C&L by Newsline

THE NE W S I L K RO U TE BR I NGS CH I NA C L OSER TO E U RO P E Volume III n No 3

may 2014 I `60

c a r g o

l o g i s t i c s

THE SEARCH FOR

ONE WINDOW

There is a need to overcome obstacles through a single window – especially the proliferation of documents – since country-specific regulations and operational requirements slow down the process of international trade and transport. Maharaja gets a cargo boost

Air India’s cargo business – in slumber for 2 March 2014 quite some time – is looking up

India is the target

Air France KLM Martinair Cargo announces another freighter flight touching Mumbai

managing EDITOR’s NOTE

Knowledge is power – even for shippers

oo many things happened at around the same time. Even as the world continued to emerge from the shadows of the economic slowdown, capacity was built up. All with the hope that once the situation got back to normal, shippers would not have to look around. The question then that many in the cargo and logistics industry have been asking is: Do we have the knowledgeable staff and technology to make the movement of cargo cost effective and reliable. Indeed, the downturn that began in 2008 created huge challenges for forwarders and their customers. In India, the situation was even more acute. Unlike the developed nations, we were still trying to find our way around with our infrastructure even as we looked at growth. Air cargo, for instance, saw reduced demand which in turn led shippers to ask for lower rates and slower modes of transport. On their part, forwarders offered options on various modes of transport. It all boiled down to people. The forwarding business is woven around people and technology. So, to be successful in this business, it is essential to find people who have the right knowledge. Also, since the forwarding industry is based on the expertise of people and leveraging of personal relationships, there are few obstacles to entry. Perhaps, that is why there is a dearth of knowledgeable people. While understanding the various modes of transportation, freight handling and warehousing are essential, equally useful is the knowledge of Customs regulations, banking, hazardous material rules and security requirements. Only then can this business be successful. In today’s businesses, the emphasis is on simplification. And as forwarders become focused to e-freight, there is a need for people who are versed in the technology to handle the task. Fortunately there are many software vendors offering suitable solutions for any sized company. In addition, the move to cloud-based systems are gaining in popularity because they tend to be more secure and do away with expensive mainframe hardware. Are forwarders capable of understanding and utilizing the new technology. As a senior member of the forwarding community remarked, “Technology can make smart companies more efficient, but it can’t make stupid companies smart. It’s all about how IT systems deliver value to the shipper.” It is at this juncture that the air cargo industry received welcome news that The International Air Cargo Association (TIACA) had announced a summer launch for its new air freight-specific ed-

ucational workshop series. The three-day Air Cargo Professional Development Program has been tailored for the air freight logistics industry to develop management and decision-making skills, including financial analysis and marketing, along with team-building leadership expertise. It is not without reason that Doug Brittin, TIACA Secretary General mentioned that the new programme would address the specific needs of the air freight industry and would provide students the practical information and skills they need to succeed on a day-to-day basis. The programme is the result of a strategic collaboration between TIACA and Strategic Aviation Solutions International (SASI), and aims to fill the management knowledge-gap identified in a report released by a TIACA-led Education and Training Task Force in January this year. The report, based on a two-year study headed by TIACA’s Education and Research Committee (ERC) in conjunction with the International Air Transport Association (IATA), the International Federation of Freight Forwarders Associations (FIATA), and the International Civil Aviation Organization (ICAO), concluded that focused courses were needed to teach vital “soft skills” in order to avoid a leadership crisis in the industry. There will, however, be a leadership crisis but that will be right at the top. With the resignation of Des Vertannes, IATA’s head of Cargo, the air cargo industry will lose not only one of its prime movers but also one who has made a difference. He ushered in e-freight, set up GACAG, set the tone for a friendly relationship with FIATA, gave ground handlers a voice and much more. The gentleman that he was, Vertannes had this unique ability to motivate people and he did so with earnestness and depth of experience – having spent a lifetime in air cargo. While bidding goodbye to Des, it is only proper that we hail another industry veteran. Jacques Ancher was recently inducted into TIACA’s Hall of Fame. The 49th air cargo executive to be awarded the honour, Ancher – his career spanned 40 years with KLM with more than 17 years solely with air cargo – has been recognised as a “true business innovator, unafraid of taking risks to demonstrate the need for change if cargo was to remain relevant to scheduled passenger airlines”, according to Michael Steen, chair of TIACA’s Chairman’s Council. Here’s wishing Des Vertannes good-bye and congratulations to Jacques Ancher, we hope you like this issue of C&L. As always, we welcome your comments and suggestions. tghosh@newsline.in May 2014

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

contents

C&L

Volume III n No 3

Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH Consulting Editor ramesh kumar Senior Sub-Editor-cum-Reporter punit mishra Sr. Proof Reader Rajesh Vaid

Cover Story

p25

Regulations and operational requirements of different countries often slow down the process of international trade and transport. What are the difficulties in connecting the logistics world and what are the ways forward to simplify the documentation process in the supply chain

focus

p10

The battle between ACAAI and IATA related to the Cargo Accounts Settlement System has ended for the time being but is it really the end?

SPECIAL REPORT

Correspondents anjana tanwar, naveed anjum, charchit singh 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 Vice President (Business Development) Vinod kaul

The slumbering cargo division of Air India has woken up and has been able to make a mark and contribute to the carrier’s bottom line.

SPOTLIGHT

p16

Vice President of Air France KLM Martinair Cargo announced the launch of another freighter flight touching Mumbai and outlined how important India was for the carrier.

NEWS IN BRIEF

Cargo volumes handled at Bengaluru airport in 2013-14 grew by 7.0 per cent compared to 2012-13. In land section increase in freight traffic of Indian Southern Railways.

Subscription Geeta jena, juhi rohilla Distribution Pankaj Kumar, bhusan kumar, sandeep kumar Executive Director renu mittal For advertising and sales enquiries, please contact:

+91-9810030533, 9810159332 Editorial & Marketing office: News Kingdom Media Pvt. Ltd., 20, Nizamuddin West Market, Nizamuddin West, New Delhi –110 013, Tel: +91-11-41033381-82 All information in C&L is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket- IV, Mayur Vihar Phase–I, Delhi–91 and printed by him at Nutech Photolithographers, B–240, Okhla Industrial Area, Phase–I, New Delhi–110020.

Cover Design

Ajay Negi

May 2014

Cargo & Logistics just in time

Rise in cargo growth brisk business: An outside view of Hyderabad Air Cargo terminal

ir freight market again witnessed a marginal rise of 5.9 per cent compared to a year ago while also seeing a 3.4 per cent rise in capacity, according to the latest data released by International Air Transport Association (IATA). “Cargo markets had a boost in the last quarter of 2013, but have now levelled off. It is a competitive industry with growing capacity chasing weak demand. The business cycle will eventually swing upwards. But the air cargo industry also needs to improve its value proposition if it is to attract growth when markets improve. Modernising air cargo processes and infrastructure offers the potential to cut end-to-end shipping times by up to 48 hours. We cannot let market doldrums hold us back from this critical competitive gain,” said Tony Tyler, IATA’s Director General and CEO.

Regional analysis in detail: Ø Asia-Pacific carriers grew 6.9 per cent compared to a year ago. Some of the March growth will reflect a resumption of business activity after the break for the Lunar New Year. Ø European airlines expanded by 5.1 per cent compared to March 2013. Measures of business activity in the Eurozone have been pointing to continuous expansion since mid-2013, which is expected to be maintained. Capacity expanded just 1.3 per cent, strengthening

May 2014

load factors. Ø North American carriers grew 1.9 per cent year-on-year. The slower growth could be a reflection of the weather-related disruption in the first quarter of the year. Business fundamentals in North America are strong, which should support greater air freight volumes in coming months. Capacity declined by 0.3 per cent. Ø Middle Eastern carriers saw a 13.2 per cent year-on-year rise in FTK volumes. This strong performance comes on the back of airlines taking advantage of growth in both developed and emerging markets. Carriers in the region are expanding their networks and services, broadening the range of goods they transport. Capacity grew just 4.7 per cent, taking the load factor to nearly 50 per cent. Ø Latin American air freight volumes were flat. Trade in the region deteriorated in early 2014, which could explain the slowdown. Capacity rose by 2.3 per cent, weakening the load factor. Ø African airlines expanded 5.9 per cent compared to March 2013. Growth in the region remains volatile, but the average for the first quarter was an expansion of 1.5 per cent. Growth has been affected by a slowdown in the South African economy. Capacity grew broadly in line with demand, at 5.5 per cent.

Lessons for air freight

major takeaway from the recent Nordic Air Cargo Symposium in Stockholm was the demand by shippers to commoditise air freight. That would be in tune to the needs of customers for simpler pricing and quicker quotations, according to a report from Lloyds Loading List.com. Logistics managers from a number of companies that included Ericsson and Volvo, among many others, pointed out that they would willingly go for air freight if they could have immediate access to tariffs of moving by air. There was also a demand that if air carriers could make their prices available to customers as passenger airlines had done, it would help exporters and all those who wanted their goods to be moved by air. A logistics manager even went to the extent of saying that he had been frustrated when he wanted to get quotes from carriers simply because ‘different air freight suppliers’ systems were “not even able to agree on the distance between two airports”‘. The report also mentioned Robert Mellin, Head of Distribution Logistics at telecommunications specialist Ericsson, who said that the growth of e-commerce meant shippers were receiving smaller and more-frequent orders that could increase their use of air freight, but the lack of standardised pricing for air freight meant it was difficult to give accurate quick quotes. There was, therefore, a call for “increased commodification of price structures across the industry so it is easier for us to procure air freight services”.

gac logistics Pvt. Ltd. One Company All Solutions • Air Freight • Ocean Freight (FCL/LCL) • Export and Import Consol • Custom Clearance • Project Cargo • Warehousing (Bonded and Normal) • Distribution

Head Office (DELHI) GAC Logistics Pvt. Ltd. B301, Ansal Chamber-I, 3 Bhikaji Cama Place New Delhi - 110 066 Tel: +91 11 26160470/71/72, +91 11 43439999 Fax: 91 11 26160473/26178196 Mob: +91 9711856949 (for Import) +91 9899701132 (for export) Email: info@gaclogistics.in Website: www.gaclogistics.in

Branches: New Delhi * Mumbai * Bengaluru * Chennai * Hyderabad * Kolkata * Jaipur * Visakapatnam * Coimbatore * kanpur * Lucknow * Panipat

Multimodal Transportation Logistics

Cargo & Logistics just in time

No more Antonovs?

Dmitry Kiva

he Ukrainian government announced in the middle of April that it had fired Dmitry Kiva, the head of the Antonov Design Bureau at Kiev-based Antonov Air-

lines. Kiva had almost full control over the Ukrainian AN-124 sales programme and was seen as being one of the key lobbyists for a close cooperation with Russia on the

AN-148, AN-70 and update of the AN-124 aircraft. He was also a working partner with Volga-Dnepr Airlines that has put in efforts to produce the updated AN-124 transporter. The Antonov Design Bureau chief’s activities were closely linked to the Russian aviation industry. In October last year, he was at the Aerospace Salon MAKS at Moscow where he signed a long-term agreement with the Governor of the (Russian) Ulyanovsk Region, Sergey Morozov, for after-sales services of Antonov’s various aircraft programmes and promote joint initiatives for the production of future cargo and passenger planes. At the Paris Air Show in Le Bourget in June 2013, Kiva had spoken out about a modernised Antonov-124 freighter programme. With its payload capability of 150 tons, “the new An-124 will be a transporter hardly any other aircraft will surpass in foreseeable times,” Kiva had said. He strongly supported political initiatives to assemble the An-124 successor at the Ulyanovsk-based manufacturer Aviastar.

LH Cargo initiates a new stream K

arl Ulrich Garnardt, Lufthansa Cargo’s Chairman and CEO, made a startling announcement at the recent Nordic Air Cargo Symposium in Stockholm. He said that they were “on the lookout for oil and gas”. The initiative was not to source “oil and gas” but a focus on the Oil and Gas industry in Scandinavia. LH Cargo’s Scandinavian team will coordinate with LH cargo experts around the world to offer tailor-made solutions for the oil and gas industry. There will be a dedicated Oil & Gas team under Wouter Boekee, LH’s Key Account & Business Development Manager Oil & Gas, at Oslo. He will work with specialised sales representatives at oil and gas hubs around the world. The team will work out best ways to put into effect customised solutions for the transport of equipment and spare parts according to the oil and gas client’s require-

May 2014

Karl Ulrich Garnardt

ments. LH Cargo will have specialists at Vancouver, Aberdeen, Amsterdam, Baku, Houston Rio, Lagos, Dubai Seoul and Singapore. This, according to Lufthansa Cargo, will provide the necessary worldwide oil and gas coverage and enable the airline to address emergency situations and design customized transportation solutions to remote areas in cooperation with forwarding partners. While Lufthansa works with Chapman Freeborn for chartering of “additional cargo capacity” out of Scandinavia since it has no freighter flights to that country, it is to be seen whether LH Cargo will start scheduled widebody freighter services in the market to become the “carrier of choice” for the oil and gas sector stakeholders. However, the project is still taking shape and it will be quite a while before operations start.

t fastes ient c i f f e most ctive e f f e t cos

Mission: “To achieve customers requirements within its time frame”

• Air Freight • Sea freight • Warehousing and Distribution • Customs policy related Consultancy and Insurance • Consolidation

Scorpio Freight Pvt. Ltd. 119, Kirti Shikhar Building, District Centre, Janakpuri, New Delhi-110 058 (INDIA) E-Mail: info@scorpiofreight.com

Trust • value • commitment

Cargo & Logistics FOCUS

iata WINS IN CASS CASE In a vindication of sorts for the International Air Transport Association (IATA), the country’s Competition Appellate Tribunal (COMPAT) has recognised that IATA’s Cargo Accounts Settlement System (CASS) operates within the bounds of India’s competition law. The order from the Competition Commission of India (CCI), came following an injunction on CASS by ACAAI. A report

kirmishes between the Air Cargo Agents Association (ACAAI) and the International Air Transport Association (IATA) are not new. The latest round was seen at an international air cargo meet in Mumbai when a discussion on CASS (Cargo Accounts Settlement System) of IATA came up. In fact, the war of words that ensued was rather heated. The see-saw battle between the two bodies has seen complaints and counter-complaints. The latest – in what can be seen as a vindication for IATA – points out that CASS operates within the bounds of India’s competition law. ACAAI, incidentally, had filed a complaint with the Competition Commission of India (CCI) apprehending that “many of the working conditions of the International Air Transport Association which were forced upon the business of air cargo agents might fall under cartelization”. ACAAI was concerned that the implementation of CASS would be prejudicial to the air cargo agents and therefore had to be stayed till the investigation by CCI was concluded. The CCI, after going through the complaint and investigating the matter, delivered its order on March 25, 2014. The Competition Appellate Tribunal’s (COMPAT) order states that it recognises that CASS operates within the bounds of India’s competition law. COMPAT’s order upholds the order by the Competition Commission of India in July 2013. With the order, COMPAT has disposed of an injunction on CASS by the Air Cargo Agents Association of India (ACAAI) following ACAAI’s withdrawal of their appeal. In its recent order, COMPAT validated that:

May 2014

•

CASS leads to efficiencies in the airline-cargo agent relationship • Participation of airlines and cargo agents in CASS is voluntary, with agents and airlines free to bill and settle amounts as bilaterally agreed outside the CASS. COMPAT’s order upheld the CCI’s conclusion in July 2013. In its order, CCI acknowledged that: • Airlines and agents are not mandated by IATA Resolutions to participate in CASS • The modalities of CASS do not raise any competition concerns • The use of modern technology to make systems more effective and responsive is common and also desirable.

