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IS 3PL NOTHING BUT SLAVERY? YES, NO, MAYBE... Volume III n No 7

C A R G O

SEPTEMBER 2014 I `60

L O G I S T I C S

DO IT LIKE SCHIPHOL How did Amsterdam Airport Schiphol buck the trend – beating airports in Europe — by achieving high growth in cargo operations consistently.

Shape up or... Prescription for the growth of the logistics industry in the country

Focus on major ports A quick look at development plans chalked out to boost public sector ports

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

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Email : Website :

Mumbai

info@sagroupindia.com www.sagroupindia.com

Srinagar

MANAGING EDITOR’s NOTE

A small step

ave ‘Achchey Din’ started in the cargo and logistics industry? Maybe, but one will have to wait and watch. Even as we go to press, a bit of good news has trickled in – indeed, after a long time – of a no-objection certification being issued to the Delhi-based MSD Aviation to launch a cargo carrier. While the whole process – and that includes the necessary permissions from the Directorate General of Civil Aviation — will take a while to complete, we can only hope that the carrier will take off and continue flying. Apparently, the Civil Aviation Minister Ashok Gajapati Raju is keen to see that “Indian carriers carry a large amount of cargo from India and wants more and more cargo airlines to start”. The green signal to MSD Aviation was, hopefully, the first firm step to encourage more start-ups to enter the domestic air cargo arena. Over the last few years, we have seen a few dedicated cargo carriers take off amidst a lot of hype and optimism only to vanish into thin air. There was Captain G R Gopinath’s Deccan 360 and Aryan Cargo Express (ACE) – both died untimely deaths due to a variety of reasons. Around that time, there were reports that the government had given out quite a few cargo licences to: Flyington Freighters, Avicore, QuikJet and Deccan Cargo. Of these, only Quikjet remains in the air. And along with Blue Dart have kept hopes of the country having a thriving domestic air cargo business alive. The reasons of failure were many. Take the case of Capt Gorur Ramaswamy Iyengar Gopinath and his express logistics company Deccan 360. It began with a lot of hype but lasted for barely two years. The company failed due to variety of reasons: from funding constraints and high fuel costs to the manner in which it expanded. Deccan 360 failed, according to many in the business, because of Capt Gopinath’s ambition to scale up operations without the necessary revenues. On the other hand, one of the reasons for ACE’s failure was that it could not secure aircraft for its operations. But there were other reasons too. As Capt Mukut Pathak, ACE’s Managing Director told me at that time, that one of the major threats that he faced as a new start-up was the predatory pricing from established players on the routes he was planning to operate in. But, he did not seem worried because he said he try to avoid the trans-Atlantic routes where the big players were operating and concentrate more on the cargo

segment that was growing within Asia. As for the successes, Blue Dart’s air cargo services are part of the company’s bigger field of operations. To top it all, its has a solid, international giant backing it up. Quikjet, on it part, is ramping up slowly and steadily. It aims “to establish an efficient line-haul network connecting high-demand catchment areas in the country, which are currently underserved, due to lack of air-cargo transportation infrastructure”. It currently operates tri-weekly flights with its aircraft based in Kolkata to the North East providing a vital link to the economy. The reasons for success or failure notwithstanding, air cargo stakeholders – or for that matter anyone involved in the cargo and logistics industry – have more than enough reason to rejoice since the building blocks of infrastructure that is necessary for the rapid growth of the economy are being put in place. For long, those of us who have been reporting and writing about the air cargo industry in the country, have heard the word “infrastructure” (in fact, the lack of it) being bandied about in almost every public forum. For that last-mile connectivity and the rapid movement of goods across the country, it is infrastructure that the cargo and logistics sector have been crying out for. Perhaps, what is more important is the fact that proper infrastructure will be needed for the growing pharma sector – reason enough for the nation’s health and well-being. The Civil Aviation Minister was quoted saying that though there was huge growth in passenger and cargo traffic in and from India, “we have a long way to go. We are still very behind the world leader in cargo — the US, which carries 23 times more freight per tonne km than India”. The Minister also mentioned that “Indian cargo aviation has great potential, particularly in agro-based businesses, floriculture, fisheries and allied sectors.” So, while steps to create state-of-the-art air cargo facilities in 19 major airports have been taken, moves have also been initiated to start air freight stations that have remained non-operational till today. We, in the cargo and logistics industry, can only hope and look forward to good times. We, in C&L, will keep you abreast of what is happening on Ground Zero. Keep reading and, of course, do keep in touch. tghosh@newsline.in

Cargo & Logistics I September 2014

contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST STATISTICS COLUMNS

CONTENTS

C&L

VOLUME III n NO 7

Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH Consulting Editor RAMESH KUMAR Senior Sub-Editor-cum-Reporter PUNIT MISHRA

COVER STORY

p10

Amsterdam Airport Schiphol is an Airport City in which a lot of creativity and innovative spirit come together. It has built itself into a formidable cargo hub that is certainly one of the top in Europe. Our planners and airport operators could certainly take a leaf out of Schiphol to develop a much-needed hub.

FOCUS

p17

Logistics in India is in its developmental stages. Today, India spends 13 per cent of its GDP on Logistics against 8-10 per cent by other developed nations. The sector faces problems and a lot needs to be done for the growth of the logistics industry.

COLUMN

p22

Dubai World Central is looking forward to Indian companies to set up trading units. DWC’s Paolo Serra, VP, Business Park, showcased Dubai as the gateway to the global business world recently in Delhi.

Correspondents ANJANA TANWAR, NAVEED ANJUM, CHARCHIT SINGH Designers NAGENDER DUBEY, MOHIT KANSAL Picture Editor PRADEEP CHANDRA Photo Editor HC TIWARI Staff Photographer HEMANT RAWAT Director (Admin & Corporate Affairs) RAJIV SINGH

3PL is an effective way to reduce operational costs. Outsourcing logistics operations to a 3PL provider adds to the bottom line for both the customer and supplier through accurate, well-managed inventory and supply chain solutions.

SPOTLIGHT

Sr. Proof Reader RAJESH VAID

Vice President (Business Development) VINOD KAUL Subscription GEETA JENA, JUHI ROHILLA Distribution PANKAJ KUMAR, BHUSAN KUMAR Executive Director RENU MITTAL For advertising and sales enquiries, please contact:

NEWS IN BRIEF

Turkish Cargo has launched freighter operations from Rajiv Gandhi International Airport with its modern Airbus A330200F freighters. In the land section CONCOR saw a nine per cent boost in the container volumes in the month of July.

+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: Nagender Dubey Cover Photos: megaconstrucciones.net

September 2014 I Cargo & Logistics

JUST IN TIME

PANALPINA

AIR CARGO’S JUMP IN JULY

uly was a bit easy for global air freight markets. Recent data released by the International Air Transport Association (IATA), Netherlands-based research house WorldACD and Association of Asia Pacific Airlines (AAPA) all showed a strong increase in air cargo in the month. There was, however, a difference in the figures. According to the IATA’s released data, the global air freight markets in July 2014 freight tonne kilometers (FTKs) rose to 5.8 per cent compared to July 2013. This acceleration in growth was from June when cargo demand grew at less than half that rate (2.4 per cent). “The strong growth mirrors positive developments in some key regional economies. After a slowdown at the start of the year, global business confidence and trade are showing signs of improvement again, especially in Asia-Pacific. Global air cargo volumes have now surpassed their previous July peak, in 2010, and look set to continue to increase. European air freight, however, grew just 1.8 per cent. This reflects the effects of the Russia-Ukraine crisis (including the impact of mounting economic sanctions), which is adding to economic weakness in the Eurozone,” IATA said. As per WorldACD market data, world-

September 2014 I Cargo & Logistics

wide volume in July increased 6 per cent YoY, accompanied by a USD-yield improvement of 2.9 per cent. The USD-yield remained stable for the third month in a row. Of the total volume-growth in July, two-thirds came from the Asia Pacific area. The markets between Asia Pacific and North America showed a 25 per cent revenue growth (both directions together). Europe outbound business again showed much less volume growth than the worldwide average, but a higher yield growth (+6 per cent in USD, +2.4 per cent in EUR). In inbound traffic, the three largest markets continued to do better than the three smaller markets of Africa, Latin America and the Middle East & South Asia (MESA). Preliminary traffic figures by the Association of Asia Pacific Airlines (AAPA) showed continued growth in air freight demand. Supported by encouraging growth in demand for exports from major regional manufacturing hubs, air freight growth accelerated in July with a 6.4 per cent increase compared to the same month last year. For the third consecutive month, the expansion in capacity lagged growth in demand. In July, offered freight capacity increased by 3.2 per cent, leading to a 2.0 percentage point increase in the average international freight load factor to 65.3 per cent.

TREND Security is always the top priority in air freight logistics. Screening procedures, such as x-ray scanning of freight, are time consuming and costly and have to be repeated in the event of suspicious circumstances. To improve safety and ensure security, researchers at the Fraunhofer Institute for Factory Operation and Automation IFF in Magdeburg, Germany have been working with development partners and users such as Panalpina and Lufthansa Cargo in a joint project: ESecLog. Using simple screening procedures, they aggregate features such as 3D contours or RFID identifiers into one central shipment profile for every freight item. “The trick is that we document and aggregate these features into one complete digital image. Thus, every freight item has one digital fingerprint. This delivers accurate information of freight’s security status throughout the entire transport chain across operations and at any time,” explained Olaf Poenicke, Project Manager at the Fraunhofer IFF. The researchers are additionally developing an RFID seal in order to detect subsequent tampering with a shipment. To do so, they affix a transponder on a package’s seal with an ultrafine safety wire. If it is opened, the wire breaks. The shipment continues to be identifiable but the screener is additionally notified that the wire has been damaged. “This technology makes it possible to even inspect entire pallets. If one of the freight items has a broken wire, the shipment concerned can be identified precisely by its ID,” according to Poenicke. A pallet’s contour can additionally be captured by means of a 3D scan which changes if a package is subsequently placed on it. All of this information is aggregated into a kind of shipping record. Screeners can view this documentation in the central fingerprint information system as a timeline on a tablet. If necessary, they can retrieve additional information on individual stations and view all of the x-ray scans once again. The system will drastically reduce the work required for re-inspections.

JUST IN TIME

e-AWB penetration increases

he electronic Air Waybill (e-AWB) penetration jumped to 17.4 per cent in July, a 1.2 per cent increase month over month, according to IATA. Domestic market penetration reached 42.7 per cent — an increase of 2 per cent month over month. e-AWB has been gaining momentum in India too with e-AWB Penetration in July reaching 19.7 per cent: a growth of 6.7 per cent. While SIA Cargo (SQ) took the third place on the leaderboard again, Cathay Pacific (CX) and Emirates (EK) took first and second place in June. In the domestic market, Delta Air Lines (DL) led the group with China Southern Airlines (CZ) in second position and SAA - South African Airways (SA) on third. Nine IATA member airlines: SAS Cargo, Finnair Cargo, Lufthansa Cargo, Air France/KLM, Korean Air, Cathay Pacific, Qatar Airways and Emirates took the lead to drive adoption of e-AWB in the Nordic market through harmonisation of their operations procedures and data quality improvement.

QUOTE/UNQUOTE

“Governments must first recognise the vital role our industry plays in national and international economic development and employment and then understand the importance of engaging with us as part of the legislative process. There also needs to be much more cross-government co-ordination and global standards development on areas such as air cargo security and aviation emissions. ” DOUG BRITTIN Secretary General, The International Air Cargo Association (TIACA)

TOP E-AWB PERFORMERS Country/Location

e-AWB Penetration Growth in July

India

19.7%

6.7%

Thailand

25.0%

5.4%

Malaysia

18.0%

5.0%

Delta Air Lines

37.4%

9.2%

Emirates

38.1%

6.6%

Malaysian Airline

7.2%

6.4%

Expeditors Group

23.8%

5.3%

Kuehne + Nagel

11.4%

3.7%

TNT Group

21.8%

3.0%

AIRLINES

FREIGHT FORWARDERS

FIATA, IATA at loggerheads, again

ill it be back to square one in FIATA-IATA relations? Matters have once again come to a head with FIATA’s decision, that according to IATA, was to “mobilise the industry through collective action against particular carriers”. It all began when FIATA, in the beginning of September, sent out a note to its members to take part in a survey to find out whether the introduction of a paper air waybill surcharge was desirable or not. Soon afterwards, BIFA, the UK freight forwarding association, joined the battle asking its members to “stand against the introduction of this surcharge”. Speaking to a trade publication, BIFA’s Director General Robert Keen made it clear that the “stick approach” would not work. Instead, it would be worthwhile to give forwarders an incentive – like a discount — to take up e-freight instead of “a surcharge for failing to do so”. He also made it clear that e-AWBs were not in use in many countries. Many countries still wanted “reams of paper and there can be differing versions of methods of communication”, he said and pointed out that forwarders needed a common standard. It is still not clear which of the air-

lines that are fully on e-freight — according to IATA, Cathay Pacific, Emirates and Singapore are the top three carriers — will be imposing the surcharge. According to Keen, Lufthansa Cargo, for example, charged “¤ 1 per HAWB for every electronic data transmission” and “¤12 per HAWB for manual disposal with hardcopies”. The carrier also applied charges for “minimum shipments not booked or bookable through eChannels”. The UK body has decided to voice its objection through FIATA to IATA so that the application of “yet another surcharge, and create yet another revenue stream, under the guise of supporting IATA’s e-freight initiative” is stopped. On its part, an IATA spokesman commented to the trade publication: “As to the e-Freight and e-AWB industry-led projects, they are proven to add value to the air freight industry through reducing costs, improving efficiency, increasing speed and driving up reliability. These benefits have been acknowledged by FIATA, and indeed by BIFA in its own statement, and we are pleased to report that penetration has risen steadily throughout the year and currently stands at 17.5 per cent.”

Cargo & Logistics I September 2014

NUMBERS

PER CENT GROWTH AT TIRUCHI

Export of goods from Tiruchi international airport has witnessed steady growth over the past three years. Exports in 2011-12 were 2,075 tonnes. The figure went up to 2,920 tonnes in the subsequent fiscal and reached 4,773 tonnes in 2013-14. The air cargo terminal witnessed 63 per cent jump in exports in 2013-14 fiscal. The credit for the growth in export goes to more exporters using the air cargo facility and airlines making use of the belly space in their flights to optimum capacity. Perishable goods such as agri products, vegetables, and flowers account for 90 per cent of the cargo exported from Tiruchi airport which is surrounded by agrarian districts. Onions, drumsticks and coconuts were among the vegetables most exported. Fabric and garments exports contribute the rest. Officials expect a 10 to 20 per cent increase in exports during the current fiscal going by the existing trend. Import of cargo such as household goods, chemicals and electronic items was also gaining pace.

