C&L March 2016

Page 1

NEW REGULATIONS FOR SHIPPING CONTAINERS KICK IN ON JULY 1, 2016 Volume V No 1

MARCH 2016 I `60

C A R G O

RAIL BUDGET 2016

UNION BUDGET 2016

UNION BUDGET 2016

L O G I S T I C S

RAILWAYS Freight is top priority

PORTS & SHIPPING Kick-start for infrastructure

AIR CARGO Only a few sops Capt Preetham Phillip

THE REBIRTH OF QUIKJET

MANAGING EDITOR’s NOTE

Words of hope

I

f Finance Minister Arun Jaitley’s Budget of 2016 held little for those in aviation to rejoice, the words of Dr Renu Singh Parmar, Senior Adviser in the Ministry of Civil Aviation indeed helped bring a good night’s sleep to air cargo stakeholders – in fact, anyone who is in cargo and logistics. Speaking at the recent Air Cargo India 2016, she said that the country’s air cargo sector was expected to grow more than 180 per cent in the next 15 years. And, it will be – to a great extent – largely due to the Prime Minister’s ‘Make in India’ initiative. That will boost manufacturing from the present 15 per cent of GDP to a whopping 25 per cent by 2022. Dr Parmar also mentioned that while India’s cargo tonnage throughput was 2.58 million tonnes in 2014/15, it would shoot up to 4.2 million tonnes in 2020/21 and go on to 5.25 milion tonnes in 2023/24 and 8.75 million in 2030/31. She predicted that the rise will be due to e-commerce, which will reach $36 billion in 2016 (from the $16 billion in 2014) and leap to $100 billion by 2020. The figures are heartening especially when the last few months – at least for air cargo – have proved to be a dampener. As C&L has been emphasizing time and again, there is an urgent need for infrastructure and Dr Parmar highlighted the fact when she said: “We need a robust supra national supply chain – air, road, rail and sea.” While it is true that the government has moved to set things right – the ten-year tax holiday for infrastructure enhancements made at airports; creation of free-trade zones; setting up of new cargo facilities at airports; 24/7 Customs operations; paperless systems; clearances for air freight stations; reduction in dwell times, etc. – there is, of course, a lot more that needs to be done. What is, perhaps, heartening to note is that private initiatives are ensuring smooth flows in the supply chain. Witness the creation of new delivery operations that are being used by e-commerce portals. And once in a while a venture like the

recent one – Quikjet Airlines – comes along to show to stakeholders that a cargo airline is possible in India provided there is dedication and commitment (see Cover Story in this issue). That the air cargo industry has to transform itself into an economic engine of the future and counter the challenges thrown up by the difficult business environment was emphasized by the International Air Transport Association (IATA) at the recent World Cargo Symposium (WCS) in Berlin. Yields have been falling continuously since 2010 with a lot of business going away to land and sea transport. Even so, air cargo continues to be important or as Tony Tyler, IATA’s Director General and CEO put it so succinctly, it “generates enormous value. Over a third of goods traded internationally—measured by value — are delivered by air cargo. To do that profitably, the air cargo sector must bolster its key strengths of speed and flexibility with modern processes and improved quality. That means transformation”. Keeping the “potential disruptors — data-sharing platforms, new market entrants, or e-commerce” – at arm’s length, the challenge, said Tyler, was to “stay a step ahead in satisfying customer expectations”. The moves in air cargo apart, it is great to see the work being done for roads and ports. The same is the case with the railways. With pro-active leaders at the helm of the two ministries, there are noticeable changes. Already, some foreign ship owners have started registering their ships under the Indian flag — the Singapore-based container shipping company Pacific International Lines Pte Ltd has converted one of its ships to the Indian flag — to carry cargo on local routes. Obviously, the business of shipping containers by sea is attractive. Let us hope other ministries will be pro-active. Only then will we see the 180 per cent growth or some figure near that. Till then, keep reading… tghosh@newsline.in

Cargo Logistics I March 2016

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

CONTENTS

C&L

VOLUME V NO 1

Editor-in-Chief

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

COVER STORY

p18

After waiting for a long time, Quikjet Airlines took to the skies in the mid of February. It offers a premium overnight network designed to best serve the requirements of the express cargo, e-commerce and many more. It has launched its services with Mumbai-based Sovika Aviation and will also be available for domestic and international cargo charters.

SPECIAL REPORT

p26

Surat city of Gujarat which accounts for 90 per cent of global diamond polishing and cutting industry and exports $15 bn worth of diamonds every year has all the right ingredients for an international airport. Form IV (See Rule 8) C&L 1. Place of Publication 2. Periodicity of Publication 3. Printer’s Name Whether Citizen of India? (If foreigner, state the country of origin) Address

: : : : :

New Delhi Monthly K. Srinivasan Yes Not Applicable

: 4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-110091 4. Publisher’s Name : K. Srinivasan Whether Citizen of India? : Yes (If foreigner, state the : Not Applicable country of origin) Address : 4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-110091 5. Editor’s Name : K. Srinivasan Whether Citizen of India? : Yes (If foreigner, state the : Not Applicable country of origin) Address : 4C Pocket- IV, Mayur Vihar, Phase-I, Delhi-110091 6. Name, Address of : individuals who own the newspaper and the partners or shareholders holding more than one per cent of the total capital

1. Renu Mittal 2. K. Srinivasan 4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-91

I, K. Srinivasan, hereby declare that the particulars given are true to the best of my knowledge and belief. Date: 1st March, 2016

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March 2016 I Cargo Logistics

Sd/K. Srinivasan Publisher

10

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Sr. Proof Reader RAJESH VAID Correspondents NAVEED ANJUM, ANJANA RAGHAV Designers NAGENDER DUBEY Picture Editor PRADEEP CHANDRA Photo Editor HC TIWARI Staff Photographer HEMANT RAWAT

With an eye on shoring up finances and the other on populism, Union Railways Minister Suresh Prabhu promised to bring down freight rates and double non-tariff revenue for the ailing national transporter. The roads and ports sectors got a big chunk in the outlay for modernisation and upgradation of existing projects as well as for new projects.

30

NEWS IN BRIEF

Qatar Airways increased its tonnage by 37.5 per cent in 2015, according to statistics revealed by it. Celebi Delhi Cargo Terminal was awarded the Cargo Ground Handler of the Year - Region India: Winner at Air Cargo India 2016. Plus: KIFTPL organised its first business trade meet in Kashipur and CRWC provides sanitation facilities to students in Langra village, Haryana.

Director (Admin & Corporate Affairs) RAJIV SINGH Vice President (Business Development) VINOD KAUL Subscription ALKA SHARMA Distribution PANKAJ KUMAR, BHUSAN KUMAR Executive Director RENU MITTAL For advertising and sales enquiries, please contact:

+91-9810030533, 9810159332 Editorial & Marketing office: News Kingdom Media Pvt. Ltd., D-11, Nizamuddin East 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 Archna Printers, 18, DSIDC Shed, Okhla Indl Area Ph-1, New Delhi -110020

Cover Design: Nagender Dubey

JUST IN TIME

A solid start to 2016:IATA But, WorldACD pointed out that while India’s top 10 air forwarders lost market share in 2015, the country’s air freight growth percentages for 2015 were more than double the worldwide average: +4.1 per cent outbound, +4.7 per cent inbound. For January 2016, the year-onyear (YoY) volume growth was even higher: 4.4 per cent and 7 per cent, respectively, WorldACD said

T

he International Air Transport Association (IATA) released data for global air freight markets in January showing a rise in freight tonne kilometers (FTK) of 2.7 per cent compared to January 2015. This continues the improving trend witnessed toward the end of 2015, and is the fastest pace since April of last year. The freight load factor (FLF) fell 1.8 percentage points, however, indicating that yields are likely to come under further pressure. Total FTKs in January surpassed the previous all-time peak reached in February 2015. All regions except the smallest markets of Africa and Latin America expanded in January, but all regions reported declines in the FLF. Despite this good start, the underlying weak trade performance makes it XQOLNHO\ WKDW JURZWK ZLOO DFFHOHUDWH VLJQLÂżcantly in the coming months. “It is good news that volumes are growing, but yields and revenues are still under tremendous pressure. Air cargo plays a vital role in our globalized and fast-paced world in which trade is the foundation for longterm prosperity. Removing barriers to trade is a win-win. It will shore-up the foundations for stronger economies. And an improved business environment for air cargo will help facilitate much needed technology and process investments so that the industry will be an even stronger catalyst for growth and development. A third of the value of goods traded internationally are delivered by air. But the value of air cargo goes much deeper in the prosperity that it creates in supporting jobs and economic opportunity,â€? said Tony Tyler, IATA’s Director General and CEO. Regional Analysis: African airlines’ FTKs declined by 1.4 per cent in January compared to January

6

March 2016 I Cargo Logistics

2015, and the FLF was 22.6 per cent, down 4.8 percentage points, and the lowest of any region. The largest economies in the region, Nigeria and South Africa, are heavily dependent on energy industries and have been hit hard by the slump in global commodity prices. $VLD 3DFLÂżF FDUULHUV which comprise almost 39 per cent of all air freight, expanded by 1.3 per cent year-over-year (although WKH LQWHUQDWLRQDO IUHLJKW ÂżJXUH ZDV D PXFK lower 0.2 per cent). The FLF fell 2.3 percentage points to 49.8 per cent, still the highest

of any region. Emerging Asia trade contracted in the second half of 2015 and in general WUDGH WR DQG IURP $VLD 3DFL¿F LV ZHDN European airlines’ demand grew by 2.5 per cent in January but the FLF fell 1.5 percentage points, to 41.6 per cent. Growth PD\ KDYH EHHQ ÀDWWHUHG E\ WKH YRODWLOLW\ and weakness seen a year ago. The growth trend for volumes looks weak for the months ahead, so there is a strong possibility that Europe could slip back into negative growth. Latin American carriers continued the weak performance of recent months, declin-

JUST IN TIME

USD) moving along with the worldwide FKDQJHV RQH FRXOG VD\ WKDW ,QGLDÂśV VWDUWLQJ point was good. The United Kingdom continues to be the most important outbound market, but its dominant position was dwindling. The top inbound markets of Hong Kong, Germany and China East strengthened their position ZLWK GRXEOH GLJLW JURZWK ÂżJXUHV WKH ODWWHU two even managed over 20 per cent YoY JURZWK LQ -DQXDU\ ,PSRUWDQWO\ WKHUH ZDV D JRRG RYHUDOO EDODQFH EHWZHHQ ,QGLD RXWbound and inbound.

Air freight market detail- Jan 2016(per cent YoY) World share1 (in per cent)

FTK (in per cent)

AFTK (in per cent)

FLF (-pt) (in per cent)

FLF (level) (in per cent)

Total Market

100

2.7

7.0

-1.8

41.3

Africa

1.5

-1.4

19.4

-4.8

22.6

Asia PaciďŹ c

38.9

1.3

5.9

-2.3

49.8

Europe

22.3

2.5

6.3

-1.5

41.6

Latin America

2.8

-3.6

4.2

-2.7

32.9

Middle East

14.0

8.8

9.8

-0.3

39.2

North America

20.5

2.5

6.7

-1.4

34.6

1

( )% of industry FTKs in 2015 ing by 3.6 per cent. The FLF fell 2.7 percentage points, down to 32.9 per cent. Brazil, the region’s largest economy, has struggled, particularly with the fall in the price of oil and other commodities. Middle Eastern carriers resumed their strong growth trend, expanding 8.8 per cent in January. The FLF was broadly stable, declining just 0.3 percentage points to 39.2 per cent. The region’s airlines continue to enjoy strong growth, helped by large-scale netZRUN DQG ÀHHW H[SDQVLRQ North American airlines saw FTKs expand 2.5 per cent in January compared to January 2015. The FLF was 34.6 per cent, a fall of 1.4 percentage points. Following the spike in volumes due to last year’s West Coast ports strike, air freight from the US DFURVV WKH 3DFL¿F IHOO DZD\ 2Q WKH RWKHU hand trade with Europe, particularly imports, has increased. Meanwhile, WorldACD pointed out that ZRXOG EH GLI¿FXOW EXW ,QGLDœV VWDUW RIIHUHG KRSH $FFRUGLQJ WR WKH UHSRUW WKH ¿UVW month of the year indeed gave little cause for