ACAAI in its petition, inter alia, had submitted that in the light of the provisions of the Competition Act, 2002, the existing functioning and modalities of IATA in India could amount to complex phenomena of cartelisation both on ‘micro’ and ‘macro’ economic operational processes and, hence, may be in violation of Section 3 and 4 of the Competition Act, 2002. ACAAI did not want to find itself in a situation where, for any reason, if IATA was found to be indulging in any anti-competitive practice

in India, ACAAI would be construed as an unwitting collaborator acting in concert with such practices whether voluntarily or otherwise”. In its letter to CCI, ACAAI asked the Commission to examine the factual situation “regarding a chain of activities such as unilaterally determining the polices that govern air cargo agents, prescribing the qualification and conditions for the accreditation and retention of air cargo agents, acting in a self-acclaimed regulatory capacity, determining the commission (or its exclusion, for example, in recovering fuel surcharge on behalf of the airlines) payable to agents, determining norms for air cargo agents, and institutionalising IATA in its various operational bureaucracy would all amount to macroeconomic cartelisation. It was further pointed out that determination of financial criteria, penalty for non-compliance, exclusion of fuel surcharge from payment of commission to agents as set out above, etc., which prejudicially affected the air cargo agent so far, would amount to microeconomic cartelization”. On its part, IATA has emphasized that it will continue to work with the cargo community in India to enhance its efficiency and competiveness. India is expected to be the tenth-largest market by international freight handled by 2017. In order to derive maximum economic benefits from the anticipated traffic growth, the Indian air cargo community, IATA feels, needs to modernise its processes and enhance its efficiencies. CASS is a tool available for airlines and cargo agents and it simplifies the billing and settling of accounts between airlines and cargo agents. Operational in 81 countries around the world, including Australia,

FOCUS

Austria, Bangladesh Belgium, Denmark, France, Italy, Norway, the Netherlands, Pakistan and the United Kingdom, more than 240 airlines and over 80,000 agents at 14,000 locations around the world participate in CASS. IATA has also pointed out that the benefits of participating in CASS include: • Streamlined invoicing and collection of sales revenue processes • A neutral settlement office • Total flexibility to manage data centrally or from any field office with CASSLink, a web-based application • Elimination of loss of invoices or failure to deliver through electronic production and distribution. • Enhanced financial control • Reduced personnel and administrative overhead costs associated with outsourcing activities. Since the launch of the CASS India Pilot in May 2013, IATA informed that there has been an increase in the number of participating cargo agents, with more airlines

and agents expressing active interest to participate. Training sessions for CASSLink, the web-based application, have been held in Delhi, Mumbai, Bengaluru and Chennai. Requests for additional training sessions have been received and such training sessions have been planned for the rest of the year. There have been no comments yet from ACAAI. CASS, incidentally, had not been widely accepted in India because most of the small freight forwarders in the country felt that the system was partial to the carriers and did not allow them to take a fixed commission. According to top office-bearers of ACAAI, some multinational companies that are members of ACAAI have been involved in the CASS pilot project, but were unhappy with it. Even the President of ACAAI, S L Sharma echoed similar sentiments. When asked how many ACAAI members had joined CASS, he said he did not know and

he was not aware of any. ACAAI also pointed out that while CASS claimed to improve their cash flows “as the CASS rate of success in collecting funds is virtually 100 percent in other jurisdictions, it is imperative to mention that in India, the success rate in agent payments to airlines has remained at virtually 100 per cent over the last 40 years without CASS. Much of this is accorded to the responsible behaviour of the cargo agents, who have invested their own funds to pay the airlines on time and in full, regardless of the delays and defaults in payments from the shippers, who in fact are the airlines’ customers,” ACAAI said. IATA, however, held a different view. According to Amitabh Khosla, Country Director-India, “CASS was introduced under Resolution 851 and every change to the Resolution was discussed within the IATA/ FIATA Consultative Council, of which ACAAI is a long-standing member.” n May 2014

Cargo & Logistics

Top grossers around the world The global economy continues to remain in a vulnerable state as we move forward into 2014. While many of the advanced economies have experienced varying degrees of recovery, the ongoing risks in the euro area and fiscal imbalances in the United States, have slowed down the global economy. As a result, air cargo has only moved ahead slightly. A look at how the top 30 airports around the world have fared.

LOUISVILLE KY

2.2%

2, 216,079 mt ANCHORAGE

-1.7%

2, 421,145 mt

irports Council International (ACI) recently released the preliminary passenger traffic results for 2013. Based on reports from over 1105 airports worldwide, the report shows that the top six ranked positions with respect to the worldâ&#x20AC;&#x2122;s busiest airports remained unchanged as compared to the previous year. Although Atlanta (-1.1 per cent) remains the worldâ&#x20AC;&#x2122;s busiest airport, Beijing (+2.2 per cent) continues to close the gap in second position. London-Heathrow (+3.3 per cent) remains in third while Tokyo-Haneda (+3.2 per cent) preserves fourth position. Chicago-Oâ&#x20AC;&#x2122;Hare (+0.2 per cent) and Los Angeles (+4.7 per cent) maintain fifth and sixth ranks, respectively. One of the fastest-growing airports in the world is Dubai, moving from 10th to 7th rank. Dubai passenger traffic grew by over 15 per cent in 2013. Istanbul (18th rank) and Malaysia (20th rank) were two other airports experiencing double-digit growth rates, increasing by 13.6 per cent and 19.1 per cent, respectively. While passenger traffic remained resilient in the face of the global uncertainties and downside risks that beleaguered many economies in 2013, air cargo inched up only slightly by 0.7 per cent. The volume of air cargo has remained at essentially the same levels over the last three years. Most

May 2014

7 6 2

MEMPHIS

4,137,801 mt

PARIS

-3.8%

2, 069,200 mt

... And the others CARGO (Metric tonnes) Loaded and RANK AIRPORT

INCHEON

0.3%

2, 464,384 mt

FRANKFURT

1.4%

2, 094,453 mt

3 1

DUBAI

6.8%

2, 435,567 mt

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

HONG KONG

2.3%

4, 161,718 mt

4 10

TOKYO

0.7%

2, 019,844 mt SHANGHAI

-0.3%

2, 928,527 mt

unloaded MIAMI FL, US (MIA) 1 945 012 SINGAPORE, SG (SIN) 1 885 978 BEIJING, CN (PEK) 1 843 681 LOS ANGELES CA, US (LAX) 1 747 284 TAIPEI, TW (TPE) 1 571 814 AMSTERDAM, NL (AMS) 1 565 961 LONDON, GB (LHR) 1 515 056 GUANGZHOU, CN (CAN) 1 309 746 NEW YORK NY, US (JFK) 1 295 473 BANGKOK, TH (BKK) 1 236 223 CHICAGO IL, US (ORD) 1 228 791 INDIANAPOLIS IN, US (IND) 991 953 TOKYO, JP (HND) 954 446 SHENZHEN, CN (SZX) 913 472 DOHA, QA (DOH) 883 264 LEIPZIG, DE (LEJ) 878 024 COLOGNE, DE (CGN) 717 146 KUALA LUMPUR, MY (KUL) 713 254 ABU DHABI, AE (AUH) 712 488 OSAKA, JP (KIX) 682 338

% change

0.8 0.8 2.4 -1.9 -0.4 3.6 -2.6 4.9 0.8 -8.1 -2.0 6.4 4.9 6.9 4.6 3.8 -1.8 1.6 24.1 -5.6

regions remained relatively weak in relation to year-over-year growth rates with the exception of the Middle East (+5.1 per cent). A third of the world’s top 30 busiest cargo airports experienced declines in 2013. “The airport that really makes its mark in 2013 is Dubai (DXB),” said ACI World’s Economics Director Rafael Echevarne. “Aviation’s nucleus appears to be moving eastward. With double- digit growth rates in passenger traffic for 2013, Dubai is likely to move up several spots again in the 2014 rankings, solidifying its status as the major hub connecting the east and west. Other emerging markets such as Turkey, China and South East Asia that have a critical mass of traffic also remain major contributors to the upward surge in air transport demand. This trend will continue into 2014.”

May 2014

Cargo & Logistics Numbers

5,000

km contracts from NHAI

he National Highways Authority of India (NHAI), after a dismal show in 201314, is planning to award about 2,000 kilometer (km) through cash contracts, or engineering, procurement and construction (EPC) mode, and is ready with 3,000 km to be bid via the public-private partnership (PPP) mode. They have informed the highways ministry of their targets for 2014-15 but awarding projects on the EPC mode can

`495 A

only take off if NHAI is able to acquire 90% of the land. In addition, the final award on PPP mode would depend on the market response, which has been poor of late, and may need to be converted to the EPC mode if no bids are received, NHAI officials said.

ANALPINA increased its airfreight business by three per cent last year, beating the market’s one per cent growth. It transported some 24,000 tonnes more, reaching an annual total of 825,000. At the same time, increasing competitive pressure led to gross profit per tonne decreasing by

May 2014

merican Airlines Cargo and US Airways Cargo, the freight arms of the merged American Airlines Group, recorded an airfreight increase of 11.2 per cent to 213.4 million tonnes in March 2014. The US carrier’s year-over-year combined results were also positive, handling 560.7 million tonnes – up 12.1 per cent on the same

period in 2013. “The company continues to outperform major US competitors in year-overyear cargo traffic,” a statement said.

crore land acquisition for port

report relating to the land acquisition for the deep water port project at Machilipatnam was submitted to the Andhra Pradesh Lokayukta and the State government by Krishna District Collector M. Raghunandan Rao. It would cost

24000

11.2

per cent rise in AA Cargo

about `495 crore to acquire the land. The total land to be acquired for the project would be 5,277 acres, including 937 unsurveyed land and 2,489 acres of patta land in Machilipatnam mandal, according to the report. The land falls under the lim-

tonnes more airfreight approximately two per cent. In total, gross profit realised through airfreight services posted a small increase of 0.5 per cent to US$720 million in 2013. The Swiss company has an expanding network of 500 branches in more than 70 countries and partners in 90 additional countries.

4.16 J

its of Manginapudi, Tapasipudi, Gopuvanipalem, Karaagraharam, Chilakalapudi, Bandar East Revenue villages in Krishna district. It is estimated that over `43 crore will be required for resettlement and rehabilitation of the 563 families.

mn TEUs handled by JN Port

awaharlal Nehru (JN) Port handled 4.16 million TEU (Twenty Foot Equivalent Unit) in its financial year from 2013 to 2014, accounting for 57 per cent of the total contain-

er throughput handled by the nation’s major ports. The port handled 62.35 million tonnes (mt) of cargo over the reporting period, 3.3 per cent lower than the 64.49 mt handled the last year. Of the total, the share of containerised cargo was 55.24 mt, liquid cargo 6.29 mt and the remaining 0.82 mt was made up of miscellaneous cargo in the form of dry bulk and breakbulk.

Numbers

11,000

timber logs from Yangon

ew Mangalore Port (NMPT) received big ship, M V Riva Wind, carrying 11,000 imported timber logs weighing 53,533 tonnes from Yangon. “New Manga-

1.4 K

ochin Port handled 208.9 lakh tonnes of cargo in fiscal year (FY) 2014, up 5.25 per cent over the throughput of 198.4 lakh tonnes registered in the previous fiscal year. The handling of break-bulk cargo (including timber) improved by 40.8 per cent while bulk cargo (including cement) grew 17.2 per cent. Oil cargo, the major component of the port, was also 3.1 per cent higher than

per cent increase in K+N volumes

UEHNE+NAGEL saw airfreight volumes increase 1.4 per cent in the 2014 first quarter to 285,000 tons, although divisional air cargo turnover fell 0.9 per cent. The Switzerland-based logistics operator said that the volume increases in air cargo were mainly realised in Europe and North America, while in Asia, Middle East and Africa

4,773

lore Port is handling timber logs, one of the major traditional cargoes of the port since 1984”, said a release by NMPT. In 2013-14, the port handled 3.13 lakh tonnes of timber logs as against 2.47 lakh tonnes in the last year, a growth of 27 per cent. Over the years, the port has introduced innovative methods for safe and efficient handling of the logs.

per cent tonnage hike at Cochin port

tonnage declined in comparison with the first quarter 2013. K+N’s airfreight volume increase was slightly below the

market’s estimated average benchmark increase of 2-3 per cent in the first three months of 2014. The division’s conversion rate (EBIT-to gross profit-margin) improved from 24.2 per cent in the first quarter 2013 to 28.3 per cent. to increase in 2014 as Surat Airport is expected to be connected to more destinations including Kolkata.”

tons handled by Trichy airport

richy International Airport handled record cargo clocking a 63 per cent growth in cargo handling during 2013-14

to top non-metro air cargo terminals in the country in terms of volume. The terminal handled 4,773 tons of cargo during

2013-14 as against 2,920 tons in the previous year, an official release said. The terminal handled commodities like assorted vegetables, fruits, flowers, garments and medicines exported to Singapore, Kuwait, Hongkong, Sydney and Melbourne while the import cargo consisted of household goods, electronic items and chemicals among others, Officiating Airport Director K Jebaraj said.

in the previous year. Container handling grew by 3.4 per cent during the period. The port registered a growth of 9.3 per cent in stuffing/destuffing of containers at its container freight station (CFS).