`4,200

CRORE GANGA PROJECT UNDER MONITORING UNIT

The Shipping Ministry has set up a monitoring unit for its ambitious `4,200 crore Allahabad- Haldia Jal Marg Vikas project on the Ganga for commercial navigation as well as cruise tours connecting religious places. “Process of establishment of PMU (project monitoring unit) has been completed,” the Shipping Ministry said in a communication to the Finance Ministry. The project includes developing the National Waterways-1 between Allahabad-Varanasi-Buxar-Patna-Haldia, which has several religious places. The Ministry also said a detailed project report for ‘Jal Marg Vikas’ (National Waterways-I) was under preparation for it to cover a distance of 1,620 km, that would enable commercial navigation of at least 1500 tonnes ships. It said that “the project will be completed over a period of six years at an estimated cost of `4,200 crore. The implementation of Jal Marg Vikas by 2020 would enable movement of large cruise vessels through the year up to Allahabad”.

`700

CRORE FOR IT AND LOGISTICS

Dubai-based Emke Group is going to invest `700 crore in IT and logistics infrastructure in Kerala this year. Emke Group, best known for its Lulu Hypermarket chain in GCC countries, had earlier announced `3,000 crore urban infrastructure investment in three Kerala cities — Thiruvananthapuram, Kochi and Kozhikode — within three years. Lulu Cybertower Phase II and the stateof-the-art logistics park will be the first set of Emke Group’s Indian projects to take off, sources said. The logistics park in Aluva was almost complete and would be inaugurated before December 2014. Emkay Logistics, set up with an investment of `300 crore, is said to be the largest logistics park in South India. The 7-lakhsq-ft built-up space in 27 acres will have the capacity to store 18,000 tonnes of food products. This would have cold storage facility to stock 1,500 tonnes of fruits, vegetables and milk, giving a boost to agro-industries and dairy business.

23.88

PER CENT GROWTH IN COLD CHAIN SECTOR

CONNECTING INDIA: The Union Minister for Shipping, Nitin Gadkari (centre) along with the Secretary, Ministry of Shipping, Vishwapati Trivedi at a review meeting of major ports

September 2014 I Cargo & Logistics

According to a recent report by research-based global management consulting firm TechSci Research titled ‘India Ready-to-eat Food Market Forecast and Opportunities, 2019’, the Indian cold chain market is projected to register a compound annual growth rate (CAGR) of about 23.88 per cent between 2014 and 2019, in revenue terms. The country’s cold chain market is anticipated to grow at a rapid pace on account of rising food exports, private investments and favourable initiatives undertaken by the Indian government to boost cold

NUMBERS

$100

1,316

M ALLOCATED BY INDIA FOR CHABAHAR PORT

To improve trade with Afghanistan and other Central Asian countries, India will be upgrading the Chabahar port in Iran, as reported earlier, and has already allocated $100 mn for the purpose, according to Afghan envoy Shaida Mohammad

Abdali. “Ultimately, the port connects Central Asia with South Asia. And we have in-principle agreed to the plan. The draft has been circulated, and India has already pledged $100 million for upgrading the port,” Abdali said. The decision

chain infrastructure in the country. The report revealed that more than half the total cold storage capacity in India was dominated by potatoes. Most of the multipurpose cold storage facilities were also dedicated towards potato storage due to its high consumption, especially in North India. Uttar Pradesh and West Bengal together cumulatively accounted for around 57 per cent of the available cold storage capacity in India, followed by Maharashtra, Punjab, and Gujarat.

to use Chabahar port for Indo-Afghan trade was taken given the fact that India could not export to Afghanistan through Pakistan. However, Afghanistan is allowed to export to India through Pakistan, Abdali pointed out. “So we worked with the Indian govern-

ment and all the three parties agreed that the Chabahar port will be upgraded and the two countries (India and Afghanistan) can operate, and also do business with Iran,” he said. Bilateral trade between India and Afghanistan is currently pegged at over $600 mn.

17,603

CONTAINERS HANDLED BY MAERSK

AP Moeller Maersk has set the world record by handling 17,603 containers. The Maersk Triple-E, the world’s largest ship, set the mark on July 21 when it left Algeciras, Spain, on its way to Tanjung Pelepas, Malaysia. “Algeciras has been preparing for full utilisation of the Triple-E for more than a year,” according to Carlos Arias, Head of the South Europe Liner Operations Cluster. “This included the upgrading of four existing cranes and the arrival of four new Triple-E cranes.”

FORWARDERS SIGN E-AWB AGREEMENT

A total of 1,316 forwarders have now signed the International Air Transportation Association’s (IATA) multilateral e-AWB agreement. But the number of airlines signed up to the agreement remains at 77, according to IATA’s current data. The single standard document allows shipment information to be exchanged electronically, rather than being accompanied by paper airwaybills. Global e-AWB penetration reached 16.2 per cent in June – up 1.2 per cent on the previous month. The e-AWB target for 2014 is 22 per cent.

`2,300

CRORE INVESTMENT PLAN

Great Eastern (GE) Shipping plans to invest up to $380 mn or around `2,300 crore in acquiring ships and on a rig by March 2017, according to a senior official. “Around $180 million will be for six ships on order, which include a major thrust on increasing the bulk capacity and one product anchor vessel, and a new building,” the group’s Chief Financial Officer G Shivakumar said. He said that the company, which was also into the offshore segment, had a $200 mn rig on order, which would be delivered by the end of the fiscal. The shipping line had reported a 6 per cent growth in its revenue to `385.08 cr in the first quarter of the fiscal, while the net profit was down at `87.61 cr from `141.96 cr a year ago, largely due to the fall in other income.

Cargo & Logistics I September 2014

COVER STORY

SCHIPHOL AIRPORT

Schiphol shows the way

â&#x20AC;&#x153;We are once again experiencing positive growth in terms of both passengers and cargo. This trend seems set to continue, thanks to the daily efforts of all our business partners at the airport. To further consolidate the international competitiveness of the Mainport, Amsterdam Airport Schiphol is investing around EUR 1.5 million each day in the quality of its services and facilities.â&#x20AC;? Jos Nijhuis, Schiphol Group President & CEO, Amsterdam Airport Schiphol

September 2014 I Cargo & Logistics

COVER STORY

Over the years, Amsterdam Airport Schiphol has built itself into a formidable cargo hub – certainly one of the top in Europe. The airport’s success can be attributed to its “continuing drive towards streamlined processes”, reports Tirthankar Ghosh. We have been trying to create a hub in the country but have been unsuccessful till today. Perhaps, we could learn a lesson or two from Schiphol

LEADING BY EXAMPLE: A view of Schiphol Airport

he Schiphol Group President & CEO’s remarks came after Schiphol Group’s 2014 Interim Report came out in early September this year. He was specifically pointing to the number of air transport movements at Amsterdam Airport Schiphol that had risen by 2.6 per cent to 209,800. Along with that while cargo volumes increased to 802,000 tonnes

(+9.1 per cent), passenger numbers at Amsterdam Airport Schiphol rose by 4.0 per cent to 25.7 million in the first half of 2014. The figures do speak for themselves and our airports could take a few ideas from Schiphol to boost cargo. After all, an airport is an airport. As Enno Osinga, Senior VP, Cargo at Amsterdam Airport Schiphol would like to put it, “An airport

… is a bit of concrete. It’s got runways. It’s got aprons…They’re all the same.” What then is so special about Amsterdam Airport Schiphol? The cargo unit of the airport has been in the news for quite some time. Take the second quarter of 2014, for example. Air cargo tonnage has grown 8.84 per cent in the year to date: In January-June 2014, Schiphol handled 801,700 tonnes. The tonnages

Cargo & Logistics I September 2014

SCHIPHOL AIRPORT

COVER STORY

EYE ON PROCEDURES: Schiphol Airport’s Air Freight Centre

were more than the 2013 figures – in fact, every month of 2014 saw y-o-y rise with the peak in May this year when it touched a whopping 14.1 per cent. Schiphol’s performance in comparison to the other gateways in Europe is due to the efficient procedures painstakingly built over the years – all part of the airport’s “continuing drive towards streamlined processes”. Many of these procedures have reached fruition and are now ‘paying off”. Osinga pointed out that the reason for Schiphol’s growth figures being the strongest among the major European gateways was due to “our logistics community and our authorities strongly supporting the continuing drive towards streamlined processes. We believe in an integrated support of the entire logistics chain; given our current results, this seems to be paying off.”

“OUR PRIMARY FOCUS REMAINS INDIA” Enno Osinga, Senior VP, Cargo at Amsterdam Airport Schiphol, on the factors responsible for the airport’s continued growth, the rising pharma volumes and the India market. YOU HAVE BEEN HAND-HOLDING THE INDIAN PHARMA INDUSTRY TO REALIZE ITS TRUE POTENTIAL. ARE YOU DOING THE SAME IN OTHER COUNTRIES TOO? India is a unique and special case. The growth of pharma production is phenomenal, and it deserves our full attention. We have done some preliminary work in the USA, and other markets may follow in due course. But, right now, our primary focus remains India. THAT BRINGS ME TO SCHIPHOL’S LOVE WITH PHARMA. WHAT ARE YOUR PLANS TO WOO MORE PHARMA TO THE AIRPORT IN 2014 AND BEYOND? Schiphol certainly recognises the huge importance of pharma to its own community and to airfreight in general. The progress we have made so far has been based on working hard to achieve full understanding of the industry and its special requirements, and we continue to research and investigate both in Europe and in India.

September 2014 I Cargo & Logistics

Although as an airport we are not directly involved in processing airfreight, fully understanding such regimes as the EU GDP guidelines enables us to help drive the implementation of appropriate resources and practices throughout our community. BANKING ON THE NEW OPPORTUNITIES FOR GROWTH, HAVE PHARMA LOGISTICS COMPANIES IN INDIA STARTED GEARING UP? WHAT ELSE DO THEY NEED TO DO TO BE AT PAR WITH WORLD STANDARDS? As an airport, we do not have visibility to day-to-day operations and such matters as the quality of presentation of cargo. But we don’t need to: the rapidly increasing volumes of pharma traffic through Schiphol are clear evidence that the Indian pharma sector is successfully managing its supply chains and complying with EU regulation. India now has more FDA approved sites than any other country outside the USA. The level and quality of attendance at our Pharma Shippers’ conference in

The cargo team at Schiphol deconstructed the whole cargo process. It all boiled down to the fact that most of what comprised airfreight actually happened on the ground: basics like following regulations and security measures. Both these measures were pushing transit times to the extreme. The only way to counter that: optimise processes “to preserve speed, improve efficiency and achieve cost savings”. Osinga explained it in detail. In his conversation, he said that “most of what we identify as airfreight actually happens on the ground. As an industry, we need to comply with ever-increasing regulation and security measures that have the tendency to lengthen transit times. The industry is also working on thinner margins than ever. The only answer is optimisation of processes to preserve speed, improve

Mumbai earlier this year spoke loudly of how seriously the Indian pharma sector is taking the design and maintenance of robust supply chains. Even the senior executive of the Indian Drug administration attended. These people mean business, and Schiphol will continue to support them in every way possible. The pay-back for our community’s active involvement in this debate is clear, as we see more Indian pharma manufacturers re-shaping supply chains to use Schiphol as their European gateway. Our carriers are reporting strong growth in traffic from this sector. WE UNDERSTAND THAT PHARMA COMPANIES ARE BEING INVITED TO NETHERLANDS, ESPECIALLY THE PORT AREAS OF AMSTERDAM AND ROTTERDAM, TO SET UP HUBS FOR THEIR LOGISTICS OPERATIONS. HOW MUCH OF INTEREST HAVE PHARMA MAJORS SHOWN? The Netherlands has long been a favoured location for distribution centres for all sectors. Independent studies by organisations such as the World Bank repeatedly rank the Netherlands as one of the best countries to do business. INFRASTRUCTURE-WISE, WHAT MORE CAN INTERNATIONAL AIRPORTS DO TO

SCHIPHOL AIRPORT

COVER STORY

RAEDY TO FLY: Ground procedures complete, cargo is ready to move on

FURTHER THE PHARMA BUSINESS? The obvious move is to ensure all facilities and operators invest in compliance with EU GDP standards. Beyond that, adopting Schiphol’s facilitator model – in which it has brought all stakeholders and authorities together to examine and solve issues – can only help. We have had tremendous cooperation from our Customs body, which is now a strong ally dedicated to ensuring that compliance and security do not raise unnecessary obstacles to the efficient transit of urgent cargo. The key is to involve everyone, and that is something we as an airport are uniquely able to achieve because we are commercially neutral. There is now such an acute interest in pharma matters within the Schiphol community, that we are becoming a centre for pharma logistics competence. For example, there is now a Schiphol-based training company that provides dedicated online training on GDP compliance. And specialist equipment manufacturers are setting up shop to provide every kind of active and passive temperature control solution. DO YOU FEEL THAT A GROUP LIKE THE PHARMA LIFESCIENCES STEERING GROUP (PLSG) THAT SCHIPHOL HAS

FORMED, WOULD BE ABLE TO PUSH THE PHARMA CARGO BUSINESS FORWARD? Undoubtedly. We believe this move to bring all stakeholders together remains a unique initiative. But we recognised from the start that it was a means to an end, rather than an end in itself. Today, it plays more of a back-seat role, as the community now has direction and is working on issues such as individual compliance. If we were starting again on our voyage into pharma, we would not do anything differently. It has been an unqualified success, and the concept could work at any airport. WHAT IS THE KEY TO BOLSTERING CARGO OPERATIONS IN ANY AIRPORT? Every airport has its own views about how to be successful in the cargo sector. What has worked for Schiphol are our unique facilitator stance – in which we actively bring all supply chain parties and other stakeholders to the table, to identify and implement opportunities for process optimisation; and our active marketing to key industry verticals. Of course, Schiphol’s strategic location, surrounding infrastructure and hinterland connections, and space for expansion are all key factors, too.

