full underuse as a concept in certain segments of the standing of the current situation. The probsupply chain — sequencing low risk/ideallem here isn’t just-in-time or lean thinking. ly easily ‘re-sourceable’ components into a And the solution shouldn’t necessarily be to semi-automatic assembly line…If JIT were stock up. The problem is the potential for to ever work we would by now have had the a shortage of supply, particularly in cases experience of a flourishing market selling where parts come from one supplier or one supply chain insurance. In other words segregion. If we define the problem this way, ments of the supply chain could be owned we might find other solutions such as aland traded as commodities and could be ternative suppliers, designs that allow for underwritten. Yet before anyone is willing alternative components, and a number of to ‘own the supply chain’ or any substantial other potential solutions that do not require

April 2014

share thereof it remains my firm conviction that ‘Just in time’ gurus will continue to fruitlessly pedal a Promethean dream.” “If the supply chain worked faultlessly,” adds he, “delivery and deliverance would be the same. Allow me to raise another questions that may even sound more surprising: Would trading still exist? I think not because buying and selling would suddenly become child’s play. Totally risk free. The reality as we know, is very different. The supply chain is a dream. It only exists in the realm where time runs backwards. Where I see the biggest risk to the supply chain is in the naive faith that everything is calculable. JIT gurus may be able to improve their forecasting capabilities and thereby make risk more calculable, however all they can ever achieve to affect is to calculate a particular portion of the total risk.” Tsunamis, strikes, port congestion, potholes, not to forget human nature yes will ensure that events per se will escape total control. And if there weren’t any we would have to create them, he opines. All ‘events’ seem to be on the increase and/or are certainly not (absolutely speaking) - diminishing, in number, scope and interpretable effect. The irony is that improved forecasting methods (including weather forecasts) might increase in accuracy, event awareness will increase without the fear of the unknown ever been eradicated, concludes Stempel.

Cargo & Logistics PERISHABLES

Information sharing

is top priority Pharma stakeholders list out challenges in temperature-sensitive exports

he need for information sharing in order to manage pharma and life science shipments throughout their transportation was one of the key conclusions of the recent Pharma Shippers’ Forum organized and co-hosted by Amsterdam Airport Schiphol, as part of this year’s Air Cargo India event in Mumbai. The unprecedented gathering of 40 leading pharma shippers, together with representatives of logistics service providers, cargo handlers, airports, airlines and regulators uncovered many of the problems and concerns facing India’s multi-billion dollar pharma industry as it steps up its export drive. Moderated by Schiphol Cargo Senior VP Enno Osinga, the event opened with an overview of the sector by Ryan Viegas, VP Supply Chain and Procurement for Watson Pharma. He spoke about pharma being India’s third biggest industry, employing 350,000 people in 10,000 companies. He also added that India had the largest number of FDA-approved sites outside the USA, and that the sector

April 2014

was growing at 20 per cent per annum. With initial input from experts representing all elements of the pharma supply chain, the forum provoked debate among the 100-odd delegates. Among the many challenges mentioned were the danger of temperature excursions rendering medicines ineffective; the need to secure supply chains from counterfeit products; the lack of transparent pricing from forwarders; and the often extreme difference between climates at origin and destination. Also highlighted was the need for greater collaboration; the resistance to share information between supply chain partners; and the inability of some carriers to participate in the flow of information from forwarders. One airline spoke of the challenges faced by the airlines in selecting handling partners with the resources and correct procedures to handle temperature-controlled shipments. Talking about instructions on handling of individual shipments, she observed: “There is no one standard. All the

forwarders, shippers, airlines and handlers are busy designing their own, and they can be conflicting. The only way out of this impasse is for everyone to cooperate and seek a single solution that is uniform throughout the supply chain.” A handler agreed, adding: “We need a running document from origin up to destination. We need to know we can control the process. If something goes wrong, we have to see where it went wrong. This is a challenge especially for IATA to take the initiative.” On the positive side, handlers demonstrated how they had invested to provide for the sector’s needs. A local specialist pharma forwarder also confirmed dramatic improvements in the Indian pharma industry’s export performance, with 90 per cent of all temperature excursions now taking place after export from India. On the subject of possible modal shift to seafreight, a shipper suggested this would not occur with most producers, as they had insufficient volumes to justify ocean con-

PERISHABLES

“We believe Industry has to be fully involved” Schiphol Cargo Senior VP Enno Osinga and Bart Pouwels, Director Business Development, Cargo, Schiphol Amsterdam Airport, talks about the Pharma business: How was the pharma business from India in 2013? What are the changes that you see? The growth in volumes is 3.2 per cent at Schiphol (1.5 mn MT), out of which 4 per cent (i.e. 60,000 MT) is Pharma globally. This is in alignment with the global average of 3-5 per cent. From India, KLM had two freighters; it has been increased by two more. Business has grown at Schiphol over the past 2-3 years. It has developed into a hub for distribution to the Americas, Europe and Africa. Watson has shifted a major portion of their operations to Schiphol. Banking on the new opportunities for growth, have pharma logistics companies in India started gearing up? What else do they need to do to be at par with world standards? Actually, around 90 per cent of the regulations are standardised on global basis. Only about 10 per cent needs to be formulated with local conditions in mind, like languages, environment, education levels, etc. This comment was backed during the open discussions by Dr. Somani, Jt. Drug Controller of India. In any pharmaceutical process worldwide, production control is a critical process. The focus is now on India, due to the huge volumes involved. The high demand of pharma products from India led Lufthansa Cargo to establish a pharma hub at Hyderabad International Airport. Is Schiphol Airport interested in creating a similar kind of hub in one of the Indian airports? No. For two reasons. Firstly, it was