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March 2016 I Cargo Logistics

cheer: year-on-year (YoY) January showed a volume increase worldwide of no more than 0.3 per cent. Europe was the exception, just as it was in the second half of last year, with volume growth of more than 5 per cent outbound and 1.5 per cent inbound. Although $VLD 3DFL¿F DV D UHJLRQ KDUGO\ JUHZ LWV EXVLness to and from Europe thrived (+8.8 per cent resp. +10.6 per cent). Whilst yields normally drop between December and January, this year’s MoM decrease of 6.6 per cent (in USD) was slightly smaller than last year’s. The January USD\LHOG GURS ZDV SHU FHQW <R< D ¿JXUH not compensated for by lower jet fuel prices, even though these prices decreased by DURXQG SHU FHQW <R< 2QO\ &HQWUDO DQG South America managed to generate the same yield YoY. ,QGLDœV JURZWK SHUFHQWDJHV IRU WKH \HDU 2015 were more than double the worldwide average: +4.1 per cent outbound, +4.7 per cent inbound. And for January 2016 the YoY volume growth was even higher: 4.4 per cent and 7 per cent, respectively. With yields (in

2XWERXQG EXVLQHVV WKURXJK *6$V JUHZ in line with the market in 2015, but increased spectacularly in the markets to the Middle East and South Asia. The top-5 GSAs increased their market share (among GSAs) from 60 per cent to 70 per cent, the top-10 from 80 per cent to 90 per cent, making life PRUH GLIÂżFXOW IRU WKH VPDOOHU *6$V RSHUDWLQJ LQ ,QGLD 7KH VDPH FRXOG QRW EH VDLG IRU ,QGLDÂśV top forwarders. Their market share was alUHDG\ VPDOOHU LQ ,QGLD WKDQ ZRUOGZLGH DQG LW decreased further in 2015. Whereas the top-5 forwarders only lost 0.1 per cent, their share going from 14.6 per cent to 14.5 per cent, WKH ÂżYH QH[W ELJJHVW IRUZDUGHUV ORVW D ODUJHU part of the market, as their share went down from 10.5 per cent to 9.9 per cent. Airlines could take some consolation from the fact that yields realised through the top-10 held up better than the yields from the smaller forwarders. With the exception of UPS SCS, the global forwarders fared less well than the large regional and local forwarders, who showed spectacular volume growth.

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Good time for freight sector

PRESENTING BUDGET: Union Minister for Railways, Suresh Prabhu arriving Parliament House to present the Railway Budget 2016-17. Minister of State for Railways, Manoj Sinha was also seen

I

n the Railway Budget 2016-17, Union Railway Minister Suresh Prabhu focussed on the development of the Delhi-Chennai, Kharagpur-Mumbai and Kharagpur-Vijayawada freight corridors on a priority basis. Presenting the Railway Budget, Prabhu said the railways has proposed to develop freight corridors between Delhi-Chennai (north-south), Kharag-

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March 2016 I Cargo Logistics

pur-Mumbai (east-west) and Kharagpur-Vjayawada on the east coast. “The three new Dedicated Freight Corridors (DFCs) are extremely important. These will enable economic linkages with eastern countries such as Vietnam, Thailand, Cambodia, etc by connecting the hinterland to the eastern seaboard of India and give a push to Make in India,” said Manish Agarwal, leader for capital projects and infrastructure at PwC India. Industry stakeholders were mixed in their response. “I won’t say I am elated, but Mr Prabhu is certainly taking up the right issues and ZRUNLQJ H[WUHPHO\ KDUG LQ D YHU\ GLI¿FXOW scenario.” On the other hand Sachin Bhanushali,

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With an eye on shoring up finances and the other on populism, Union Railways Minister Suresh Prabhu, in his second Rail Budget, promised to bring down freight rates and double non-tariff revenue for the ailing national transporter C O of logistics facilitator ateway Distriparks said, “ hile the budget takes up important components of increasing modal share and rationalising freight rates, the details of how this will be achieved isn’t so clear.” “Right now, the railway line capacity is primarily dedicated to passenger trains. For freight trains to increase their share, there needs to be more dedicated freight FRUULGRUV $OO WKLV ZLOO GH¿QLWHO\ WDNH PRUH than a year, maybe two years,” he added. Vineet Agarwal, MD of the TCI roup also said the budget “doesn’t address explicitly the efforts to increase the share of movements by rail compared to the road

sector”. The Railway Minister said that the three projects would be on high priority to ensure structuring, award and implementation in a time-bound number. The projects would be funded through innovative models including public-private partnership (PPP) mode. e said all the contracts for the civil engineering would be awarded before the close RI WKH ¿QDQFLDO \HDU 3UDEKX VDLG VLQFH KH DVVXPHG RI¿FH contracts worth `2 ,000 crore had been awarded against contracts worth `1 ,000 crore in the last six years. e said as the railways was focused on increasing freight

revenue and expands the freight business, it was essential to build more dedicated freight corridors. “The proposed investment plan (201 1 ), which includes network expansion, national projects such as ortheastern connectivity, high speed rail, elevated corridor, station redevelopment and logistics park look promising. These activities would give a boost to the logistics sector, Rhenus ogistics India oint Managing Director Parikshit Arya said. Regarding budget estimates 2016-17, WKH 0LQLVWHU LQIRUPHG WKDW WKH IUHLJKW WUDI¿F LV SHJJHG DW LQFUHPHQWDO WUDI¿F RI PLO-

Cargo Logistics I March 2016

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Railways on mission-mode

S

uresh Prabhu proposed some mission-mode activities called Avataran to transform railways. These were: Mission 25 tonne: It aims to increase revenue by augmenting carrying capacity. To achieve this 10 to 20 per cent freight loading will be done through 25-tonne axle-load wagons in 2016-17 and target movement of 70 per cent of freight traffic on high axle load wagons by FY 19-20. Mission PACE (Procurement and Consumption Efficiency): This mission aims to improve procurement and consumption practices to improve the quality of goods and services. It will introduce a culture of optimum usage by adopting practices such as Vendor Managed Inventory, direct procurement of High Speed Diesel (HSD), new procedures for identification and disposal of scrap. Comprehensive review of procurement and consumption of HSD will lead to saving more than `1,500 crore in 2016-17. Mission Raftaar: It targets doubling of average speeds of freights trains and increasing the average speed of superfast mail or express trains by 25 km per hour in the next 5 years. Loco hauled passenger trains will be replaced by DEMU or MEMU over the next five years. It will complement Mission 25 Tonne to increase throughput of the railway system. Mission Capacity Utilisation: It proposes to prepare a blueprint for making full use of the huge new capacity that will be created through two dedicated freight corridors between Delhi-Mumbai and Delhi-Kolkata scheduled to be commissioned by 2019. Prabhu said that each of the missions will be headed by a Mission Director reporting directly to the Chairman, Railway Board for a timely targeted delivery. They will be supported by officers from each zone/production unit/RDSO/ centralised training institutes. Each Mission will have annual outcome based performance targets.

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March 2016 I Cargo Logistics

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lion tonnes, anticipating a healthier growth in the core sector of economy. oods earnings was accordingly proposed at `1, 17, crore. The Railway Minister proposed three solution sets for reversing the trend of declining modal share of freight trains expanding the freight basket of railways, review its tariff structure and build more terminals in a bid to recoup its fast-shrinking share in cargo transport. Prabhu said, “The freight basket of Indian Railways is dominated by 10 bulk commodities which enjoy a share of around per cent. Railways should look beyond these to expand revenue base. A fullĂ€HGJHG PDUNHW VWXG\ ZDV EHLQJ XQGHUWDNHQ and detailed supply and demand scenarios, service level and infrastructure re uirements would be assessed so that an action SODQ WR UH FDSWXUH WKDW WUDIÂżF WKURXJK HLWKHU containerisation or new delivery models such as roll-on roll-off would be developed and implemented.

“From industry’s perspective, we welcome the announcement of a review of freight tariff (rate) policy to evolve a competitive freight structure and increase the share of railways. This will help in bringing down overall logistics cost for the industry and improve our competitiveness,â€? said Sajjan indal, Chairman, S roup. Prabhu also acknowledged that network capacity limitations did not allow the plying of freight trains on a timetable but, still, they would start time-tabled freight container, parcel and special commodity trains on an experimental basis, he added. “ e welcome the announcement made on expanding the freight basket of railways, wherein it is proposed to start a time-tabled freight container, parcel and special commodity trains the manufacturing sector ZLOO DOVR EHQHÂżW IURP UDWLRQDOLVLQJ WKH WDULII structure,â€? said Ajay Kapur, Managing Director, Ambuja Cement. The Minister also said that the container

VHFWRU ZRXOG EH RSHQHG WR DOO WUDIÂżF EDUULQJ FRDO DQG VSHFLÂżHG PLQHUDO RUHV DQG SDUW loads would be permitted during the nonpeak season. All existing terminals or sheds ZRXOG EH JUDQWHG DFFHVV WR FRQWDLQHU WUDIÂżF where considered feasible. e further added that the current tariff structure of railways had led to out-pricing of freight services. A review of tariff policy would be undertaken to evolve a competitive rate structure vis-a-vis other modes, permit multi-point loading unloading and apply differentiated tariffs to increase utilisation of alternate routes. The possibility of signing long-term tariff contracts with key freight customers using pre-determined price escalation principles would be explored which would provide predictability of revenues to railways and of costs to customers. “On the freight side, the government seems to be cogni ant of the fact that in the past, rail as a mode of freight transport has ORVW D VLJQLÂżFDQW VKDUH DQG WKH EXGJHW RXWlines measures to regain the share. This is a progressive step as the railway’s share of freight has fallen from per cent in 1 0 to 1 per cent presently due to several legacy infrastructure, regulatory and commercial hurdles, many of which have been addressed in some initial way in the budget,â€? said Prahlad Tanwar, Director for Transport and ogistics at consultancy KPM . Manish Agarwal of PwC India called the move for price rationalisation a potential game-changer for the industry as it would reduce prices and help attract larger volumes. “ ven for 1,200 to 1, 00 km distances, road transport of containers is now to 10 per cent cheaper than rail. Also, there is impending competition from coastal shipping and inland waterways,â€? he said. The policy will need to combine personalised service and bulk discounts to be competitive in chosen areas,â€? he added. ower industrial demand has had an impact on the railways performance. Prabhu said the freight earnings estimate for the FXUUHQW ÂżVFDO \HDU ZRXOG EH FXW WR `111, crore from the `121, 2 crore projected earlier. e said his ministry was undertaking D IXOO Ă€HGJHG PDUNHW VWXG\ DQG DVVHVVLQJ detailed supply and demand scenarios, service level and infrastructure re uirements so that an action plan to recapture freight WUDIÂżF ZDV GHYHORSHG DQG LPSOHPHQWHG

Cargo Logistics I March 2016

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Kudos to sunshine sectors

Big-ticket announcements especially in the roads and ports sector in Union Budget 2016 could push these sectors to perform well in the coming years and become a major contributor to boost the GDP. C&L takes a look

U

nion Budget 2016 saw some big announcements for the infrastructure sector with roads and ports garnering huge attention. The roads and ports sectors got a big chunk in the outlay for modernisation and upgradation of existing projects as well as for new projects the infra-

structure sector altogether got a record budgetary allocation of `2.21 lakh crore. The roads sector alone was allocated ` 7,000 crore for new road projects entailing 10,000 kilometres in F 17 including `1 ,000 crore earmarked for rural roads under the Pradhanmantri ram Sadak ojna (PM S ). The Ports sector too attracted an allocation of 1600 crore for the shipping sector and inland waterways including the Sagarmala project. hile presenting the Union Budget 2016-17, Finance Minister Arun aitley said that

14

March 2016 I Cargo Logistics

LQIUDVWUXFWXUH DQG LQYHVWPHQW ZDV WKH ¿IWK support pillar of the Budget’s theme Transform India’. For speeding-up the process of road construction, an allocation of `27,000 crore had been proposed for PM S and ` ,000 crore for road transport and highways. Another `1 ,000 crore was to be raised by ational ighways Authority of India ( AI) through Bonds. aitley further announced that nearly 10,000 kms of national highways were expected to be approved in 2016-17. In addition, nearly 0,000 kms of State highways will also be taken-up for upgradation as national highways. According to the conomic Survey 201 -16, India has the second largest road network in the world with 2. 2 lakh km of road network comprising ational ighways ( ), State ighways and other roads. The s in the country cover a total

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length of 1,00, 7 km and carry about 0 SHU FHQW RI WKH URDG WUDIÂżF For the development of the ports sector, the Finance Minister also announced a slew of plans, “ e are planning to develop new *UHHQÂżHOG SRUWV ERWK LQ WKH HDVWHUQ DQG ZHVWHUQ FRDVWV RI WKH FRXQWU\ 7KH ZRUN on the ational aterways is also being expedited as ` 00 crore has been provided