Cargo & Logistics I September 2014

efficiency and achieve cost savings,” he emphasized. This, then has been a focus of Schiphol’s for some years. And “it has manifested itself in a number of projects in which we have partnered, such as E-link (smart cards carried by truck drivers that grant security access, allocate transit shed doors, and transfer shipment data into handlers’ systems), Smartgate Cargo (streamlining of Customs processes, such as remote monitoring of cargo security scanning) and e-Freight. We have already seen time savings up to 25 per cent in some processes. To achieve our objectives, we have cast ourselves as neutral facilitators, bringing together all stakeholders, and often getting competitors to share information when it is in their mutual interests,” said Osinga. Schiphol also took the initiative to boost cargo capacity with a programme to welcome industries. Carefully crafted, the programme identifies key vertical markets like pharma, for example. As Osinga put it: “We also spend a lot of time and effort in identifying key vertical markets, such as pharma, getting to understand their logistics needs, and finding ways of making airfreight and Schiphol integral elements. In addition we travel the world, exhibiting at major trade shows, and speaking at major conferences, to deliver Schiphol’s message to a global audience.” Once Schiphol’s team selects a vertical, the cargo unit focuses on the logistics needs and designs plans where both airfreight and Schiphol dovetail with the overall plan. To constantly feed that vertical market and keep it growing, the Schiphol Cargo team travels around the world, exhibiting at major trade shows, and speaking at major conferences. The message to the global audience is loud and clear: ‘Welcome to Schiphol!’ In fact, one of the verticals that Schiphol is keenly interested in developing is pharma from India. The four-pronged approach that Schiphol follows for strategic development include e-Freight, SmartGate, ACT (Amsterdam Connecting Trade) and seamless connection. The airport is one of the top gateways for IATA’s e-freight – it received a ‘Certificate of Achievement’ from

September 2014 I Cargo & Logistics

SCHIPHOL AIRPORT

COVER STORY

SECURITY ABOVE ALL: Cargo Checkpoint operation in progress

IATA Cargo in 2012 for its and exports and the simplest in Schiphol ‘outstanding performance processes. also took the initiative in supporting and helpHowever, it is the ing to adopt e-freight first-ever public-prito boost cargo capacity in 2011’. In addivate collaboration in with a programme to weltion, the airport has the field of air cargo come industries. Carefully created the Schiphol that has set Schiphol crafted, the programme SmartGate Cargo that apart from the rest identifies key vertical has managed to hasten and that is SmartGate markets like pharma, the movement of goods Cargo. The principal for example in the airport, making it players in SmartGate Carone of the fastest in imports go are AAS, Air Cargo Neth-

t Fastes ficient f E t s Mo 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) Tel: +91-11-49993333, 25540119, 25593123 E-Mail: info@scorpiofreight.com, Website: www.scorpiofreight.com

Trust • Value • Commitment

COVER STORY

WIKIMEDIA COMMONS

Connections aims to create truly seamless connections to enable the Amsterdam Metropolitan region to excel in terms of speed, safety and reliability, low costs and sustainability, both now and in the future. The success of Schiphol has come, according to Osinga, because of the airport’s willingness to speak to stakeholders. “People continue to puzzle about why, at Schiphol, we seem so willing to start dialogues and take initiatives that often benefit other airports. It’s simple: we are all in this together. The airfreight logistics chain is only as fast as its slowest link. We try to set examples that others will follow. Ultimately, we want all airports to be as logistics-friendly as Schiphol. In that way, airfreight will have a more certain future, and we will all benefit.” This joint effort is certainly having an effect. And Osinga knows it better than TOP PRIORITY: Airport ground support equipment at Schiphol ready with full loads. anyone else. As he put it: “We must be doing something right: our cargo growth has automatically assigned a door to offload been outperforming other European gateerlands (ACN) and Dutch Customs. The his cargo while the Customs people know ways, and even other parts of the world, for first phase of SmartGate Cargo will be what has been brought in by the vehicle some time. In 2014 H1, we are up 8.8 per ready by late 2015 and will be a “one-stop and they can plan their inspeccent on 2013.” shop for cargo monitoring”, according to tions. The Schiphol Cargo stoOsinga. Involving the integrated monitorThe last two ry would not be complete ing of goods leaving the European Union People continue prongs, ACT or Amwithout mentioning pharfrom Amsterdam Airport Schiphol, Smartsterdam Connecting ma. Osinga emphasised Gate Cargo will allow rapid and efficient to puzzle about why, at Trade and Seamthe importance of pharclearance. Schiphol, we seem so willless Connections, ma when he pointed out To ensure that the concept does not ing to start dialogues and add more spokes that “there is now such ‘scare’ any of the stakeholders who have take initiatives that often to boosting cargo. an acute interest in phar‘fears of change’, the SmartGate Cargo benefit other ACT is a unique proma matters within the team has been talking about what it has airports. gramme for the spatial Schiphol community that been doing. To top it all, the team has been and economic developwe are becoming a centre for motivating younger employees to be conment of the Logistics Corpharma logistics competence. For versant with SmartGate through ‘Smartridor of the Amsterdam Metropolitan example, there is now a Schiphol-based Gate: The Game’ which demonstrates the Area (AMA): the corridor between Greentraining company that provides dedicated intricacies of the supply chain and shows port Aalsmeer (the world’s largest flower online training on GDP (Good Distributhe advantages of using SmartGate Cargo. auction), Amsterdam Airport Schiphol and tion Practice) compliance. And, specialist The game will help to open up the system the Port of Amsterdam. ACT is linked to equipment manufacturers are setting up to stakeholders and demonstrate what the the AMA, a major transit hub for the flow shop to provide every kind of active and changes could bring to the industry. of people, goods, capital and services to passive temperature control solutions.” SmartGate Cargo comprises a large and from the 350 million potential customSupporting the pharma move, the airnumber of processes and technologies – ers of the European continent. port now has the Pharma Lifesciences “from scanning equipment to the control The last bit is the Seamless ConnecSteering Group (PLSG) to develop a longcentre”, according to Osinga. The first step tions, a programme in which the logistics term strategy for the promotion of lifein the process has been to install scanners. sector, government and knowledge insciences-related activity centred around Then came the E-Link system that uses a stitutes work together to remove boundthe airport. Incidentally, the initiative ‘smartcard’ containing information about aries and obstacles between partners in followed Schiphol Cargo’s India foray to Customs clearances, number-plate recogthe supply chain, both literally and metadevelop a pharma trade lane with Europe, nition and identification. Once the smartphorically. As the name suggest, Seamless using the airport as its distribution hub. card is ‘read’, the driver of the truck is

September 2014 I Cargo & Logistics

FOCUS

Shape up or ship out

WIKIMEDIA

DR VENI MATHUR charts out a prescription for the growth of the logistics industry in the country and advocates a number of ‘must-haves’ without which the country would be doomed to mediocrity.

TREACHEROUS JOURNEY: Heavy transport vehicles have to take difficult routes in ensuring proper logistics

ogistics — a key word in today’s economics and planning — entails a proper coordination of certain functions such as production, transportation, and inventory management, location of the plant, and information and communication technology for the purpose of ensuring the supply of the right product, at the right place, in the right condition, at the right price, and most important, at the right time. Logistics in India is in its developmental stage. India spends 13 per cent of its GDP on Logistics against 8-10 per cent by other developed nations. Logistics costs

India and have set up operations and serincluding inventory, transportation, warevices with an aim to become big game playhousing, packaging and administration ers in the future. There is, thus, a need for costs are very high and a lot needs creation of a vast range of Supply to be done in this direction. Chain Management (SCM) An Integrated Logistics The National and logistics solutions covPolicy for efficiently Transport Development ering several factors such managing and conPolicy Committee was set as warehousing and trolling the flow of up to provide a framework for material handling, cold goods and services transport growth till 2030, chain management, in India has to be involving pricing and e-commerce, inventory worked out. coordination between altermanagement, informaSeveral global native modes of tion technology, training third party logistics transport of manpower, etc. to im(3PL) providers have alprove the efficiency and producready made their ingress in

Cargo & Logistics I September 2014

FOCUS

WIKIPEDIA

IMPORT COG IN THE WHEE: Heavy vehicles such as trucks (as seen in the picture) are involved in transportation of most of the goods

tivity of the complete value chain in terms of profits, speed and customer satisfaction. The Indian logistical market players should gear up to face the global challenge. The Indian logistics sector clearly needs to focus on reducing transportation costs that are high due to regional concentration of manufacturing and geographically diversified activities as well as inefficiencies in infrastructure and related technology. Freight movement in India is shifting from rail to road that has implications on quality of transfer, timeliness of delivery, costs as well as congestion and pollution. The road transportation industry is fragmented and unorganised. This segment comprises owners and employees with inadequate skills, perspectives and abilities to organise or manage their operations effectively. Low level of technology, low wages, poor maintenance of equipment, overloading of trucks beyond capacity and price competition amongst a large number of service providers in the industry are some of the ills plaguing these players. Logistics costs are also increasing in India due to the dramatic growth in several sectors like steel, pharmaceuticals, food

September 2014 I Cargo & Logistics

and agro-business, and auto. Investments in cold chains and losses in warehousing and packaging might also be the causes of high costs. Erratic power supply has caused low dependence on technology and more on manual handling and has hampered productivity as well as service quality. A very small percentage of firms use any software for scheduling dispatches. In addition, some firms claim to have more than 500 suppliers. This is, perhaps, where difficulties in managing logistics in India lie – the larger the number of suppliers or distributors, the higher is the cost of coordination. As ‘octroi tax’ is very high and warehouses are located outside city limits, the operating costs are high. The ability to provide quick response to customer requirements is reduced due to location policies of the past, where manufactures were forced to locate plants away from each other. The increase in consumer awareness in India has caused the rise in demand and eventual growth in international trade. Therefore, improvement of infrastructure support in terms of roads, rail, ports, warehouses and uninterrupted power-supply hold the key to the success of

Needed: Faster C onsulting and financial advisory firm Deloitte in a recent report, Indian Logistics: Focus on infrastructure creation to sustain and drive growth, has pointed out that even as India was being viewed as the second-most attractive logistics market after China, inefficiencies in logistics infrastructure costs the Indian economy an extra $45 billion, 4.3 per cent of the gross domestic product, every year. Quoting a McKinsey study, the Deloitte report warned that a 2.5 times growth in freight traffic demand by 2020 (compared with 2010 levels) would strain the country’s infrastructure further. Even so, the high demand would create opportunities for logistics companies in India, according to Deloitte. The Planning Commission has budgeted for an initial logistics infrastructure investment of `4.1 trillion over the 12th Five Year Plan period (2012-2017), double that proposed under the 11th Five Year Plan (2007-2012). Highlighting the challenges faced by each of the segment of logistics infrastructure: Road, railway, port and air cargo, the Deloitte report concluded that there were

the economy. The National Transport Development Policy Committee was set up to provide a framework for transport growth till 2030, involving pricing and coordination between alternative modes of transport. The point to note is that with modes of transportation come other logistics services like warehousing, inventory control, IT, operations, finance, 3PL/4PL, production, marketing, customer care, etc which also need attention at the same time. There is need to create an Integrated Logistics Policy to take care of all these issues simultaneously, to ensure efficiency and reduce costs. The key issues that need to be incorporated in the policy should be: • Shift of cargo movement from road back to rail by accelerating the pace of Dedicated Freight Corridor • Strengthening of coastal shipping for the movement of freight traffic

FOCUS

r growth on all fronts three key aspects the sector should look into. One, in each of the sectors profiles, there was scope for capacity creation and efficiency improvement to ensure improvement on a ‘logistics performance index’ (time and cost). Second, the opportunity in each sector was enormous and the 12th FYP (Five Years Plan) had set ambitious targets for expanding these capacities significantly over the plan period. Third, if the gap between current and potential levels had to be closed urgently, huge private sector investment would be required to bring in both – funds and best practices. For this purpose, the government and respective authorities must facilitate private sector participation. Over the past two years, environment clearances and land acquisition emerged as key issues that coupled with economic slowdown jeopardised projects under implementation / reaching financial closure, which adversely affected investor sentiment. The economic slowdown significantly changed viability of many projects across sectors, partly because of aggressive bidding by private sector on some projects. This experience must be leveraged to

put in place mechanisms that ensure project risks are identified and project viability and traffic projections are assessed objectively before the award of project. Also, steps must be taken to address any major project viability risks that materialise, before they begin to affect the larger investment sentiment and/or create several project delays. Furthermore, there was a requirement of continuously evolving the risk sharing framework between the private sector and the government. While the PPP frameworks for roads and ports sectors were at an advanced stage of development, having undergone several rounds of revision, there were likely to be areas for continued focus. For instance, in the Roads sector, renegotiation of certain provisions under the concessions were being sought by the private sector to make the project development viable after bidding (for instance, allowing back-ending of payments of premium). Proposed revision in the guidelines for setting of tariff for major ports was expected to allow greater role of competitive forces in tariff determination and to providing a level playing field between major and non-major ports. For other sectors PPP framework development

• •

•

• • • • • • • • • •

More focus on inland water transport Completion of construction of National Highways Ensuring last mile connectivity Developing a robust Cold Chain system Build Multi-modal Logistics Parks System of road maintenance programmes on a continual basis Build a talent pool to look after all operations efficiently Better standardisation and upgrade of technology. Use of IT in logistics Sustained liberalisation of the trade policy Sustained liberalisation of foreign investment Developing infrastructure to meet the demands generated by industrial growth

Promoting Public Private Partnerships (PPP) • Rationalise taxation policies, procedures • Grant industry status to the logistics sector The scenario then poses an immense logistics challenge: from building the infrastructure, changing the industrial policies to facilitating the production and movement of goods and services, deploying effective managerial practices and technology to enhance the competitiveness through better management of logistics networks and developing new models for the services sector as well as agriculture. The interplay of transportation, technology and value added services will improve customer satisfaction as well as bring costs down and increase efficiency. Changing government policies in terms of

would need to be focused on. Private investment in creation of rail infrastructure could take-off subsequent to the private sector participation policies announced by Ministry of Railways, provided the concession agreements for the same were also finalised and notified. Development of air cargo complexes on PPP basis was presently getting bundled as part of the overall airport development and could need separate focus – especially in as far as it contributed to storage / movement of specialised (perishable) cargo. Time had also come that an integrated approach was adopted to plan investments in the sector. For example, the Deloitte report said, while greater private participation was resulting in rapid port capacity expansion, adequate evacuation infrastructure i.e. roads and railways needed to be built to transfer goods between the hinterland and ports. Similarly, railway infrastructures needed to be developed faster, and the existing network strengthened on major freight routes, as roads get congested quickly with passenger as well as freight traffic despite rapid expansion. Planning and implementation in these sectors had to be undertaken in a coordinated manner to ensure that economic value was actually created.

taxation and regulation of service providers will play an important role. Coordination between various government agencies will pave the way for growth in multi-modalism. The logistics industry in India should be able to develop integrated business models and at the same time do away with the existing policy based on rigidities. All these efforts will be a boon to the logistics business in India. Without these in place, in letter and, more importantly, in spirit, we are doomed to mediocrity and under-utilisation of the potential that exists: a potential that can easily be ours to conquer! (The writer, a transport economist and Visiting Faculty at IIT, Delhi for the last 15 years, is Dean at Million Minds Management Services Ltd., New Delhi, and is responsible for training and placements)

Cargo & Logistics I September 2014

hi-tech

STRAIGHT TALK: (L-R) Malcolm Monteiro, CEO, DHL E-commerce, Asia-Pacific; Frank Appel, CEO, DPDHL and Anil Khanna, Managing Director, Bluedart Express at the media briefing in Mumbai.