tainers at the necessary frequency. One of the pharma companies said that the cost of financing high value pharma inventory during ocean voyages of up to six weeks, against the much faster option of airfreight, was high. Yet another pointed out the short shelf lives of many products, and the unacceptability of losing up to six weeks of this

gistics operations in Amsterdam and Rotterdam? So far, the focus is on improving the supply chain, as well as the capacity. There is no direct link with Pharma companies asking for any activities. They ask only for special facilities. More than Pharma companies, it is the freight forwarders who are interested in proximity to the handling companies situated at the airport. Lufthansa with Menzies, not Frankfurt airport which was involved, hence it will be realised that airports do not get involved in this kind of effort. Secondly, it is not good policy to focus on one gateway only. What more can Indian international airports do to further the Pharma business? The best way is to develop an integrated cool chain at every airport and this process must be applied professionally in accordance with world standards. All aspects like airlines, Ground Handling, airports, security, inspection agencies, etc, should act together. Do you feel that a group like the Pharma Lifesciences Steering Group (PLSG) that Schiphol has formed, would be able to push the pharma cargo business forward? We do feel so and the proof is already there. In the open discussion, all were involved — industry bodies, airports, airlines, etc. — showing that PLSG is united on behalf of the community and no commercial group is involved. How much of interest have Indian pharma majors shown to set up hubs for their lo-

at sea. Speaking after the forum, Amsterdam Airport Schiphol’s Senior VP Cargo, Enno Osinga said: “The message from all parts of the chain is clear. We need to provide a platform that allows sharing of information to protect the integrity of each shipment. It will not be easy to achieve the solution, but there is no point in continuing to identify the

What is the big takeaway from the Mumbai Pharma conference? There is no common point of everybody saying the same thing. There is no common vision as there are too many groups, hence this is still very individual and separate. It is critical to have transparent information from the manufacturer downwards and not just from the earlier stage. This can be done with better IT, so that all are aware of the requirement (similar to DGR, from which a lesson has to be learnt). Currently, the problem is that each company has separate requirement lists. IATA is working on this aspect. What other tangible investments are you making to turn this effort into a success? This is our third conference and certainly will not be our last. We are sponsoring four Masters students, from the University of Amsterdam, for five weeks starting March 31, 2014, to study India’s requirements for change. Their itinerary will include two weeks in Mumbai, one week in Bengaluru and two weeks in Delhi. Their report will be released in July 2014. n Interviewed by Vinod Kaul

problems if we are not prepared to address and solve them. Pharma traffic is a huge opportunity for airfreight, but we must get it right. There is a clear role for us to play as an airport, and Schiphol will continue to invest time and resource in ensuring that information platforms are made available to the industry.” n April 2014

Cargo & Logistics news in brief

air/ Awards  Schiphol: Top airport in cargo Amsterdam Airport Schiphol has been ranked top major European airport (over 1 million tonnes per annum) in the tenth Air Cargo Excellence Survey. The airport section of the Air Cargo Excellence Awards is based on the voting of airlines on a number of specific criteria. Schiphol’s 2014 winning score of 113 marked a further significant improvement in its recent trend; in 2012 it scored 103 points, and in 2013 it achieved 106 points. Schiphol also attained the highest rating in each of the categories — customer service, value, facilities and information technology — which combine to decide the overall results. Said Schiphol Cargo’s Senior Vice President, Enno Osinga, “We are delighted to have moved into top position this year, and to have shown a marked improvement in all categories. Once again, we thank all those who have ranked Schiphol so highly. Our continuing work to drive streamlining of processes at Schiphol, in conjunction with our community and our authorities, has clearly played a part in these results, as it has in the steady growth of traffic through our airport.”

Kale: Numero uno in IT solutions

Kale Logistics Solutions Pvt Ltd was adjudged as “Supplychain IT Solutions Provider of the Year-2014” at this year’s ICC Supplychain Excellence Awards 2014 organised by the Indian Chamber of Commerce (ICC). The award was presented by Oscar Fernandes, Minister for Road Transport and Highways.

April 2014

Auto sector gets DHL-Blue Dart’s push D HL and Blue Dart recently jointly announced an innovative logistics solution to support Original Equipment Manufacturers (OEMs) during the launch of new vehicle models in India and abroad. While most logistics companies focus on inbound to manufacturing and after sales logistics, DHL’s product comprises the entire go-to-market process. With new product launches in the automotive sector becoming increasingly complex and cost-intensive, DHL-Blue Dart’s focussed automotive solution will benefit companies from

minimised supplychain risks, lower third party costs, higher efficiency and visibility. “The average time from the first sketch of a car to market entry is 2 to 3 years and requires precise synchronisation amongst several involved parties, more often, not located even in the same continent. We can reduce to minimum, the supplychain incidents which may occur during this challenging process which cause cost increases and final delays in development,” said Fathi Tlatli, President-Global Sector Automotive, DHL Global Customer Solutions and Innovation.