6.29 per cent cargo growth at New Mangalore

he New Mangalore Port recorded a growth of 6.29 per cent in cargo handling during financial year 2013-14. The port handled 39.36 million tonnes (mt) of traffic, as against 37.03 mt in 2012-13. The port handled 14.94 mt of imported crude oil for Mangalore Refinery and Petrochemicals Limited (MRPL), which exported 7.85 mt of petroleum products through the port during the period. The total import of LPG by Hindustan Petroleum Corporation Limited and TotalGaz through the New Mangalore Port, however, fell to 1.48 mt during the year. The number of containers handled at the port crossed the 50,000 TEU (twenty-foot equivalent units) mark during the year. The port handled 50,126 TEUs of containers during 2013-14. May 2014

Cargo & Logistics SPOTLIGHT

“Our target in India is to optimise the capacity” Air France KLM Martinair Cargo Vice President, Asia & Middle East, Christophe Boucher was in India recently to announce the launch of another freighter flight touching Mumbai and future plans. A report from Tirthankar Ghosh

ir France KLM Martinair Cargo had revamped its dedicated freighter operations in India. On one hand, it had stopped flying to Delhi and, on the other it has added more capacity in Mumbai in the hope of ushering in more profitability from the Indian operations. The move comes on the heels of the group’s freighter operations losing money in 2013: the freighter business had a $281 million loss in 2013 that had prompted media stories about the group putting down the

May 2014

shutters on its global freighter operations. The move, in fact, puts an end to speculation in the media that Air FranceKLM was planning to leave the dedicated air freighter business. On a recent visit to India to announce the launch of another freighter flight touching Mumbai, the Singapore-based Christophe Boucher, Vice President, Asia & Middle East, Air France KLM Martinair Cargo, pointed out that no decision had been taken to end the freighter services even though operating full freighters were not profitable.

He was, however, quick to add that “India needs to be near the top of our freighter network”. Boucher along with Stanislas Brun, Director for India, Nepal and Bhutan, and Manvendra Singh, Regional Cargo Manager, West and Central India, mentioned that the group was starting a new set up for the full freighter operations in the summer schedule of 2014. Admitting that the freighter operations of the group were going through difficult times, Boucher exuded optimism since the first few flights were quite full: “We have decided not only to maintain but reinforce the presence of full freighters in India. The first few flights have been full,” said B o u c h e r. Excerpts from his conversation:

SPOTLIGHT More freighter capacity in India It’s quite important for us this period for India not because it’s election time but also we are starting a new setup for our full freighter. Probably you are aware that not only for Air France-KLM but overall running full freighters is not something easy. Running them is quite okay, but making them profitable is quite a challenge. So we have worked together — the Air FranceKLM team from this market and the Hong Kong market — in order to see what kind of setup we can bring to try to make our freighters as profitable as possible. We were earlier flying into Delhi. We do not fly this full freighter to Delhi any more, but we fly four times a week Hong Kong-Madras-Mumbai to Amsterdam and, of course, from Amsterdam, serving the whole of Europe and serving all of the network of KLM mainly from Amsterdam but also if need be the network of Air France because we can easily truck to Paris. So, that’s the new setup. We have high hopes that it will bring more profitability. The first flights are full, which is nice. The issue that we have overall again as an industry is not to fill this full freighter but to get the right cargo on board at the right rate. So, it’s about finding the right mix of products. Of course, pharmaceutical is very important but we also try to have mail on board, courier on board … all kinds of products that we can get. There is also a good mix of cargo in terms of density because that is also the name of the game. We would like — once these freighters are full – to try to increase the rates as much as the market deserves it. That’s what we need to do in order to make these freighters more profitable. That’s going to be the challenge. That’s also the reason why we are trying to visit our customers and try to promote these full freighters along with the passenger aircraft that we have. It gives us the opportunity to ask the different markets in India to compete because we have Madras and we have Mumbai that is going to get on board. It’s also going to depend on what kind of revenue we can get from each of the markets. Of course, we would have long-term

full loads: A KLM freighter being loaded

and if we combine the flows that we have from Hong Kong-India, from India into Europe or beyond, that’s quite good for the profitability of the flight. There is a strong investment from our side. We still believe that in spite of the difficulties of the full freighter, we can do something with our full freighters in India. That will be one of the targets in the coming months.

“We have decided not only to maintain but reinforce the presence of full freighters in India. The first few flights have been full,” said Christophe Boucher.

commitments for some of the capacity, but the rest would go to the best paying cargo that will be able to get on board. We believe that the combination of Hong Kong together with India is quite a good one. We have flows between Hong Kong and India

Concentration on pharma Our focus will be on the pharmaceutical products and the different level of pharmaceutical products…of course, active temperature control and also passive temperature control. For the rest of the cargo, we also have a lot of pharmaceutical — that is more or less normal cargo. That cargo will have to compete with the rest to get on board. We have this clear focus: to further develop the pharmaceutical business that we have. We have dedicated people working on pharmaceutical — to make sure that we have the right level of expertise to deal with — and also have a good understanding of what the shippers expect in terms of quality as far as pharmaceutiMay 2014

Cargo & Logistics SPOTLIGHT cal is concerned. Again it’s not only about pharmaceutical, it’s also about having the right mix of cargo into our planes. One of the key issues for us will be — probably like most of our competitors — to get the right rates on board. As I was saying, we see a good first quarter of the year especially a good March, but the beginning of April is also pretty good. That’s quite a good signal that we have. We expect to increase the rates as much as we can in order to again get the best out of the market. We are not trying to make much profit but enough to be able to say that flying in Asia with full freighter is still competitive. The freighter business You may have heard that there are some questions about what we should do on the full freighter fleet of Air France-KLM… yes the question is there. We have been losing money on the full freighter for quite sometime now. So the question is clearly there. We would have an answer probably in the coming months on the final setup for the full freighter. What we are sure is that what we are aiming at with the team in India is to get the best possible results so that when the time comes we can say, ‘Okay, we are going to keep on flying freighters and where do we fly?’ We are going to compare the profitability of these flights that we have in India with the ones that we fly in America or South Africa. Then we have to be — if possible — not at the bottom of the list but more at the top of the list. So, that’s also internal competition which is good within our network to see who is going to be the best in the future. Proactive with customers That’s for the revenue side. On the quality side, something is very important. We are trying to be the preferred carrier for our customers. That’s something that we are working on with the team. We had a meeting where the topic of customer preference was discussed. This, we believe, is very important: being able to give quotations quickly and, of course, very sharp. We have to find the balance between sharp and profitable, but being quick and being

May 2014

growth path: Air France-KLM is keen to give its freighter business more technological push

proactive with our customer is something that is very important for us. Another thing that we are trying to develop is e-business. So, the two aspects of it that we are trying to develop are the e-Airwaybill and try to get rid as much as we can of the paper-Airwaybill. It looks very easy but it is not that easy because we have our own system. Each of our customers have their own system and we have to find the right process and the right interface between the systems that works. So, we have to go step-by-step. That’s something that we definitely want to emphasize this year. That will take time but we will put some resources, time, and energy into that. Talking about e-development, we already offer our customers what we call Click ‘n Book. I told you that our target was to react quickly when we receive a quotation. Not only do we try to react

quickly but we also try to react with the right level of rates and when we want to offer that rate to the customer, we send a PDF file to the customer, so that there is something in writing and there is no miscommunication. And if the customer wants to book, once he agrees to get our offer, he just has to click. In two clicks, he can book on Air France or KLM. We are very proud of that one. I think not everybody is offering that. That’s very simple, easy, down to earth kind of progress that will allow us either to reduce costs but more than that have more time for our staff to be closer to the customers. India is in the picture with this full freighter set-up. We expect a better rate from India. Our commitment together with a very professional team that we have in India is to improve the quality of service and as much as we can develop and implement the e-Airwaybill process.

SPOTLIGHT freighter footprint that Air France-KLM and Martinair had and where we are now. We have reduced our capacity definitely because this belly capacity from the Middle East carriers or other carriers is driving the price down. And then at one point in time, we were not able to make this fleet profitable. If you look at Air France, we had, I think in 2008, something like 26 full freighters. Now, we have 10 that we are flying. We saw that some of our competitors did something different. They kept on bringing new aircraft. That has not been the policy of Air France-KLM. The policy of Air France-KLM is bellies first. So we have bellies and we have a lot of combies. We don’t have combies in India but in Asia, we keep on having a lot of combies. And we use full freighters to compliment our belly and not fly them for the sake of it. That’s the reason why we have reduced our footprint. If I look at the previous weeks, in terms of load factor we were around 85 per cent out of Asia. Our flights are rather full for the time being. And when your flights are full, the next step is to get even more precise in the way you optimize your flight in order to get the best in, what we call ‘contribution to the network of Air France-KLM’.

Rates and competition with Gulf carriers Rate, of course, is a problem and is an issue. On the other hand, for me, we offer direct services to Europe which all the Gulf carriers are not offering. Our network is more extended and as I mentioned, where we can make a difference is in the customer service: try to be quick, try to have the best professional team … so it’s still a people business. I really believe that if we have the best people to serve the customer, we can still get and we prove it every day because we have a very high load factor. We are able to fill our flights at the present time. But you are right, we have more and more of this belly capacity whether it’s from the Middle East carriers or from other carriers like the Chinese carriers. I am talking about Asia because I am in charge of Asia. We have reduced the number of full freighters that we have. Look at the situation six years ago in terms of full

Focus on high-value products The idea is not to increase capacity tremendously, but the idea is to get a kind of setup where we can optimize the rotation. That’s more the name of the game that we have. We are not going to go for the growth of tonnage of the capacity but get the smart way of operating the aircraft in order to try to optimize the profitability of the flight. That’s the idea. We would like to focus as much as possible on the high-value products…so more active or passive temperature control. That’s what we are aiming at. Of course, in some markets, you also need to do more generic and more general type of cargo and then it will be a matter of comparing this flow with some other flow of other type of equipment. And pharmaceutical is not always paying the most. So, in view of what I was talking about optimization of the flight, sometimes we need this type of cargo and we will focus on that. Sometimes, it will be more a competition between this type of

cargo and other type of cargo but our focus would be more on the added value product where we can sell at the better rate where we can make the difference in terms of the product that we can offer. That’s definitely the idea. Is AF-KLM going out of freighter business? Is there a decision? No. I think if you look at the profitability of the full freighter, then yes, they are not profitable. And I think that in a company that is properly run, yes, you have to ask yourself some questions. For the time being, our target here in India is to optimize whatever the capacity. We have to prove that we can keep on flying this capacity in a profitable way. That’s definitely our target and we hope to be able to keep them in India, but it depends mainly on our ability to prove that they are profitable because if we keep on having the same result, I doubt if the mother company will accept the kind of losses that we had in the previous year. I think they are quite independent to question (our work). At the same time, what is clear is that some of these aircraft are very cargo efficient, which definitely is good on one side because the passenger business is doing better. The result in 2013 was better than in 2012. So, the passenger business will help us to get, not necessarily in India, but overall more capacity on the network. If I look not only at Air France, but the overall situation of cargo, whether it’s because of these aircraft new orders or the belly capacity that we saw, it was a big rose in the past. One of the reasons why the full freighter operators are in trouble now is because of the fact that the growth was not the one we expected on the cargo side, but also because we have all this belly capacity. In a B777300 when you have 10 pallets and 20 tons, that is quite a nice piece of equipment. If you have that on a daily basis, it’s pretty nice. Whatever the decision that is going to be taken on the full freighter, (a fact that cannot be ignored is that) Air France-KLM cargo will offer lot of cargo capacity. But, coming back to the full freighter, our only focus for the time being is to optimise the capacity in order to be able to maintain it in the coming years. n May 2014

Cargo & Logistics SPECIAL REPORT

Maharaja gets a

cargo boost Air India’s financial position received a shot recently, thanks to cargo. If the trend continues – provided the Maharaja overcomes the challenges in the next few months – the national carrier could at least think of getting back the position it held as a cargo carrier not too long ago. A report

ir India has a special reason to celebrate: air cargo is boosting the carrier’s finances. This when the carrier had an operating loss of $351 million (`2,100 crore) and a net loss of $652 million (`3,900 crore) in the financial year that ended on March 31, 2014. Air India has, however, projected that it will be able to pare down its operating losses by 42.85 per cent in 2014-15 since it expects to see its earnings go up from larger number of passenger and higher volumes of cargo. Though no one was willing to go on record, cargo officials said that the carrier had seen “good business” in the last two years. The officials could not quantify the “good business” in Rupee terms because there were no profit and loss figures for the cargo vertical. According to sources in Air India, cargo will bring it 30 per cent more revenue in financial year 2014-15. In the last two financial years (2012-13 and 2013-14), the carrier had cargo revenues totaling $140 million (`835.11 crore) and $155 million (`932.58 crore), respectively. In tonnage terms, 158,220 tonnes in FY 2013 in comparison to 137,000 tonnes in FY 2012. During April-December 2013, Air India transported 131,055 tonnes against 102,013 tonnes carried in the same period of the previous year. Air India flies to 31 international (130 flights) and 62 domestic destinations (277 flights). There is a 70:30 ratio in the international and domestic tonnages, and as the sources pointed out, both have shown healthy growth leading Air India to project

May 2014

nancial problems. Quite a few years ago, higher revenues from the cargo segment. Air India decided to put an end to its cargo The top grosser among the international business which was making losses. At that destinations are London, Frankfurt and time it put up its freighter fleet – all from Paris, with the Far East and Middle East the former Indian – of six Boeing 737-200s following. As for the domestic routes, the for sale hoping to bring in revenue. Before metro cities have been seeing high cargo that, Air India had disposed off four of its growth. Airbus A-310 freighters. The 30-year-old Air India, incidentally, has non-stop Boeings had been converted to freighters flights to the US but they have not been doin 2007 in preparation of a full-scale cargo ing too well as far as cargo is concerned. service with Nagpur as the hub. IncidentalThe Maharaja hopes that the Dreamliners ly, the B737s had been converted at a great — now that these planes have started flying cost and after they were leased out to destinations they were not doin 2007 and 2009, the business ing earlier — will be able to continued to lose money. carry more cargo. In fact, Air India, Air India also started the Dreamliner connects incidentally, has noncargo services with its to a number of metro stop flights to the US own freighters on the cities in the country and but they have not been India-Paris, India-FrankAir India officials hope furt and India-Far East that they will be able to doing too well as far and South East Asia utilise the bigger belly as cargo is conroutes. During the two-year space to move higher toncerned period of operations (2007 to nages. 2009), Air India Cargo incurred Internationally, Air India’s a loss of more than `217 cr. The losses connection with Australia — flights to forced the Air India management to stop Sydney and Melbourne have been in opthe flights of all the freighters in September eration since August 2013 – has seen the 2009. national carrier garnering 17-20 per cent Indian carriers have failed to take admarket share on the route. Come May-end, vantage of the huge potential available. In when Singapore Airlines, the market leader fact, figures show that foreign carriers take with 30 per cent market share on the Delaway 82 per cent of the country’s air cargo: hi-Australia route and 40 per cent share it was 83.1 per cent of the total export trafon the India-Australia route, starts A380 fic in 2009-10, 83.7 per cent in 2010-11 and flights from Delhi and Mumbai. 82.5 per cent in 2011-12. Against this, the The growth in cargo volumes is good Indian carriers have managed to wean away news for the Maharaja. Over the last few only a small percentage: 16.9 in 2009-10, years, Air India has been facing huge fi-