DHL’s e-commerce foray

India will be the base for the international mail and logistics group’s pilot project for its e-commerce business model. It has started investment in infrastructure and new delivery options to lay the foundation for global e-commerce leadership in the fastest-growing logistics sector

ail and logistics group Deutsche Post DHL has focused on India to pilot the development of its e-commerce business model for Asia-Pacific. DPDHL’s business unit DHL e-Commerce has started investing in infrastructure and developing fulfillment centres, multiple delivery and payment options as part of its aim to become the preferred global provider of e-commerce related services including e-fulfillment and e-facilitation. This will be done through Blue Dart Express (a DHL subsidiary and a domestic leader in doorto-door delivery). Announcing the pilot project, Frank Appel, CEO, DPDHL, said that the Asia Pacific region was expected to surpass North America and Europe as the biggest online market in the world. “As the leading logistics company with an unsurpassed global footprint, there’s a huge opportunity for us to become the world’s leading pro-

September 2014 I Cargo & Logistics

vider of e-commerce logistics and we have a ready solutions infrastructure in India to pilot our solutions.” Appel also pointed out that over the next five years, the global e-commerce sector is expected to grow by more than 10 per cent per annum with Asia Pacific leading the way. Blue Dart Express with its widespread reach – more than 34,154 locations in India – within the country was ideally positioned to pilot e-commerce in the country and models for Asia Pacific. Emphasising India’s importance, Malcolm Monteiro, CEO, DHL e-Commerce Asia Pacific pointed out that with 250 million Internet users, Indian e-commerce still remained underdeveloped. In fact, online shopping was valued at EUR 2.3 billion in 2013 and was expected to grow to EUR 4.1 billion by 2018, a CAGR of 12.3 per cent in 5 years. “All countries across Asia are in different evolutionary stages when it comes to e-commerce. We need to adapt our service portfolio within

the region accordingly,” he opined. DHL e-Commerce will work through Blue Dart. While building infrastructure, it will develop multiple delivery options and cash on delivery capabilities. In fact, these two key needs were identified in a consumer survey carried out in 20 countries to understand home shoppers preferences. Titled, ‘Shop the World’, the survey by DHL e-Commerce found out that India’s top online shoppers were male, high-income and young urbanites. For Blue Dart, the opportunity to be part of the pilot project is being viewed as a vehicle for future growth. According to Blue Dart Express’, Managing Director, Anil Khanna, Blue Dart’s network in the country will “provide the perfect base for piloting the development of region wide e-commerce solutions”. Khanna also said that Blue Dart was working with leading brands, market place sellers and retailers helping them establish a sustainable e-com-

hi-tech Max. accepted order time in days

Orders Abroad Respondents in %

merce footprint. “We are investing in the right infrastructure — including IT — to build the right model for consumers and sellers,” he said. The ‘Shop the World’ survey pointed out some interesting facts: online purchases in India were focused on consumer electronics, fashion and media products. Most of the shopping was done due to geographical restrictions on choice and unlimited shopping hours. Perhaps, what was remarkable was the fact that online shoppers wanted their deliveries faster than the global average. Despite the infrastructure problems – bad roads, hinterland connectivity, etc – Indian shoppers wanted delivery in five days against the global average 6.5 days as well as tracking options and free delivery. The survey also identified growth opportunities in the development of online payment systems – cash on delivery or cards being India’s top payment choice – and in international sales. The majority of Indian e-commerce is domestic with only a third of consumers having ordered overseas. This is set to grow with more than half planning to place an international online order with US being the number one target market.

day’s emerging markets would be the entional experts from retail, logistics and acgine of growth 11 years from now. A strong ademia. It is the first global scenario study global economy and a stable middle class on cross-border online commerce and its would have established a true “Everywhere implications for the logistics industry. Commerce”. Consumers would receive In four scenarios the study showed what their purchases much faster than today, with the electronic world of shopping around the Express shipments being delivered in less globe could look like for consumers and than 24 hours and measured in minutes. businesses in the near future. The different In a different scenario a highly develfuture projections are based on a detailed oped digital culture has evolved, in which analysis of the most influential factors – almost all products would be sold online from energy and raw material prices to and consumers would receive support by technological, political and social factors avatars. To protect manufacturers from to retail and consumption patterns. The counterfeit, logistics companies would ofscenarios also outlined possible effects of fer protected supply chains. However, the changes to society’s value system by 2025. study not just portrayed positive future The research examined selected developed projections of worldwide e-tailing, but also and emerging markets around the world. possible crisis scenarios. Scenario four Trend scouts also studied purchasing and outlined how the worldwide consumption logistics trends in 12 international metroppatterns would develop after the global olises – among them New York, Moscow, economy would have suffered another fiBengaluru, Jakarta and Lagos. These consumer insights anchored the scenarios nancial crisis and energy and raw main today’s world and increased terial prices rise considerably. their plausibility. Under these circumstances, Today e-commerce people could adopt a DoDeutsche Post DHL’s makes up eight per cent It-Yourself mentality strategy 2020 including of the overall trading instead and sharing the pillars Focus, Connect volume in Europe models instead of the and Grow showed that the already. Depending “all new” approach on the scenario, this The scenario Group was in a position share could rise up to analysis was supplefor these develop40 per cent in developed mented by multiple ments countries and up to 30 per essays from renowned locent in today’s emerging margistics experts: Prof. Dr. Dirk kets. Commented Jürgen Gerdes, Moschett of Fribourg University in CEO Post - e-Commerce - Parcel at DeutSwitzerland underpinned the necessity for sche Post DHL: “In the future, logistics will all of society to bundle supply flows more take over the role as an enabler for online efficiently. Professor Geritt Heinemann, of retailers even more than today. We as a lothe University of the Lower Rhine elabogistics company have a good overview on rated in his “E-Pace” contribution on the companies in various industries in almost importance of timing for the success of onall countries of the world. That’s why we line retail. Professor Shashi Matta of Ohio increasingly become an advisor and partner State University analysed how changes in for success.” consumer behaviour, e.g. trends such as From a highly developed digital culture sustainability or crowd-shaping would afto Do-It-Yourself In the first scenario, tofect online retail.

SOURCE: DHL GLOBAL MALL, 2013

Development of Distance Selling per Year 20132018 in %

ver the next ten years, online retail will gain even more importance than expected so far – not just in developed countries, but also in emerging markets. Logistics will play a key role: it provides companies important competitive advantages, such as deliveries within a few hours on the day of ordering, flexible receiving and return times as well as resilient logistics and value-added concepts in emerging countries. This was one of the key findings of the “Global E-Tailing 2025” study, initiated by Deutsche Post DHL with participation of the trend research institutions Z_punkt and See More as well as numerous interna-

Cargo & Logistics I September 2014

WWW.DWC.AE

SPOTLIGHT

Even as what is projected to be the world’s largest airport gets ready in Dubai, Dubai World Central – the aerotropolis around Al Maktoum International Airport – is laying out red carpet to Indian companies to set up trading units, as Tirthankar Ghosh found out after talking with DWC’s Paolo Serra.

ubai World Central (DWC) is wooing India and Indians. Projecting the world’s first purpose-built aerotropolis around the newly-built Al Maktoum International Airport, DWC’s Paolo Serra, VP, Business Park, was recently in Delhi to showcase Dubai as the gateway to the global business world. With his focus on the growing small and medium enterprises (SME) sector in India, Serra said that the Al Maktoum International Airport had been planned

September 2014 I Cargo & Logistics

as the world’s largest passenger and cargo hub spanning over 220 square km (85 sq. miles). Upon completion the airport will have an annual cargo capacity of 12 million tonnes and a passenger capacity of up to 160 million people per year making it among one of the busiest airports in the world. Serra made it clear that Al Maktoum International Airport would in no way compete with the present Dubai International Airport. In fact, “it would be a complementing feature”. He explained that

SPOTLIGHT

Dubai comes wooing the present airport had limited capacities; hence, the vision of the government to have a new airport. “First, all cargo facilities had moved to Al Maktoum because cargo was consuming lots of slots and space at the international airport. Emirates Cargo has moved its operations completely. In fact, all the cargo operators now are operating from the Al Maktoum. This was in Phase 1 and we have started with lowcost passenger operators from the airport,” said Serra. Speaking about the DWC, Serra said DWC would be especially suited for “companies in the aviation field as well as into R&D Research and Development… that also includes aerospace. Aviation is the key component of all …actually it is a very characteristic component”. He went on to mention that DWC already had a few joint ventures and operators in the aviation district but they were in the traditional

Why DWC? India emerged as the top trading partner of Dubai in 2013 with a trade volume of $37 billion • Companies can set up offices within 10 days • As a Free Economic Zone, DWC offers 100 per cent foreign ownership • Zero Tax Policy along with variety of business licenses are also offered • Over 1,000 companies are already registered with DWC Business Park, including Nestle, CEVA Logistics, Helukabel, and Sinopec Petroleum etc.

sense of the word — facility management of private jets, reaffirmation, MRO (Maintenance, Repair and Operations). Serra also said that with the launch of the Emirates Academy, there will be more in the aviation sector at DWC. “They will start the breaking ground within this year… and they will finish the construction in around one and a half year.” The aviation district in DWC would be 4.7 sq km in area. “Pretty sizeable in area, it has both access to the airport sites and the land sides, which is very important,” said Serra. “We want aviation to be a pure service centre of excellence for research,” he said. As for Indian companies in the aviation sector, he said DWC was in negotiation with different operators. The investment in the aerotropolis will be “many billions of Dirhams”, said Paolo Serra. Part of the developments were being done by DWC directly. Some of the development of the residential units would be done by the developers. During the presentation, Serra pointed out that DWC would be a planned commercial, logistics and residential complex. Set to be world’s first truly integrated and self-sustained economic zone and logistics platform supporting a wide range of transport modes, logistics and value-added services, including manufacturing and assembly, in a single Free Economic Zone, DWC is about 30 minute from Dubai. Its other big attraction is the World Expo 2020. Serra emphasized the reason for coming to India: “Indian people and businesses have enjoyed a long standing relationship with Dubai, so much so that over 50 per cent of the population of Dubai is of expatriate Indian community. India emerged as the top trading partner of Dubai in 2013 with a trade volume of $37 billion, representing a 10 per cent share of the total foreign trade of the emirate. DWC’s Business Park boasts of swift business facilitation, where companies can set up offices within 10 days, which is a great advantage for businesses in India who want to quickly set up their businesses at the gateway of global business environment. As the Free Economic Zone DWC offers 100 per cent foreign ownership and zero tax policy along with variety of business licenses.”

Cargo & Logistics I September 2014

Ports plan for growth

focus

is taking a close look at ways in which it can develop and expand its major ports along with 7,517 km coastline (including Iwithndia the coastlines of Andaman and Nicobar Islands in the Bay of Bengal and Lakshwadweep Islands in the Arabian Sea) to cope increasing demands. The lack of infrastructural facilities at the 13 major ports is negatively affecting exports and imports. Ports are unable to handle container and vessel traffic despite the decline in economy. One of the first tasks of the Narendra Modi-led government was to co-ordinate new port development in key strategic hubs and to encourage private investment to ensure that these key elements of infrastructure allow the country to keep pace with the demands of its economic development

KANDLA– : Traffic handled in April to March 2014 - 87005 tonnes. Loss-7.06 per cent compared to last year

MUMBAI– : Traffic handled in April to March 2014 - 59186 tonnes. Gain- 1.98 per cent compared to last year Ongoing projects

Ongoing projects

Estimated Cost (` in Mn)

Construction of two new off Shore container berths and Development of container terminal on BOT basis in Mumbai Harbour

MUMBAI

Estimated Cost (` in Mn)

Container Terminal, NSICT BPCL Jetty Third Container Terminal

6000.00 2000.00 9000.00

JAWAHARLAL NEHRU PORT

MORMUGAO– : Traffic handled in April to March 2014 - 11739 tonnes. Loss - -33.65 per cent compared to last year Ongoing projects

MORMUGAO

Estimated Cost (` in Mn)

Bulk Cargo Berths No. 5A & 6A

2500.00

MAP NOT TO SCALE

COCHIN– : Traffic handled in April to March 2014 - 20887 tonnes. Gain- 5.25 per cent compared to last year. Ongoing projects

Estimated Cost (` in Mn)

Crude Oil handling facility International Container Transshipment Terminal (ICTT) LNG Re-gasification Terminal

215.00 7500.00 207.00 410.70 4465.40

KANDLA

14600.00

JAWAHARLAL NEHRU PORT– : Traffic handled in April to March 2014 - 62346 tonnes. Loss - -3.32 per cent compared to last year Ongoing projects

Estimated Cost (` in Mn)

Fifth Oil Jetty (IFFCO) Oil Jetty related facilities at Vadinar (ESSAR) Oil Jetty awarded to M/s IOCL Container Freight Station Container Terminal (Phase I & II)

September 2014 I Cargo & Logistics

7200.00

21180.00 31950.00

NEW MANGALORE– : Traffic handled in April to March 2014 - 39365 tonnes. Gain- 6.29 per cent compared to last year Ongoing projects

NEW MANGALORE

COCHIN

Estimated Cost (` in Mn)

Construction of Captive Jetty for handling Coal by M/s NPCL

2300.00

V.O. CHIDAMBARANAR

focus

COMPETITION

DEVELOPMENT

n the last five years, the country’s major Ifaced ports owned by the central government a tough challenge from the private ports

he government has been aware of the isT sues and is working hard to eliminate the anomalies in this very crucial sector. The

or non-major ports, which have been growing at three to five times the pace of major ports. The non-major ports have been snatching away market share from the major ports at the rate of two to three percentage points every year. This is evident from the fact that the market share of the major ports, which was 91 per cent in 1995, slipped to 57 per cent in March 2014. The cargo handled by the major ports increased from 215.34 million tonnes (mt) in 1995-96 to 555.49 mt in 2013-14. During the same period, the cargo loaded by the non-major ports jumped from 20.3 mt to 420.24 mt.

government has started a process to appoint a consultant which will outline a plan to provide a corporate structure to the major ports. The consultant will be appointed by October 30 this year to prepare a draft for the amendment of Major Ports Trust Act, 1963. The initiative intends to bring back professionalism in operation at the major Indian ports, which will consequently boost their financial autonomy and help them compete better with the private sector. The major ports that will be given a corporate structure include Kandla, Mumbai, JNPT, Marmugao, New Managlore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia).

KAMARAJAR– : Traffic handled in April to March 201427337 tonnes. Gain- 52.85 per cent compared to last year. Ongoing projects-

KOLKATA DOCK SYSTEM-: Traffic handled in April to March 2014 - 12874 tonnes. Gain- 8.70 per cent compared to last year.

Estimated Cost (` in Mn)

Marine Liquid Terminal Coal Terminal Iron Ore Terminal

2490.00 3990.00 4800.00

KOLKATA HALDIA DOCK COMPLEX–: Traffic handled in April to March 2014 - 28511 tonnes. Gain - 1.52 per cent compared to last year.

HALDIA PARADIP Ongoing projects-

VISAKHAPATNAM

CHENNAI –: Traffic handled in April to March 2014 - 51105 tonnes. Loss-4.30 per cent compared to last year.