Air freight witnesses growth

HL and Blue Dart recently jointly announced an innovative logistics solution to support Original Equipment Manufacturers (OEMs) during the launch of new vehicle models in India and abroad. While most logistics companies focus on inbound to manufacturing and after sales logistics, DHL’s product comprises the entire go-tomarket process. A strong rise in air freight growth compared to a year ago was recently reported by The International Air Transport Association (IATA). Global freight tonne kilometers (FTKs) rose 4.5 per cent in January compared to January 2013. This is a

significant acceleration on the 2.2 per cent year-on-year growth rate recorded in December, and is well above the 1.4 per cent full-year growth reported for 2013 as compared to 2012. “The improvement in demand is good news. It is a step-up in pace from the mild strengthening that we saw towards the second half of 2013. And in real terms, volumes are similar to the 2010 post-recession peak. But there is also ample reason to be cautious. Companies continue to re-organise supplychains in their efforts to move manufacturing on-shore,” said Tony Tyler, IATA’s Director General and CEO. TONY TYLER

news in brief

Unique ULD management app

HEP Aerospace Solutions along with galley cart management services recently announced the launch of CHEP Focus, a unique mobile application for iOS and Android devices including smartphones and tablets. The CHEP Focus app simplifies several unit load device (ULD)-related processes which are currently mainly paper-based, and is designed to save time and money for airlines,

ground-handling agents, freight forwarders and other key industry stakeholders. CHEP Focus app records and transmits ULD messages in the standard International Air Transport Association (IATA) format, manages and updates stock and serviceability information, submits ad-hoc track and trace requests for individual container and pallet units, and is able to share ULD movement information with configurable recipients via email.

Qatar unveils new freighter routes Q atar Airways Cargo recently unveiled that it will begin scheduled dedicated freighter services to two new destinations: Hyderabad (India) and London Stansted (UK), and subsequently it will re-start services to Zaragoza (Spain) also. “Our goal is to be a world-class air cargo service provider and in order to achieve that goal, we need to constantly increase frequencies and expand our number of destinations, so that our customers can benefit from our global reach,” said Qatar Airways’ Chief Officer of Cargo, Ulrich Ogiermann. “The addition of these new freighter routes clearly represent yet another milestone in Qatar Airways’ growth strategy,” stated Ogiermann. “And on top of this, we will take delivery of three

new freighter aircraft in the course of 2014: two B777F and one A330-F.” Hyderabad will be the first new destination to be added to the Qatar Airways Cargo network, with the start on April 1 of a twice weekly service, using the A330 freighter. Main exports from Hyderabad will include IT products and pharmaceuticals. Qatar Airways already operates a daily passenger flight between Doha and Hyderabad. And effective May 2, Qatar Airways Cargo will begin five weekly Boeing 777 freighter flights to London Stansted. Qatar Airways Cargo is also resuming services to Zaragoza. The scheduled twice-weekly Airbus A330 freighter service has commenced.

air  Sumeet Nadkar, CEO and MD, Kale Logistics Solutions accepted the award on behalf of Kale Logistics. Speaking on the occasion, Nadkar said, “We are very pleased to accept this recognition, especially coming from an industry body like ICC. In past few years, we have successfully developed and deployed IT solutions mapped to the needs of a global logistics business. Our vision of unifying the Indian logistics industry with their global counterparts is fast shaping-up and our expanding global clientele is a testimony that we deliver world-class IT systems.” Kale Logistics was conferred with the award on the basis of innovation and initiatives undertaken by it and successful deployment of its solutions for the benefit of supplychain industry in India.

Chapman collaborates with EYOS Chapman Freeborn, the world’s leading air charter specialist, has collaborated with EYOS Expeditions to offer a luxurious twist on adventures to some of the most remarkable and often inaccessible places on the planet. The collaboration of the superyacht and aviation industry’s charter specialists will allow travellers to visit those destinations that are not always accessible by other means, adding the luxurious element. Travellers will be able to travel by private jet to key destinations with Chapman Freeborn, before boarding a luxury expedition superyacht and travelling to some of the world’s most unique and breathtaking destinations.

April 2014

Cargo & Logistics news in brief

shipping and ports  ICC survey reveals practical barriers

An International Chamber of Commerce (ICC) survey, released recently, highlights common impediments to cross border trade that can be taken into consideration by governments and policymakers worldwide when determining what can be done to facilitate the flow of goods across borders thereby contributing to global economic growth. While recognising that the survey results are neither statistically valid nor entirely representative of the hundreds of thousands of organisations that trade globally, the survey does much to reveal a set of common prerequisites – such as predictability, reliability and consistency – that international traders seek. With 88 per cent of respondents involved in import and export or trade in services including freight forwarding, transportation and third party logistics, the survey reveals a need for greater capacity building, in particular through education and making information more easily available, to ensure that both traders and border control officials follow proper international trading procedures.

Ennore Port and Ford India sign agreement Ennore Port Limited (EPL), Chennai and Ford India Private Limited have signed an agreement for export of Ford cars through Ennore port for a period of 10

April 2014

Investments of `21,000 c A

round `21,000 crores have been invested in 30 projects during the current year, achieving the target set by the Prime Minister’s Office for the port sector, according to the Minister for Shipping G K Vasan, while the capacity addition has been around 217 million tones. Providing details of the achievements of his ministry, the minister said that over the last five years, several policy initiatives relating to tariff structure, security clearances and environmental

clearances for project approvals have been taken. With these initiatives, the capacity of the major ports has increased to 800 million tonnes now from 575 million tonnes in 2009. The minister said that the port sector had become the best example for the PPP mode of development. With tariff reforms, PPP projects from the industry in the port sector have received good response. During the last four years, 88 new projects have been approved with an investment of `42,953 crores leading to additional capacity of 558 MTPA. Today, 36 PPP terminals are in operation in major ports while another 34 were under construction. He also said that the largest project in the port sector in the country, the