SPECIAL REPORT

back to cargo? Air India planes at Delhi Airport

16.3 per cent in 2010-11 and 17.5 per cent in 2011-12. In domestic cargo, the share of the private carriers put together was 79.8 per cent in 2009-10, 81.4 per cent in 201011 and 83.8 per cent in 2011-12 with Air India’s share declined from 20.2 per cent in 2009-10 to 18.6 per cent in 2010-11 and 16.2 per cent in 2011-12. Opportunities exist aplenty. The country has the potential to become an important hub for international cargo but investment in infrastructure has been holding it back. Over the past few years, most of the investment in air cargo infrastructure has been focused on major international airports like Delhi and Mumbai. Cities like Nagpur, Jaipur or Surat did not see similar kind of investment in infrastructure. This, despite the fact, that Nagpur was being readied as a major multi-modal international cargo hub and airport. Meanwhile, the international airports of Hyderabad, Mumbai, Delhi and Bengaluru – all managed by private promoters – have realised the importance of cargo and have fast-tracked infrastruc-

ture. The airports, for example, have spent considerable effort and investment to set up perishable handling units. Indeed, the moves have paid off: the world class Pharma Zone at the international airport at Hyderabad prompted Lufthansa Cargo to certify the airport as one of its key cargo hubs in South Asia for the transport of temperature sensitive pharmaceuticals. The dedicated Pharma Zone with controlled temperature ensures appropriate storage condition in line with the product requirements, testing facility and custom clearances. The zone also has officials from the Drug Controller’s office and Customs department. On its part, the Airports Authority of India (AAI) has also planned out to make concerted efforts to boost cargo. To develop cargo hubs in the country, it was essential to develop regional airports with cargo terminals. These regional airports would be connected to the metros. To achieve this, the AAI has already decided to convert unused passenger terminals at 24 airports into cargo terminals. The old terminal buildings at these

airports would undergo modifications since cargo facilities would entail both city side and air side access. The AAI has set up cargo terminals in Coimbatore, Tiruchi and at Mangalore. The cargo terminal in Mangalore has facilities for perishable cargo. The cargo complex is electronically linked with a centralised cargo server at Kolkota. With the growth in e-commerce, carriers like Air India with wide connectivity, have the opportunity to expand the cargo business. The e-commerce market has been growing steadily: it was valued at $6.3bn in 2011 and $14 bn in 2012. Retailers are, therefore, looking at logistics providers and delivery service providers. In addition, there is also the question of last-mile delivery. Air India could easily team up with Indian Post to facilitate e-commerce operations. n May 2014

Cargo & Logistics logistics

Collaborate and gain Ramesh Kumar advocates the need for automakers to come together in the transportation of finished products. It will be a win-win situation for all those who join forces. Ramesh Kumar

The very mention of ‘collaborative logistics’ also presupposes a cosy relationship between rivals, obviously in the same segment or vertical. How can one work alongside one’s rivals? Is it not blasphemy? Is it not unethical? Well, such thoughts are nothing unusual among the logistics and supply chain practitioners. 22

May 2014

he phrase ‘collaborative logistics’ has a nice ring and an aura to it. Logistics and supply chain honchos seldom miss a chance to harp on this ‘exotic’ stuff – exotic because most of them talk lovingly about it, but very few practice. Why so? It’s something as simple as the old saying that it would be easy to ‘gift’ something you don’t have. The very mention of ‘collaborative logistics’ also presupposes a cosy relationship between rivals, obviously in the same segment or vertical. How can one work alongside one’s rivals? Is it not blasphe-

my? Is it not unethical? Well, such thoughts are nothing unusual among the logistics and supply chain practitioners. Yet it is happening. Writing in The Handbook of Logistics and Distribution Management, authors Alan Rushton, Phil Croucher and Peter Baker, highlight the fact that “competitive companies in the same industry share logistics operations where these operations are regarded as commodity and therefore not a basis for competition.” In fact, they go further to cite the case of Kimberly-Clarke and Uni-

logistics lever ‘collaborating’ together not only on the distribution side, but even on the manufacturing consolidation centre that “further enhanced mutual benefits”. Well that is on the overseas side. What’s the Indian story? My personal exposure to the automotive logistics sphere since 2010 showed that there was a lot of reluctance on the part of automotive OEMs to share finished vehicle movement on the road. I have never seen eight or ten capacity car carriers ferrying a mix of Hyundai, Ford, Toyota, Nissan, Renault cars to the same destinations from their southern base Chennai, Bengaluru, etc. Or, for that matter, I have seldom seen vehicles belonging to Maruti Suzuki and Honda based out of the National Capital Region (NCR) in the north moving to common destinations under the same roof. What auto OEMs would miss if they collaborate and achieve operational efficiency through such ‘collaborative’ delivery exercise remains unanswered till today. Car carriers would be compelled to wait for full capacity – eight or

ten – from the same auto OEM, but a firm ‘no’ for any mix and match. Similarly is the case of stock yards. Maruti Suzuki has its own massive remote yards at Bengaluru and Nagpur besides in-plant parking yards soon after vehicles roll out of production lines. Similarly, Hyundai Motors has its own in-plant yards and its remote yards are not shared with anyone. General Motors, for instance, has remote yards at Kochi, Bengaluru and Guwahati exclusively to service its potential buyers and obviously they are not shared with anyone. The story is the same for every single auto OEM as far as movement on road is concerned. The situation, however, is changing now that OEMs have begun exploring movement of finished vehicles by rail. Maruti Udyog, India’s number one passenger car manufacturer, and APL Vascor have bagged licenses to operate their own rakes for moving market-ready cars. Expectedly, Maruti Suzuki has announced that its rail rake facility is exclusively for itself and a firm ‘No Entry’ for its rivals. However, APL Vascor is ready and already negotiating with non-Maruti auto OEMs for collective or ‘collaborative’ logistics. In view of the fact that at many times no single OEM would be in a position to consume the entire rake that can accommodate 315-odd cars, APL Vascor is in a position to make auto OEMs see reason and ensure they utilise portions of each rake to achieve optimum utilisation. Auto OEMs that were reluctant to move their vehicles under one car carrier on road are ready to come together to share space in the same rake now. Indeed, laudable. As the authors quoted earlier point out, distribution is something akin to ‘commodity’ and there is nothing to differentiate among themselves and tom-tom about uniqueness. Unless, like high end passenger vehicles such as BMW, Mercedes Benz and Rolls Royce opting for differently-styled car carriers and charge a hefty price tag to the end-user. There is a greater understanding among top bosses at companies that service quality would be the finest differentiator, not how the finished product is moved. So, it is not out of place to claim that collaborative logistics is gradually creeping into India. Similarly, on the warehousing front — we will see a lot of action on this front in the days to come once the GST roll out becomes a reality — India Inc is looking for warehousing

The situation, however, is changing now that OEMs have begun exploring movement of finished vehicles by rail. Maruti Udyog, India’s number one passenger car manufacturer, and APL Vascor have bagged licenses to operate their own rakes for moving market-ready cars. May 2014

Cargo & Logistics logistics

Talking about collaborative logistics, it is pertinent to draw the attention to the ‘partnership’ between Glovis India, a fully owned subsidiary of Hyundai Motors India, and Mahindra Logistics, a group company belonging to the Mahindra group. Both these entities are operating in the 3PL space. 24

May 2014

space at selected key points from where they would serve their respective clientele. Here again, since every company worth its salt is eyeing ‘outsourcing route’ via 3PLs who in turn again are firm believers and practitioners of asset light format where they own nothing, but lease space or services on rental are mostly renting warehousing space at multi-user facilities, owned by others. Those who already have built their own in the past continue to utilize them in that ‘me only’ format. So, it is not unusual to witness massive warehouses tenanting or servicing multiple clients by allotting fixed space under the same roof because in many locations, no single company may have need for such massive space. Such collaborative logistics is a win win for all. Manufacturers pay for the space they rent, not the entire warehouse thus enabling better cost management. After all, everything costs and better cost control again leads to better pricing which is a most sought after survival strategy. Talking about collaborative logistics, it is pertinent to draw the attention to the ‘partnership’ between Glovis India, a fully owned subsidiary of Hyundai Motors India, and Mahindra Logistics, a group company belonging to the Mahindra group. Both these entities are operating in the 3PL space. Glovis operates out of Chennai and Mahindra Logistics from Mumbai. Under the collaborative logistics agreement, all Glovis vehicles that ferry Hyundai cars to the western zone of India, returns with Mahindra group’s vehicles sold in the south-

ern market. Similarly, Mahindra Logistics vehicles return from the south with Hyundai vehicles. Two big advantages that emanate out of this collaboration: primarily, waiting or idling time post-delivery is more or less totally eliminated; second, the ‘empty haul’ syndrome is given the go by. Though the rates mutually agreed between them may be much lower than the prevailing market rate for car carriers, it is rightly argued that this loss due to lower pricing strategy is actually a net gain since the long waiting period is eliminated. Both Glovis and Mahindra Logistics are able to ‘manage or control’ costing, no doubt. Another case is the collaborative usage of Ennore Port ro-ro facility yard near Chennai. Japanese automaker Nissan, operating out of Chennai, built this yard for its captive consumption. However, over a period of time, other auto makers – rivals actually such as Honda Cars, Ford, etc. – are offered parking space for their own exports from the same parking yard. Before concluding, it is worth listening to Kevin Lynch: “The key to understanding Collaborative Logistics lies in recognizing how costs are distributed in a logistics network. Both shippers and carriers focus a lot of attention on controlling costs to improve profitability. Following a traditional approach, each organization has the ability to increase the efficiencies and reduce the “individual costs” of only those business processes that the organization independently controls. However, they have no visibility over “hidden costs.” Here’s the big question: How is it possible to reduce costs that are hidden? And, here’s the sole answer: Collaborative Logistics. This new business process makes hidden costs visible, so companies can work together to reduce them.” n (The author is Member, Committee on Supply Chain & Logistics, National Centre for Cold-Chain Development - A Govt of India Organisation Under Ministry of Agriculture. He is also author of 10,000 KM on Indian Highways, Naked Banana! And an Affair With Indian Highways.)

cover story

Search for a

single window Following country specific regulations and operational requirements often slow down the process of international trade and transport. Added to that is the coordination â&#x20AC;&#x201C; or rather the lack of it â&#x20AC;&#x201C; among the various agencies in the supply chain process. Result: the whole process becomes complicated spawning a whole range of documents. Vineet Malhotra details the difficulties in connecting the logistics world and points out the way forward to simplify the documentation in the supply chain process.

he business process or the physical flow of goods and the information flow between different stakeholders involved in the air cargo supply chain is very intricate. The chart depicts a process wherein a freight forwarder consolidates shipments from various shippers into a single consignment at origin and performs brokerage activities and delivery at the final destination. There are 14 main documents that may be used along the entire supply chain, as is explained below. Freight trade is of paramount importance to global nations as it represents a significant share of gross domestic product (GDP), yet smooth information and document flow combined with changing regulations poses barriers to efficient trade. Globalisation and the e-commerce revolution in the last decade have resulted in increased complexity of documentation. Trade ministries have established an extensive range of agency-specific and country-specific regulatory requirements for international trade and transport with little coordination amongst each other, at national, European or international levels. Supply Chain Complexities Logistics Service Providers are required to manage and maintain the records of a complex set of duplicative and redundant documentation and related systems. Consequently, businesses are forced to develop and maintain interfaces with many different systems to manage compliance with different national systems. May 2014

Cargo & Logistics cover story

Forwarders, Liners, Custom Agents, Ground Handling Agents and National Customs Authorities have to develop interfaces to integrate with a range of different systems they encounter in their day-to-day operations. This adds significant costs to all parties, both in financial terms and in terms of problems in managing timeliness and accuracy of reporting data. Small Medium Enterprises (SMEs) are particularly affected by this situation because they need access to information systems that are often closed and different for every country and for different authorities. Even the regulatory compliance complexity has become more acute with the introduction of advance trade and transport notifications for security purposes. This has called for streamlined operations to improve interoperability between stakeholders in international supply chains. Internationalisation also means awareness of standards and compliance certification processes. Easy integration of SMEs into transport networks and reporting systems is therefore an important issue for Single Window developments. A Single Window is defined as “a facility that allows multiple trade entities involved in cargo supply chain to file and track standard cargo shipment information and documents on a single system to fulfil all import, export, and transit-related regulatory requirements.”

Global Trends in addressing the Complexities Single Window Systems (Cargo Community Platforms) have been developed by over 10 leading nations, since the beginning of the 1990s. Particularly in developing countries and transition economies, the national Single Window has been a success story. Single Window projects have simplified and automated operational procedures introduced change and brought about collaboration between government agencies and the private sector. Many of these countries have shown marked improvements in their trade-facilitation indicators, as seen in the various surveys including the World Bank’s doing Business — Trading across Borders,

Export Customs 10. Air Cargo Flight Manifest 11. Export Cargo Declaration 12. Import Cargo Declaration

Origin Freight Forwarder

5. Air Waybill (MAWB & HAWB) 6. House Cargo Manifest 7. Export Goods Declaration 8. Customs Release Export 9. Air Cargo Security Declaration

Consignor – Shipper

1. Invoice 2. Packing List 3. Certification of Origin 4. Dangerous Goods Declaration

May 2014

as well as the Logistics Performance Index. In many advanced trading economies, such as the EU, the US and China, the national Single Window concept has not been implemented. Instead, other forms of Single Windows, in particular Community Systems and Customs Single Windows are being successfully used to enhance a high-performing logistics sector. Howev-

cover story

Carrier

Ground Handler

The common features across platforms include: • Ensure Electronic Shipment/Cargo Processing, Clearance and tracking • Use of EDI, UN/EDIFACT and UN LOCODE standards • For import procedures, the key benefit is reduction in cargo release time and paperwork cost • Improved accuracy of information and elimination of data duplication • For port/airport related procedures, messages are sent once resulting in reduced communication and personnel cost • The key success factor is co-operation between the parties that are responsible for cargo logistics, customs and

Enablers for the successful implementation of a Single Window System are: • •

• • •

Import Customs

Destination Freight Forwarder

13. Import Goods Declaration 14. Customs Release Import

transportation (safety, security, and environmental) issues.

Political will and strong government support A strong supporter at the senior level to drive the implementation process A dedicated project implementation team Co-operation of the multiple government agencies involved Continuous education, awareness and change management to ensure stakeholders ‘buy in’ Business Process Rationalization Regional cooperation Adequate budget.

Quick wins are crucial in driving the implementation process. There is no need for a computer system to be in place to achieve successes; these can be achieved through administrative decisions having an effect on the ground.

Consignee

Graphic: Nagender Dubey

er, linking these different platforms into a national or regional network remains a challenge. There are certain commonalities across these systems. However, the effectiveness and efficiency of each of these varies.