CHENNAI KAMARAJAR Ongoing projects-

Estimated Cost (` in Mn)

Container Terminal Development of Second Container Terminal

4690.00 4950.00

Estimated Cost (` in Mn)

Container Terminal (Berth No. 7) Construction of Coal Berth at NVW for NLC – TNEB

1000.00 490.00

1500.00 300.70 750.00 750.00

PARADIP– : Traffic handled in April to March 2014 - 68003 tonnes, Gain - 20.25 per cent compared to last year. Ongoing projects-

Estimated Cost (` in Mn)

Captive Fertilizer Berth 261.70 Mechanisation of Cargo Handling Project-1 373.20 Mechanisation of Cargo Handling Project-2 251.30 Construction of Single Point Mooring Captive Berth 5000.00

V.O. CHIDAMBARANAR Traffic handled in April to March 2014 - 28642 tonnes Gain- 1.35 per cent compared to last year. Ongoing projects

Estimated Cost (` in Mn)

Multipurpose Berth No. 4A Multipurpose Berth No. 12 Mechanisation at HDC berth no. 2 Mechanisation at HDC berth no. 8

VISAKHAPATNAM-: Traffic handled in April to March 2014 - 58503 tonnes. Loss-0.91 per cent compared to last year. Ongoing projects

Estimated Cost (` in Mn)

Container Terminal, Outer Harbour Multipurpose Berths – EQ-8 & EQ-9

1080.00 1960.00

Cargo & Logistics I September 2014

COLUMN

3PL is slavery! Veteran logistics watcher RAMESH KUMAR was astounded when he heard what a top logistics honcho had to say about 3PL but remains optimistic about the environment improving in the future

The ‘productivity gain’ route basically means tighter work norms at the workplace. That reminds me of a senior executive at a MNC bank confessing, “You get paid two times what PSU banks offer, but asked to deliver 5-6 times of what the PSU banker at my level does!” Sweat shop? Maybe. 26

“

3PL is slavery”. My jaw dropped when I heard that. I am sure you’re equally flummoxed as I was. Vijay Sankeshwar, the man who uttered these words, is no ordinary mortal. He is the Chairman of `1,500 crore VRL Logistics, based out of Hubli, Karnataka. His stunning response came during my short visit to his corporate headquarters situated midpoint between Pune and Bengaluru on National Highway 4. I had broached the subject of whether he was contemplating value added services to his 4,000-strong fleet empire that specialises in pan-India parcel services. Talking in a measured tone, the sixtyish transport baron who abhors the light asset format concept, told me unhesitatingly: “3PL is nothing short of slavery!” and halted. Being well acquainted with my background, he was watching my shocked expression closely. He also noticed the abrupt rigor mortis that had set in my right hand with a piece of the choicest south Indian vegetarian delicacy dangling a few inches away from my oral trapdoor at his palatial Hubli home during dinner one August evening. “Just to grab orders and show higher topline, many 3PLs resort to gross undercutting (of costs). Once the client is bagged, then they

VRL LOGISTICS.

Ramesh Kumar

September 2014 I Cargo & Logistics

have to balance out expenditure with income. Ruthless work performance parameters are deployed towards that end. Service seekers (read India Inc.) demand the best services at rock bottom prices. Every inconceivable condition laid down by the service seeker is blindly accepted. Neither you as the service provider have a say in price fixation nor actual delivery. They order and you deliver and wait endlessly for payment. If this is not slavery, what is?” asked the former Member of Parliament from Hubli, representing the Bharatiya Janata Party (BJP) in a cool and undetached manner. His logic was beginning to sink in, while I quickly recovered to bite into the morsels of food laid before me. Actually speaking, the VRL Logistics boss is not off the mark. Rather, he is bang on. Harry Lagad of Toll Global Logistics echoed similar sentiments way back in 2010 while he was at Gati, emphasising that “world quality 3PL services in India is difficult because no one wants to pay the right price”. With outsourcing becoming the norm, business enterprises quietly hive off labour-intensive operations to 3PLs for almost one-tenth of the money they have been spending for ages. There are several advantages that the business enterprises derive from this outsourcing route: primarily, expenditure suddenly goes down, fetching a few accolades from the top management.

In one stroke, the labour management on the shop floor or wherever is no longer their ‘headache’, but the 3PL’s. Unlike monthly dispersal of salaries and other perks to workers on its rolls, payment to 3PL for services rendered is nothing short of 90 days and above. Yes, it is a win-win for business enterprises. In the strictest sense of the term, business enterprises have ‘transferred’ their headaches or challenges to an outsider viz., 3PL. Many 3PLs, in turn, have in their hunger for business and topline and competing against their peer group quote the barest minimum – perhaps, with the hope that over time they would be able to ‘improve’ their margins either via better negotiation skills with the management or through productivity gains at the workers level. By and large, ‘productivity gains’ is the only reliable route to begin with because there is no guarantee of higher rates – given the dog-eat-dog or catfight among competing 3PLs. The ‘productivity gain’ route basically means tighter work norms at the workplace. That reminds me of a senior executive at a MNC bank confessing, “You get paid two times what PSU banks offer, but asked to deliver 5-6 times of what the PSU banker at my level does!” Sweat shop? Maybe. I would say, ‘Not may be’ but ‘It is actually sweat-shopish’ if I may be allowed to coin a word. This holds good at 3PL level as well. Move over to Ramanathan Iyer, ex-Kuehne+ Nagel and now into full time SCM consultancy across continents: “You are absolutely right. Profit margins are wafer-thin for 3PLs. Chances of rate revision are very bleak even after the maiden contractual period, due to – as you rightly said – dog-eat-dog scenario among 3PLs. Interestingly, this leads to squeezing the maximum out of low headcount and longer working hours, etc. Low

WIKIPEDIA

COLUMN

headcount actually translates into multi-tasking and well, sort of slavery.” According to Iyer, who had a ringside view of 3PLs servicing various verticals while at Kuehne + Nagel for over a decade, watched the huge ingress of MBAs into 3PLs. But the ground reality of multitasking and long working hours at 3PLs is something “they don’t cherish”. So, what do they do? “They work for a period of say two years or so, pick up skills and understand how and where 3PLs make money and ultimately want to move onto the client side,” pointed out Iyer. Such transition from 3PL to client’s SCM side is a big boon/boost for business enterprises. “Having seen the operations of 3PL from inside out, these neo-SCM practitioners further spoil the game by tightening norms,” added the former Kuehne + Nagel honcho wistfully. I could not help recollecting the classic piece, “I Was A Warehouse Wage Slave” (Mother Jones, March-April 2012 issue) that detailed the worker’s plight. Who says ‘slavery’ has been abolished? It has not. No longer, the bare-bodied, copper-skinned, types pushing or pulling stone-wheels of chariots that we have seen in Ben-Hur. Modern-day slaves are suited, booted – some uniformed and some not – and engaged on shop floors of business enterprises of every single vertical. Will things improve? We can only hope so. (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

Neither you as the service provider have a say in price fixation nor actual delivery. They order and you deliver and wait endlessly for payment. If this is not slavery, what is?” asked the former Member of Parliament from Hubli, representing the Bharatiya Janata Party (BJP) in a cool and undetached manner.

Cargo & Logistics I September 2014

INNOVATION

big

The

job

Apple has mastered the art of delivering its products to its buyers around the world. It took a lot of planning before the iPhone 6 reached your hands. A close look at the logistics involved.

“

For those of you encountering some difficulty booking Air freight out of China in the last couple of weeks the culprit may be the mass transit of the new iPhone 6 handsets which were released on the 11th of September. Another indicator

September 2014 I Cargo & Logistics

of the high demand for this new Apple product is the fact that since the second quarter of this year the shipments of other prominent smartphones have taken a dip with all the signs pointing to one of the biggest smartphone releases of the last few years with iPhone 6 handsets being predicted to boost China’s and Taiwan’s export growth by one per cent and two per cent respectively until the end of 2014.” “To our customers who ship from China regularly please rest assured that we have taken preventive safeguards to ensure that

our service isn’t hindered and that you the customer are given a painless service as you are rightly used to from the team at Freedom.” This was the note that was posted by Freedom Logistics from UK for its customers. The ‘problems’ created by the movement of the iPhone 6 from factories in China to phone dealers around the world was a topic that was avidly followed by shippers. In fact, the iPhone’s release was awaited by almost everyone in the logistics chain for one simple reason: it was expected to deliver a

INNOVATION

much-needed kick to the slow-moving global cargo market. In addition, the factories in Zhengzhou, Henan where two-thirds of the world’s iPhones were produced last year were looking for a boost. The air cargo market has been going through a slow process of revival over the last few months and the iPhone 6 would provide the magic touch to bring it somewhere near the good old times. Enno Osinga, Vice-Chairman of the International Air Cargo Association (TIACA) exuded optimism when he said that the new iPhone launch “is going to be a massive boost to air cargo. Last year in November we had a boost from both the PlayStation 4 and the Xbox One and that lasted for three months”. Not only was the iconic mobile phone going to boost air cargo but it was certainly playing a stellar role to revive the fortunes of Zhengzhou. The South China Morning Post pointed out that Apple supplier Foxconn had moved its biggest iPhone production base from Shenzhen to Zhengzhou in 2010, and had ushered in not only growth to the economy of the city but also sent its logistics sector zooming ahead. The article quoted Huang Qing, Deputy Director of the management committee of the pilot Zhengzhou Airport Economic Zone where the Foxconn factory is located, “Its (iPhone’s) production value in 2013 was 180 billion yuan (HK$226.4 billion) and its import-export value made up close to 60 per cent of Henan province’s total”. The output from the Zhengzhou factory in 2013 was a whopping 96.45 million iPhones. Put that beside the 150 million iPhones sold by Apple last year around the world to get an idea of how important Zhengzhou is. In fact, the Zhengzhou airport is considered to be the fastest growing cargo airport in China where traffic has increased 120 per cent in the first seven months of 2014: around 20 times faster than the Chinese national average of 6 per cent. It is not only the iPhone 6 that is helping air cargo. Apple has been moving a number

of devices from its factories to outlets around the world. Reports indicate that FedEx and UPS were getting high loads from Apple with most consignment being the iPhone 6 and the iPad. The simple movement of a phone from one country to almost anywhere in the world is part of a serious logistical manoeuvre, conceptualized by none other than Steve Jobs. Quite a few years ago, Apple logistics executive John Martin told Businessweek how Steve Jobs devised the manner in which Apple shipped its products. He revealed how Apple began innovating on the nitty-gritty details of supply-chain management almost immediately upon Steve Jobs’s return in 1997. At that time, computer manufacturers usually moved products by sea. Jobs changed all that because he wanted to be certain that the new translucent blue iMacs would be available for buyers at Christmas the following year. He paid $50 million “to buy up all the available holiday air freight space”. That move virtually took the wind out of the sails of Jobs’ competitors like Compaq that later wanted to book air transport. Later, Apple adopted another strategy when iPods were released in 2001. Since the gadget was so small a huge number of them could be put on planes. So, Apple decided to ship them out directly from the factories in China to buyers’ doors. Not only was it economical but it created a ‘Wow!’ factor for Apple. This time around, according to an estimate by Creative Strategies analyst Ben Bajarin, Apple could potentially sell 60+ million iPhones 6 this holiday quarter! What is so special about the way Apple moves its products? Adam Satariano writing for Bloomberg’s Global Tech Today in September 2013, mentioned the “complex operation” behind sending the millions of iPhone handsets to store shelves around the world. He revealed how the “process starts in China, where pallets of iPhones are moved from factories in unmarked

containers accompanied by a security detail. The containers are then loaded onto trucks and shipped via pre-bought airfreight space, including on old Russian military transports. The journey ends in stores…” he wrote. The story mentioned that Apple’s worldwide logistics operation was now being overseen by Michael Seifert, formerly from Amazon.com veteran who joined the company in 2010. He reports to Jeff Williams, Apple Senior Vice President of Operations, responsible for the smooth running of the company’s supply chain. The final movement of the iPhones to stores is, of course, the last link in the chain. The logistical process begins quite early when the company officials take the final call on moving components from suppliers to the assembly plants in China by planes and trucks. Before that the sales, marketing, operations and finance teams meet “to forecast how many devices the company expects to sell”. Once the figure is arrived at, the manufacturing process starts and the final version of the iOS software – being developed by Apple engineers in the US — is the last piece that is loaded in the handsets that are in the assembly lines in the Chinese factories. After the devices are packed to move out of the factories, security guards take them “to the truck depots, airports, customs and storage warehouses until the product is finally unveiled”. According to Satish Jindel, a logistics-industry consultant and president of SJ Consulting Group, who was quoted in the story, FedEx primarily uses Boeing 777s for the 15-hour flight from China to its Memphis hub. “The 777s can carry about 450,000 iPhones and cost about $242,000 to charter, with fuel accounting for more than half the expense,” wrote Satariano. One of the big advantages that the iPhone has is that it is light in weight meaning many more can be accommodated in a single container.

Cargo & Logistics I September 2014

PROFILE

‘Soldier’ing Relentlessly A name that is synonymous with relocation in the country is Agarwal Packers and Movers. Behind that name and the respect that the organisation commands is former Air Force officer RAMESH AGARWAL. For him, his drivers are soldiers who work around the clock to serve the nation.

ou can never question the patriotism or desh bhakti of faujis (soldiers). However short their tenure in Army olive green, Navy white or Air Force blue uniforms protecting the country against external threats, their love and respect for the nation is etched permanently in their psyche. The question,“How do I serve this country?” keeps buzzing in their heads forever. It is always: Service, service, service. Ramesh Agarwal fits into this category to the ‘T’. Never did this ex-IAF officer in his wildest imagination think of building a logistics/transportation empire and emerging as the ‘king of relocation’ when he stepped out of the services to return to Bhiwani with `100,000 in his pocket. First

September 2014 I Cargo & Logistics

thing, he sliced half of that separation money from the Force to war widows. Nothing surprising, given his proclivity towards the ‘armed service’ fraternity to which he belonged. Before he could blink and chalk out a future course of action post the IAF assignment, an unusual request came from an erstwhile colleague. In the year 1987, Squadron Leader Subhash Gupta called up young and raring “Ramesh” to enquire how to transport his belongings from Dud-

Never did Ramesh Agarwal, ex-IAF officer, in his wildest imagination think of building a logistics/transportation empire and emerge as the ‘king of relocation’

igal, near Hyderabad to his new posting at Balasore, Odisha. That was where the seeds of Agarwal Packers Movers (APM) were sown. Being a ‘service’ man, the man from Bhiwani did the job with such aplomb that it almost became mandatory for any ‘fauji’, irrespective of rank, when transferred to knock on the doors of the one and only Ramesh Agarwal. Thus was born the “Relocation Boss” of India. Today, he owns almost 1,000 vehicles. He does not believe in the ‘light asset format’. Fleet ownership makes his life easier, instead of ‘hiring from the market’. With fleet, came the army of drivers to steer these machines. And next, he began to worry about the drivers’ welfare. How and why did he begin to worry?