LQFUHDVHG E\ SHU FHQW WR PLOOLRQ WRQQHV LQ ZLWK WUDI¿F DW QRQ PDMRU ports increasing at a faster rate than at ma MRU SRUWV´ ³'XULQJ $SULO WR 6HSWHPEHU ZKLOH FDUJR WUDI¿F DW DOO SRUWV LQFUHDVHG E\ SHU FHQW PDMRU SRUWV UHSRUWHG DQ LQ FUHDVH RI SHU FHQW DQG QRQ PDMRU SRUWV D GHFOLQH RI SHU FHQW DV FRPSDUHG WR WKH

IRU WKHVH LQLWLDWLYHV ´ DQG DGGHG ÂłLQ ,QGLDÂśV PDMRU SRUWV KDYH KDQGOHG WKH KLJK HVW HYHU TXDQWLW\ RI FDUJR :H KDYH DOVR DGGHG WKH KLJKHVW HYHU FDSDFLW\ LQ PDMRU SRUWV :H KDYH VWDUWHG D VHULHV RI PHDVXUHV for modernising the ports and increasing WKHLU HIÂżFLHQF\ 7KH 6DJDUPDOD SURMHFW KDV DOUHDG\ EHHQ UROOHG RXW´ “Ports in the public sector need to both attract such investment as well as leverage the huge land resources lying unused with WKHP 7R HQDEOH XV WR GR VR SRUWV LQ WKH public sector will be encouraged to cor poratise and become companies under the &RPSDQLHV $FW ´ -DLWOH\ H[SODLQHG -DLWOH\ÂśV SUDLVH IRU WKH SRUWV VHFWRU DOVR UHVRQDWHG LQ WKH (FRQRPLF 6XUYH\ 16 which termed it as a strong performing VHFWRU KROGLQJ KLJK SRWHQWLDO LQ WKH IXWXUH 7KH GDWD LQ WKH (FRQRPLF 6XUYH\ QRWHG WKDW ÂłWKH FDUJR WUDIÂżF RI ,QGLDQ SRUWV

FRUUHVSRQGLQJ SHULRG LQ ´ WKH (FR QRPLF 6XUYH\ DFNQRZOHGJHG ,QGLD DW SUHVHQW KDV PDMRU SRUWV XQGHU WKH FRQWURO RI WKH &HQWUH DQG QRQ PDMRU SRUWV 7KH PDMRU SRUWV XQGHU the control of Centre Mumbai, Kand la, ew Mangalore, Marmugao, Cochin, -137 &KHQQDL 9 2 &KLGDPEDUQDU (Q QRUH 9LVDNKDSDWQDP 3DUDGLS DQG .RON ata (including aldia) handle approximate ly 61 per cent of the country’s total cargo WUDIÂżF iving more credence to the roads sector, the Budget outlined a slew of plans WR UHLQYLJRUDWH WKH URDGV VHFWRU -DLWOH\ announced that the overnment would enact necessary amendments in the Motor 9HKLFOHV $FW DQG RSHQ XS WKH URDG WUDQV SRUW VHFWRU LQ WKH SDVVHQJHU VHJPHQW $Q HQDEOLQJ HFR V\VWHP ZLOO EH SURYLGHG IRU the States which will have the choice of

DGRSWLQJ WKH QHZ OHJDO IUDPHZRUN (QWUH preneurs will be able to operate buses on YDULRXV URXWHV VXEMHFW WR FHUWDLQ HIÂżFLHQ F\ DQG VDIHW\ QRUPV 7KLV ZLOO EHQHÂżW WKH poor and middle class, encourage new in vestment, promote start up entrepreneurs DQG FUHDWH QHZ MREV ailing the announcements for the roads and shipping sector in the Budget, itin adkari, Union Minister for Road 7UDQVSRUW +LJKZD\V DQG 6KLSSLQJ VDLG “First time in the history of India for the URDG SURMHFWV ZKLFK LQFOXGHV Âľ5DVKWUL\D Mahamarg’ and PM S , around `1 lakh crore provision has been given and this is a historic decision for the infrastructure of WKH FRXQWU\ ´ adkari also expressed satisfaction at the proposed budgetary allocation given to WKH 3RUWV VHFWRU Âł)RU WKH ÂżUVW WLPH LQ KLVWR ry, ` 00 crore has been sanctioned for our ambitious inland waterways and Sagarma OD SURMHFWV EHVLGH WKDW KH KDV PDGH D SUR vision for ` 00 crore tax exempted bonds, so these `1600 crore would be of great help WR WKH VKLSSLQJ DQG LQODQG ZDWHUZD\V ´ Announcements in the Budget for the ports and roads sector elicited mixed re actions from industry stakeholders and analysts some hailed it while others GHEXQNHG LW 3UDKODG 7DQZDU 'LUHFWRU IRU 7UDQVSRUW DQG /RJLVWLFV .30* ZDV TXRW ed as saying, “ hile Sagarmala (the gov HUQPHQWÂśV SRUW PRGHUQLVDWLRQ SURMHFW KDV been mentioned as a comprehensive longer term port transformation initiative, mention of immediate initiatives especially around ÂżUVW DQG ODVW PLOH FRQQHFWLYLW\ DW NH\ SRUWV to augment port capacity expansion was ab VHQW ´ C Sasidhar, Managing Director, Krish napatnam Port Company hailed the an nouncement of the implementation of ,QGLDQ &XVWRPV 6LQJOH :LQGRZ 3URMHFW “Implementation of Indian Customs Single :LQGRZ 3URMHFW DQG LQLWLDWLYHV WR UHGXFH the cargo release time and the transaction costs of IM trade will bring in the re TXLUHG ERRVW LQ WHUPV RI HDVH RI RSHUDWLRQV while also making the sector more attrac WLYH ´'LUHFWRU (PDPL *URXS $GLW\D 9 Agarwal said that focus on infrastructure and rural sector, which are the backbone of WKH HFRQRP\ DQG VRFLHW\ ZLOO SURYLGH PDMRU LPSHWXV WR WKH LQGXVWULHV LQ WKH ORQJ WHUP

Cargo Logistics I March 2016

15

FOCUS

For aviation, a few sops

There was little for the aircargo community in this year’s Budget proposals even though the everyone in the government was aware that the air cargo sector was passing through troubled times

T

he picture of a heavy bag containing the 2016-17 Indian Budget being handled by Parliament staff was indeed a telling one. There were many who felt that somewhere in that bag were the hopes of the air cargo segment. Perhaps, out of the bag would come major decisions that would boost the air cargo sector. Indeed, the bag was heavy but leave alone air cargo, there was little for aviation. opes there were a-plenty going by the way the air cargo sector has performed both nationally and internationally. After all, as a veteran freight forwarder pointed out, surely the Indian leaders were aware of the low volumes that air cargo has been witnessing. So, what prevented Indian Fi-

16

March 2016 I Cargo Logistics

nance Minister Arun aitley from providing incentives to boost the sector, he asked. Others like Conrad Clifford, Regional, 9LFH 3UHVLGHQW IRU $VLD 3DFLÂżF UHJLRQ International Air Transport Association (IATA), virtually dismissed the budget saying it had “minimalâ€? focus on aviation. Perhaps, the saving grace for the air cargo community was the announcement to implement the Indian Custom Single indow Project (ICS P) at major ports and airports starting from April 1, 2016, WKH EHJLQQLQJ RI WKH QH[W ÂżQDQFLDO \HDU Civil Aviation Minister P Ashok ajapathi Raju commenting on the Budget said that the move would reduce the dwell time of export and import air cargo by bringing all regulatory agencies responsible for giving

clearances to a common platform. It would also enable the integration of processes of import cargo stakeholders to enable easy adoption of DI. e also said that the opportunity for deferred payment of Customs duties would facilitate importers and exporters with proven track records for faster processing of cargo. This, he announced, would reduce the dwell time of cargo. The Civil Aviation Minister seemed to be unaware that the ICS P had been announced in the Budget of 201 -1 and was being tried out at the awaharlal ehru Port Trust (Nhava Sheva) and two Inland Container Depots near Delhi on a pilot basis. In fact, in the beginning of February this year, more than a fortnight before Minister Raju’s comment, the move was

FOCUS

extended to imports at the Air Cargo Complex in Mumbai and Delhi Air Cargo and to all other locations where the Food Safety Standards Authority of India (FSSAI) and the Department of Plant Protection, uarantine and Storage (DPP S) were operational, according to a circular issued by the Central Board of xcise and Customs (CB C). Other than the reduction in dwell time, the air cargo community would SUREDEO\ EHQH¿W ¹ RI FRXUVH ZKHQ LW GRHV KDSSHQ ¹ IURP WKH UHYLYDO RI XQVHUYHG DQG XQGHU VHUYHG DLUSRUWV LQ WKH FRXQWU\ %XGJHW DOORZV WKH 0LQLVWU\ RI &LYLO $YLDWLRQ WR SDUWQHU VWDWH JRYHUQPHQWV WR GHYHORS VRPH RI WKHVH DLUSRUWV DQG DLUVWULSV LQ WKH FRXQWU\ 7KH $FWLRQ 3ODQ IRU UHYLYDO RI WKHVH DLUSRUWV LQFOXGHV WKH LGHQWL¿FDWLRQ of airports and airstrips under the control RI WKH VWDWH JRYHUQPHQWV IRU GHYHORSPHQW in consultation with airlines along with WKH UHYLYDO RI QRQ RSHUDWLRQDO DLUSRUWV owned by the Airports Authority of India. +RZ ORQJ WKH UHYLYDO SURFHVV ZRXOG WDNH is anybody’s guess but domestic air cargo VWDNHKROGHUV DUH RSWLPLVWLF Minister Raju has gone on record to

VD\ WKDW %XGJHW KDV SDYHG WKH ZD\ IRU GHYHORSLQJ ,QGLD DV D 0DLQWHQDQFH 5HSDLU DQG 2YHUKDXOLQJ 052 KXE RI $VLD 7KH PRYH LQ D ZD\ FRXOG KHOS WKH air cargo industry. The Budget, he said has PDGH SURYLVLRQV IRU LQFHQWLYLVLQJ GRPHVWLF YDOXH DGGLWLRQ WR KHOS Âľ0DNH LQ ,QGLDÂś 8QGHU WKLV WKH WRROV DQG WRRO NLWV XVHG E\ WKH 052 VHFWRU KDYH EHHQ H[HPSWHG IURP Customs and xcise duty. The MRO business of Indian carriers is around 7 mn, 0 per cent of which is FXUUHQWO\ VSHQW RXWVLGH ,QGLD Âą LQ 6UL /DQND 6LQJDSRUH 0DOD\VLD 8$( HWF :LWK WKH WHFKQRORJ\ DQG VNLOO EDVH DW KRPH WKH JRYHUQPHQW LV NHHQ WR GHYHORS ,QGLD DV an MRO hub in Asia, attracting business from foreign airlines while retaining the GRPHVWLF EXVLQHVV :KDW KDV FRPH DV D big dampener is the increase in the excise GXW\ OHYLHG RQ DYLDWLRQ WXUELQH IXHO $7) &DUULHUV KDG PDGH SURÂżWV ZLWK WKH ORZHU cost of ATF with airfares in 201 being 1 20 per cent lower than those in 201 . This \HDU KRZHYHU WKH KLNH LQ WKH H[FLVH GXW\ ZLOO QRW RQO\ PDNH DLU WUDYHO H[SHQVLYH EXW also affect air cargo. “Increase in excise

GXW\ RQ $7) ZLOO PDNH WKH UDZ PDWHULDO FRVWOLHU E\ IRXU ÂżYH SHU FHQW $W D WLPH when ATF in India is 60-70 per cent costlier than global ATF prices, it goes against WKH JRYHUQPHQWÂśV VWDWHG REMHFWLYH WR PDNH Ă€\LQJ DIIRUGDEOH IRU WKH PDVVHV ´ VDLG $Pber Dubey, partner and head of aerospace and defence at global consultancy KPM . The proposal to increase the tax on ATF will result in increase in airfares and dampen air passenger growth, said Sharat Dhall, President, Yatra.com +RZHYHU K Vishwanath, a partner at consulting ÂżUP 7ULQLW\ $YLDWLRQ &RQVXOWDQWV 3WH /WG in Singapore and former Vice President FRPPHUFLDO VWUDWHJ\ DQG LQYHVWRU UHODWLRQV DW -HW $LUZD\V /WG VDLG WKLV ZLOO QRW KDYH D PDMRU LPSDFW RQ DLUOLQHVÂś SURÂżWV DV RLO SULFHV DUH GRZQ DQG DLUOLQHV KDYH WKH VFRSH WR SDVV LW RQ WR SDVVHQJHUV ZLWK WUDIÂżF growing at 20 per cent in India. “Airlines were paying around per cent of customs duty when oil was at 100 per barrel. It has FRPH GRZQ DQG WKH JRYHUQPHQW LV ÂżQGLQJ D ZD\ WR ERRVW LWV UHYHQXH SURVSHFWV ,Q DQ\ FDVH WKLV SURSRVHG LQFUHDVH ZLOO KDYH RQO\ LQFUHPHQWDO LPSDFW ´ 9LVKZDQDWK VDLG