Guidelines on new land policy for major ports T

he Union government recently unveiled new policy guidelines for major ports, aimed at helping them leverage their land resources for commercial advantage. Participating in the ‘Ports in India’ annual conference in Mumbai, Shipping Secretary Vishwapati Trivedi said the new guidelines provide necessary regulatory framework for land allotment by major ports. He added the guidelines have been drawn to help the ports to carry out leasing and licensing of port land in a transparent manner. Discretionary powers have been reduced and tender-cum-auction have been prescribed as the most preferred method of allotment, he said. Major ports in India have 2.64 lakh acres of land, which is a major resource. Under the new policy guidelines, land can be allotted only through licensing in

custom bond areas by inviting competitive bidding, while land outside custom bond areas can be leased through tender-cum-auction. There is also a provision to license land outside custom bond areas, but it should be only for port related activities. The Boards of respective ports can approve leasing of land for a period up to 30 years. For leasing of land beyond 30 years and up to 99 years, approval of the government has to be obtained through the mechanism of Empowered Committee. All the 12 major ports of the country are required to draw land use plan covering all land owned or managed by them. The new guidelines are applicable to all major ports in India except for the land relating to township areas in Mumbai, Kolkata and Kandla.

& news in brief

0 crores in five years Fourth Container Terminal in JNPT, had been awarded to a Singapore-based company recently. Once the project was completed, container handling capacity of JN Port will be more than doubled. Through the agreement for JNPT’s Fourth Container Terminal, the government would also receive around 36 per cent revenue share while the revenue share from the Ennore Container Terminal would be 37 per cent. Efforts have also been made to deepen all the major ports so that large vessels could call on them. The minister said that the new Land Policy Guidelines for Major Ports had been announced to bring in transparency and accountability in leasing of port land. He pointed out that the Ministry of Shipping was the only ministry to have a sector specific Land Policy Guideline approved by the Cabinet. Besides new projects in the Port, Shipping and Inland Waterways Sec-

tors, the infrastructure at the Indian Maritime University had been strengthened for better maritime education. Three new campuses had been opened: in Kerala, Gujarat and Puducherry. For the first time, largescale movement of coal through Inland Waterway had commenced on National Waterway-I for NTPC unit at Farrakka. The Minister also said that this would be a game changer and will lead to many more projects in the National Waterways. He pointed out that it was a matter of pride for the Ministry that the first indigenous aircraft carrier, INS Vikrant, was built by Cochin Shipyard for the Navy. The ministry had also taken steps to strengthen the coastal security by implementing the Automatic Identification System (AIS) all along the coast and Vessel Traffic Management Services (VTMS) in all the Ports and in Gulf of Kutchh.

Huge cold storage facility at MIAL T he country’s largest cold storage facility for imported good has been set up at the Mumbai International Airport Limited (MIAL). The new facility is huge enough to accommodate, at a time, goods from eight cargo aircraft. The lack of cold storage facilities was a perennial problem

at the airport, leading to perishable goods decaying. A senior official at the airport was quoted as saying, “The new facility, set up in a modular building constructed over an area of 1,400 square metres, can handle all kinds of temperature-sensitive products. It will surely be a boon for the high-end food and hotel industry that depends a lot on imported food materials.” According to industry insiders, Delhi, Chennai and Mumbai are the major export-import hubs in the country with centres like Hyderabad and Bengaluru fast catching up. But Mumbai, being the country’s economic capital, now stands out.

shipping and ports  years. Speaking on the occasion, Minister for Shipping G K Vasan said that this was a part of the series of initiatives by the UPA government to attract investments in the infrastructure sector. The agreement provides for various volume-based discounts on wharfage by EPL ranging from 5 per cent to 30 per cent to encourage more exports through EPL. Ford India Private Limited has set up a modern integrated manufacturing facility at Maraimalai Nagar, near Chennai, for export of their automobile products. In the last few years, Chennai has emerged as the hub of automobile manufacturing sector with all global auto majors having their manufacturing plants in the city and a major centre for export of automobiles.

Seaworld, Kanoo signs shipping joint venture Mumbai-based Seaworld Shipping and Logistics has signed a joint venture (JV) agreement with Saudi Arabia’s Yusuf Bin Ahmed Kanoo Company, to establish a joint logistics and shipping network. The representatives of Indian and Saudi companies signed the memorandums of understanding (MoU) at India-Saudi Arabia Business Forum meeting organised jointly in New Delhi by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Council of Saudi Chambers. The agreement, which was inked by Ali Abdulla Kanoo, regional Director of Yusuf Bin Ahmed Kanoo Co, and Vaishnav Puri, Managing Director of Seaworld Shipping, broadly covers port and shipping agency, but may subsequently be extended to freight forwarding. It was revealed that bilateral investment between India and Saudi Arabia has been growing steadily.