PROFILE

“In the 1980s, we found that there were 1,310 drivers per 1,000 vehicles. By 1992, we noticed this ratio was at par: 1,000 drivers and 1,000 vehicles. A decade later (2002), we were horrified to notice this equation “bigad gaya” (worsened): 890 drivers/1,000 vehicles. Before we could recover from the jolt, this touched the nadir of 750 drivers per 1,000 vehicles. Hey, Ram! If we allow this situation to continue and no remedial action is taken immediately, we will have 480 drivers only by 2022 – just eight years away!” explains the APM chieftain in his spacious Chairman’s office with a large dose of anguish. Another thought that hit him hard was: How could he bequeath his transport empire – managed jointly with his younger brother Rajendra, based out of Mumbai – to the next generation? Would they like a large fleet and inadequate drivers? Would they be happy to inherit such a business enterprise? Instead of tweedling his thumbs, he began looking for solutions. Much to his dismay, he found what made truck driving less ‘sexy’ as a career option for uneducated/illiterate fellow Indians was the poor working conditions. It was less than three hours sleep in a 24-hour cycle; no rest room on highways for them; no decent food… The list was pretty long. Lack of sleep also led to accidents on highways, thus leading to loss of men and material. It was also a huge loss to the nation in terms of GDP. As a soldier, he strongly felt such a scenario could not be allowed to continue and something needed to be done post haste. Net result: A Driver Seva Kendra at Dudu, on the Jaipur-Ajmer highway. How important is the driver? Listen to him: “When we wake up every morning, what we need is a cup of tea and a daily newspaper. For us to enjoy that necessity, a driver has to drive the whole night to ‘satisfy’ us. In a way, he sacrifices his sleep to help us keep awake. Kashmir ka apple jaakar Kolkata ke bangaliyon ko khilata hai woh sipahi; Assam ki chai Bambai vasiyon ko pilakar unki neend kholta hai woh sipahi (These soldiers on Indian highways deliver Kashmir apples to Kolkata. And these are the same people who take Assam’s tea to be served to Mumbai residents),“ points out Agarwal. Soldiers on Indian highways? Beautiful

and meaningful terminology. Only a soldier could think on those lines. Despite serving the entire nation on a daily basis, these drivers are neglected and treated shabbily by all and sundry. All kinds of epithets are used: “Drunkard”, “Madcap” and what not. No wonder he suffers from a low self esteem and does not want his own children to get into the trucking profession. That should explain the dwindling numbers of illiterate/ uneducated lot wanting to become truck drivers. Alarm bells began to ring everywhere. While jawans stay away from home for months together to protect the nation from external threats, these sipahis equally stay away from home for months together to serve the nation by delivering raw material for manufacturing sites and ferrying finished goods (cars, grains, edible oil, fuel, cement, steel, etc) to the nooks and corners of India. Their services are quintessential and are as important as a doctor, teacher, lawyer or a bureaucrat. This basic fact is missed out or ignored sadly. Agarwal draws attention to another peril of being a truck driver in India. If you are a truck driver, your chances of getting married is bleak. “None will give their daughters in marriage to him (driver) because of the long absence from home and the possibility of many bad habits (extra marital affairs or sex with unknown commercial sex workers, consuming illict and narcotic items to while away time and to beat bore-

dom or loneliness). One cannot blame such fathers too,” elaborates the APM owner. It is no secret that Ramesh Agarwal and driver welfare are more or less synonymous. His flock of drivers are taken care of well. The trucking business is cyclical. If the economy does well, he does well and vice versa. It is difficult to hazard a guess about his bank balance. But one can safely conclude a billionaire he would be several times on the basis of the ‘goodwill balance’ alone. A salute to this son of Bhiwani! — Ramesh Kumar (The profile is part of C&L’s spotlight on personalities from the cargo and logistics sector who have contributed immensely to the Indian economy.)

Cargo & Logistics I September 2014

NEWS IN BRIEF

AIR  TURKISH CARGO ADDS HYDERABAD TO ITS ROUTE

Rajiv Gandhi International Airport (RGIA), operated by GMR Hyderabad International Airport Limited (GHIAL), added another prominent connectivity/route on the global cargo map when Turkish Cargo launched freighter operations last month. Turkish Cargo is operating its modern Airbus A330-200F freighters, connecting Hyderabad and its catchment area to 260 destinations in Europe, North and Latin Americas, Africa and CIS (Commonwealth of Independent States) countries through its Global Super-Hub located in Istanbul. With Hyderabad strategically located for India and South Asia region, and having evolved into a surging economic centre housing India’s first airport-based Free Trade Zone and a growing Aerotropolis, the dedicated wide-body cargo aircraft connectivity came as a significant milestone.

BRUSSELS AIMS FOR CEIV PHARMA Brussels airport has launched its pharmaceutical certification process. The European hub aims to become the world’s

Cathay Pacific and CHEP signs ULD management deal

athay Pacific Airways and CHEP Aerospace Solutions signed a fiveyear renewable agreement for the supply and management of ULDs and pallet accessories. CHEP will acquire Cathay Pacific’s fleet of 25,000 ULDs, convert the majority of their containers to modern composite units weighing 58 kg, and supply a fleet of lightweight containers. CHEP will supply Cathay Pacific with a dedicated, branded fleet of lightweight containers, and fulfil global cargo pallet requirements through CHEP’s pooling system, providing significant synergy benefits to Cathay Pacific through the cross-utilisation of pallet assets with existing CHEP customers including AirBridgeCargo, Air Canada and Cargolux. Cathay Pacific Director Cargo, James Woodrow, said: “Our teams have gone through a thorough review of the different possible ways to optimise the management of our ULD fleet. CHEP have demonstrated their capability to meet our operational requirements. They have

offered a tailor-made solution enabling Cathay Pacific to achieve substantial benefits. We also expect efficiency gains in our operations, as well as quickly modernising our fleet of ULDs. We are confident that our long-term partnership with CHEP will be a success and our teams look forward to working together.”

SWISS

WORLDCARGO

PARTNERS WITH WCA

HAPPY FACES: (Left to right) Adam Mckenna, WCA Speciality Networks, Oliver Evans, Swiss WorldCargo, David Yokeum, WCA and Colin Mcinnes, Swiss WolrdCargo during the signing of MoU

S first certificated community in IATA’s Center of Excellence for Independent Validators in Pharmaceutical Handling programme (CEIV Pharma), serving as a pilot project. Brussels Airport has invited a group of ten local stakeholders (ground handlers, freight forwarders, truckers and airlines) to undergo the

September 2014 I Cargo & Logistics

wiss WorldCargo entered into a partnership agreement with WCA, the freight forwarding network for independent logistics providers. Under a Memorandum of Understanding, the air cargo division of Swiss International Air Lines will undertake cross-cooperation projects with three of WCA’s specialty groups – WCA Pharma, WCA Time Critical and WCA Dangerous Goods. The two organisations will exchange product and operational information

to drive growth and cost-efficiencies across the three sectors. Swiss International Air Lines Chief Cargo Officer, Oliver Evans, said that the logistics market was complex and customers needed a range of solutions to support and develop their supply chain. WCA President David Yokeum said that an increasing number of airlines recognised the growing importance of the independent logistics sector to the health of the industry.

NEWS IN BRIEF

ABC targets pharma business

irBridgeCargo Airlines is targeting Basel, Switzerland’s thriving health care industry with the launch of a Boeing 747 freighter service on Sept. 19. Basel has one of the highest concentrations of life sciences businesses in the world, including pharmaceuticals, biotechnology and medical technology organisations. ABC will operate its new Basel-Moscow Sheremetyevo service every Friday. The airline’s high on-time performance and fast handling through Moscow will enable AirBridge-

to maintain the integrity of products through strict temperature-control services,” Robert van de Weg, Senior Vice President Marketing and Sales at ABC, said. “Operating from Basel will enable us to provide a fast and reliable link into Russia and Asia for customers in the industry as well as the other industries that have grown up to support the health care market in Switzerland. This new route and the connections we can offer will facilitate further growth between both regions,” he added.

AIR  CEIV Pharma training, bringing the cargo community together for the common goal of becoming certified. This will allow those Brussels-based stakeholders to offer pharmaceutical companies the competitive advantage of assuring coldchain integrity to their clients. “IATA has been working very hard with our stakeholders to ensure product integrity for these types of shipments,” said Tony Tyler, IATA Director General and CEO. The global pharmaceutical industry will spend $8.36 billion on cold chain logistics in 2014 and is expected to expand more than $10 billion by 2018.

QATAR CARGO EXPANDS ITS WINGS

Cargo’s customers to achieve less than 48-hour connections to major cities in Asia, including Shanghai, Beijing, Hong Kong, Zhengzhou, Chengdu, Seoul, and Tokyo, via ABC hub in Moscow. “The health care industry relies strongly on the speed of air cargo and its ability

ABC can adjust each of the Boeing 747’s four cargo compartments to 4-29 degrees Celsius (39.2-84.2 degrees Fahrenheit), ensuring safe transportation for high-value pharma goods. AirBridgeCargo is represented in Basel by its GSSA partner, RTW Air Services SA.

DHL expands in China

HL Global Forwarding is expanding its services for the life sciences and healthcare industry in China adding Beijing, Shanghai, Hong Kong, Guangzhou and Shenzhen to the company’s worldwide DHL Thermonet network of certified life sciences stations. The 2,000 sq m facilities in Shanghai

and Beijing are owned by DHL Global Forwarding, while the airport facilities are located in Hong Kong, Guangzhou and Shenzhen with specific operational arrangements. The facilities in China offer more than 6,200 sq m of minus 15 degrees Celsius to plus 25 degrees Celsius cold storage space. “Our customers in the life sciences and healthcare sector are looking for better ways to manage the risk of product damage and loss from temperature deviations in their supply chain,” said Steve Huang, chief executive of DHL Global Forwarding China. “DHL Thermonet tackles these requirements and offers China consignors and consignees access to a reliable end-to-end cold chain,” he added.

Qatar Airways Cargo is set to continue its expansion with the launch of two new freighter destinations, Brussels in Belgium and Shanghai in China. Brussels will be served four times weekly by the Airbus A330F freighter, effective 1 October. The freighter will fly via Entebbe to Brussels on Wednesdays and Sundays and via Nairobi to Brussels on Mondays and Fridays. A three-time weekly non-stop Boeing 777 freighter service will operate on the Doha-Shanghai-Doha route, effective 2 October. In addition, with effect from 1 October, an additional Boeing 777 freighter frequency will be added on the Doha – Hong Kong route, bringing up the weekly frequencies to 14. “We are delighted to launch freighter services to these two important cities. The new Qatar Airways Cargo services will create exciting opportunities for businesses, especially in the pharmaceutical industry in both these countries. Importers and exporters can also benefit from the increased capacity introduced on both these trade lanes,” said Ulrich Ogiermann, Qatar Airways Chief Officer Cargo.

Cargo & Logistics I September 2014

NEWS IN BRIEF

SHIPPING AND PORTS 

Carriers may get Custom free fuel

SHIPBUILDING TO GET A BOOST

The Shipping Ministry is looking for-

ward for long-term cargo support from sectors like petroleum, steel and fertiliser for domestic shipping companies. The first move follows GAIL (I) Ltd’s decision to use indigenously-built vessels to carry part of the cargo it imports. The Ministry recently held a meeting with state-run companies, such as Oil & Natural Gas Corp, Indian Oil, Steel Authority of India and Fertilizer Corporation of India, and urged them to give transportation contracts to Shipping Corporation of India or other Indian firms for 5-10 years. The move would, in the long run, boost domestic shipbuilding. The shipbuilding sector of India has been facing a crisis since most companies had either cancelled their new orders or put them on hold. However, the situation has started improving, according to reports.

CABINET NOTE FOR INDO-BANGLADESH SHIPPING SOON The Shipping Ministry is likely to float a Draft Cabinet Note by November 2014 for implementing coastal shipping between India and Bangladesh. It will be an initiative that will boost trade between neighbours. According to a presentation by the Shipping Ministry to Prime Minister Narendra Modi, “In November 2014, Draft Cabinet Note would be circulated for comments for implementing the coastal shipping between India and Bangladesh.”

September 2014 I Cargo & Logistics

he Shipping Ministry is planning to urge the Finance Ministry to remove Customs duty on marine fuel for vessels carrying cargo for transshipment. India levies 25-30 per cent Customs duty on bunker or marine fuel. Removing the tax would draw big container ships to Indian coasts, according to the ministry and shipping experts. According to a government official, mainline carriers often berth at Colombo and use smaller feeder vessels to carry cargo from and to India. According to rough estimates, the government would have to fore go revenue of around `56 crore a year but the expected increase in export-import cargo handling operations would accrue direct and indirect benefits of more than `700 crore. And, if tax relaxation worked, transshipment would get a boost even without changing the cabotage (coastal movement) rules that restrict the movement of foreign vessels on coastal routes, the official added.

CMA CGM signs

he CMA CGM Group recently signed three major agreements with CSCL and UASC. Under the name of Ocean Three, the agreements concern Asia-Europe, Asia-Mediterranean, Transpacific and Asia-United States East Coast maritime trades. The agreements (a combination of Vessel Sharing Agreements, Slot Exchange Agreements and Slot Charter Agreements) will complete the CMA CGM offering on the biggest global maritime markets. On the Asia-Europe trade CMA CGM will offer four weekly services, which complete the two existing services, thereby offering six departures per week. On the Asia-Mediterranean trade, there are four weekly services: two to the Mediterranean, one to the Adriatic and one to the Black Sea, the only one on this market. On the Transpacific route, it will offer four weekly services to California and one service to the Pacific Northwest (United States and Canada) and on the Asia-US East Coast trade CMA CGM will offer one service via

VPT TO BE DUST FREE V

isakhapatnam Port has decided to make it mandatory to handle bulk cargo in the general cargo berth by covering with tarpaulin as a part of its efforts to minimise dust pollution. The decision was conveyed to all stakeholders, including SAIL, Bhushan Steel, Sesa Sterlite, and NALCO. “For handling imported coking coal, major users, including SAIL, spend `2,200 per tonne out of which the port gets `230. He said, since covering the cargo with tarpaulin would cost just `10 per tonne, the VPT had instructed the users to absorb the additional cost,” according to Port Chairman M T Krishna Babu. “For steam coal, which could

not be covered with tarpaulin, expert opinion would be sought on how to avoid pollution during transportation,” he added. The port officials also told the stakeholders that Ore Berth 1 in the GCB, which was closed following a breakdown, was ready for handling non-coal cargo immediately to decongest traffic. A team was sent to Goa recently to study an automatic truck tyre cleaning system installed by Adani and replicate such a project in Visakhapatnam, for which tenders had been invited. Mechanical road cleaners would also be introduced shortly, Krishna Babu stated.

NEWS IN BRIEF

three agreements

Asia-Europe container traffic up

SHIPPING AND PORTS 

ontainer traffic in the Asia to Europe trade continued to grow in July with volumes nearly 1.4 million Twenty Foot Equivalent Unit (TEU), a jump of 7.3 per cent on the same month of 2013. But the growth was slower than May and June’s when the year-on-year increases were 11.7 per cent and 10.2 per cent respectively. So far this year has been ahead of 2013, apart from February when it fell 6.3 per cent. The surge in liftings from Asia to Europe has caught container lines by surprise, given sluggish economic conditions. Maersk Line attributed its strong financial results in the AprilJune period in part to the unexpected increase in traffic on this route during the period. “We saw the growth where we didn’t expect it, and where we expected growth, we did not see any,” said Maersk Line CEO Soren Skou.