Cargo Logistics I March 2016

17

COVER STORY

Quik and ready

T

here was no media, ministers or bells and whistles for uikjet Airlines’ launch of B7 700SF jet freighter operations. There was, however, the water cannon salute at Bengaluru airport to herald the DUULYDO RI WKH Ă€LJKW LQ WKH HDUO\ KRXUV RI )HEUXDU\ 7KH Ă€LJKW FUHDWHG KLVWRU\ RI VRUWV along with Blue Dart, uikjet became WKH VHFRQG FDUJR DLUOLQH LQ WKH FRXQWU\ It is no wonder that Capt Preetham PhilOLS &(2 RI 4XLNMHW $LUOLQHV UHPDUNHG “The launch of the B7 7 freighter service is also the launch of a much-needed QHZ HUD LQ WKH ,QGLDQ DLU FDUJR LQGXVWU\ ´ 7KRXJK WKH FRXQWU\ KDV ZLWQHVVHG D KXJH growth in the number of passenger aircraft, the freighter segment has remained VWDJQDQW DQG WKHUH DUH QRZ RQO\ VHYHQ freighter aircraft serving the seventh ODUJHVW HFRQRP\ LQ WKH ZRUOG ,QLWLDOO\ FRQQHFWLQJ 'HOKL &KHQQDL %HQJDOXUX DQG +\GHUDEDG WKH % IUHLJKWHU KDV D FDSDFLW\ RI WRQQHV DQG LV FRQÂżJXUHG WR WDNH SDOOHWV RI cargo. The new service will offer four GDLO\ Ă€LJKWV RSHUDWLQJ RYHUQLJKW WR OLQN 'HOKL ZLWK &KHQQDL %HQJDOXUX DQG +\GHUDEDG LQ WKH ÂżUVW SKDVH ,W ZLOO FRQQHFW Mumbai and Kolkata in the second phase E\ ZKHQ LW ZLOO EH FRYHULQJ DOO PDMRU PHWUR KXEV LQ WKH FRXQWU\ The Bengaluru-based airline received its scheduled services Air Operator’s Permit from the Director eneral RI &LYLO $YLDWLRQ LQ HDUO\ )HEUXDU\ $ joint venture with AS Aviation roup (it holds 7 per cent stake in the venture), a Dublin, Ireland-based global aviation services provider with seven airlines, PRUH WKDQ DLUFUDIW DQG DLUOLQH RSHUDWLRQV RQ VL[ FRQWLQHQWV +XJK )O\QQ Chief xecutive of AS Aviation roup, was there at the launch. e mentioned that “ uikjet will now offer a neutral

18

March 2016 I Cargo Logistics

COVER STORY

After waiting in the wings for a long time, Quikjet Airlines, the country’s first dedicated cargo carrier took to the skies in the middle of February. It was a bold move and one that no one has tried earlier. Once the carrier ramps up its services, reports TIRTHANKAR GHOSH, it will be able to accommodate not only the booming e-commerce trade but also cater to the perishables business from Tier-2 and Tier-3 cities.

A NEW BEGINNING: Quickjet’s freighter gets a watery welcome at Bengaluru; and CEO Capt Preetham Phillip with others celebrate the launch

Cargo Logistics I March 2016

19

COVER STORY

‘The Indian aircargo scenario will see a dramatic change with the advent of Quikjet’

Capt Preetham Phillip, CEO of Quikjet, has his work cut out for 2016 and is keen to get on with the job of providing time-definite services Now that you will be completing a month of operation, what will your top priority for 2016 be?

lines to Tier 2, areas, will make this a reality. owever the maturity of this concept will take a bit of time for the market.

My priority will be to stabilise the operational network of uikjet and establish the company as a dependable freighter carrier in the country.

I remember when I spoke to you last time, you had said, “Our understanding in the industry is that it has not yet moved to a stage where time-definite delivery is critical”. With e-commerce growing rapidly, do you think we have reached the stage where we have come to have an understanding of time-definite delivery?

Tell us a little more about the partnership with Sovika? How is it functioning? Sovika has bought out the capacity of our aircraft and we in turn operate the network based on their re uirements. Sovika has control of the payload and is responsible for selling the capacity in the market and uikjet operates the airline network based on Sovika’s commercial re uirements. Sovika is the SA with two other passenger airlines in the country and the dedicated freighter capacity enhances their reach in the country by complementing their available passenger network.

Would you be building a hub-and-spoke system? One reason why I ask this is because Tier-2 and Tier-3 cities remain largely untouched. In the current scenario we will not be operating the hub-and-spoke model. owever, our network complements Sovika’s SA freight network on passenger airlines hence, our freighter is used to optimise their reach and increase the movement of freight to Tier-2 and Tiercities.

Are there plans to induct more freighters and if so when? For the current year we intend to induct a second B7 7- 00 by mid-May and one ATR 72- 00 by the end of the year.

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March 2016 I Cargo Logistics

What have you done with the ATR that you were using for operations in the North East? e did suspend our orth ast operations with the ATR in early 201 , primarily due to the non-viability of return loads. owever, we are reconsidering commencement of the same by the end of 2016 with an ATR 72- 00 and perishables appear to be an emerging commodity for return loads from the orth ast.

At one point of time, for example, one of the large retail enterprises had decided to employ freighters to bring in perishables from Tier-2, 3 cities and even rural areas. Do you see this happening in the long run? e have been receiving a few ueries on this matter and we believe our network of providing a dedicated freighter option to complement the reach of passenger air-

$OWKRXJK FXVWRPHUV DUH NHHQ RQ WLPH GH¿nite delivery and this can be seen from the options given by the -commerce websites for a charge for early deliveries, unfortunately the guarantees for these deliveries are not offered by most of these sites. ou will notice that most -commerce websites after you choose an express delivery option immediately after payment gives you a delivery date about a week down the line. -commerce sites using this option are going to drive customers away from choosing an early premium delivery product. So, although customers are willing to pay for the service, the lack of commitment to meet these expectations is not conducive to the industry. I would also highlight that a few of the larger -commerce companies to meet these expectations are investing si eable amounts of monies in developing regional warehouses and logistics hubs. This, in my view, is going to drive the industry backwards as the fundamental ethos of ust in time’, o real estate’, o stock on shelf’ and Reduced resource cost’ have been reversed to a price point beyond that of the retail store on the streets.

A general question: Why do you think en-

COVER STORY

trepreneurs are so hesitant to go into the aircargo business in India? We have had numerous instances and all have failed. What is it that one must have to get and stay in the business? 7KH DLU FDUJR VHJPHQW LQ ,QGLD KDV been challenging as it has been mostly dependent on the available space on SDVVHQJHU DLUFUDIW 7KLV VSDFH XQIRUWXQDWHO\ LV QRW D FOHDUO\ GHÂżQHG DYDLOable space on a given day. For example, GHSHQGLQJ RQ WKH WLPH RI WKH \HDU DQG the passenger payload, the available IUHLJKW VSDFH FKDQJHV IURP GD\ WR GD\ This, in turn, creates an uncertain enYLURQPHQW IRU WKH VKLSSHU +H LV QRW VXUH DERXW WKH TXDQWXP RI SD\ORDG KH FDQ EH DVVXUHG RQ D Ă€LJKW ,Q WXUQ the shipper to make sure he meets the customer’s expectation makes arrangements to move a considerable YROXPH RI KLV FRQVLJQPHQW E\ VXUIDFH transport. e, in turn, saves the mustVKLS E\ DLU LWHPV IRU WKH ODVW PLQXWH E\ DLU IUHLJKW +HUH ZH KDYH FUHDWHG D UHGXFHG TXDQWLW\ RI IUHLJKW WKDW LV planned to be shipped by air. This rathHU YRODWLOH VFHQDULR DOVR FUHDWHV D Ă€XFtuating price point based on supply and demand. For an aircargo airline to be sucFHVVIXO LW LV LPSRUWDQW IRU WKH RSHUDWRU WR EH DEOH WR Ă€\ KLV QHWZRUN ² UHJDUGOHVV RI WKH ORDG IDFWRU IRU D UHDVRQDEOH SHULRG RI WLPH ZLWK D VXE ORDG FDSDFLW\ WR PLJUDWH PRUH RI WKH VXUIDFH VKLSSHG ORDGV RQWR D JXDUDQWHHG DLUIUHLJKW QHWZRUN RI KLJKHU FDSDFLW\ WKDQ ZDV DYDLODEOH 7KLV XQIRUWXQDWHO\ LV DQ H[SHQVLYH SURSRVLWLRQ IRU WKH RSHUDWRU ,W LV D chicken-and-egg scenario, wherein you need a network to be viable, you need WR EXUQ PRQH\ WR EHFRPH SURÂżWDEOH Further still, you will continue to comSHWH ZLWK WKH FXUUHQW Ă€XFWXDWLQJ SULFH SRLQWV WR ÂżOO WKH UHVW RI WKH DLUFUDIW 7KH ,QGLDQ DLUFDUJR VFHQDULR ZLOO VHH D GUDPDWLF FKDQJH ZLWK WKH DGYHQW RI GHGLFDWHG IUHLJKWHUV VXFK DV 4XLNMHW ,W LV JRLQJ WR WDNH WLPH WR FKDQJH WKH ZD\ DLU FDUJR LV GRQH WRGD\ 2I FRXUVH LW UHDOO\ GHSHQGV RQ WKH DYDLODELOLW\ RI the appetite to make the market change.

FROM OUR FILES: Quikjet’s ATR being loaded

6SHDNLQJ DERXW WKH RIIHULQJV &DSW cargo service and as it grows it aims to Phillip said that the airline was improvserve multiple customers, airlines, busiLQJ DLU FDUJR FDSDFLW\ VLJQLÂżFDQWO\ DQG ness and industry to help enable growth, ÂłZH QRZ RIIHU FXVWRPHUV D IDU PRUH SUHcompetitiveness and customer service.â€? mium service keeping in mind the time e also said that the airline’s services ZLOO ÂłEHQHÂżW WKH HFRQRP\ LQ ,QGLD DQG VHQVLWLYH QDWXUH RI WKH DLU FDUJR EXVLWKLV EHQHÂżW ZLOO EH IHOW PRUH DQG PRUH nessâ€?. The newly-introduced tie-up with Sovika will provide a key advantage to as uikjet expands its operations in the the booming e-commerce industry. Capt months and years aheadâ€?. 7KH FRXQWU\ÂśV ÂżUVW QHXWUDO FDUJR Phillip explained that in some cases belO\ VSDFH ZDV XQVXLWDEOH IRU ODUJH VL]HG airline uikjet is a standalone entity VKLSPHQWV RU FHUWDLQ FDWHJRULHV RI Âą LW LV RIIHULQJ D SUHPLXP RYHUgoods that cannot be shipped QLJKW QHWZRUN VSHFLÂżFDOO\ RQ SDVVHQJHU DLUOLQHV IRU designed to best serve the freighter regulatory reasons. WKH UHTXLUHPHQWV RI network had been Âł2XU H[SHUWLVH DQG IRthe express cargo, designed in a way cus lies in providing e-commerce and that it blended well much needed airport automotive induswith line flight netto airport air cargo WULHV ,Q DGGLWLRQ LW works thereby enconnectivity,â€? he emhas launched with abling maximization phasised. VHUYLFHV IRU 0XPof loads and guaranAS Aviation bai-based Sovika teeing capacities to *URXS H[SHFWV 4XLNMHW WR Aviation (Sovika is an the fraternity grow this partnership with airport to airport logistics Sovika and to expand its services specialist and is the aviation DUP RI WKH \HDU ROG 6RYLND *URXS all customers based on its capability to DQG ZLOO DOVR EH DYDLODEOH IRU GRPHVWLF SURYLGH D UDQJH RI DLUFUDIW ZLWK YDU\LQJ SD\ORDG RSWLRQV WR VXLW VSHFLÂżF FXVWRPHU and international cargo charters. Sovire uirements. Flynn projected a dynamic ka’s COO, Akhilesh Rao mentioned that WKH IUHLJKWHU QHWZRUN KDG EHHQ GHVLJQHG IXWXUH IRU 4XLNMHW Âł7KHUH LV D UHDO DQG VLJQLÂżFDQW PDUNHW QHHG DQG 4XLNMHW LV DOin a way that it blended well with “our OLQH Ă€LJKW QHWZRUNV WKHUHE\ HQDEOLQJ ready building its capability to serve this PD[LPL]DWLRQ RI ORDGV DQG JXDUDQWHHLQJ need. e will be providing assistance DQG H[SHULHQFH IURP WKH $6/ DLUOLQHV FDSDFLWLHV WR WKH IUDWHUQLW\´

Cargo Logistics I March 2016

21

COVER STORY

Problems and solutions C apt Phillip has been in the aircar-

Currently, the royalty charges im-

ness of Indian airports. The royalty charges in India are much higher in comparison to

go game long enough to understand the obstacles — especially

posed by domestic airports on MRO, Cargo, Ground Handling and ATF are unrea-

the developed countries. Below are the royalties charged by some

those relating to infrastructure — that hinders the business. In fact, he sent

sonably high. Just to quote an example, the Airports Authority of India (AAI) charges

major airports:

a letter to the Minister of Civil Aviation sometime ago detailing the problems:

13 per cent of royalty from Indian MROs. Ground Handling royalty charges are as high as 36.3 per cent in some airports. A

Reduction in airport royalty charges: To encourage induction of more cargo aircraft in the country, we request for a reduction or removal of royalty charges for cargo airlines.