April 2014

Cargo & Logistics news in brief

land  2014 will not see much growth: DB Schenker Year 2013 was full of ups and down, but this year may be considered as the year for the logistics company. The upcoming year seems to be decent for the

local logistics industry. The transportation industry will continue to feed off of the slow but steady recovering manufacturing and retail markets, despite the slowdown in the economy. Specially, the trucking and rail companies can expect moderate growth than the air and water cargo. Reiner A Allgeier, Managing Director, Schenker India was quoted as saying, “As we look to forecast what 2014 will hold for the transportation industry, it’s is equally important to consider what the year will hold for our city and country economically. It is important to remember that the transportation industry is driven directly by the success of retail and manufacturing. This being considered, taking a look at the global, national, and local economy becomes an imperative step in forecasting our transportation will fare in the coming year.” Development in supply chain is influenced by customers’ need and wants and the major concerns are associated with short-term availability, cost, and assuring the continued flow of goods and services. 2014 will not see much growth in the freight volumes (air/ocean) but Contract Logistics will continue to grow on a rate of 10-15 per cent.

Awards at Supply Chain Summit The Indian Chamber of Commerce (ICC) has organised the 4th edition of Indian Supply Chain and Logistics Summit and Excellence Awards on Febru-

April 2014

Railways cargo traffic goes down T

he Indian Railways’ share in cargo traffic is expected to go down by two to three per cent this year against the current 36 per cent. This is in sharp contrast to two per cent increase targeted for the 12th Plan period. The main reason has been the lackluster performance of the Railways in setting up dedicated lines and centres for expanding business in commodities like steel and cement. India is the fourth largest producer of steel in the world. The Indian railways even with the current growth of loading rate at 8.39 pc would carry less than half of the steel produced about 40 million tonnes, compared to the overall production of 96 million tonnes annually.

Apart from Steel Authority of India, other major private steel producers have switched to roads because of issues like cost, service, and connectivity for transportation. In the case of cement, the Railways’ carrying capacity grew by about 1.84 pc, while the overall cement demand grew by about 8.2 pc this year, according to a report by ICRA of 2013. The Railways has also missed the opportunity to tap automobile traffic. Each year, the Railways announce a policy revision for automobile traffic. It hopes for better performance. But the policy for its inherent flaws has never succeeded because of capacity and servicing issue, said Abhay Agarwal, Partner and Advisory, Ernst & Young.

CONCOR to develop 15 Mega Projects Logistics company Container Corporation of India (CONCOR), a Government of India undertaking under the Ministry of Railways, would take up 15 mega projects comprising multi-modal logistics parks, Inland Container Depots (ICDs), private freight terminals, temperature controlled warehouses and general cargo warehouses. These would come up shortly and would be game changers in the logistics sector. In all, CONCOR would be spending about `6000 crore including the cost of facilities and ma-

chinery. CONCOR has achieved a throughout of 2.15 million TEUs (twenty feet equivalent units) of Exim traffic and 0.43 million TEUs of domestic traffic and registered a turnover of `4,743 crore with a workforce of 1198 employees during financial year 2012-13. In the previous year of 2011-12, it had handled a total traffic of 2.6 million TEUs, including 2.13 million TEUs Exim trade and 0.46 million TEUs domestic traffic.

news in brief

Outlook Stable for logistics: India Ratings

ndia Ratings & Research (Ind-Ra) has recently assigned logistics sector a stable outlook for FY15 (Fiscal Year 2015). This is based on the strong likelihood of the sector continuing to display overall moderate growth rate despite a continued economic slowdown. According to the Fitch Group Credit Rating Agency, most of the segments of the industry have low leverage, except the container freight station/inland container depot segment, giving industry players a degree of financial flexibility to weather the slowdown,

Ind-Ra said. Revenue for companies offering value-added road freight services would grow at a higher rate of 12-15 per cent during the 2014-15 fiscal than those offering basic road freight services (8-10 per cent), Ind-Ra said. Large companies in the road transportation segment will continue to be resilient to the slowdown, given their high operating efficiency and presence in profitable sub-segments such as time-definite delivery services and specialised offerings, it added.

LAND  ary 18, 2014 in New Delhi. The summit focused on some of the perennial issues creating hurdle towards growth of the logistics sector, including infrastructure development–road, railways and aviation, simplification of public private partnerships, FDI in single and multi brand retail, tax and regulatory aspects, warehouse and cold storage solutions, technology and skill related challenges, role of third party logistics (3PL) in Indian logistic sector, better investment opportunities, to name a few. The forum provided excellent networking opportunities to manufacturers, users, service providers and policy makers.

GATI-KWE launches e-billing system Gati Kintetsu Express Pvt. Ltd (GATI-KWE), the Express Distribution and Supply Chain Solutions provider, a subsidiary of Gati has launched a new project - ‘Green & Clean Billing’. Under this project, the company has taken up an initiative to of-

A need to cut logistics costs A multi-modal logistics conference recently organised by the Confederation of Indian Industry (CII) at Hyderabad highlighted the need to bring down the high logistics costs in India by diverting freight from road to rail and coastal shipping. Experts pointed out that the Indian road network was shouldering more than 60 per cent of the total domestic freight movement, leading to congestions and higher transportation cost. Girish Pillai, Adviser (Infrastructure), Railway Board pointed out that dedicated industrial corridors all across

the country would make a tremendous difference to the manufacturing sector. “There is a need of private initiatives to increase the capacity. A model shift from road to rail and a model mix of logistics is required,” he explained. Prahlad Tanwar, Associate Director of KPMG, said, “Goods trucks in India move at an average speed of 30-40 kmph, half of the global benchmark. Also, the vehicles logged an average of 250-300 km a day, again half of the distance covered by freight trucks in developed countries.”

fer its customers e-bills linked to e-POD. The aim of this initiative is to eliminate the need to physically print, deliver and maintain a hard copy of the bills and thereby help sustain the environment. Also, with the implementation of the new platform, customers can view their outstanding bills, payment history and can print the statements, invoices and POD copies at any time they require. The new e-billing is available with statements linked to POD copies by bill no. Bills would be emailed to multiple people at the customers end. Payments can be made through RTGS to enable reverse e-utilisation as well. Commenting on the initiative, Diljeet Singh - Chief Sales and Marketing Officer at GATI-KWE said, “With internet and e-mail penetration very high now, this new offering is more convenient to our customers and gives a boost to our existing green projects.”