May 2014

Cargo & Logistics cover story

African Single Window projects present

10 Days

Maximum 3 days

5 Days

Maximum 1 day

2 Days

Maximum 1 hr

Countrywise Trends in Single Window Initiatives Kenya: The objective of the Single Window system was to reduce cargo dwell time to three days at the port, one day at the airport and a maximum of one hour at the border. This could be achieved by eliminating existing inefficiencies, which lead to delays in cargo clearance, high trade transaction costs and corruption which together reduce Kenya’s competitiveness. A survey was carried out to quantify the economic losses incurred through inefficient procedures and to highlight the potential savings through trade facilitation. Based on the present volume of goods imported and exported, the survey predicts saving to the economy from $150 to $250 m in the first 3 years and $300m to $450m per annum thereafter. These savings are derived from reduced trade transaction costs, reduced delays, inefficiencies, corruption, paperwork and manual handling of documents, reduced cost of capital (JIT Concept) and

Single window objective

May 2014

demurrage as well as improved space utilization at ports and the resultant increased capacity utilization. East Africa: With the East African Community (EAC), East Africa has a community and customs union in place and is on the way to having common borders. National Single Windows are planned to be implemented in each of the five East African States. Going forward it is planned to sensitize all East African Community Partner States to the Single Window concept and to set up technical working groups. These are intended to (a) spearhead initiatives in EAC Partner States, (b) advocate the establishment of National Electronic Single Window Systems in EAC partner States, and (c) advocate the creation of a Regional Platform for EAC partners States to integrate the Single Window Systems. The African countries’ - East Africa (Mozambique, Madagascar, Kenya, Tanzania, Rwanda); Central Africa (Congo Brazzaville); West Africa (Ivory Coast, Togo,

Benin); North Africa (Libya, Morocco) requirements are dissimilar. The requirements of the Western African countries are mainly for a limited, usually port-centric Single Window, termed as “Guichet Unique des Opérations du Commerce Extérieur” (GUCE), or “Single Window of foreign trade”. Specifically the requirements by the Ivory Coast, Togo, Benin and Congo Brazzaville have focused on the port requirements and have not incorporated some key Single Window functionalities such as customs declaration and/or licensing/permit requirements from the other government agencies. For the Eastern African countries, it is encouraging that the littoral countries— Kenya, Tanzania and Mozambique—are all enhancing their trade facilitation capacities. This augurs well for their neighbouring land-locked countries such as Rwanda, Uganda, Burundi, and Malawi. The requirements by the East African countries were essentially for a national Single Window creating electronic linkages with the gov-

cover story ernment agencies for permits and licensing process. Only one, Mozambique, called for a combined Single Window and Customs Management System implementation, while the Tanzanian authorities called for two separate tenders for their Single Window and Custom Management respectively around the same time. The others chose to build a new Single Window that would integrate with their existing Customs management systems. Trends in Asia / Oceania Single Window projects As many Asian countries are trade-oriented, it’s therefore no surprise that they’re very progressive in trade facilitation. Several already have a Single Window in place. The Asian requirements are also varied. The ASEAN Single Window initiative, which calls for the integration of the National Single Window of the 10 ASEAN member economies, gives a great impetus to these countries to build their Single Windows. Hence, in recent years, there has been a marked increase in Single Window development in the region. The four ASEAN countries (Indonesia, Thailand, Brunei, and the Philippines) called essentially for Single Window requirements to be integrat-

ed with the existing Customs system. Although not seen in the ASEAN countries, there is an increasing trend for countries to include a centralised risk management in their Single Window projects. New Zealand’s Trade Single Window is part of a broader Joint Border Management System that includes requirements for an integrated intelligence and risk management that supports the Customs’ as well as other agencies’ risk management needs. Likewise, Pakistan’s initiative, the Automated Commercial Community System (PACCS) has also included a Risk Management System. India’s Community Platform (Single Window) Initiative: According to industry analysts, India spends US$30 billion more than it should on logistics due to inefficiencies in the system and by the dominance of a disorganized market. The movement of air cargo in the Indian scenario gets affected on account of multiple factors that contribute to higher lead time in the movement of cargo, increased paper work, delays and other inefficiencies. What was required was a collaborative effort to streamline the flow of goods and information across the supply chain. To support this need, the Air Cargo Agents Association of India (ACAAI), the IATA-rec-

high value: A Qatar cargo carrier ready to uplift a Mercedes vehicle

e-AWB: A giant step

n today’s electronic world, air cargo still relies heavily on paper documentation for the exchange of information. Each international airfreight shipment can require more than 30 different paper documents – increasing the cost of airfreight and lengthening transport times, The AWB (AirWaybill) is the most important transportation document in Air Cargo. The e-AWB (electronic AirWaybill), is the first step to realise the e-freight vision. The International Air Transport Association’s (IATA) e-AWB project replaces the paper AWB with an electronic contract of carriage between the freight forwarder and the carrier. One of the key components in the single-window system, is doing away with the paper AWB. With the e-AWB, there will no longer be a need to print, handle or archive the paper. It will also significantly reduce processing cost due to the removal of the paper AWB, bring in greater accuracy of air waybill data, reduce in cargo handling delays due to missing or illegible paper AWB, elimination of the requirements to file paper AWB, provide real-time access to AWB information for all personnel from all locations. IATA set international e-AWB targets: 22 per cent e-AWB by end of 2014; 45 per cent e-AWB by end of 2015 and 80 per cent e-AWB by the end of 2016. The international e-AWB penetration in February 2014, is up by 0.6 per cent, though the last two month performance has remained flat in part due to Chinese New Year, which impacted Asian markets, where e-AWB penetration is high. IATA has also introduced the Multilateral e-AWB Agreement that provides a single standard agreement that airlines and freight forwarders can sign once with IATA and start doing e-AWB with all other parties to the Agreement. Till date, 64 airlines operating from 3977 airports and 818 freight forwarders from 3673 affiliates are part of the agreement.

May 2014

Cargo & Logistics cover story

A step ahead

he government has decided to cut down the paperwork in exports. In a move in January this year, the Director General of Foreign Trade (DGFT) and the Enforcement Directorate signed a memorandum of understanding to allow for the sharing of foreign exchange realisation data between exporters and relevant governmental departments in the country. The new MoU will make mandatory the sharing of foreign exchange realisation data through the e-BRC (Electronic Bank Realization Certificate) programme, which was implemented in 2013. The digitalization of foreign exchange realisation data is expected to increase efficiency for exporters operating in the country. Under the country’s Foreign Trade Policy (FTP), exporters are required to receive Bank Realisation Certificates (BRC) on all exported goods, a process previously carried out through submitting physical records to the exporter’s relevant banking institution. Once issued a BRC, the exporter may claim FTP incentives and discharge their export obligations on foreign currency earning realisations. The e-BRC programme will allow exporters to file electronically, saving them the time previously spent filling for the BRC in person. “The process for BRC issuance and subsequent utilization were largely manual and department centric. The exporters suffered most as they had to run to banks and government departments for claiming benefits,” said Anup Pujari, Director General of Foreign Trade. “The e-BRC project is a significant step in this direction and will contribute considerably in reducing the transaction cost of our exporters,” commented Commerce Minister Anand Sharma during a press conference. Currently, 90 banks offer exporters the e-BRC filing option, with tax departments in Delhi, Andhra Pradesh, Haryana, Odisha and Chhattisgarh already making the data available to the Director General of Foreign Trade.

May 2014

ognised apex trade association of Indian air cargo agents and Kale Logistics Solutions Pvt. Ltd (KLSPL) successfully created an effective cargo community platform giving attention to several usability challenges facing both the airlines and end-users. Thus, UPLIFT was launched in 2011 as India’s first electronic collaboration platform for the Indian Logistics industry. UPLIFT is a readily available portal which is easy-to-use and it does not interfere with Airlines primary responsibilities of physically handling the freight. It is a ready to deploy solution that can handle high volume transactions in a 24/7 environment, and offers minimal training costs. UPLIFT has successfully executed over 2 million EDI transactions between all cargo stakeholders like- Airlines, Shippers, Consignee Airports, Seaports, Transporters, and Customs amongst others. Currently the platform has automated the Air cargo supply chain and its Road Map includes making it a truly multi-modal and multi-lingual platform. Middle East Single Window projects The Middle Eastern countries, in particular, the Gulf countries, have been expending great efforts in enhancing trade facilitation in recent years. Saudi Arabia was an early implementer of the Single Window, when they launched their SaudiEDI project way in 2004. Initiated by the Public Investment Fund of the Ministry of Finance, one of the goals of SaudiEDI was to smooth Government-to-Business-to-Business interactions. In recent years, three Gulf Cooperation Council countries—Qatar, Bahrain and Oman—had issued RFPs for Single Window. One common feature in their requirements called for an overhaul and replacement of their previous Customs management systems, paving the way for a single seamless “Single Window and Customs Management” system. Latin America/Caribbean Single Window projects While Latin America’s trade has grown significantly since 2003, the cost of trade is reportedly higher than those reported in the countries of Asia and the Pacific. In recent years, we have seen a marked

interest in developing Single Window systems for foreign trade or “Ventanilla Única de Comercio Exterior” (VUCE) as it is called in Spanish. Colombia and Perú had an early start in establishing their VUCEs around 2006. Mexico and Chile issued their RFPs in 2010 and 2011 respectively. A common feature of the initiatives in this region, unlike in other regions, is that the VUCEs have most Single Window features, except risk management or Customs Management functionalities. Single Window-Alternative Technology Design Approaches Typically there are two classical alternatives of centralised versus decentralised solutions. The centralised approach is in place at EU level. It is based on a common application for mandatory reporting hosted at an EU level (called the ‘EU Single Window’). Each Member State hosts a National Single Window which receives information from the central EU Single Window and facilitates the sharing of information between authorities. This approach has the benefit of

cover story single window: One of Oman port’s feature in its requirements called for an overhaul and replacement of its Customs management systems

The key influencing factors are: • Supporting the implementation of all related regional policies • Facilitating regulatory information exchanges across modes and authorities • Facilitating visibility of statistics for transportation CO2 footprint and other sustainability indicators • Managing the highly dynamic nature of changes in regulatory requirements and support applications Requirements Logistics Service Providers need to: 1. Provide regulatory information in standard format irrespective of destination and mode 2. Submit information electronically, ideally extracted automatically from operational processes 3. Easily manage changes arising from new regulations

a true, centralised Single Window interface for reporting. The control of the application is centralised, allowing the EU to implement policy directly. The key advantage is easy maintenance particularly in relation to regulatory and policy change. Additional benefits relate to managing security and quality of data but such issues involve both technical and organisational considerations which complicate the situation. In the decentralised approach, the common reporting interface is relocated from the centralised application to the distributed national applications, shifting control of the application from the EU to Member States. The main advantage is that it avoids relying on a single physical computer system which becomes a single point of failure. There are many options for distributed version control, ranging from peer to peer synchronization to centralized control of the changes. To maintain central policy implementation, an EU Single Window was conceived as a set of services which maintain and support the distributed applications. Following a revaluation of the two options the decen-

tralised approach became the basis for the Next Generation Single Window concepts, which are described in later sections. The key principles are that Policy implementation is managed centrally, but the reporting application is distributed, allowing Member States control over the implementation. What more needs to be done? For e-freight story to become a success there is an urgent need to establish a coherent framework bringing order to the highly fragmented landscape in the field of regulatory information management for the logistics supply chain. The current situation is, therefore, characterised by multiple developments at national level serving the specific interests and strategies of different countries, and at EU level serving the implementation of different EU policies. Recently, there is increased recognition that it is both feasible and necessary to consider ways for improving interoperability between the many Single Window-like systems that now exist or are under development at national and international levels.

National Authorities need to: a. Enforce regulations efficiently b. Co-operate with authorities in different countries c. Easily manage changes arising from new regulations Call for Global Collaboration There’s a growing need for implementers of Single Windows to establish further international collaboration to develop common interconnectivity strategies, policies, data harmonization and standards. Already, we see some form of such collaboration being done, albeit by private sector players. The Pan Asia E-Commerce Alliance (PAA) and their African counterpart African Alliance for e-Commerce (AACE) are examples of collaborating Single Window operators, who establish a mechanism and framework for the conduct of secure cross border document and data interchanges amongst the stakeholders in the respective Asian and African regions. However, their efforts are only part of the picture and need to be complemented by the corresponding government policies to truly effect cross border exchanges. n (The author is SVP, Kale Logistics Solutions.) May 2014

Cargo & Logistics infrastructure

Silk route for cargo During his European tour, Chinese president Xi Jinping took time to visit and celebrate the arrival of the “Yuxinou” train which connects the cities of Chongqing, central China, with Duisburg, Germany.

hen Chinese President Xi Jinping made a landmark visit to Germany for the third leg of his European tour in March- April this year, it was for a historical occasion. Accompanied by German Vice Chancellor Sigmar Gabriel, Xi Jinping visited the Port of Duisburg (a major inland port and industrial hub in Germany) to welcome the arrival of a freight train — operated by Trans Eurasia Logistics, a joint venture between Deutsche Bahn and Russian Railways — crammed with laptops and electronics after it completed its journey through Central Asia, Russia, Belarus and Poland. The Port of Duisburg in Germany is now linked to Chongqing in China by the Chongqing-Xinjiang-Europe international railway. The train travelled nearly 11,000

km through Central Asia, Russia and Eastern Europe to Germany on what is called the “Yuxinou” rail line that was established in 2011 as a joint venture between track operator DB Schenker, the Chongqing Holding Group and the state railways of China, Kazakhstan and Russia. The Yuxinou railway is the world’s second longest rail link, 2,000 km shorter than the one that connects Germany with Shanghai. “The train is twice as fast as transport on the sea route, but only half as expensive as air freight. I am, therefore, confident that the frequency of the train connection will develop even more strongly in future,” explained Erich Staake, Chief Executive Officer of Duisburger Hafen AG. The traditional sea route through the Indian Ocean would have taken the containers three more weeks to reach Germany.