The Shipping Ministry said that approval of the Cabinet on the proposal will be sought by December 2014. The development follows the Indian government announcing in August that a basic understanding on commencement of coastal shipping had been arrived at between both the nations. The government had said trial runs between ports in the two countries were slated by October 14 for coastal shipping.

the Suez Canal and one service dedicated to the Gulf of Mexico. This new offering will combine both speed and reliability. Rotations will be optimised with calls in all the biggest Asian, European and North American ports, using transhipment hubs common to the three partners. The number of weekly calls proposed and the transit times will be among the best on the market, thereby responding to the expectations of our clients. These agreements are pending authorisation from the US Federal Maritime Commission, said a release.

India’s shipping cost higher than China’s

hipping a container from India can cost nearly double what it costs to ship the same container from China, according to a report from the Associated Chambers of Commerce and Industry of India (ASSOCHAM). ASSOCHAM said the average cost of shipping a container from India could be nearly $1,200. The same container from China would ship for around $600, and for only $400 from Singapore, putting Indian exporters at a competitive disadvantage in the global market. Likewise, the turnaround time at India’s best port, JNPT in Mumbai that handles over 50 per cent of the country’s containers, is 1.1 days (36 hours) while it is less than 12 hours in Singapore, Dubai, Shanghai and Colombo. According to the study, India’s port handling charges

are much higher while its logistics systems are under-performing compared to China, Thailand, South Korea, Malaysia and OECD (Organisation for Economic Co-operation and Development) countries. ASSOCHAM also identified the number of stops a truck must make as another factor driving up costs. There are currently 177 interstate checkpoints and another 268 toll plazas on India’s roads, and toll lane automation is virtually nonexistent.

KPL SET TO SIGN MOU WITH PUDUCHERRY GOVERNMENT Ennore’s Kamarajar Port Limited (KPL) is soon going to enter into a pact with the Puducherry government for the development of its port. “A Memorandum of Understanding (MoU) to this effect would be signed by both the parties soon. The MoU will facilitate the preparation of a Detailed Project Report (DPR) for developing the port to handle cruise ships, bunkering and coastal movement of containers through barges,” official sources said. “We are expecting the Puducherry Chief Secretary to indicate the date, after which, we will prepare the DPR. This will be followed by public hearing, and completion of other formalities. In all, it will take roughly two years to begin commercial activities,” a KPL official said talking to a daily. As per the plan, KPL would carry out a feasibility study for dredging, modernising and constructing berths. It would cost nearly `3 crore. Initially, KPL would spend the money, and thereafter, a Special Purpose Vehicle would be created to manage the commercial activities.

Cargo & Logistics I September 2014

NEWS IN BRIEF

LAND  VOLUME BOOST FOR CONCOR Container Corporation of India (CONCOR) saw a nine per cent boost in the container volumes in the month of July, year-onyear, marking a 32-month high. The company holding 75 per cent market share in the container rail-transportation segment and has plans to develop multi-modal logistics parks along the dedicated freight corridor with three of them to be commissioned in FY15. Concor’s Exim volumes are 25 per cent of container cargo handled in ports across India with significant scope to grab volumes both from road and smaller container rail operators. The awarding of the Navaratna status is likely to provide CONCOR a higher flexibility and autonomy, which includes making investment decisions up to `1,000 crore as well as decisions on mergers & acquisitions, and forming joint ventures. Concor is among the companies in which the government is expected to dilute stake in FY15.

BVC LOGISTICS RELIES ON KALE’S CORVI K ale Logistics recently announced that BVC Logistics went live on its Freight Management Software-CORVI in a record time of two months. CORVI is an online application that acts as a single window solution for global forwarders and caters to their automation needs for automating processes in Sales, CRM, Freight Forwarding Operations, Billing and Business Intelligence. BVC Logistics which is a market leader specialising in moving valuable cargo, recently opened its new division for general cargo. With expanding business they required a system which could be accessible from anywhere, anytime and offered the scalability to manage a growing business.

BVC went live with CORVI at its multiple branches across India namely – Mumbai, Delhi, Ahmedabad and Chennai. The system is helping streamline operations at BVC Logistics and provides the required Business intelligence to the management for critical decision making. Rajesh Panicker, SVP, Kale Logistics Solutions, said “CORVI go live at BVC Logistics happened in record time mainly due to very keen involvement from both the management and user group at BVC. We were highly impressed with the entire team as both the senior management as well as the end-users are equally keen on following stream-lined processes right from enquiries to measuring profitability.”

DHL TO SERVE FROM FARIDABAD

INDIA POST BEST FOR E-COMMERCE DELIVERY Communication and IT Minister Ravi Shankar Prasad recently said that India Post with the world’s largest postal network is best suited to offer de-

livery services to e-commerce firms. Prasad, who recently met probationers of the 2013 batch of the Indian Postal Service in Delhi, said there was a need to expose young officers to the latest developments and emerg-

September 2014 I Cargo & Logistics

HL Express recently inaugurated a new service centre facility in Faridabad. The facility was inaugurated by Mukesh Aggarwal, Managing Director, Shivalik Prints Limited and R S Subramanian, SVP & MD, DHL Express India. On the occasion Subramanian said, “DHL Express has been an integral part of business in Faridabad for over 15 years now. Due to rapid industrialisation, Faridabad has grown in prominence as an auto and manufacturing hub. The new enhanced service centre is our commitment to customers in this belt of DHL’s reliable service in support to these industries by facilitating trade

and making them globally competitive.” DHL Express services a wide variety of customers in Faridabad across industries such as textiles, automobiles and machinery. With the new enhanced service centre, all Faridabad shipments now get a same day connection to Delhi, which means customers can look forward to improved service offering for international shipments and therefore faster processing and reduced transit time. The service centre will serve as a local pickup, delivery and sorting centre, and will also cater to customer requirements for same day delivery in Ballabgarh, Prithla and Palwal.

NEWS IN BRIEF

TATA INVESTS IN SNAPDEAL F ormer Tata Group Chairman Ratan Tata has bought a stake in online retailer Snapdeal, joining a list of funds who have invested in the country’s growing e-commerce industry. Tata joins investors including Singapore sovereign wealth fund GIC Private Ltd, Tiger Global Management LLC and Accel Partners, who have invested in Indian online retailers, betting on growth in the $13 billion e-commerce sector. Snapdeal co-founder and CEO Kunal Bahl said: “Mr Tata has invested in his personal capacity. He has an immense stature and me and my team can learn a lot from him.” Bahl, however, declined to comment on the investment details.” “We reached the USD 1 billion GMV in two-and-a-half years, the shortest by a company in this space. Going ahead, we are confident of reaching the USD 2 billion milestone by March 2016,” he added when asked about the road map ahead.

Indian online firms have been raising funds to compete with bigger rival Amazon.com Inc and expand as more Indians shop online. Snapdeal raised $100 million earlier this year from five investors including Singapore’s Temasek Holdings. Flipkart, the country’s largest online retailer, raised $1 billion last month to scale up and counter increasing competition, while Amazon. com has said it would invest more than $2 billion in the country.

ndian Railway has decided to offer a new scheme giving rebate for freight loaded in covered wagons from Southern Railway to South Central Railway in inter-zonal traditional empty flow direction which will be introduced with effect from October 1. Railway is going to introduce this scheme as a pilot project for one year, according to an official release. However, iron ore, coal and coke and other commodities under similar classification are excluded from the scheme. Merchant community and industries may avail this opportunity. Movement of large volume of traffic from Southern Railway to stations over South Central Railway mostly in the state of Andhra Pradesh is identified by Railways to fetch additional revenue. Railway Board has chosen Palakkad division as one of the key operators of this pilot project. The division will soon hold a meeting with freight customers and freight forwarders to highlight the scheme, release said.

ing trends in the postal and logistics sectors. The Minister highlighted that the Digital India project, which aimed to make broadband facility available in every village across the country, would drive up e-commerce business in villages. India Post has over 1.55 lakh post offices of which more than 1.39 lakh are in the rural areas. On an average, a post office serves an area of 21.21 sq. km and a population of 7,175 people. Prasad said Post Offices could also become a focal point for delivering not only government services but also e-services to the people.

MAHINDRA LOGISTICS ACQUIRES STAKE IN LORDS FREIGHT Mahindra Logistics, a subsidiary of Mahindra Group, has purchased a

RAILWAY TO OFFER FREIGHT REBATE

LAND 

Indian Railway saw a rise in freight revenue. The Railways handled 445.73 million tonnes (mt) of freight traffic during April to August 2014, registering a growth of 4.60 per cent over 426.14 mt carried in the corresponding period of last year. Revenue earning freight traffic carried by the Railways in August rose by 6.03 per cent to 88.15 mt as against 83.14 mt it moved during the same period of last year.

majority stake in Mumbai-based Lords Freight, a move that will help the company enhance its portfolio of services. However, the company did not disclose the percentage of stake it acquired nor the investment. “Our vision is to be India’s leading, most-preferred integrated logistics service provider’ and international freight forwarding is an essential component of this vision. With this acquisition, MLL’s service portfolio will be considerably enhanced,” said MLL Chief Executive Officer Pirojshaw Sarkari. “This is our maiden investment, and will considerably add to the value proposition we offer our customers,” Sarkari added. Lords, which specialises in international logistics, is based out of Mumbai with a presence in across all major Indian cities. In April, MLL, a third-party logistics service provider, had received ` 200 crore private equity investments from Kedaara Capital in exchange for a minority stake.

Cargo & Logistics I September 2014

NEWS IN BRIEF

INFRASTRUCTURE  IAG CARGO AND EXELSIUS TO LAUNCH GDP WORKSHOP IAG Cargo and Exelsius, the international Cold Chain Management Consultancy, have teamed up to provide the Healthcare and Life Science industry with a unique and certificated training workshop in Good Distribution Practices (GDP). “In the global world of transporting and distributing temperature-sensitive pharmaceutical and life science products, compliance with Good Distribution Practice (GDP) regulation is essential. Revised EU guidance and other international rules also make it clear that all those involved in processing and handling these sensitive commodities must be properly trained,” IAG Cargo said in a statement. By forming the Good Distribu-

CATHAY PACIFIC HONOURS CARGO AGENTS

athay Pacific Airways recently honoured and thank cargo agents for their revenue contribution in 2013. The events – held at Mumbai, Delhi and Chennai – was hosted by Charlie Stewart Cox, General Manager, South Asia, Middle East and Africa. More than 80 guests attended the event with certificates and trophies being presented to the top 10 agents from the cargo fraternity in these cities. Stewart-Cox said, “This is the best

platform to thank our trade partners as we owe much to them for their excellent support in promoting our products and services. Such events give us an opportunity to recognise the support of our partners.” The event was also an opportunity to introduce Anand Yedery, the new Regional Cargo Manager-South Asia, Middle East & Africa, to the cargo fraternity and bid farewell to Ashish Kapur. Yedery has taken over from Kapur who has taken up his role as Country Manager-UAE.

HACTL WINS TOP SAFETY AWARD tion Practice Academy, IAG Cargo Constant Climate and Exelsius are able to combine classroom training in the correct handling of temperature sensitive pharmaceutical products, with a ‘live’ visit to an airport airside area. Students will be able to witness the handling process at the Heathrow IAG Cargo Constant Climate Centre and other international locations, meeting the operational team that handles pharmaceutical and life science shipments across the globe to Good Distribution Practice standards, the statement continued. With the introductory workshop being held in London (November 1112), the event will be of significant interest to all stakeholders in the logistics supply chain for temperature-sensitive healthcare products.

September 2014 I Cargo & Logistics

ong Kong Air Cargo Terminals Limited (Hactl) has received the Gold Award in the Safety Management System category at the 13th annual Hong Kong Occupational Safety and Health (HKOSH) Awards. The HKOSH Awards are designed to recognise those organisations providing outstanding performance in workplace

safety and health. Award winners undergo an exhaustive three-stage vetting process comprising a preliminary review, followed by a detailed assessment including site visit, and culminating in final judging by an independent panel of experts. A total of 312 entries were received from 120 organisations to compete for 9 categories of awards.

NEWS IN BRIEF

he Chartered Institute of Logistics & Transport (CILT), India chapter held its Annual General Meeting on August 23, 2014 at New Delhi. The meeting was attended by members of the logistics fraternity. Shanti Narain, ex Member Railway Board, was elected as the Chairman of CILT, India. The three Vice Chairmen elected were: Rajeev Bharadwaj, Director, Solar Energy Corporation of India, P.K. Goyal, retd IRTS officer of Indian Railways and Veni Mathur, Dean, Million Minds Management Services. CILT is a worldwide organisation of professional of the transport industry, set up to promote the study of the art and science of transport in all its branches and modes namely road, rail, shipping, civil aviation, pipelines etc. CILT has its headquarters in London, UK, with a membership of more than 35,000 worldwide. The main goal is to maintain highest standards of excellence in the education and training of professionals in transport.

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C&L

ACCD MEMBERS LEARN TO OVERCOME BUSINESS CONSTRAINTS

ir Cargo Club Delhi (ACCD) recently organised its first-ever hi-tea event on September 12, 2014. The event was attended by more than 100 members of the club along with a few eminent guests. The guest speaker at the event was Ramneek Kumar, Managing Director, CGR MINDS Inc. who gave a very interesting presentation on ‘Business constraints and their impact on growth’. The presentation covered various aspects of possible constraints in one’s day of work and the possible solutions to remove them to boost growth. This event also witnessed a wide variety of healthy interactions among the members. The convenor of the event Sumit Mathur started the event while Honorary Secretary Sajan Kalra handled the other proceedings. President of the Club, Yashpal Sharma gave a vote of thanks to the speaker and the entire house. The club had organised an interesting campaign on Facebook in August and the award for the best picture was also announced at the event. The speaker session was followed by an enjoyable networking evening.

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STATS

INDIAN PORTS ASSOCIATION

TRAFFIC HANDLED AT MAJOR PORTS TRAFFIC HANDLED AT MAJOR PORTS (DURING AUGUSTS, 2014 VIS-A-VIS AUGUST, 2013)

(DURING AUGUST, 2014 VIS-A-VIS AUGUST, 2013)

(*)

PORT

TENTATIVE

(IN '000 TONNES) TRAFFIC PERIOD

P.O.L.

IRON ORE

TRAFFIC DURING MONTH COAL CONTAINER

FERTILIZER FIN.