April 2014

Cargo & Logistics news in brief

DHL appoints new Director Rajiv Sharma was recently appointed as Director, Industrial Projects, India, DHL Global Forwarding. Rajiv Sharma will be reporting directly to Samar Nath, CEO, DHL Global Forwarding, India. “Industrial Projects is a focus area for us, requiring strategic skills and experience. Rajiv with his extensive field experience is sure to successfully steer the wave forward,” said Samar Nath, CEO, DHL Global Forwarding, India. Rajiv joins DHL from Geodis Overseas where he worked as Director, Industrial Project, responsible for developing and managing industrial projects for India. He has been involved in project management, and heavy lift management for the last 12 years, including extensive work in coastal movement, road transportation, and chartering and logistics management.

ACCD plays ball Air Cargo Club of Delhi (ACCD) organised its Annual Ball in the middle of February. The event, biggest social do in the air cargo industry in the country, was attended by more than 750 people of the air cargo fraternity from across the country. The show reflected the hard work put in by the managing committee for around two months: a fact that was appreciate by

all those who attended. ACCD President J P Singh welcomed the gathering at the show and emphasized the key objective of the club: bring the fraternity socially together. There were over 30 lucky draws sponsored by various airlines and forwarding companies and air tickets to some spectacular destinations like Sao Paulo, London, Paris, Hong Kong, etc were the star attractions.

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TENTATIVE

(*) Tentative

April 2014

% Variation from previous year

ALL PORTS

KANDLA

J.N.P.T.

MUMBAI

MORMUGAO

NEW MANGALORE

COCHIN

V.O.CHIDAMBARANAR

CHENNAI

ENNORE

VISAKHAPATNAM

PARADIP

TOTAL: KOLKATA

Haldia Dock Complex

Kolkata Dock System

KOLKATA

PORT

(*)

5350 5475 5961 6088 16386 15383 12689 13900 2066 1015 11588 12069 415 741 13248 12677 22500 21841 488 761 32647 31572 4086 3769 48294 49831 170368

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

TRF APRIL-FEB.'2013

TRF APRIL-FEB.'2014

Source:INDIAN PORTS ASSOCIATION

0.43

169647

613

TRF APRIL-FEB.'2013

611

P.O.L.

TRF APRIL-FEB.'2014

TRAFFIC PERIOD

-12.32

25443

22308

1000

586

7421

2561

3035

11131

11458

1584

5107

1694

2061

1554

1930

140

131

IRON ORE

-16.65

7118

5933

3477

2561

156

151

179

477

405

486

388

190

160

1960

1732

142

122

130

199

109

194

5 5

-2.83

7031

6832

929

863

356

134

331

224

564

680

224

244

556

726

3789

3590

265

321

260

321

FERTILIZER FIN. RAW

23.53

52828

65259

3528

5819

3674

4001

768

2249

2542

6095

6086

12842

19981

2720

2597

19120

22758

1804

1475

1804

1475

14.04

25979

29627

374

221

5884

6746

4074

4765

643

355

6257

6195

4522

6324

4225

5021

4188

4809

212

COAL THERMAL COKING

-4.76

109250

104045

1754

452

52824

49993

790

412

202

176

612

656

4230

4333

8457

9111

27279

25842

4176

4529

157

8769

8459

2425

2000

6344

6459

-3.92

7046

6770

107

3881

3762

306

317

434

457

1413

1339

228

242

550

516

126

103

424

413

CONTAINER TONNAGE TEUs

86082

79818

58824

56452

53000

53905

16714

10607

33615

35761

18160

19161

25635

25789

48658

46389

16155

24689

53944

52767

51415

61836

35767

36744

25122

25569

10645

11175

TOTAL

-1.12

1.19

100673 497969

99546 503918

25189

21022

2231

2373

16452

16560

1600

3018

1784

1808

872

1320

9292

9109

8844

8494

1655

2287

13244

12841

6718

7467

12792

13247

9307

9490

3485

3757

OTHER CARGO

1.19

-7.28

-4.03

1.71

-36.54

6.38

5.51

0.60

-4.66

52.83

-2.18

20.27

2.73

1.78

4.98

% VAR. AGAINST 2012-13

(IN '000 TONNES)

STATS

TRAFFIC HANDLED AT MAJOR PORTS

(DURING APRIL TO FEBRUARY’2014* VIS-A-VIS APRIL TO FEBRUARY’2013)

Cargo & Logistics STATS

INTERNATIONAL air FREIGHT movement ANNEXURE-IVA TRAFFIC STATISTICS - INTERNATIONAL FREIGHT

AIRPORT

SL. NO.