long distance: A map depicting the routes (in red) covered by “Yuxinou” train

May 2014

Chinese President Xi Jinping called on China and Germany to work together to build what he referred to as ‘the Silk Road economic belt’. The Silk Road revival comes from the ancient trade and cultural routes between China and Central and South Asia, Europe and the Middle East. He pointed out that China’s proposal of building the Silk Road economic belt, based on the idea of common development and prosperity, aimed to better connect the Asian and European markets, would enrich the idea of the Silk Road with a new meaning, and benefit all the people along the belt. He also noted that China and Germany, that are located at the opposite ends of the belt, are two major economies currently serving as the driving engines for economic growth in Asia and Europe, respectively. The two countries, linked by the Chongqing-Xinji-

infrastructure

jubiliant mood: A dragon dance after the arrival of Yuxinou cargo train at Port of Duisburg

ang-Europe international railway, would strengthen cooperation in building the Silk Road economic belt, Xi said. The Chinese leader also said that the Port of Duisburg would play a bigger role in the China-Germany and China-Europe cooperation. The importance of the rail link is likely to be increased after Xi’s visit. Starting in the bustling mega city of Chongqing, southwest China, the 11,179-kilometer (6,946-mile) network stretches across six countries–Xinjiang, Kazakhstan, Russia, Belarus, Poland and all the way to Duisburg, Germany-building a new route for transportation. The route has been compared with the second Eurasian Continental Bridge, a train line that starts at Lianyungang in East China’s Jiangsu province and passes through the Alataw Pass in Xinjiang before ending in Rotterdam in the Netherlands. At the moment, the movement is one-sided — China to Germany — with as many as 50 40-foot full containers arriving in Duisburg, and travelling back to China empty, but this economic belt could produce export opportunities for Germany. At least 114 trains are expected to exchange diversified products between the two countries within this year. The service between Chongqing and Duisburg has already increased from one train per week to three, and the aim is to have a daily service. In addition, the operator plans to enhance reloading efficiency when changing from the narrow rail gauge in China to broad gauge

in Russia and Europe. Transportation time will also be shortened to about 13 days. For example, car producers could transport quality German-made parts to the assembly plants in China. Chongqing is the hub for production sites of IT companies such as Apple, Hewlett-Packard and Acer and car-parts factories, while Duisburg is the transport and logistics hub of Europe. The Chongqing-Duisburg route being faster, climactic conditions are less damaging for electronics shipped by train. While goods insensitive to temperature such as clothes and building materials can be transported all year long, electronic products may face travel restrictions in very hot or cold periods. China is Germany’s third-largest trade partner; hence, the importance of the route in boosting economic growth for both. Bilateral trade exceeded $161.5 billion (117 billion euros) last year, according to the Federal Statistics Office. Deutsche Bahn also started a route in August 2013 from the Chinese industrial hub of Zhengzhou to Hamburg, Europe’s third-biggest port. For companies such as car producers that want to ship ‘made-in-Germany’ quality parts to their assembly plants in China, the rail route is a good alternative to seaborne transport. Multinationals operating in China have been setting up factories deep in the interiors in search of affordable labour. These plants can be more than a thousand kilometres from the coast. For companies export-

ing to Europe—still one of the largest markets for Chinese goods—shipping by air from Chongqing or other inland cities is too expensive. Trucking or carrying goods by train to the ports of Shanghai or Shenzhen’s Yantian and then shipping them to Western Europe can take 40 days. This Silk Road railway is one-fifth that of transporting cargo by air and there is just one Customs inspection from Chongqing to Europe. Since it began operating in 2011, the cost of transporting goods on the line has also fallen, from 80 US cents per 22 tons for every kilometer, to 70 cents. Shipping one container by train costs about $10,000, onethird the price of air transit. The carbon footprint of rail, meanwhile, is about one-thirtieth that of air freight. The railway line has been a particular boost to Chongqing. According to Yuxinou Logistics, which provides logistics services along the railway, from January to May this year, freight transported out of Chongqing rose 5.9 per cent, and freight into the city rose 8.3 per cent. However, challenges still exist. Most freight from China’s coastal cities to Central and Eastern Europe is still taken by ship to Rotterdam, and then transferred by air or road. To maintain the rail line, a steady supply of imports and exports along it is required, but the Chongqing-Europe railway currently lacks exports from European countries. On its part, Chongqing is trying to solve this by promoting the line to Europe. n May 2014

Cargo & Logistics news in Brief

air  Sizable cargo growth at Bengaluru Cargo volumes handled at Bengaluru airport in 2013-14 grew by 7.0 per cent compared to 2012-13, to reach a total volume of 242,426 metric tonnes (MT). In domestic cargo, the airport clocked the figure of 91,925 metric tonnes registering a growth of whopping 11 per cent. In international cargo, the airport showed marked improvement of 4.6

per cent with 150,501 metric tonnes. According to the release, the airport inaugurated dedicated cargo bays to serve freighter aircraft and further improve the air cargo supply chain. The new cargo bays include six dedicated wide body freighter stands with seamless access to the cargo terminal. All the cargo stands are equipped with fuel hydrants and integrated leak detection system. The airport currently caters to pharmaceuticals, perishables (fruits and vegetables), electronics, engineering, machineries, automobile, valuables, textiles, and readymade garments originating from South India and headed for South Asian Association for Regional Cooperation (SAARC) countries, China, Europe, United States, Canada, Oceania and the Middle East.

Pune airport to start cargo operations Decks are being cleared for Pune’s Lohegaon airport to have international cargo facilities. The airport recently witnessed a visit from the delegation of the Airports Authority of India (AAI) who checked the area where the construction of cargo arrangements will be carried out at the airport. ”After follow-

May 2014

Satellites delivered, courtesy Volga-Dnepr A Volga-Dnepr Airlines’ An-124-100 ‘Ruslan’ freighter aircraft recently delivered the Luch-5V and KazSat-3 telecommunications satellites from Krasnoyarsk in Russia to Kazakhstan’s Baikonur Cosmodrome. The satellites, weighing a combined 21 tonnes, were secured inside a special shipping container for the transportation, measuring 14 metres long, 3 metres wide and more than 4 metres high. The flight also carried support equipment for the satellites. Following the safe arrival of the aircraft and its cargo in Kazakhstan, Volga-Dnepr delivered the satellite container back to its manufacturer in Kras-

noyarsk. Alexander Prokofiev, Senior Load Planning and Logistics Engineer at Volga-Dnepr Airlines, said, “A satellite is a very high-tech, high-value and delicate piece of cargo that requires special handling throughout the transportation process. We were required to meet an extremely tight timescale for this particular flight and had to ensure the aircraft and all of the external loading equipment we needed was ready to load the satellites as soon as they arrived at the airport from their production site in the city of Zheleznogororsk, Russia.”

Nordic’s airlines lead in e-AWB Airlines based in Nordic countries are leading in implementing the e-AWB, Des Vertannes, IATA’s global head of cargo noted. SAS Cargo, Finnair Cargo, Lufthansa Cargo, Air France/KLM, Korean Air, Cathay Pacific, Qatar Airways and Emirates are the airlines leading the e-AWB project. “Congratulations to the Nordic and Baltic countries, the airlines, forwarders and ground handlers involved, for implementing the e-AWB across the region,” Des Vertannes, IATA’s Global Head of Cargo, said. “This is a fantastic example of cross-border cooperation and will be of immense benefit to businesses and the economy. This clearly demonstrates that where there is a will, there is a way. I am confident that this will motivate other nations and regions as they look to accelerate the adoption

of the e-AWB.” The Nordic and Baltic Countries began piloting the project in 2009 and implementation is now moving ahead. The project is a global project involving the World Customs Organization (WCO), ground-handlers, freight forwarders and airlines. The implementation is performed locally in each country and the nine lead airlines have agreed to a single process for the forwarders to deliver cargo to the cargo terminals and groundhandlers.

news in Brief

Qatar Airways starts freighter service to Delhi

atar Airways Cargo started operating its weekly freighter service between Doha and Delhi, using the Airbus A330 freighter, along with the two daily passenger flights that Qatar Airways

already operates. Qatar Airways Cargo fleet currently includes three Airbus A-330F and five Boeing B-777 freighters, which fly to over 40 destinations worldwide. “India is a highly important market for Qatar Airways Cargo,” said Qatar Airways Chief Officer Cargo, Ulrich

Ogiermann. “After the launch of our service to Hyderabad in April, we are delighted to start our scheduled freighter service to Delhi this month. Delhi has one of India’s largest and fastest growing retail industries. On top of that, it is an important commercial capital in Asia” he added. Welcoming the cargo airline to IGI Airport, CEO, Delhi International Airport (DIAL) I Prabhakara Rao said DIAL had taken several steps to boost cargo traffic which led to an 11 per cent growth in tonnage and helped the airport cross the 600,000 tonne mark in 2013-14. Qatar Airways Cargo is eyeing major industrial sectors in Delhi, like health sector, electric and electronic goods, gems and jewelry, textiles and leather, factory machinery, consumer goods, and metallurgy. Pharmaceutical products would be a major export from Delhi on the Qatar Airways Cargo freighters.

GACAG hails European parliament T

he Global Air Cargo Advisory Group (GACAG) welcomed the provisional agreement reached between the European Parliament, EU Council and European Commission (EC) on the place of aviation in the EU Emissions Trading Scheme (ETS), according to the release. Under the compromise text agreed by the EU’s institutions, flights to and from EU airports will be excluded from the ETS until 2016, maintaining the current “stopthe-clock” regime. The new EU arrangement therefore respects the 2013 agreement reached at International Civil Aviation Organisation (ICAO), allowing ICAO time

to develop an aligned global measure in time for its next assembly in 2016. However, on March 19, the European Parliament Environment Committee rejected this provisional agreement, the release stated. The 2013 ICAO Agreement calls for the mutual consent of all parties affected by any national/regional measures. The EC’s original proposal to include the emissions of international flights within EU airspace was thus not in line with the goodwill exhibited by all ICAO members. GACAG strongly welcomes the change in approach from the EU institutions that have agreed to the new compromise text.

air  ing up for the last two years, an AAI delegation visited the Pune airport to see the land that can be procured for cargo arrangement. A five-member team from New Delhi had visited the airport. The meeting was positive and we are waiting for clearance from the Defence,” Pune Airport’s Director Manoj Gangal was quoted as saying. Gangal stated, “After the procurement of land, we will start the construction work for cargo arrangements. We are positive that by the end of this year, the international cargo movement will start from Pune airport.” President of the Maharashtra Chambers of Commerce Industries and Agriculture (MCCIA), S K Jain, said, “As on date, more than 50 per cent of the cargo is shipped from Mumbai goes via Pune. Once we have our own cargo arrangements, it will give more options and agriculture products will be easily exported to various international destinations.”

Lufthansa Cargo flies high Lufthansa Cargo, touted as Europe’s leading cargo airline recently achieved capacity sell-out. Lufthansa Cargo flew fuller planes in the first three months of 2014 while its capacity management remained flexible and demand-driven. Having increased its capacities by 1.6 per cent, it was able to achieve a sellout in the first quarter of 2014. With 399,000 tonnes of transported freight and mail, its tonnage remained on par with the previous year’s figure. “There are noticeable, albeit still mild, signs of a market recovery,” said the cargo airline’s CEO Karl Ulrich Garnadt. For this reason Lufthansa Cargo has only gradually increased its capacities for the time being. “But I trust that we will be able to strengthen our market position with new Boeing 777 freighters and an attractive, global network in the course of the year,” pointed out Garnadt.

May 2014

Cargo & Logistics news in Brief

shipping and ports  State-owned ports see rise in cargo

wikiMedia

According to data from the Indian Ports Association (IPA), India’s major state-owned ports handled 17 per cent more imported coal in the fiscal year ended March 2013, as its coastal power firms stepped up generation to meet growing demand. Total coal handled by India’s 12 major ports jumped to 104.7 million tonnes in 2013-14 from 86.7 million a year earlier, the IPA data showed. Thermal coal imports through the ports leaped 22 per cent to 71.6 million tonnes, while shipments of cooking coal, used in making steel, rose 18.3 per cent to 33.1 million tonnes. This was due to the state-run domestic monopoly Coal India Ltd which

struggled to meet demand of Indian generators to add power capacity. Coalbased power generation rose 8 per cent to 587.64 billion kilowatt-hours in April-January. The rising demand from the country has helped coal producers in Indonesia and Australia cope with global oversupply and a price slump. India’s major ports handled about two-thirds of coal imports of 137.6 million tonnes in 2012-13. The country has about 176 so-called minor ports. More than 80 percent of India’s coal output comes from Coal India, which has fallen short of its output target for at least the past seven years due to difficulties in obtaining environmental approvals, lack of railway access and other issues.

Vizag Port to handle 65 mn tonnes+ Visakhapatnam port looks forward to a bright year in 2014-15, as several development projects are on the verge of completion, and the port expects to

May 2014

Mumbai Port extends M

umbai Port Trust (MbPT) has decided to continue with the concessional rates for stuffing / destuffing of containers for a further one year from April 1, 2014 or till the date of revision of the Scale of Rates, whichever is earlier. In a separate communiqué, it also informed the trade that the facility of free days/charges on containers and containerised cargo brought from other Indian ports to Mumbai Port by road has been extended for a further period From April 1, 2014 to March 31, 2015. The free days/charges will be as under: Containers destuffed in the Port: 3 free days from the date of receipt of the container; licence (storage) fees from the fourth day. Containerised cargo: 5 free days from the date of receipt of container, and demurrage from the sixth day. Containers not destuffed

in the Port and removed out of the Port: No free days. Licence (storage) fees will be levied from the day of receipt of container. Containerised cargo: 3 free days from the date of receipt of container, and

Aegis Logistics announces commissioning O il, gas and chemical logistics company, Aegis Logistics Limited has announced the commissioning of over 50 per cent project capacity at the Pipavav Port, Gujarat. The Pipavav Phase I expansion was initiated in February 2013 to set up bulk liquid terminal of 1, 20,000 kilolitres (KL) and 2,700 metric tonnes of gas terminal and was targeted to commission in H2 FY2015. However, due to exceptionally fast work times, Phase I of the project is now 50 percent complete, with an extra 13 tanks now operational, and a storage capacity totalling 70,120 kilolitres. With new capacity, Aegis Group will be able to handling liquid volumes of over 3 to 4 million MT and gas volumes of over 750,000 MT. Commenting on the early commissioning at Pipavav Anish Chandaria, Managing

Director & CEO said, “Early commissioning of Bulk Liquid Terminal at Pipavav is a step towards Company’s strategy of building a necklace of port terminals around India’s coast line. The early commissioning of the Liquid Facilities of the Pipavav - Phase I project will generate additional Revenues and Profitability for Aegis and also help instill confidence in our Customers for a longer term relationship and business for the upcoming Phase II project at Pipavav. The Company is continuing its activities towards its mission to build an unrivalled national port infrastructure and distribution network in the Oil and Gas sector in India.” Port Pipavav is India’s first port in the private sector, which is located in Saurashtra region of Gujarat. The port handles bulk, container and liquid cargo.

news in Brief

concessions demurrage from the fourth day. Charges after these concessional free days will be as per SOR (Schedule of Requirement) approved by TAMP (Tariff Authority for major ports), the communiqué said.

Record throughput by Chidambaranar Port Despite global pressures, V O Chidambaranar Port — one of the fastest growing major ports in the country — has handled record throughput of 286.42 lakh tonne during 2013-14, surpassing previous year’s achievement of 282.60 lakh tonnes. The growth rate has been achieved by handling of higher volume of Thermal Coal, Pet Coke and Containers in terms of imports. As for exports, the volume had been higher in commodities like Copper Slag, Phosphoric Acid and Machinery. The imports accounted for 209.77 lakh tonnes for the year while exports were 76.65 lakh tonnes. The port handled 5,07,735 TEUs (Twenty-foot Equivalent Unit) during the financial year 2013 to 2014, an increase of 6.76 per cent as compared to previous year’s container traffic of 4,75,599 TEUs, performing well above the Ministry of Shipping’s target of 5,00,000 TEUs.