DIAL (Delhi) : 20 per cent on MRO services and 13 per cent on GHA services. BIAL (Bengaluru): 11 per cent on MRO Services and nothing on GHA services.

comparative analysis of similar charges and facilities offered by some of the important international airports abroad vis-

GHIAL (Hyderabad): 13 per cent on MRO

a-vis Indian airport charges and facilities

services and 36 per cent on GHA services. Waiver/Incentive for new cargo airlines

will certainly bring out the cost ineffective-

services and nothing on GHA services. AAI MAA (Chennai): 13 per cent on MRO

READY AND WAITING: Quikjet’s ATR which was flying in 2013. An ATR would be inducted by the end of 2016.

that currently serve the world’s major express integrator brands and we have no doubt that uikjet will play a major role in the development and expansion of In-

22

March 2016 I Cargo Logistics

dia’s cargo business.” Sovika Aviation welcomed the start of uikjet’s services. Said Sahil Mehta, C O of Sovika Aviation, “This freighter

is the perfect extension of our existing business model and complements well with our vision of connecting maximum airports across the country with effective

COVER STORY

parking and landing charges: In or-

tional cargo operators.

der to encourage more domestic cargo airlines to operate in the country, we suggest waiver of parking and landing. Currently, AAI has brought an incen-

is presently highly underutilised. This warehouse has spare capacity which can

Discounted taxes on ATF: A discounted ATF tax of 4 per cent would help us in the

be effectively shared with other cargo airlines. By sharing the spare capacity

starting phase. Currently, discounted ATF of 4 per cent is being offered to passenger

Air India will generate additional reve-

tive scheme in landing charges for International transit and technical cargo freighters operated by the airlines to

aircraft with less than 80 seats.

and from Kolkata and Chennai airports. This offers incentives as high as 30 per

Usage of air cargo warehouse at Mumbai

cent for all international scheduled and non-scheduled cargo freighters depending on the number of flights --the present scheme is only helping interna-

nue, but other carriers also can avail the warehouse and screening facility within the airport premises itself. Presently, the domestic cargo warehouse is in Mar-

airport: Mumbai is a major cargo hub in India; however, there is no dedicated cargo terminal available for domestic cargo operations in the airport. Air India has a large

ol, which is around six km away from the

cargo warehouse at Mumbai airport, which

operation unviable at Mumbai.

air cargo services. The partnership itself a t t r with uikjet will go a long way ). e had emphasised LQ IXO¿OOLQJ WKLV YLVLRQ ´ that the Indian market ay back in 201 , was a challenging This freighter this correspondent one. “There are no is the perfect extenhad asked Capt Philtwo ways about it sion of our existing lip about the Indian because cargo business model and market. At that time, is ancillary revcomplements well uikjet Cargo was enue on a schedwith our vision of operating with one uled carrier’s belly connecting maximum aircraft, an ATR offerVSDFH ´ 7KH VHFRQG airports across the ing a payload of 000 kg, part of the challengcountry connecting Kolkata and the ing situation was that the orth-east four times a week success of airfreight really (the services were suspended that year ZDV RQ WLPH GH¿QLWH SHULVKDEOHV +H

domestic airport. The cargo accepted at Marol has to be transported using bonded trucks. Hence; this makes air cargo

had mentioned that the industry had not PRYHG WR D VWDJH ZKHUH WLPH GH¿QLWH GHlivery was critical. The future, C O Phillip had said, was in trying to establish a good network. Comparing conditions between India and the US, the uikjet boss had said that the challenge was similar to the one that was faced in US long back nobody wanted to commit unless one had a network. To set up a network without a commitment from a customer was an expensive business. For Capt Phillip, the launch of the freighter was the fruition of a dream journey started way back in February 2012. Often described in the country’s aviation industry as a route planning whi kid, he is a route planner par excellence (he was COO Aviation at Deccan Cargo xpress ogistics Private imited and Deputy COO of Air Deccan, InGLD¶V ¿UVW ORZ FRVW FDUULHU DQG ZDV NQRZQ for his efforts to take Air Deccan to the furthest corners of the country. Today, as C O of uikjet, his ambition is to provide a world class logistics service at competitive rates that can match the most professional services globally. Today, Capt Phillip knows that he and uikjet Airlines are both being watched closely by stakeholders because he has the network and the commitment from customers. is success will once again emphasise the fact that domestic air cargo holds promise and possibly encourage entrepreneurs to invest or start carriers.

Cargo Logistics I March 2016

23

REGULATIONS

New regulations for shipping containers Come July 1, 2016, the container weight verification requirement as outlined by the Safety of Life at Sea Convention (SOLAS) will be enforced. Shippers will be responsible for verifying the total gross weight of any container they load or run the risk of missing their booked vessel if the Verified Gross Mass (VGM) documentation is ignored. The new weight verification rules as part of the SOLAS Convention has been adopted by the International Maritime Organisation (IMO) in collaboration with industry representatives primarily to avoid major incidents and accidents caused by overweight containers

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tarting uly 1, 2016, the International Maritime Organisation’s Maritime Safety Committee approved amendments to The International Convention for the Safety of ife at Seas’ (SO AS), will re uire that shippers verify gross container weight prior to shipping. Mis-declaration of a container’s weight occurs when a shipper reduces the weight in its shipping document, sometimes in an attempt to lower shipping costs. But it may also occur when shippers merely estimate a container’s weight or fail to include the tare weight or tonnage in their calculations. Industry experts believe that approximately 20 per cent of containers at any given time are mis-declared, and that upwards of 2 of all cargo claims may be attributed to mis-declaration and poor container packing. From 2006 to 2011 alone, an estimated 12. million dollars in losses stemmed from mis-declaration of cargo weight. To reduce operational issues and promote safety, the International Maritime Organisation’s Maritime Safety Committee approved amendments to SO AS, mandatLQJ WKH YHUL¿FDWLRQ RI FRQWDLQHU ZHLJKW SULRU to shipping. Starting uly 1, 2016, SO AS ZLOO UHTXLUH WKH PDQGDWRU\ YHUL¿FDWLRQ RI the gross mass of containers pursuant to The International Convention for the Safety of ife at Sea 1 7 , Chapter VI. To comport with this new directive, the cargo must either (1) be weighed at the loading container at an approved weighing station or (2) all items in the container weighed and then included in the overall container’s weight calculation. The shipper ultimately bears the respon-

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March 2016 I Cargo Logistics

BUILDING STRONG BRIDGES: Prime Minister Narendra Modi, Shipping Minister Nitin Gadkari, Tan Chong Meng, Group CEO of PSA International and Anil Diggikar, Chairman of the Jawaharlal Nehru Port Trust, were among those in attendance at the foundation stone laying ceremony in October 2015 at Bharat Mumbai Container Terminals Private Ltd, the fourth container terminal in Mumbai’s Jawaharlal Nehru Port (BMCT is a wholly-owned subsidiary of PSA Bharat Investments, a subsidiary of PSA International)

VLELOLW\ IRU ZHLJKW YHULÂżFDWLRQ 7KH VKLSSHU PXVW FRPPXQLFDWH WKH YHULÂżHG ZHLJKW LQ advance, to allow the ship’s master and the terminal representative to prepare the ship stowage plan accordingly. The container should not be loaded onto the vessel if the shipper did not provide the SDFNHG FRQWDLQHUÂśV YHULÂżHG ZHLJKW SULRU WR shipping, unless the master or the terminal FDQ REWDLQ WKH YHULÂżHG ZHLJKW WKURXJK RWKHU means. hile this may all sound simple in theory, the practical considerations are numerous. For example ‡ ho is the “shipperâ€? hile the burden to comply is rightfully placed on WKH VKLSSHU LW PD\ EH GLIÂżFXOW WR DVFHUtain who the shipper of a non-compliant container may be. umerous parties are likely involved in intermodal

REGULATIONS

Welcome relief at JNPT W

hile most terminals in the United States have either said or indicated that they do not want to provide weighing services, given the potential to add to port congestion and the possibility that they will make the necessary investments in new or upgraded equipment but not achieve a remunerative revenue stream, in India, for example, the story is different. According to JOC.com, the DP World terminal at the JNPT complex at Mumbai will be generating a VGM (Verified Gross Mass) document on behalf of the shipper, since there is the possibility that many containers will arrive unaccompanied by the VGM. According to the DP World terminal, “We will integrate VGM with our existing terminal operating systems, or TOS, enabing the yard cranes to capture the verified weight of the container.� DP World at JNPT told JOC.com: “We will weigh containers using our yard equipment and shall integrate weight information with our existing Terminal Operating Systems (TOS). The captured information for Verified Gross Mass (VGM) will reflect during the transaction and be further shared with concerned stakeholders. In a situation where a container vessel shows up at the terminal and the VGM is not provided by the shipper, then the terminal yard equipment will be capable of weighing containers and shall provide the VGM information upon request by the shipper and shipping lines.� JOC.com reported that the possibility that many containers will show up at Mumbai with no VGM was driving the terminals’ approach. “Proper weighing facilities may not be ready or available close to the port and there are chances that containers may arrive at the terminal gates without the VGM. The weighing activity is with the lifting equipment and the captured information will be relayed through our Terminal Operating System.�

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supply chains, from the customer who packs the container to a logistics company or freight forwarder. Thus, it may EH GLIÂżFXOW WR WUDFH WKH VKLSSHU RI D non-compliant container. This is especially true when time is of the essence, when the container must be loaded timely to ensure the vessel stays on schedule. “Prior to shippingâ€? Ultimately, shippers must weigh their containers “prior to shipping,â€? but the guidelines do not govern when that may be. hile it makes logical sense to have the containers weighed before loading to avoid repacking problems, the vague verbiage leaves little guidance for shippers and transportation companies as to when the weighing of the containers should occur. Duty of Care If a shipper knows the regulation has been violated, but failed to act accordingly, will the shipper bear partial (or full) responsibility for any subse uent accident that may result ust like a master relying on the mis-declared shipping forms to trim the vessel, a driver may also rely on mis-declared documents when relaying the container to the terminal. ow do those in the latter part of the supply chain ensure that the shipper complies ZLWK WKH UHJXODWLRQ LQ WKH ÂżUVW SODFH" Record-keeping measures may need to change in order to preserve evidence to demonstrate that the container was found to comply with the new regulation before an accident occurs.