FREIGHT (IN TONNES) For the period April to December % % 2013-14 2012-13 Change Change

For the month DECEMBER DECEMBER 2013 2012

(A) 16 INTERNATIONAL AIRPORTS 1

CHENNAI

17541

18904

-7.2

167401

183337

8.1

33989

32425

4.8

2.1

12038

9444

27.5

1404

1643

-14.5

KOLKATA

3584

3315

AHMEDABAD

1128

1105

GOA

230

334

-31.1

-8.7

TRIVANDRUM

2952

1892

56.0

20938

31734

-34.0

CALICUT

1640

1689

-2.9

17086

20336

-16.0

GUWAHATI

-80.0

-8.3

LUCKNOW

115

94.9

848

946

-10.4

SRINAGAR

JAIPUR

210.0

174

131

32.8

COIMBATORE

82.4

734

417

76.0

MANGALORE

AMRITSAR

151

-82.8

1307

1166

12.1

353

237

48.9

3445

1891

82.2

0 27707

0 27753

-100.0 -0.2

0 259420

0 283489

-100.0 -

TRICHY

VARANASI

PORTBLAIR

TOTAL

-8.5

(B) 6 JV INTERNATIONAL AIRPORTS 17

DELHI (DIAL)

31888

30516

4.5

290905

266625

9.1

MUMBAI (MIAL)

38730

35754

8.3

348561

343168

1.6

BANGALORE (BIAL)

12283

12165

1.0

112324

106905

5.1

HYDERABAD (GHIAL)

4486

4323

3.8

36941

34332

7.6

COCHIN(CIAL)

3215

2757

16.6

30977

28296

9.5

NAGPUR (MIPL)

43.3

297

294

1.0

90645

85545

6.0

820005

779620

5.2

TOTAL (C) 7 CUSTOM AIRPORTS PUNE

VISAKHAPATNAM

PATNA

CHANDIGARH

BAGDOGRA

MADURAI

GAYA

TOTAL

(D) 17 DOMESTIC AIRPORTS

202

(E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E) Source: AIRPORTS AUTHORITY OF INDIA

April 2014

118353

113298

4.5

1079436

1063311

1.5

STATS

DOMESTIC air FREIGHT movement

ANNEXURE-IVB

TRAFFIC STATISTICS - DOMESTIC FREIGHT

SL. NO.

AIRPORT

For the month DECEMBER DECEMBER 2013 2012

(A) 16 INTERNATIONAL AIRPORTS 1 CHENNAI 2 KOLKATA 3 AHMEDABAD 4 GOA 5 TRIVANDRUM 6 CALICUT 7 GUWAHATI 8 LUCKNOW 9 SRINAGAR 10 JAIPUR 11 COIMBATORE 12 MANGALORE 13 AMRITSAR 14 TRICHY 15 VARANASI 16 PORTBLAIR TOTAL (B) 6 JV INTERNATIONAL AIRPORTS 17 DELHI (DIAL) 18 MUMBAI (MIAL) 19 BANGALORE (BIAL) 20 HYDERABAD (GHIAL) 21 COCHIN(CIAL) 22 NAGPUR (MIPL) TOTAL (C) 7 CUSTOM AIRPORTS 23 PUNE 24 VISAKHAPATNAM 25 PATNA 26 CHANDIGARH 27 BAGDOGRA 28 MADURAI 29 GAYA TOTAL (D) 17 DOMESTIC AIRPORTS 30 BHUBANESWAR 31 INDORE 32 JAMMU 33 RAIPUR 34 AGARTALA 35 VADODARA 36 IMPHAL 37 BHOPAL 38 RANCHI 39 AURANGABAD 40 UDAIPUR 41 LEH 42 TIRUPATI 43 RAJKOT 44 JODHPUR 45 DEHRADUN 46 DIBRUGARH TOTAL (E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E)

FREIGHT(IN TONNES) For the period April to December % % 2013-14 2012-13 Change Change

6108 7077 3274 294 119 10 670 307 251 682 440 17 18 0 29 320 19616

6694 6954 2879 272 138 48 474 303 233 549 458 25 4 0 19 245 19295

-8.8 1.8 13.7 8.1 -13.8 -79.2 41.4 1.3 7.7 24.2 -3.9 -32.0 350.0 52.6 30.6 1.7

53931 63166 26911 1902 1441 126 5230 2262 2888 5418 4600 221 94 0 324 1960 170474

59472 61148 26654 2204 1112 241 4657 1643 2459 5121 4719 219 72 0 254 1506 171481

-9.3 3.3 1.0 -13.7 29.6 -47.7 12.3 37.7 17.4 5.8 -2.5 0.9 30.6 27.6 30.1 -0.6

20016 15403 8061 3380 870 464 48194

16191 15568 6965 2896 773 422 42815

23.6 -1.1 15.7 16.7 12.5 10.0 12.6

158256 136629 68697 27621 7096 3850 402149

143293 138067 62467 25173 6679 3652 379331

10.4 -1.0 10.0 9.7 6.2 5.4 6.0

2054 95 452 277 226 112 0 3216

1669 91 219 198 108 121 0 2406

23.1 4.4 106.4 39.9 109.3 -7.4 33.7

15619 1239 3435 2586 1525 923 0 25327

15075 1016 1571 2050 1003 733 0 21448

3.6 21.9 118.7 26.1 52.0 25.9 18.1

382 463 153 302 454 205 333 62 208 96 0 91 0 12 1 0 17 2779 160 73965

306 504 138 144 482 152 259 70 56 64 0 125 0 40 1 0 29 2370 105 66991

24.8 -8.1 10.9 109.7 -5.8 34.9 28.6 -11.4 271.4 50.0 -27.2 -70.0 0.0 -41.4 17.3 52.4 10.4

2909 3344 1276 2403 5090 1530 3072 631 1798 627 0 819 0 130 15 0 210 23854 1205 623009

2406 3495 1101 1812 4469 1533 3100 740 1127 594 0 930 16 215 16 0 239 21793 1240 595293

20.9 -4.3 15.9 32.6 13.9 -0.2 -0.9 -14.7 59.5 5.6 -11.9 -100.0 -39.5 -6.3 -12.1 9.5 -2.8 4.7

Source: AIRPORTS AUTHORITY OF INDIA

April 2014

Cargo & Logistics stats

INTERNATIONAL & DOMESTIC air FREIGHT movement SL. NO.