RAW

THERMAL COKING TONNAGE

TEUs

OTHER CARGO

TOTAL

% VAR. AGAINST 2013-12

KOLKATA TRF AUG.'2014

681

319

1062

TRF AUG.'2013

631

253

942

TRF AUG.'2014

487

414

189

1218

2520

TRF AUG.'2013

493

261

442

207

978

2479

TOTAL: KOLKATA

TRF AUG.'2014

534

414

870

1537

3582

TRF AUG.'2013

537

274

443

838

1231

3421

PARADIP

TRF AUG.'2014

1392

199

270

2234

1009

1004

6111

TRF AUG.'2013

1525

570

349

2006

784

673

5914

TRF AUG.'2014

1409

833

201

210

427

393

1548

5078

TRF AUG.'2013

1283

1183

276

106

229

394

435

1012

4918

Kolkata Dock System Haldia Dock Complex

VISAKHAPATNAM

KAMARAJAR(ENNORE) TRF AUG.'2014

313

1827

234

2374

TRF AUG.'2013

228

1863

230

2321

TRF AUG.'2014

811

2613

135

860

4314

TRF AUG.'2013

1188

2487

129

942

4632

TRF AUG.'2014

129

659

862

893

2646

TRF AUG.'2013

136

561

933

789

2518

CHENNAI V.O.CHIDAMBARANAR COCHIN NEW MANGALORE MORMUGAO MUMBAI J.N.P.T. KANDLA ALL PORTS

TRF AUG.'2014

1603

510

138

2282

TRF AUG.'2013

1275

511

134

1948

TRF AUG.'2014

1743

273

367

144

2692

TRF AUG.'2013

2093

262

224

174

2876

TRF AUG.'2014

388

347

897

TRF AUG.'2013

515

264

840

TRF AUG.'2014

3230

524

1384

5265

TRF AUG.'2013

2977

276

1707

5002

TRF AUG.'2014

618

4655

373

5295

TRF AUG.'2013

475

4675

357

225

5375

TRF AUG.'2014

5113

133

246

1160

2005

8657

TRF AUG.'2013

5041

462

989

2045

8691

TRF AUG.'2014 16894

1530

598

599

6819

2605

10032

677

10116

49193

TRF AUG.'2013 16741

2336

839

691

5993

2426

10004

658

9426

48456

12.74 1.65 4.71 3.33 3.25 2.28 -6.87 5.08 17.15 -6.40 6.79 5.26 -1.49 -0.39 1.52

Source:INDIAN PORTS ASSOCIATION

September 2014 I Cargo & Logistics

STATS

INTERNATIONAL AIR FREIGHT MOVEMENT AIRPORT

SL. NO.

JULY 2014

FREIGHT (IN TONNES) For the period April - July % % 2014-15 2013-14 Change Change

For the month JULY 2013

(A) 18 INTERNATIONAL AIRPORTS 1

CHE NNA I

20030

19634

2.0

76573

75811

KOLKATA

3974

4513

-11.9

15808

14576

8.5

AHMEDABAD

1551

1360

14.0

5728

5785

-1.0

GOA

138

-50.7

323

595

-45.7

TRIVANDRUM

2705

2532

6.8

10181

9180

10.9

CALICUT

1764

2055

-14.2

7431

8819

-15.7

LUCKNOW

166

-41.6

511

386

32.4

GUWAHATI

-12.5

SRINAGAR

JAIPUR

105.0

158

107.9

BHUBANESWAR

MANGALORE

COIMBATORE

0.0

307

285

7.7

AMRITSAR

TRICHY

16 17 18

IMPHAL

1.0

-51.1

136

388

-64.9

363

435

-16.6

1496

1565

-4.4

V A RA NA S I

PORTBLAIR

0 30738

0 31024

0 117474

-0.9

0 118739

1.1 13.1

TOTAL (B) 6 JV INTERNATIONAL AIRPORTS 19

DELHI (DIAL)

38353

33524

14.4

145698

128809

MUMBAI (MIAL)

41217

39866

3.4

159884

158324

1.0

BANGALORE (BIAL)

15304

13644

12.2

55348

51781

6.9

HYDERABAD (GHIAL)

4577

3884

17.8

18222

16816

8.4

COCHIN(CIAL)

6260

4940

26.7

22418

15191

47.6

NAGPUR (MIPL)

TOTAL

-22.2

118

126

-6.3

105732

95885

10.3

401688

371047

8.3 -

PUNE

VISAKHAPATNAM

PATNA

CHANDIGARH BAGDOGRA

29 30

MADURAI

GAYA

TOTAL (D) 17 DOMESTIC AIRPORTS (E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E)

1674

0 0

1674

138144

126909

8.9

520427

488521

6.5

Source: AIRPORTS AUTHORITY OF INDIA

Cargo & Logistics I September 2014

STATS

DOMESTIC AIR FREIGHT MOVEMENT SL. NO.

AIRPORT

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

JULY 2014

For the month JULY 2013

AIRCRAFT MOVEMENTS(IN NOS.) For the period April - July % % 2014-15 2013-14 Change Change

6968 8010 3820 252 97 18 277 856 504 151 160 66 685 42 0 42 296 414 22658

6297 7321 3226 172 199 12 290 558 330 710 272 34 519 17 0 32 223 359 20571

10.7 9.4 18.4 46.5 -51.3 50.0 -4.5 53.4 52.7 -78.7 -41.2 94.1 32.0 147.1 31.3 32.7 15.3 10.1

25805 30576 13751 936 435 41 972 2837 2252 451 1494 126 2474 96 0 257 926 1517 84946

23580 27400 11676 706 502 62 922 2130 1524 2435 1081 96 1969 57 0 118 786 1260 76304

9.4 11.6 17.8 32.6 -13.3 -33.9 5.4 33.2 47.8 -81.5 38.2 31.3 25.6 68.4 117.8 17.8 20.4 11.3

22963 18821 10136 3699 919 467 57005

16995 15609 8134 3109 739 437 45023

35.1 20.6 24.6 19.0 24.4 6.9 26.6

83287 69129 35624 13736 3647 1870 207293

62210 59409 29365 11620 2936 1557 167097

33.9 16.4 21.3 18.2 24.2 20.1 24.1

2038 0 456 1486 255 98 0 4333

1592 210 407 264 236 104 0 2813

28.0 -100.0 12.0 462.9 8.1 -5.8 54.0

8491 467 1823 2396 878 415 0 14470

548 173 352 603 112 263 78 0 79 48 4 12 0 0 26 2298 114 86408

378 148 275 589 140 198 65 0 69 74 0 15 1 0 20 1972 129 70508

45.0 16.9 28.0 2.4 -20.0 32.8 20.0 14.5 -35.1 -20.0 -100.0 30.0 16.5 -11.6 22.6

2151 554 1249 2214 737 1054 341 0 285 533 4 43 3 0 86 9254 417 316380

6158 676 1541 1006 576 440 010397 1577 524 1050 2148 601 732 231 0 279 395 0 59 5 0 100 7701 453 261952

37.9 -30.9 18.3 138.2 52.4 -5.7 39.2 36.4 5.7 19.0 3.1 22.6 44.0 47.6 2.2 34.9 -27.1 -40.0 -14.0 20.2 -7.9 20.8

Source: AIRPORTS AUTHORITY OF INDIA

September 2014 I Cargo & Logistics

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Logistics Achievers Award & Talent Hunt 2014 Logistics

Achievers award & Talent Hunt 2014

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STATS stats

INTERNATIONAL & DOMESTIC AIR FREIGHT MOVEMENT FREIGHT (INT'L+DOM.) ANNEXURE-IVC

SL. NO.

AIRPORT

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

JULY 2014

NOTE:

For the month JULY 2013

AIRCRAFT MOVEMENTS(IN NOS.) For the period April - July % % 2014-15 2013-14 Change Change

26998 11984 5371 320 2802 1782 374 856 504 192 160 87 764 87 363 42 296 414 53396

25931 11834 4586 310 2731 2067 456 558 330 730 272 34 598 109 435 32 223 359 51595

4.1 1.3 17.1 3.2 2.6 -13.8 -18.0 53.4 52.7 -73.7 -41.2 155.9 27.8 -20.2 -16.6 31.3 32.7 15.3 3.5

102378 46384 19479 1259 10616 7472 1483 2844 2252 609 1494 206 2781 232 1496 257 926 1517 203685

99391 41976 17461 1301 9682 8881 1308 2138 1524 2511 1081 96 2254 445 1565 118 786 1260 193778

3.0 10.5 11.6 -3.2 9.6 -15.9 13.4 33.0 47.8 -75.7 38.2 114.6 23.4 -47.9 -4.4 117.8 17.8 20.4 5.1

61316 60038 25440 8276 7179 488 162737

50519 55475 21778 6993 5679 464 140908

21.4 8.2 16.8 18.3 26.4 5.2 15.5

228985 229013 90972 31958 26065 1988 608981

191019 217733 81146 28436 18127 1683 538144

19.9 5.2 12.1 12.4 43.8 18.1 13.2

2038 1674 456 1486 255 98 0 6007

1592 210 407 264 236 104 0 2813

28.0 697.1 12.0 462.9 8.1 -5.8 #DIV/0! 113.5

8491 467 1823 2396 878 415 0 14470

6158 676 1541 1006 576 440 0 10397

37.9 -30.9 18.3 138.2 52.4 -5.7 #DIV/0! 39.2

548 173 352 603 112 263 78 0 79 48 4 12 0 0 26 2298 114 224552

378 148 275 589 140 198 65 0 69 74 0 15 1 0 20 1972 129 197417

45.0 16.9 28.0 2.4 -20.0 32.8 20.0 #DIV/0! 14.5 -35.1 #DIV/0! -20.0 -100.0 #DIV/0! 30.0 16.5 -11.6 13.7

2151 554 1249 2214 737 1054 341 0 285 533 4 43 3 0 86 9254 417 836807

1577 524 1050 2148 601 732 231 0 279 395 0 59 5 0 100 7701 453 750473

36.4 5.7 19.0 3.1 22.6 44.0 47.6 #DIV/0! 2.2 34.9 #DIV/0! -27.1 -40.0 #DIV/0! -14.0 20.2 -7.9 11.5

Biju Patnaik Airport, Bhubaneswar, Odisha and Imphal Airport, Manipur airports declared as International airports vide Notification No.AV.20014/003/98-VB(AAI) dated 14th November, 2013 by Ministry of Civil Aviation, Government of India.

Source: AIRPORTS AUTHORITY OF INDIA

September 2014 I Cargo & Logistics

We Deliver On Time...Anywhere

Corporate Office: 187-A, 2nd Floor, Sai Sadan, Sant Nagar, East of Kailash, Delhi-110065 Phone No.: 011-26214454, 26431222, 26211730 Email: brijesh@speedmanlogistics.com, pradeep@speedmanlogistics.com speedex_services@hotmail.com Website: www.speedmanlogistics.com Warehouse: 419-420, Lane No 1, Western Green, Rangpuri, Delhi-110037 Phone No.: 011-40502052

About Us SPEEDMAN LOGISTICS’ foray into logistics industry is not just for creating another logistics company. It is a lifetime commitment to excellence and trust that our customers can bank upon. Our infrastructural strength supports in feeding arround two thousand destinations in India. We are soundly backed by our customer support and professional staff members with full fleet of various vehicles.

Our Mission • To establish lifelong associations, retain clients and increase the number of customers trading every week. • Improve the percentage of deliveries made on time. • Decrease the number of outstanding invoice queries at the end of each week. • Increase the frequency of contacts with existing and prospective customers. • High-integrity workplace atmosphere. • Empowerment of employees.

Our Services Air Freight I Train Freight I Road Freight I Warehousing I Door to Door Logistics I Packaging Service I Supply Chain Management

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FROM AIRCRAFT TO AIR CARGO Cargo is essentially a male-dominated industry. How did you find yourself in it? I have a keen interest in aircraft and travelling. So, it was only natural that I wanted to work in an airline industry. I had just finished my education when I saw an advertisement that KLM Royal Dutch Airlines was looking to hire someone. My uncle, Mr Sanjeev Talwar, Cargo Manager for Air India, convinced me to apply for the job. Not knowing anything about cargo, I went ahead… and secured the job. Little did I knew that cargo was not glamorous, nor swanky like the passenger division. It meant understanding kilos v/s pounds, pallets v/s containers, general cargo v/s perishables and much more. It also meant going to the warehouse wearing high heels, perspiring while supervising loading and unloading of cargo, meeting with Customs officials, preparing Import Delivery orders and making bookings in the system. Cargo is indeed a male-dominated industry but it was my passion of aircraft

September 2014 I Cargo & Logistics

How have your colleagues and those under you reacted to you? Being in a professional organisation, I have never faced any adversity because I am a woman. On the contrary, I have received

A veteran in the air cargo business, Nomita Kothari has seen it all: from loading and unloading cargo in the blistering heat to managing people. Today, with more than 20-odd years in the industry, she wants to continue having fun… that drew me to this industry. There isn’t a day that goes by when I am not thankful for having found a place for myself in this evolving industry.

support, guidance and feedback. The people I have worked with, and continue working with, have been a positive influence in my life.

How many years have you been with the cargo industry and how has the journey been this long? It has been 22 years since I joined the air cargo industry. It has been a motivating journey…I have learnt a great deal. I have interacted with Multinationals, national accounts, local forwarders, airlines, GSAs, GHAs, Customs and Local Custodians. In the end it all boils down to service, efficiency and relationships. I started my career with KLM Cargo in August 1992 as a Cargo Officer. In January 1996, I was promoted as Manager, Customer Service-India, reporting directly to the Area Director-Middle East and India, based in Dubai. With the merger of Air France and KLM Royal Dutch Airlines, in May 2006, I was assigned to head the joint AF/ KL Cargo, Customer Service organisation. The assignment involved the integration of people, processes and procedures between the two organisations which consists of 30 direct reports from offices in Mumbai, Delhi, Bengaluru, Chennai, Kolkata, Jaipur and Hyderabad. After 20 years of association with AF-KL Cargo, I was looking for greater challenges and in January 2014, I joined Sharaf Cargo Pvt Ltd as Business Development Manager. The Sharaf group is a UAE-based company with global presence in 26 countries across five continents. In India, we are the General Sales & Service Agents for seven airlines and operate from 14 offices with 54 personnel.

Do you specialise in any section of the industry: e.g. handling of dangerous goods, etc.? The past 20-odd years in the air cargo business has lead me to proficiency and gain expertise in: Customer relations and business development, organisational skills, budgeting and cost control, HR-staff growth and motivation and much more. My forte, however, is Customer Services. What is so exciting about the cargo industry that keeps you addicted to it? The cargo industry is rapidly progressing. We are heading towards e-platform covering e-freight, e-booking, e-AWBs. From airport to airport delivery, the services have improved to include door delivery. There is more: expanding networks, joint ventures and alliances, new specialised products, focus on revenue enhancement and cost control… it sure is a inspiring world out there and the cargo industry is keeping abreast with these challenges. Today, our customers are aware of what they want. We must maintain a flexible attitude towards our customers’ requests — always focus on what our customers want and not what we think they need. What advice would you give youngsters – especially women – to join the industry? Do what you like and like what you do. Whatever you do, be sincere, loyal, have a positive attitude and most important: ‘Have fun!’