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Technological Concerns Shippers may not have the easy access to technology that terminal operators and trucking companies may already have in place. Technology like twist locks or head block sensors may weigh the containers. Alternatively, spreaders used to lift the containers onto the vessel can weigh these containers. Cost Transfer Shippers may need to invest in new technology and retro¿WV ZKLFK PD\ FRPH DW D KLJK FRVW Ultimately, shippers will need to bear these costs, or shift them to consumers, in order to successfully implement these new measures. on-Compliant Containers ow should a terminal or transportation company deal with a non-complaint container As noted above, it may be GLI¿FXOW WR WUDFH WKH VKLSSHU LI D FRQtainer is found too heavy upon arrival at the terminal. If the shipper is far away geographically, who should be responsible for the re-packaging of the container to ensure compliance If so, who pays for the storage costs in preparation for re-packaging here should it be stored If the shipper does not pay these incidental costs immediately, who should bear the initial cost of re-packaging before the cost is transferred to the shipper From a terminal port vessel owner’s perspective, it may be prudent to clearly set forth these terms before a non-compliant container reaches its door.

Cargo Logistics I March 2016

25

SPECIAL REPORT

Surtis want a working airport

The demand and supply game – to say the least – is an intriguing one and if one of the players is the aviation ministry, the end-result could be anybody’s guess. With so much talk of connectivity going on around, the Gujarat city of Surat begs to be connected. The city has all the right ingredients for an international airport but, as TIRTHANKAR GHOSH found out, it is still to get a working airport that would not only help its diamond and textile trade but also its fliers

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irst the facts eight of every ten diamonds sold in the world are cut and polished in Surat city of ujarat the city accounts for 0 per cent of global diamond polishing and cutting industry and exports 1 bn worth of diamonds, the highest in Asia the city is India’s top production centre for synthetic textiles a ira, a deep-water terminal and multi-cargo port, is next door. To top it all, a ira has some of the top industrial corporations of the country Reliance, ssar, arsen and Toubro, Shell, and the government-owned Oil and atural as Corporation td, among some others. More acts Surat is among the fastest growing Indian cities in terms of economic prosperity. According to data compiled by

26

March 2016 I Cargo Logistics

HFRQRPLF UHVHDUFK ¿UP ,QGLFXV $QDO\WLFV Surat has registered an annualised DP growth rate of 11. per cent over the past VHYHQ ¿VFDO \HDUV $V SHU *'3 UDQNLQJ RI ,QGLDQ FLWLHV LW LV UDQNHG HLJKWK ZLWK D *'3 of 0 bn with estimates of 7 bn DP by 20 0. $OO WKHVH LQJUHGLHQWV PDNH 6XUDW DQ ideal location for an international airport. owever, it is only now that an airport be¿WWLQJ 6XUDWœV VWDWXV LV WDNLQJ VKDSH ,Q IDFW according to locals, Surat has been waiting for more than two decades for a proper airport. There was an airport of sorts used by carriers, however infre uently. This despite the fact that around ,000-odd diamond PHUFKDQWV DQG FRUSRUDWH KRQFKRV WDNH ÀLJKWV RXW WR 0XPEDL HYHU\ PRQWK IURP WKH

city. The only way out for these people was WR WDNH D NP URDG MRXUQH\ WR 0XPEDL :RUN WR HQKDQFH WKH DLUSRUW EHJDQ ZD\ EDFN LQ EXW WKH ZRUN ZDV SDLQIXOO\ slow. In desperation, in December 2006 the locals sent more than ,000 postcards to the WKHQ 3ULPH 0LQLVWHU DQG WKHQ &LYLO $YLDWLRQ 0LQLVWHU 7KH $LUSRUWV $XWKRULW\ RI ,QGLD (AAI), which was handling the construction RI WKH QHZ WHUPLQDO ÂżQLVKHG WKH EXLOGLQJ which was opened to the public on February (YHQ VR WKH DLUSRUW ODFNHG FDUJR facilities. hile the Southern ujarat Chamber of Commerce and Industry (S CCI) has been lobbying for a fully functional cargo terminal at Surat, logistics player ujarat State xport Corporation imited ( S C )

SPECIAL REPORT

evinced interest in setting up an air cargo complex at Surat Airport and even sent a proposal to the AAI in October 2010 after it carried out a feasibility study for the cargo complex. S CCI was convinced that the cargo terminal would attract business of ` FURUH IURP WKH ÂżUVW \HDU 7R EHJLQ with, the list of perishable goods fruits, Ă€RZHUV DJUR SURGXFWV DQG VHDIRRG ² WKDW is exported from the south ujarat region has to go by road to Mumbai. ith a view to the conditions, the locals formed a body to demand a proper airport. Among them is businessman inesh Shah. Shah is a determined man like many of the members of “ e ant A orking Airport $W 6XUDW´ :::$6 7KH :::$6 LV D very strong social media community comprising a wide cross-section of professionals from the city of Surat. Surat’s airport, located in Magdala, barely 1 km from the city, is owned and operated by the Airports Authority of India (AAI). It has been handling airlines and private aircraft for uite some time but in

ovember 201 when a water buffalo that had strayed on to the runway was hit by a Spice et plane taking off, operations had to EH VXVSHQGHG IRU D IHZ GD\V 7KH $LUSRUW Director was shunted out and a new one has come in. At the time of writing, the airport VHHV RQO\ WZR 'HOKL ERXQG Ă€LJKWV D GD\ this, despite a 7 per cent increase in the QXPEHU RI Ă€LHUV 7KDW LV ZK\ WKH :::$6 KDV EHHQ demanding a working airport the capacity needs to be expanded to handle seven airplanes and the runway extended to 00m. 7KH PHPEHUV SRLQWHG RXW WKDW 6XUDW ZDV D beautiful, powerful, wealthy, clean, environment-friendly city that was recogni ed E\ WKH ZRUOG EXW ZDV VWLOO ÂżJKWLQJ IRU LWV RZQ H[LVWHQFH LQ ,QGLD Âł:H KDYH WR ÂżJKW IRU RXU own rights now... if smaller cities can have DLU FRQQHFWLYLW\ WKHQ LW LV WLPH IRU XV WR ÂżJKW IRU WKH DLUSRUW ´ VDLG 3UL\DQN . 'HVDL 7KH group wants to spread awareness among the local residents about the importance of air connectivity. “ e have made presentations to dif-

ferent airlines and have even invited them to come to the city and see for themselves. And, many of them had no idea of Surat’s potential to deliver cargo or passengers,â€? said inesh Shah. In addition, Surat has been selected as WKH ÂżUVW VPDUW ,7 FLW\ LQ ,QGLD WKDW LV EHing constituted by the Microsoft City ext Initiative, IBM has chosen the city among 16 global locations for its smart cities programme. Also, the city is the fourth-fastest developing city in a study conducted by the City Mayors Foundation, an international think tank on urban affairs. As for the cargo potential, the opportunities are aplenty. “After China, Surat is the RQO\ SODFH ZKHUH V\QWKHWLF ÂżEUHV DUH ZRYHQ WR SURGXFH PQ PHWHUV GDLO\ 7KHUH DUH 16 textile markets with 6 000 texile shops LQ WKH FLW\ 7KHVH H[SRUW DURXQG PQ worth of textile fabrics and that is growing DW D VWHDG\ FOLS ´ VDLG 7DUXQ &KXJK ZKR LV in the textile business in addition to being a AS member. Chugh has been studying the cargo prospects of Surat and often does presenta-

Cargo Logistics I March 2016

27

SPECIAL REPORT

tions to airlines. e spoke about the city’s diamond business churning out 0 million worth of diamonds. They are all sent to Mumbai. “ inety per cent of the world’s total rough diamond cutting and polishing is done in Surat. ith a warehouse that is safe, diamonds will be the top cargo to be Ă€RZQ RXW RI 6XUDW ´ KH VDLG Sevantilal Premchand Shah, Partner of Venus ewels, one of the top diamond merchants in the city, said that diamonds were traded in Mumbai but they were polished in Surat. “The airport will help us save a lot of money and end our security headaches to begin with. e can send our diamonds without any problems to Mumbai by air and once the airport starts receiving internaWLRQDO Ă€LJKWV ZH FRXOG GR WKH trading here and not Mumbai. It would be so much safHU ´ KH VDLG If everything goes according to plans, the ujarat government is planning to VHW XS WKH FRXQWU\ÂśV ÂżUVW GLamond hub in the city. The hub in a Special conomic one (S ), will permit jewellery exporters to bring in diamonds and process them LQ WKH QRWLÂżHG DUHD 3ROLVKHG diamonds from Surat are sent to Antwerp, Dubai and other places. Once the S starts operations, diamond and jewellery can be sent directly from Surat to anywhere in the world. In addition, the cargo section would get a major boost from Indian e-commerce majors like Ama on, Flipkart, Blue Dart and India Post. All have warehouses in the city but are unable to send their consignments because the planes do not have the capacity to transport goods and there are not too PDQ\ Ă€LJKWV (DUOLHU LW ZDV RQO\ 6SLFH-HW that was accepting cargo and its Mumbai DQG 'HOKL Ă€LJKWV KDG EHWZHHQ WR WZR WRQQHV RQ HDFK Ă€LJKW 7KH SHRSOHVÂś YRLFH seems to have made a difference. Chugh said “Some members of AS gave a presentation to the Air India Cargo team to start air cargo services to Surat. If air cargo is started by AI, it is going to be a win-win for everyone as it will increase revenue for Air India and provide much needed timely

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March 2016 I Cargo Logistics

services to e-Commerce, perishable comPRGLW\ DQG KLJK YDOXH FDUJR ´ e went on to point out, “It was noted that during the presentation the Air India RIÂżFHUV ZHUH LQLWLDOO\ RI WKH RSLQLRQ WKDW Surat was smaller and less developed than Rajkot and amnangar. Their eyes opened when we presented the facts to them and told them that Surat was the th largest city in the country and the fourth fastest growing in the world. They were very supportLYH ´ Soon afterwards, there was news that Air India was planning to take out the CR Ă€LJKWV SUHVHQWO\ RSHUDWLQJ EHWZHHQ 'HOKL and Surat and use A 1 20s instead that FDQ FDUU\ NJ WR NJ SHU Ă€LJKW 7KH

carrier wants to start cargo operations in a big way with these planes in the next couple RI PRQWKV $ IHZ GD\V DJR RIÂżFLDOV IURP Air India’s cargo department visited Surat to take stock of the cargo potential and WKH\ ZHUH VDWLVÂżHG :KLOH $LU ,QGLD PD\ EH looking at Surat’s cargo potential today, in une 201 , low-cost carrier AirAsia India’s RIÂżFLDOV YLVLW WKH FLW\ DQG GHFLGHG WKDW LW could be developed into a major cargo and parking hub for national and international DLUFUDIW ZLWK IHZ PRGLÂżFDWLRQV´ DFFRUGLQJ WR DQ RIÂżFLDO IURP $LU$VLD ,QGLD On its part the AAI has been working to enhance the cargo capacity at the airport ever since it gave an in-principle approval in December 201 for the construction of a cargo terminal. In a letter to AS member Pathan, the then AAI Chair-

man Sudhir Raheja had pointed out that “the extension of the runway will allow bigger aircraft to land at Surat airport. A team of ÂżYH $$, RIÂżFHUV KDG FRQGXFWHG D GHWDLOHG study on ovember 11 for uninterrupted H[HFXWLRQ RI ZRUN DW WKH DLUSRUW´ 7KH LQVSHFWLRQ E\ WKH $$, RIÂżFHUV KDG FRPH VRRQ after the buffalo incident. A month later, in anuary 201 , AAI approved a ,000 tonne storage capacity cargo terminal bowing to a demand from the Chamber of Commerce and AS. Almost simultaneously, the AAI estern 5HJLRQ RIÂżFH DW 0XPEDL SHUPLWWHG 6SLFH-HW WR UHVWDUW LWV SDVVHQJHU FXP FDUJR Ă€LJKW RQ the Mumbai, Surat, Delhi route. According to Pramod Kumar Thakre, Airport Director, Surat, “Based on the secondary data and input from Southern ujarat Chamber of Commerce and individual entrepreneurs, the potential for Surat air cargo complex is estimated at 20 mn in value terms and about 7000 MTs in WRQQDJH WHUPV ´ Along with the peoples’ group, the state government of ujarat has demanded that the central government led by Prime Minister arendra Modi enhance the status of Surat into that of an international airport. ujarat’s Finance and Civil Aviation Minister Saurabhbhai Patel met Civil Aviation Minister Ashok ajapathi 5DMX DQG DVNHG IRU LQWURGXFWLRQ RI Ă€LJKWV WR Dubai from Surat. “An international airport in Surat will help to boost business as well DV WRXULVP ´ 3DWHO ZDV TXRWHG VD\LQJ Venus ewels’ Sevantilal Shah echoed similar sentiments. “ e are from the diamond trade and often when we ask our estern buyers to come to Surat, they want WR NQRZ ZKLFK Ă€LJKWV FDQ EULQJ WKHP KHUH 7KH\ ZDQW WR Ă€\ LQ DQG Ă€\ RXW $QG ZKHQ we tell them that Surat is a three-hour train ride, they opt for meetings in Mumbai. An international airport would do wonders for us and bring in buyers as well as boost the FLW\ÂśV WRXULVP ´ KH VDLG

PRODUCT

Aircraft ahoy!