AIRPORT

For the month DECEMBER DECEMBER 2013 2012

(A) 16 INTERNATIONAL AIRPORTS 1 CHE NNA I 2 KOLKATA 3 AHMEDABAD 4 GOA 5 TRIVANDRUM 6 CALICUT 7 GUWAHATI 8 LUCKNOW 9 SRINAGAR 10 JAIPUR 11 COIMBATORE 12 MANGALORE 13 AMRITSAR 14 TRICHY 15 VARANASI 16 PORTBLAIR TOTAL (B) 6 JV INTERNATIONAL AIRPORTS 17 DELHI (DIAL) 18 MUMBAI (MIAL) 19 BANGALORE (BIAL) 20 HYDERABAD (GHIAL) 21 COCHIN(CIAL) 22 NAGPUR (MIPL) TOTAL (C) 7 CUSTOM AIRPORTS 23 P UNE 24 VISAKHAPATNAM 25 PATNA 26 CHANDIGARH 27 B A GD OGR A 28 MADURAI 29 GAYA TOTAL (D) 17 DOMESTIC AIRPORTS 30 BHUBANESWAR 31 INDORE 32 JAMMU 33 RAIPUR 34 AGARTALA 35 VADODARA 36 IMPHAL 37 B H OP A L 38 RA NCHI 39 A U R A N GA B A D 40 UDAIPUR 41 LEH 42 TIRUPATI 43 R A JK OT 44 JODHPUR 45 DE HRA DUN 46 DIBRUGARH TOTAL (E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E)

NOTE:

FREIGHT(IN TONNES) For the period April to December % % 2013-14 2012-13 Change Change

23649 10661 4402 524 3071 1650 671 422 251 713 533 30 44 353 29 320 47323

25598 10269 3984 606 2030 1737 479 362 233 559 509 25 155 237 20 245 47048

-7.6 3.8 10.5 -13.5 51.3 -5.0 40.1 16.6 7.7 27.5 4.7 20.0 -71.6 48.9 45.0 30.6 0.6

221332 97155 38949 3306 22379 17212 5241 3110 2888 5592 5334 266 1401 3445 324 1960 429894

242809 93573 36098 3847 32846 20577 4669 2589 2459 5252 5136 219 1238 1891 261 1506 454970

-8.8 3.8 7.9 -14.1 -31.9 -16.4 12.3 20.1 17.4 6.5 3.9 21.5 13.2 82.2 24.1 30.1 -5.5

51904 54133 20344 7866 4085 507 138839

46707 51322 19130 7219 3530 452 128360

11.1 5.5 6.3 9.0 15.7 12.2 8.2

449161 485190 181021 64562 38073 4147 1222154

409918 481235 169372 59505 34975 3946 1158951

9.6 0.8 6.9 8.5 8.9 5.1 5.5

2054 95 452 277 226 113 0 3217

1669 91 219 198 108 121 0 2406

23.1 4.4 106.4 39.9 109.3 -6.6 #DIV/0! 33.7

15629 1239 3435 2586 1525 924 0 25338

15075 1016 1571 2050 1003 733 0 21448

3.7 21.9 118.7 26.1 52.0 26.1 #DIV/0! 18.1

382 463 153 302 454 205 333 62 208 96 0 91 0 12 1 0 17 2779 160 192318

306 504 138 144 482 152 259 70 56 64 0 125 0 40 1 0 29 2370 105 180289

24.8 -8.1 10.9 109.7 -5.8 34.9 28.6 -11.4 271.4 50.0 #DIV/0! -27.2 #DIV/0! -70.0 0.0 #DIV/0! -41.4 17.3 52.4 6.7

2909 3344 1276 2403 5090 1530 3072 631 1798 627 0 819 0 130 15 0 210 23854 1205 1702445

2406 3495 1101 1812 4469 1533 3100 740 1329 594 0 930 16 215 16 0 239 21995 1240 1658604

20.9 -4.3 15.9 32.6 13.9 -0.2 -0.9 -14.7 35.3 5.6 #DIV/0! -11.9 -100.0 -39.5 -6.3 #DIV/0! -12.1 8.5 -2.8 2.6

Lucknow, Varanasi, Tiruchirapalli, Managalore and Coimbatore airports declared as International airports vide Notification No.AV.24032/10/2012-AAI dated 22

Source: AIRPORTS AUTHORITY OF INDIA

April 2014

October, 2012 by Ministry of Civil Aviation, Government of India.

RNI No. DELENG/2011/387546

GROUP

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SA Consultants & Forwarders Pvt. Ltd. SA Cargo Services Pvt. Ltd. SA Aviation Pvt. Ltd. SA Travcare Pvt. Ltd.

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L2, Kanchanjunga Building, 18, Barakhamba Road, New Delhi - 110001

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