Gangavaram sees 20 per cent growth G angavaram port in Andhra Pradesh has notched up a 20 per cent growth in cargo throughput last fiscal due to the increase in coal traffic. The port handled 15.81 million tonnes of cargo during 201314 as against 13.09 million tonnes the previous year (2012-13). The port handled 11.32 million tonnes of coal, 1.37 million tonnes of iron ore, and 3.12 million tonnes of other cargo during the year as against

9.89 million tonnes, 0.27 million tonnes, and 2.93 million tonnes respectively during the previous year. The other cargoes included fertilizers, manganese ore, alumina, limestone and agri commodities. The port is in the process of expanding its capacity from the current 15 million tonne to 45 million tonne, involving addition of 3 multipurpose berths and a coal handling terminal, which will be capable of handling vessels up to 200,000 DWT (Deadweight tonnage). It also involves a massive dredging of about 4 million cubic meter of silt, including rocks and sand trap, which is being executed by the state owned Dredging Corporation of India. The port will aim at increasing the share of non-coal cargo such as fertilisers, bauxite and foodgrains after the expansion.

shipping and ports  handle not less than 65 million tonnes of cargo during the year, according to Deputy Chairman G V L Satya Kumar. Despite a fall in cargo handled, Visakhapatnam port registered more than 100 per cent growth in net profit during the just-ended fiscal. During 2013-14, the port earned a net profit of `79.19 crore against an operating surplus of `261 crore, when compared with `37.04 crore net profit with an operating surplus of `213 crore last fiscal. “Several projects in the PPP mode are in execution in the port and to an extent cargo-handling have been affected. Many of them will be completed during the current year. The dredging in the outer harbour has been com-

pleted to the extent of 95 per cent and in the inner harbour up to 46 per cent or so. The dredging projects costing `415 crore will be completed in a few months’ time and they will add to the capacity of the port to handle bigger ships. Recently, we handled a cape size vessel in the outer harbor,” said GVL Satya Kumar. During the just-concluded fiscal, the port made a capital expenditure of `265 crore, which led to creation of additional 15 mt handling capacity. The capex in the earlier fiscal was `72 crore. Satya Kumar stated that Visakhapatnam port was the cheapest and the most efficient. He said that 250 tonne bollard pull tugs were commissioned in the port during the year. The rail evacuation system was also one of the best in the country and during the year 32.80 million tonne was moved by the railways.

May 2014

Cargo & Logistics news in Brief

land  Kedaara Capital buys stake in Mahindra Logistics Kedaara Capital has acquired minority stake in Mahindra Logistics for `200 crore. This is Kedaara’s first investment after it had earlier in November 2013 raised $540 million through its maiden fund. Mahindra Logistics Limited (MLL),

a subsidiary of Mahindra & Mahindra Limited, is a leading Third Party Logistics (3PL) service provider. Over the past four years, MLL has grown rapidly by diversifying its industry segment focus, developing an integrated supply chain services portfolio, and unique people transport solutions. “Kedaara will add significant value to our expansion plans as well as in evaluating and executing an acquisition led growth strategy. This is a significant step towards an IPO by 2017 and achieving our vision of being India’s most preferred integrated logistics service provider,” Pirojshaw Sarkari, Chief Executive Officer (CEO), MLL, said.

NHAI getting ready for heavy vehicular traffic

ational Highways Authority of India (NHAI) is getting ready to handle heavy vehicular traffic in the coming years. NHAI anticipates the movement of a larger volume of over-dimensional cargo (ODC) between the State’s most important ports at Visakhapatnam, Krishnapatnam and Kakinada in the near to medium term. Though it takes several years for seaports to become hubs of maritime trade and large manufacturing industries, the NHAI is expected to be prepared to handle the general surge in vehicular traffic, particularly the likelihood of a larger number of ODC criss-crossing the highways. The Vijayawada Project Implementation Unit (PIU) have a record of five to six units of ODC ranging from 50 to 100 tons of total laden weight each (TLW- it includes the weight of a vehicle) passing through them in a month. The number is likely to go up in the coming years. NHAI Project Director (Vijayawada) G. Sreedhar said that cargoes weighing

Customs department to

DTDC seeks IBM help DTDC has sought advice from IBM to transform the company into a logistics company focused on the e-commerce sector and emerging opportunities in the market. DTDC wants a winning strategy in a market where there is surging demand from online retailers. IBM will guide the entire group on its strategies and will also evaluate venture funding for DTDC’s e-commerce logistics business. DTDC aims to grow at least 100 percent annually for the next three years in the e-commerce logistics business. The engagement which began earlier this year is slated to be a five-year

May 2014

more than that will not be given permission for movement on national highways mainly keeping the high chances of damage to bridges. Vehicles carrying such massive cargoes will not be allowed to get on to the roads and if such over-dimensional goods are imported through ships, they will not be permitted to leave the ports for safety reasons. He pointed out that bridges were designed according to codes stipulated by Indian Road Congress. The movement of an ODC weighing more than 100 TLW on a bridge, whatever be its span and robustness, will certainly affect stability. That is the reason why such ODC are strictly barred on national highways. The NHAI gives permissions to multi-axle trucks carrying ODC after carefully assessing the impact of stress exerted by them on roads and more crucially the bridges. Period checking of bridges is done to ensure smooth passage of ODC, Mr. Sreedhar added.

he Customs department is planning to open an inland container depot (ICD) at Kalinganagar steel hub in Jajpur district of Odisa to facilitate hassle-free clearance for imports and exports, according to central Excise, Customs and Service Taxes Chief Commissioner S K Panda. He said that it would be easy to get Customs clearance at the new facility for manufacturers and suppliers of different goods. “Customs clearance for both exports and imports are being given at Visakhapatnam and Haldia ports. We selected Kalinganagar because of good railway connectivity,” said

news in Brief

Railways carried 1053.54 mn tonnes

he Indian Railways has closed 2013-14 with a 15 per cent increase in revenue, rising to `1,40,485 crore, compared to `1,21,831 crore last year. The railways also carried 1053.54 million tonnes of revenue earning freight traffic during the fiscal 2013-14. The freight carried showed an increase of 43.68 million tonnes over the freight traffic of 1009.86 million tonnes actually carried during the corresponding period last year. During the month of March 2014, the revenue earning freight traffic carried by Indian Railways was 100.49 million tonnes. This was an increase of 2.15 million tonnes over the actual freight traffic of 98.34 million tonnes carried by the Indian Railways during the same period last year. Higher tariff and fuel surcharge helped it register an increase in passenger earnings at `37,478 crore, compared to `31,896 crore in 2012-13, its passenger volumes

dropped marginally. The passenger earnings were, however, a tad lower than the interim budget estimates of `37,500 crore. The total approximate numbers of passengers booked during the year were 8,535 million, compared to 8,602 million last year. The worrying part for the Railways is the fall in long-distance travel which reflected in the non-suburban traffic, where the numbers of passengers booked were 3,985 million compared to 4,128 million the previous year. In short-distance suburban travel, passenger bookings rose to 4,549 million from 4,473 million previous year. Anticipating a below target performance on the passenger side, the Railways had revised its earning target downwards at `1,40,499 crore in the February interim budget. The original target set at the beginning of 2013-14 was `1,43,742 crore.

open ICD at Kalinganagar Panda. He further added that manufacturers of consumer goods can get customs clearance by paying considerably less money than what they were paying now. The department prevented leakage of central excise and service tax by forming anti-evasion and audit teams. “We detected 56 cases of tax evasion and recovered `14.84 crore. Two persons were arrested in this connection,” he said. Similarly, the department in the past one year detected tax evasion to the tune of `502 crore by manufacturers and service providers of which `30 crore has been recovered.

LAND  project to transform the courier services firm into a logistics company. Last year, DTDC launched its ecommerce service arm DotZot. DotZot already contributes over 3 percent of DTDC’s India revenues of about `525 crore and is expected to earn revenue of`20 crore this fiscal. This engagement is expected to be the first for an Indian logistics firm, to provide guidance for both present and future lines of business.DTDC roped in former TNT India director Sanjiv Kathuria to head the unit which began operations last June. DTDC last raised equity capital to fund growth in 2006 when Reliance Equity Advisors, the private equity arm of Anil Ambani-owned Reliance Capital, bought a 39.5 percent stake in the company. Reliance Equity exited DTDC last year when its holding was bought by France’s GeoPost for `158 crore. GeoPost now holds about 40 percent stake in DTDC.

Tripura wants rail access to Bangladesh port The Tripura government approached the Union Ministry of External Affairs again to press for access to Bangladesh’s Ashuganj port (a port city in the Meghna River delta in the Brahmanbaria District of Chittagong Division in Bangladesh) in order to transport essential commodities to the state. Officials said the state government had initiated the move after the railways announced suspension of train services to Agartala because of gauge-conversion work. “The need for access to Ashuganj port will arise from October 14 this year when railway connectivity between Tripura and the rest of the country through northeastern region will come to a standstill because of work on conversion of current metre gauge track into broad gauge” officials stated. The temporary disruption in railway connectivity will put immense pressure on NH-44, which connects Assam and Agartala, making inward movement of essential commodities difficult.

May 2014

Cargo & Logistics news in Brief

infrastructure  Aegis Group commissions a tank farm facility

World Bank approved loan for corridor link

The Aegis Group inaugurated a new tank farm facility at Port Pipavav recently for commercial operations. This new tank will act as a cost effective and efficient gateway to service the industry’s feedstock requirements in specialty chemicals, hazardous chemicals, petro chemicals, petroleum and non-petroleum products for the key markets of North and Northwest India. The Aegis Group facility is the first of three sub-lease agreements signed by the port with liquid terminal operators for setting up and operating tank farm facilities, while APM Terminals Pipavav will provide all port and marine related facilities on the waterfront to ensure seamless cargo handling.

JNPT ties up with NHAI on road project Jawaharlal Nehru Port Trust (JNPT) in association with National Highway Authority of India (NHAI) and City Industrial Development Corporation of Maharashtra Limited (CIDCO) is working on a `1,800 crore road project to provide seamless connectivity for trucks using the National Highways (NH) to the port and vice versa. Neeraj N Kumar, Chairman, JNPT said: “We are making this project a traffic conflict-free road. For uninterrupted movement port traffic we are making provisions for over bridges and grid separators. Due to this, the cost is coming very high at `1,800 crore. Normally, such a road could have cost `500 crore. We are also envisaging the future New Mumbai airport. This road will give last mile connectivity to the New Mumbai airport. So we are ensuring that the traffic coming to the airport do not disturb the port traffic.”

May 2014

he World Bank sanctioned a loan of `6,700 crore for the construction of a 393-km double rail track between the Mughalsarai-Bhaupur section of the Eastern Dedicated Freight Corridor (DFC) project. As a preparatory step, the Dedicated Freight Corridor Corporation Limited (DFCCIL), the special purpose vehicle responsible for implementing the rail freight corridor project, has already shortlisted bidders for the civil construction contract of this segment. The value of the contract is expected to be `3,500-4,000 crore. The loan agreement for the second phase is expected to be signed in June 2014. World Bank has agreed in principle to partly finance the Eastern Corridor project from Mughalsarai to Ludhiana, which has been divided into three phases. The total loan commitment is USD 2.725 billion, out of which the loan

for the first phase was to the tune of USD 975 million. It was sanctioned in May, 2011 and the loan agreement was signed in October, 2011. The entire Western Corridor is being funded by Japan International Cooperation Agency (JICA), while the Eastern Corridor from Mughalsarai to Ludhiana is being funded by the World Bank.

L&T arm may exit two unviable road projects

arsen & Toubro (L&T) is likely to call off two highway projects in Maharashtra which included the widening of 485 km of carriageway on Amravati-Jalgaon and Jalgaon-Gujarat/Maharashtra border due to escalation in costs, sources said. The cost of the development of contiguous stretches on National Highway 6 (NH-6) from Amravati to Jalgaon and the Jalgaon-Gujarat/Maharashtra border were valued at `2,538 crore and `1,968 crore, respectively, when these turnkey engineering procurement construction (EPC) contracts were awarded to L&T by the National Highways Authority of India (NHAI) in June 2012. However, the said cost had shot up several folds since then as prices of the major inputs such as bitumen and diesel had escalated.

stats

TRAFFIC TRAFFIC HANDLED HANDLED AT AT MAJOR MAJOR PORTS (DURING APRIL TO MARCH, 2014* VIS-A-VIS APRIL TO MARCH, 2013)

(*) TENTATIVE

(IN ' 000 TONNES)

PORTS

APRIL TO MARCH

% VARIATION

TRAFFIC

AGAINST PREV.

2014* 2

1 KOLKATA Kolkata Dock System

YEAR TRAFFIC 4

2013 3

12874

11844

8.70

Haldia Dock Complex

28511

28084

TOTAL: KOLKATA

41385

39928

1.52 3.65

PARADIP

68003

56552

20.25

VISAKHAPATNAM

58503

59040

-0.91

KAMARAJAR (ENNORE)

27337

17885

52.85

CHENNAI

51105

53404

-4.30

V.O. CHIDAMBARANAR

28642

28260

1.35

COCHIN

20887

19845

5.25

NEW MANGALORE

39365

37036

6.29

MORMUGAO

11739

17693

-33.65

MUMBAI

59186

58038

1.98

JNPT

62346

64490

-3.32

KANDLA

87005

93619

-7.06

555503

545790

1.78

TOTAL:

Source:INDIAN PORTS ASSOCIATION

Subscribe today!

Cargo and Logistics

for 36 issues

{

C&L

{ SAVE `432/-

Please accept my subscription for C&L name________________________________________________________________________________________________________________________ address_____________________________________________________________________________________________________________________ ph. no. ______________________________________________________________________________________________________________________ payment 

cash 

cheque 

cheque/dd. no. _____________________________________________________

drawn on___________________________________________ credit card no._____________________________________________________ date_________________________________________________ signature___________________________________________________________

No. of Issues

Cover Price

Discount

You Pay

`720/-

10%

`648/-

`72/-

`1440/-

15%

`1224/-

`216/-

`2160/-

20%

`1728/-

`432/-

Cheque / DD should be drawn in favour of NEWS KINGDOM MEDIA PVT. LTD. Send your subscription to News Kingdom Media Pvt. Ltd., 20, Nizamuddin West Market, Nizamuddin West, New Delhi –110 013, Contact: +91-11-41033381-82, Email: vkaul@newsking.in

You Save

Cargo & Logistics stats INDIAN PORTS ASSOCIATION TRAFFIC HANDLED AT MAJOR PORTS

(DURING APRIL TRAFFIC TO MARCH’2014* VIS-A-VIS APRIL TO MARCH’2013) HANDLED AT MAJOR PORTS (DURING APRIL TO MARCH'2014* VIS-A-VIS APRIL TO MARCH'2013)

(*)

TENTATIVE

PORT

(IN '000 TONNES) TRAFFIC PERIOD

P.O.L.