The world’s largest air vehicle, a hybrid airship that could be the first step in transforming logistics for mines and other businesses in remote areas, is preparing for its inaugural flight

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he Bedfordshire-based ybrid Air Vehicles ( AV) is getting ready to launch the civil test programme for its Airlander 10 craft in the next two months. This AV uses multiple heOLXP ÂżOOHG KXOOV UDWKHU WKDQ D VLQJOH KXOO $FRUGLQJ WR WKH ÂżUPÂśV EXVLQHVV development director for commercial PDUNHWV $QG\ %DUWRQ ÂłWKHVH KXOOV provide greater lift capacity and enables it to be loaded and unloaded like a conventional aircraft unlike traditional airships that have to be tied down and loaded and unloaded slowly and carefully to maintain the same level of buoyancy.â€? 7KH $LUODQGHU PHDVXULQJ P LQ OHQJWK FDQ FDUU\ XS WR WRQQHV RI FDUJR DW D PD[LPXP VSHHG RI PSK Âą FRPSDUHG WR WKH ZRUOGÂśV ODUJHVW FRQYHQWLRQDO DLUFUDIW WKH $QWRQRY which measures m. The aircraft was originally developed to carry out surveillance missions for the US miliWDU\ DV LWV KLJK OLIW FDSDFLW\ HQDEOHV LW to stay airborne for up to three weeks ZLWK D RQH WRQQH SD\ORDG FRPSDUHG WR ÂżYH GD\V IRU D WUDGLWLRQDO DLUVKLS with a similar payload. AV says the Airlander 10 is ideDO IRU FDUU\LQJ RXWVL]H ORDGV VXFK DV EODGHV IRU ZLQG WXUELQHV WR SODFHV such as northern Sweden where there are few asphalt roads. But AV believes that the bigger version the $LUODQGHU ² ZKLFK LV FXUUHQWO\ LQ the design phase and is an estimated WKUHH \HDUV DZD\ IURP Ă€\LQJ ZLOO UHYROXWLRQLVH ORJLVWLFV LQ IDU Ă€XQJ

ORFDWLRQV 7KH $LUODQGHU ZLOO KDYH D cargo payload of 60 tonnes at ranges unGHU NP RU WRQQHV IRU ORQJHU WUDQV RFHDQLF Ă€LJKWV FRPSDUHG WR D WRQQH payload for a Boeing 777 cargo aircraft. Âł$W WKH PRPHQW PDQ\ RI WKH PLQHV LQ DUeas such as northern Canada depend on ice roads which are only open for about six weeks of the year for receiving around WRQQHV RI VXSSOLHV DQQXDOO\ ´ %DUWRQ VDLG 7KH $LUODQGHU ZRXOG EH DEOH to bring in supplies at any time of year at D FRVW RI DURXQG 86 FHQWV SHU WRQQH SHU km. This compares to an estimated cost

of around 0 US cents per tonne per km to use unasphalted roads. %DUWRQ VD\V WKDW LQ PXFK RI $IULFD 6RXWK $PHULFD DQG $VLD DV ZHOO DV the north of orth America and SiEHULD WKHUH DUH IHZ DVSKDOWHG URDGV away from the coasts and outside the connections between major cities. It is these remote areas where he EHOLHYHV +$9ÂśV QH[W FUDIW ZLOO UHYolutionise logistics with its ability to transport goods and supplies at a ORZHU ÂżQDQFLDO DQG HFRORJLFDO FRVW than road transport.

Cargo Logistics I March 2016

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NEWS IN BRIEF

AIR B777 FREIGHTER JOINS ETIHAD CARGO

Etihad Cargo added a new Boeing 777 freighter to continue its expansion plans into 2016. The aircraft became the eleventh freighter in the fleet. Kevin Knight, Chief Strategy and Planning Officer for Etihad Airways said, “The additional freighter gives us the opportunity to expand our specialist cargo services and grow our market share. Over the last year, we have been expanding into South America, Africa and Asia and the new aircraft will enhance capacity and enable us to increase frequency across our scheduled network, but importantly also increase our charter opportunities to growth areas of the world.”

OMAN AIR CHOOSES SMARTKARGO

Oman Air chose SmartKargo to power its cargo sales and operations. SmartKargo provides 100 per cent Cloud-based management solution. It delivers a range of benefit for users including electronic air waybills, highly flexible pricing and ratemaking to increase cargo sales, quick completion of all tasks and 24/7/365 support from trained SmartKargo experts through three global call centers. Mahfood Al Harthy, Chief Officer Sales said, “SmartKargo has one of the best solutions in the marketplace. Our objective is to have a rapid deployment

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March 2016 I Cargo Logistics

Qatar cargo’s growth continues

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he world’s third largest international air freight carrier, Qatar Airways increased its tonnage by 37.5 per cent in 2015, according to statistics revealed by it. Highlighting the airline’s continued growth and expansion, year-on-year figures show that the carrier increased its tonnage from 1,104,000 tonnes in 2014 to 1,520,000 tonnes in 2015. The airline also pointed out that import cargo into Doha increased by 29 per cent, exports out of Doha increased by 10 per cent and transit cargo at the hub increased by 39 per cent in 2015. “At a time when international air cargo traffic grew only 2.5 per cent in 2015, it makes us very proud that our year-on-year figures from 2014 to 2015 show that we have grown our tonnage by 37.5 per cent,” said Ulrich Ogiermann, Qatar Airways Chief Officer Cargo. “We have achieved this phenomenal growth through a combination of fleet and network expansion, creative interline agreements and by deploying capacity on expanding or untapped markets.” Further tonnage growth is expected for 2016 as more aircraft join the expanding fleet and more destinations are added to the route network. An A330F and a new Boeing 747F nose loader were received by the airline in December, while an eighth A330F recently joined the fleet. Three more Boeing 777 freighters are scheduled to arrive by the end of 2016. The airline has split its cargo capacity across its freighters and passenger air-

craft with 51 per cent of shipments carried on freighters compared to 49 per cent in the belly-hold. Qatar Airways Cargo’s network expansion for 2016 began in January with the launch of a new freighter destination to Dallas/Fort Worth, taking the airline’s number of freight destinations in the US to 13. In addition, a fourth-weekly freighter began serving Los Angeles on 19 January, complementing the new passenger service to the city, which commenced January 1. In March, Qatar Airways Cargo launched three new freighter routes to Budapest, Prague and Ho Chi Minh.

Partnerships have strengthened cargo for Etihad: Hogan

E

tihad Airways’ President and Chief Executive Officer James Hogan gave the opening address to more than 1,200 delegates attending the World Cargo Alliance (WCA) Conference taking place at the Abu Dhabi National Exhibition Centre between March 10 and 13. Hogan spoke in depth about changes in the global cargo industry and how the Etihad Airways Partner alliance increased the airline’s strength and depth in cargo operations. By combining aircraft fleets and networks, Etihad Car-

NEWS IN BRIEF

Amazon leads: Women delivery teams in India and 20 B767s in US

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any of us do not know this but Amazon India has launched delivery teams managed and staffed exclusively by women. The move is geared to giving Indian women an entry into a growing field dominated by men. “Our vision is to create opportunities for individuals to realize their potential and transform their lives. We are committed to use our resources and infrastructure of innovation and technology to support the women in our country explore and succeed in what was otherwise a very male dominated sector,” Amazon India’s transportation director Samuel Thomas said in a statement. The first women-only delivery stations are in Thiruvananthapuram and in Chennai. They consist of a team of women delivering packages on scooters within a radius of about two miles. The sites also will be run by women. With that effort, Amazon has joined a number of companies and non-governmental organisations pushing for economic independence among single women as a way to break out of the poverty cycle. Meanwhile, in the US, Amazon has completed a deal with a

cargo-airline partner to run its own airfreight delivery operation flying 20 used Boeing 767 cargo jets. In fact, the online retail behemoth has also been talking to Boeing about buying new 767 freighters, according to two reliable sources After running a secretive trial since last summer with five Boeing 767s leased from freight carrier Air Transport Services Group (ATSG), Amazon confirmed recently that it had signed an agreement to let ATSG run a dedicated air-cargo network and expand the operation to four times its size. As part of the deal, Amazon also has the right to acquire around one-fifth of ATSG for more than $600 million. A senior aviation-industry executive with knowledge of the discussions between Amazon and ATSG said the Seattle company asked for a larger stake in the airline, up to 49 per cent, which would have given it effective control. According to the deal, ATSG will provide the 767s on leases running five to seven years, which is typical in the air-leasing world, and will use its base in Wilmington, Ohio, as the hub of the Amazon air-cargo operation.

go is recognised as the fifth largest cargo operator in the world by working in close harmony with Jet Airways Cargo, airberlin Cargo, Air Serbia, Alitalia and Air Seychelles Cargo. The Etihad Cargo division of Etihad Airways generates over US $1 billion in annual revenues and is one of the world’s most successful air cargo operations. It accounted for 88 per cent of cargo imports, exports and transfers at Abu Dhabi International Airport in 2015, a year in which it carried 592,090 tonnes of freight and mail, up four per cent on 2014. Etihad Cargo currently operates a freighter fleet of four Boeing 777F, three Boeing 747s, and four Airbus A330s. An additional Boeing 777 freighter is due to arrive this month with a further Airbus A330

freighter scheduled to arrive in 2017. Hogan spoke about how the Middle East region continues to outperform global growth rates for cargo and plays an increasingly important role in the flow of world trade and goods, with its geographical importance enhanced as traffic shifts from traditional and established markets to emerging commercial centres in the Middle East, Asia, South America and Africa. He said: “Our hub of, Abu Dhabi is at the crossroads of the world, and as a combination carrier, Etihad Airways is perfectly positioned to capitalise on the growing passenger traffic, and the increasing volumes of cargo and goods transported between expanding and emerging markets.”

AIR of an industry-standard solution without having to spend on infrastructure and SmartKargo meets that criterion. Moreover, SmartKargo’s robust and flexible capabilities will help us leverage our joint venture agreement with Cargolux to develop Muscat as a logistics hub, ready to flow a wide range of commodities from the USA, Europe, and Africa to destinations throughout the Gulf and Middle East, South Asia. And with a system born on the Cloud, every partner in the Oman Air cargo chain will have instant access to shipment.”

AA CARGO EXPANDS NETWORK

American Airlines Cargo expanded its temperature-controlled network in San Juan (SJU) and Dallas/Fort Worth (DFW). The move came after increasing demand for both pharmaceutical and perishable goods across the world. From fresh fruit and meat to life-saving medications, the safe and timely transport of pharmaceutical and perishable cargo remains a top priority for American’s Cargo operation. As demand for these goods continues to grow worldwide, investing in and improving on current infrastructures will also continue. “Investing in refrigeration targeted to perishable foodstuffs that transit through DFW is great to see. It’s a major step in the right direction for American Airlines Cargo,” said customer Chris Connell, President of Commodity Forwarders Inc (CFI). “Being able to provide an expanded cooler network during those warm Texas months gives us peace of mind when we route via their Dallas hub.”