IRON ORE

FERTILIZER FIN. RAW

COAL CONTAINER THERMAL COKING TONNAGE TEUs

OTHER CARGO

TOTAL

% VAR. AGAINST 2012-13

KOLKATA TRF APRIL-MAR.'2014

717

147

238

7062

449

4671

12874

TRF APRIL-MAR.'2013

708

6960

463

4125

11844

TRF APRIL-MAR.'2014

6105

2170

194

366

1598

5350

2202

114

10526

28511

TRF APRIL-MAR.'2013

6195

1715

109

277

1976

4503

2869

137

10440

28084

TRF APRIL-MAR.'2014

6822

2317

199

400

1598

5588

9264

563

15197

41385

TRF APRIL-MAR.'2013

6903

1715

146

282

1976

4512

9829

600

14565

39928

TRF APRIL-MAR.'2014

17703

5593

122

3932

25027

7042

8485

68003

TRF APRIL-MAR.'2013

16466

3094

142

4004

21394

4627

171

6654

56552

TRF APRIL-MAR.'2014

14009

12999

1771

795

2744

6928

4916

263

14341

58503

TRF APRIL-MAR.'2013

15036

12568

2023

565

2951

6845

4554

247

14498

59040

KAMARAJAR (ENNORE) TRF APRIL-MAR.'2014

2340

22127

355

2515

27337

TRF APRIL-MAR.'2013

1124

14240

685

1836

17885

TRF APRIL-MAR.'2014

12784

160

255

28330

1468

9576

51105

TRF APRIL-MAR.'2013

13375

190

232

29708

1540

9847

53404

V.O.CHIDAMBARANAR TRF APRIL-MAR.'2014

479

388

790

6644

10129

508

10212

28642

TRF APRIL-MAR.'2013

792

487

564

6661

9372

476

10384

28260

TRF APRIL-MAR.'2014

14321

271

4785

351

1474

20887

TRF APRIL-MAR.'2013

13896

331

4607

335

961

19845

TRF APRIL-MAR.'2014

24647

3123

454

2928

5420

747

1996

39365

TRF APRIL-MAR.'2013

24301

2616

519

2553

4358

692

1980

37036

TRF APRIL-MAR.'2014

522

179

7518

235

3241

11739

TRF APRIL-MAR.'2013

823

7421

768

6606

213

1784

17693

TRF APRIL-MAR.'2014

35982

151

4459

450

17993

59186

TRF APRIL-MAR.'2013

34785

156

356

4018

829

17894

58038

TRF APRIL-MAR.'2014

4566

55234

4161

2546

62346

TRF APRIL-MAR.'2013

4125

57911

4259

2454

64490

TRF APRIL-MAR.'2014

53137

586

2644

991

6080

270

452

22845

87005

TRF APRIL-MAR.'2013

54355

1006

3678

946

4064

374

1935

118

27261

93619

TRF APRIL-MAR.'2014 187312

24662

6104

7635

71607

33121

114641

7465

110421 555503

TRF APRIL-MAR.'2013 185981

28472

7441

7297

58653

28007

119821

7704

110118 545790

-13.38

-17.97

4.63

22.09

18.26

-4.32

-3.10

Kolkata Dock System

Haldia Dock Complex TOTAL: KOLKATA

PARADIP

VISAKHAPATNAM

CHENNAI

COCHIN

NEW MANGALORE

MORMUGAO

MUMBAI

J.N.P.T.

KANDLA

ALL PORTS

% Variation from previous year

0.72

0.28

8.70

1.52

3.65

20.25

-0.91

52.85

-4.30

1.35

5.25

6.29

-33.65

1.98

-3.32

-7.06

1.78

Source:INDIAN PORTS ASSOCIATION

May 2014

stats

INTERNATIONAL air FREIGHT movement

AIRPORT

SL. NO.

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

For the month FEBRUARY FEBRUARY 2014 2013

(A) 16 INTERNATIONAL AIRPORTS 1

CHE NNA I

16377

17093

-4.2

199968

216285

KOLKATA*

3291

3134

5.0

40874

38982

4.9

AHMEDABAD

1122

986

13.8

14404

11585

24.3

GOA

114

212

-46.2

1728

2146

-19.5

TRIVANDRUM

1953

1914

2.0

25137

35671

-29.5

CALICUT

1695

2077

-18.4

20487

24650

-16.9

GUWAHATI

-33.3

88.9

LUCKNOW

15.6

1067

1076

-0.8

SRINAGAR

-7.5

JAIPUR

44.4

219

159

37.7

COIMBATORE

27.3

873

518

68.5

MANGALORE

AMRITSAR

TRICHY

V A RA NA S I

PORTBLAIR

TOTAL

-85.0

1332

1300

2.5

394

307

28.3

4279

2509

70.5

0 25943

0 25140

0 334906

-100.0 -

-3.1

0 310469

-7.3

(B) 6 JV INTERNATIONAL AIRPORTS 17

DELHI (DIAL)

29753

27879

6.7

352676

323530

MUMBAI (MIAL)

37110

33948

9.3

423395

411496

2.9

BANGALORE (BIAL)

11867

11626

2.1

136378

129742

5.1

HYDERABAD (GHIAL)

3623

3613

0.3

44576

41788

6.7

COCHIN(CIAL)

3716

3084

20.5

38133

34235

11.4

22 22

NAGPUR (MIPL) (MIPL) NAGPUR

41 41

43 43

-4.7 -4.7

384 384

366 366

4.9 4.9

86110

80193

7.4

995542

941157

5.8

TOTAL

9.0

VISAKHAPATNAM

PATNA

CHANDIGARH

BAGDOGRA

MADURAI

GAYA

TOTAL

(D) 17 DOMESTIC AIRPORTS

202

-100.0

(E) OTHER AIRPORTS

111250

106136

4.8

1306022

1276265

2.3

GRAND TOTAL (A+B+C+D+E)

#DIV/0!

Source: AIRPORTS AUTHORITY OF INDIA

May 2014

Cargo & Logistics stats

DOMESTIC air FREIGHT movement SL. NO.

AIRPORT

For the month FEBRUARY FEBRUARY 2014 2013

(A) 16 INTERNATIONAL AIRPORTS 1 CHE NNA I 2 KOLKATA* 3 A H ME D A B A D 4 GOA 5 TRIVANDRUM 6 CALICUT 7 GUWAHATI 8 LUCKNOW 9 S R IN A G A R 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 C H A N D IG A R H 27 B A GD OGR A 28 MADURAI 29 GAYA TOTAL (D) 17 DOMESTIC AIRPORTS 30 BHUBANESWAR 31 IN D O R E 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 D IB R U G A R H TOTAL (E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E)

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

5669 5948 2850 245 117 15 780 249 265 301 532 14 11 0 24 239 17259

6472 5832 2738 149 117 46 396 184 172 482 423 19 6 0 10 288 17334

-12.4 2.0 4.1 64.4 0.0 -67.4 97.0 35.3 54.1 -37.6 25.8 -26.3 83.3 140.0 -17.0 -0.4

65041 75633 32847 2450 1694 150 6807 2816 3430 6337 5615 257 117 0 375 2461 206030

71613 73372 32379 2387 1359 318 5484 2073 2830 6255 5616 268 83 0 286 1985 206308

-9.2 3.1 1.4 2.6 24.7 -52.8 24.1 35.8 21.2 1.3 0.0 -4.1 41.0 31.1 24.0 -0.1

17765 13498 7147 3033 794 349 42586

13977 13565 6321 2609 647 410 37529

27.1 -0.5 13.1 16.3 22.7 -14.9 13.5

195501 164971 83677 33994 8742 4691 491576

172615 166775 75406 30662 8041 4428 457927

13.3 -1.1 11.0 10.9 8.7 5.9 7.3

1798 199 494 263 27 82 0 2863

1591 298 186 180 3 104 0 2362

13.0 -33.2 165.6 46.1 800.0 -21.2 21.2

19191 1590 4361 3039 1740 1108 0 31029

18234 1459 1949 2325 1106 960 0 26033

5.2 9.0 123.8 30.7 57.3 15.4 19.2

389 484 125 295 526 166 314 74 207 72 0 68 0 8 2 0 19 2749 141 65598

305 375 113 148 404 137 278 68 175 40 0 34 0 31 0 0 25 2133 120 59478

27.5 29.1 10.6 99.3 30.2 21.2 12.9 8.8 18.3 80.0 100.0 -74.2 -24.0 28.9 17.5 10.3

3563 4293 1537 3042 5935 1895 3728 789 2246 768 0 973 0 146 18 0 253 29186 1487 759308

2992 4341 1360 2137 5251 1807 3673 890 1356 679 0 1084 16 291 18 0 287 26182 1485 717935

19.1 -1.1 13.0 42.3 13.0 4.9 1.5 -11.3 65.6 13.1 -10.2 -100.0 -49.8 0.0 -11.8 11.5 0.1 5.8

Source: AIRPORTS AUTHORITY OF INDIA

May 2014

stats

INTERNATIONAL & DOMESTIC air FREIGHT movement SL. NO.

AIRPORT

For the month FEBRUARY FEBRUARY 2014 2013

(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 C H A N D IG A R H 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 U D A IP U R 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 February % % 2013-14 2012-13 Change Change

22046 9239 3972 359 2070 1710 782 323 265 327 602 24 23 394 24 239 42399

23565 8966 3724 361 2031 2123 399 248 172 500 478 19 86 307 10 288 43277

-6.4 3.0 6.7 -0.6 1.9 -19.5 96.0 30.2 54.1 -34.6 25.9 26.3 -73.3 28.3 140.0 -17.0 -2.0

265009 116507 47251 4178 26831 20637 6841 3883 3430 6556 6488 324 1449 4279 375 2461 516499

287898 112354 43964 4533 37030 24968 5502 3149 2830 6414 6134 268 1383 2509 293 1985 541214

-8.0 3.7 7.5 -7.8 -27.5 -17.3 24.3 23.3 21.2 2.2 5.8 20.9 4.8 70.5 28.0 24.0 -4.6

47518 50608 19014 6656 4510 390 128696

41856 47513 17947 6222 3731 453 117722

13.5 6.5 5.9 7.0 20.9 -13.9 9.3

548177 588366 220055 78570 46875 5075 1487118

496145 578271 205148 72450 42276 4794 1399084

10.5 1.7 7.3 8.4 10.9 5.9 6.3

1798 199 494 263 27 82 0 2863

1591 298 186 180 3 104 0 2362

13.0 -33.2 165.6 46.1 800.0 -21.2 #DIV/0! 21.2

19201 1590 4361 3039 1740 1109 0 31040

18234 1459 1949 2325 1106 960 0 26033

5.3 9.0 123.8 30.7 57.3 15.5 #DIV/0! 19.2

389 484 125 295 526 166 314 74 207 72 0 68 0 8 2 0 19 2749 141 176848

305 375 113 148 404 137 278 68 175 40 0 34 0 31 0 0 25 2133 120 165614

27.5 29.1 10.6 99.3 30.2 21.2 12.9 8.8 18.3 80.0 #DIV/0! 100.0 #DIV/0! -74.2 #DIV/0! #DIV/0! -24.0 28.9 17.5 6.8

3563 4293 1537 3042 5935 1895 3728 789 2246 768 0 973 0 146 18 0 253 29186 1487 2065330

2992 4341 1360 2137 5251 1807 3673 890 1558 679 0 1084 16 291 18 0 287 26384 1485 1994200

19.1 -1.1 13.0 42.3 13.0 4.9 1.5 -11.3 44.2 13.1 #DIV/0! -10.2 -100.0 -49.8 0.0 #DIV/0! -11.8 10.6 0.1 3.6

Lucknow, Varanasi, Tiruchirapalli, Managalore and Coimbatore airports declared as International airports vide Notification No.AV.24032/10/2012-AAI dated 22nd October, 2012 by Ministry of Civil Aviation, Government of India.

Source: AIRPORTS AUTHORITY OF INDIA

May 2014

Cargo & Logistics last page

Sheer passion and excitement! Gitika A Pruthi, National Sales Head, Aargus Global Logistics, gets her adrenaline going whenever she sees cargo Cargo is essentially a male-dominated industry. How did you find yourself in it? The cargo industry indeed is very challenging and dynamic industry. People who have passion to work and perform can only survive in this industry. There are days when you need to work round the clock coordinating with people across geographies. It’s challenging and as I love challenges … I really enjoy working in this industry. With changes, I am sure even this industry will witness more and more dynamic women succeeding. How many years have you been with the cargo industry and how has the journey been this far? It’s been almost 12 years and I never felt the urge to move to any other industry. The journey has been fantastic, adventurous sometimes… as you have critical projects, requiring working in tandem with people of various walks of life including the top brass from various industries to the loaders at the airport. How have your colleagues and those reporting to you reacted to you? Like I mentioned the journey has been fantastic. I get all the respect from my colleagues, reportees, clients and top management. Like all industries, the performers, here too get rewarded and get due recognition.

May 2014

Do you specialise in any section of the industry: e.g. handling of dangerous goods, etc.? Yes, I am certified in handling DG shipments and cargo. I head the pharma verti-

I With changes, is th en ev am sure industry will witness more and more dynamic women succeeding

cal at Aargus Global Logistics Pvt Ltd.

What is so exciting about the cargo industry that keeps you attracted to it? Sheer passion and excitement! New techniques, moving things which are critical to life across world in the toughest possible situations make you learn so much that you remain connected and attracted.

How confident are you about future growth on equal opportunity basis with male colleagues? Absolutely, I am very sure of this. Women across industries are setting benchmarks and it is true here as well. There are challenges but then nothing comes easy. What advice would you give youngsters — especially women — to join the industry? Oh…Yup… just go for the kill…It’s one of the best industries to work in .. if you are ready to explore the world while working … Exporters, importers, airlines, multinationals, the public sector, hospitals, big projects, just think of any business and it either needs us directly or indirectly. So, feel the power of running these to success. More importantly work, work and enjoy working. The industry is ready to welcome you!!

RNI No. DELENG/2011/387546

GROUP

Committed to Deliver

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

Head Office:

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

Branches :

Tel: +91-11-2331 0752 / 53 / 54 / 55 Fax: +91-11-2331 0797, 6630 4004

Bengaluru

Chennai

Kochi

Email : Website :

Mumbai

info@sagroupindia.com www.sagroupindia.com

Srinagar