Cargo Logistics I March 2016

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NEWS IN BRIEF

AIR AIR INUIT’S LAUNCH CUSTOMER: Q300 FREIGHTER

Québec-based Air Inuit and Bombardier Commercial Aircraft declared that they were working together on a passenger-to-freighter conversion for the Q300 turboprop aircraft. The freighter would include a large cargo door. Air Inuit, a long-time operator of Q300 aircraft has championed this modification and would be the launch customer for the conversion. In support of this conversion, a new Supplemental Type Certificate (STC) will be developed under license by a specialised third party entity. The converted Q300 aircraft is expected to have a cargo capacity of 12,500 lb with an optimised cargo door. The aircraft will accommodate palletised and free load cargo. “With its excellent airfield performance - especially on gravel runways - the Q300 aircraft is well adapted for remote operations like those required to support Canada’s resource industries and Northern Communities,” said Christian Busch, Vice President and Chief Operating Officer, Air Inuit. “The cost-effective Bombardier Q Series aircraft continue to prove their high value with more than 150 operators around the world,” said Todd Young, Vice President and General Manager, Customer Services, Bombardier Commercial Aircraft. “The passenger-to-freighter conversion will offer an outstanding opportunity for additional utilisation of the robust, reliable plat-

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March 2016 I Cargo Logistics

Kale summit calls for 100% e-freight

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Kale Thought Leadership Summit for air cargo took place in Dubai recently. Named Clear View, the first of its kind interactive platform witnessed a participation from leading airlines, airport cargo handlers, industry associations, regulators and prominent industry consultants. The summit discussed industry issues in a round table format involving all the participants. Clear View endeavoured to ensure that a collective voice of the industry was collated and the industry itself could now prepare a charter for enabling doable activities so as to provide practical solutions to the issues discussed during the summit. There were discussions around e-freight and e-AWB, where the leaders agreed that there needed to be a mechanism for looking at 100 per cent e-freight adoption. Industry leaders also agreed that in order to accelerate worldwide adoption, a regulatory mandate may be the need of the hour. The Clear View Call for Action programme would ensure making 100 per cent e-freight adoption a reality at one of the leading Middle Eastern airports. On the sidelines of the Clear View Summit, Sanjiv Edward, Chairman, TIACA said, “Clear View has been an enriching experience for me. It’s a well thought and well organised summit focusing on what really needs to be the way forward for air cargo industry. It is always great to meet air cargo fraternity and the experience has really been more than what I

had expected; challenges were deliberated and there were some excellent ideas that have come up. But more important was the notion of ‘way forward’— how as an industry we ought to be constantly moving forward. Focused groups that have been formalized will be taking the discussions forward, so I am really keen to be contributing to more of such focused sessions being aimed at bringing in the positive changes in the industry.”

Cargolux, Oman Air boost Mumbai touchdowns

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argolux and Oman Air have expanded their partnership with the addition of two weekly flights to Mumbai. The first service heads from Luxembourg to Bahrain before connecting with Mumbai while the second flight goes from Luxembourg to Kuwait and then Muscat before heading to Mumbai.Oman Air Chief Operating Officer Abdulrahman Al Busaidy said, “Our product advantages include the carriage of project cargo, livestock, cargo aircraft-only freight, odd size cargo, vehicles and aircraft engines. “And, importantly, the new service would make an even greater contribution to the development of Oman as a global cargo hub.”

NEWS IN BRIEF

Blue Dart Sales at `652.31 cr

AIR form that the Q300 aircraft provides.”

CHEP AND AIR EUROPA EXTEND ULD PARTNERSHIP CHEP Aerospace Solutions, the leading global provider of outsourced Unit

B

lue Dart Express Limited, South Asia’s express air and integrated transportation, distribution and logistics company, declared its financial results for the quarter ended December 31, 2015. The company posted `50.05 crores profit after tax for the quarter ended December 31, 2015. Net Sales or income from operations for the quarter ended December 31, 2015 stood at `652.31 crores. Anil Khanna, Managing Director, Blue Dart Express Limited said, “The economy has had a fair share of challenges this quarter which has decelerated growth for the express industry. Blue Dart has been able to sustain the growth momentum in its performance and has shown a modest growth in revenues by effectively optimising costs. Our commitment to deliver excellent service quality, high customer satisfaction and innovative methods to enhance our service offerings in Blue Dart Country has been persistent. We will continue to bring immense value to internal and external stakeholders by incorporating high benchmarks and quality standards in every aspect of business and remain the undisputed leader in the air and ground express industry in Blue Dart country”.

Leadership Awards: Blue Dart Express recently presented the 5th Blue Dart World CSR Day and Blue Dart Global CSR Excellence & Leadership Awards. The awards recognized organisations that best demonstrated leadership and commitment towards bringing a change across different businesses. The awardees were felicitated by Dr Bhaskar Chatterjee, Director General & CEO, Indian Institute of Corporate Affairs, Yogesh Dhingra, COO & CFO, Blue Dart and Belinda Tan, Head of Corporate Communications and Responsibility, Asia Pacific & Eastern Europe, Middle East & Africa, DHL. This year’s edition of Blue Dart’s World CSR Day was centred on the theme ‘What Next’ and covered topics like Sustainable and Responsible Business, Inclusive Development, Corporate Governance and Emerging Paradigms of CSR. The event was inaugurated by Ramon Magsaysay Award Winner Dr. Prakash Baba Amte. Speaking at the event, Ketan Kulkarni, Senior Vice President & Head – Marketing, Corporate Communications and Sustainability, Blue Dart said, “In recent years, CSR has gained unprecedented importance and has become imperious for any company to make strategic decisions on the subject.”

Load Device (ULD) pooling and repair solutions, and Air Europa, Spain’s leading privately owned airline, have renewed their ULD management partnership for a further five years. This partnership will allow CHEP continue to supply its sustainable ULD pooling model to Air Europa, with the additional benefit of converting 770 containers to CHEP’s lightweight units. This new development demonstrates both Air Europa and CHEP’s commitment to minimising their environmental impact, and a joint goal of seeking further sustainability opportunities in the future. This renewed partnership also marks CHEP’s efforts to reduce the CO2 emission in the aviation industry as CHEP now provides all its passenger airline customers with lightweight LD3 containers from its pool of 90,000 ULDs. Air Europa’s Handling Contract Manager, Mauro Rodriguez, said, “We have built a strong relationship with CHEP over the years and have particularly valued the flexibility to adjust our ULD needs to our growing aircraft fleet without any financial and operational hassle. As sustainability is high on Air Europa’s agenda we have also decided to switch to lightweight containers to reduce our carbon footprint and fuel costs. We look forward to continuing our successful partnership with CHEP.”

Cargo Logistics I March 2016

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NEWS IN BRIEF

AIR DIAL LAUNCHES DIAL CARGO APP GMR Group-led Delhi International Airport (DIAL) recently unveiled its official app for cargo operations at the Indira Gandhi International Airport (IGIA). The app, DIAL Cargo, is live and fully operational. The app offers different levels of authorised access to the cargo terminal operators, Customs, Custom House Agents, Airlines, Freight Forwarders, shippers or Consignees and other statutory bodies, thereby enabling greater visibility into cargo operations and tangible cost and resource benefits. Commenting on the release, DIAL CEO I Prabhakara Rao said, “The ‘DIAL Cargo’ app would benefit the entire air trade system where you could transact complete business functionalities such as tracking consignment, paying terminal charges, issuing delivery and carting orders and many such items in a paperless manner. In line with the vision of Prime Minister’s Digital India vision -- this is our contribution in supporting the air cargo business at Delhi Airport. DIAL Cargo is our second official app after FlyDel.”

Free e-AWBs for independent forwarders

I

ndependent forwarder members of the World Cargo Association (WCA) have free access to Worldwide Information Network’s (WIN) e-Air Waybill (e-AWB) platform for the remainder of this year. The platform, which connects more than 90 airlines, opens for WCA members to submit any INDEPENDENT FORWARDERS: John DeBenedette, Managing Director, International Air Transport WIN (left) and Dan March, Chief Executive Officer, WCA Association (IATA) resolution 672 (paperless) e-AWB free of charge tap into the growing trend of airport fast on the web, as well as make e-bookings lanes for cargo tendered with electronic and receive tracking alerts. data in advance.” “We are at a tipping point with the WCA members can access the system level of e-AWB adoption in the industry directly via a link on the WCA website at approaching the halfway mark, so we are www.wcaworld.com very pleased to be able to offer the WCA “WCA takes pride in our long history this opportunity to leap forward,” said as an innovative business development John DeBenedette, Managing Director, platform helping independent forwardWIN. “Independents can act now to gain ers compete on a level playing field with the same level of efficiencies already entheir larger rivals,” said Dan March, Chief joyed by multinational forwarders and Executive Officer, WCA.

AA CARGO HAS REVAMPED WEBSITE American Airlines Cargo introduced new redesigned tracking functionalities on its website. Developed to increase visibility into the entire shipping process and offer a more customised experience, the enhanced tracking capabilities would improve shipment visibility for all customers from booking to delivery. The enhanced features include - live at-a-glance status updates via colour-coded progress bars, detailed flight, air waybill (AWB) and Customs information, simple access and navigation to shipping history, added sorting and viewing capabilities for logged-in users. Logged-in users can also sort their shipments by origin and destination, which give them the ability to quickly simplify and consolidate the information displayed on their screens. “We gathered feedback from our customers on the tracking process and used that

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March 2016 I Cargo Logistics

AWARDS/APPOINTMENTS

FedEx

Celebi

Frank Newman, Managing Director, FedEx Services, has been appointed to The International Air Cargo Association (TIACA) Board of Directors. Newman has over 35 years’ experience in the aviation industry, including senior roles with McDonnell Douglas and FedEx.“TIACA has a vital role to play in bringing together all sectors of the air cargo supply chain and giving them a voice,” said Newman. “I am looking forward to using this role to help ensure industry keeps abreast of changing demands as well as providing innovative solutions to colleagues around the globe.”

Cargo handling company Celebi Delhi Cargo Terminal was awarded the Cargo Ground Handler of the Year - Region India: Winner at Air Cargo India 2016 organised by Stat Trade Times. Air Cargo India is one of the most respected events or exhibitions with a global participation base including various stakeholders and provides a platform to showcase our brand and interact with a global participant base. The selection criteria for the award was based on a transparent voting mechanism wherein various companies including all stakeholders were allowed to vote.

NEWS IN BRIEF

TIACA sets up Shippers’ Advisory Committee

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o complement the organisation’s other committees and review all elements of the air freight supply chain in order to make improvements with the interests of the shipper in mind, the International Air Cargo Association (TIACA) announced the creation of its new Shippers’ Advisory Committee. Lars J T Droog, Manager of Supply Chain and General Affairs for the Tosoh Corporation will chair the new group. He had almost two decades of experience in the aviation sector including senior management roles with Polar Air Cargo, Schreiner Aviation Group and Asiana Airlines. Welcoming his appointment, Sebastiaan Scholte, TIACA Vice Chairman said, “Lars has spent eight years as head of EMEA Supply Chain for Tosoh, and brings with him a wealth of experience in shipping, supply chain, and air freight in particular.” Droog will lead a panel debate on shipper issues at TIACA’s Executive Summit titled Air Cargo Challenges from the Shipper’s Point of View. The Executive Summit runs from May

valuable information to make needed changes—overall it’s just a simpler and more user-friendly experience,” said Eric Mathieu, Cargo’s director of Customer Experience. “Our customers wanted better organisation, increased transparency into their flights and shipments, and real-time updates from point A to point B. This is a much easier tool to use. Now, our website contains all of these enhanced functionalities and more.”

HACTL, CKS JOIN HANDS

24 – 26, 2016 at the Margaritaville Resort, Hollywood Beach, near Miami, USA. Sanjiv Edward, TIACA Chairman said, “Shipper feedback is paramount in any effort to improve the air freight supply chain. TIACA has set-up this Shippers’ Advisory Committee to act as a bridge, understanding the shipper requirements on end and then taking them back to the players in the air freight supply chain, for creating effective and quality solutions.”

DB Schenker Global logistics service provider DB Schenker’s subsidiary, Schenker India Pvt Ltd, has received the International Award for Excellence in Air Cargo organised by The Stat Trade Times. The award was conferred to DB Schenker in the category of international freight forwarder of the year. These awards were instituted in 14 categories from user and logistic segments and were intended to honour winning organisations for their consistency in service quality, innovation, and demonstrating leadership in various sectors of the air cargo industry. “Our customers are our drivers to excel in freight and supply chain solutions. This award is an affirmation of our continu-

AIR

AWARD: K Sankar, Sr Director – Region West (centre) and Nitin Shirkar, DGM – Airfreight – Region West (right) receiving the award from Tadesse Tilhaun, Regional Director India & Asia, Ethiopian Airlines.

ous efforts to serve the customer with the best in class solutions,” said Oliver Bohm, CEO Schenker India Pvt Ltd. “We are honoured by this recognition from the industry and would like to dedicate this to our customers and employees in India, without which this would not have been possible.”

HACTL Development Holdings Ltd (HDHL) — the business development arm of the Hactl Group — has entered into a Memorandum of Understanding (MoU) with Chu Kong Shipping Enterprises (Group) Co. Ltd (CKS), a Hong Kong listed company. The objective of the MoU is to explore the joint development of logistics links and infrastructure in and around Hong Kong International Airport and the Pearl River Delta (PRD) region, supporting the air cargo sector. The cooperation aims to leverage CKS’ comprehensive logistics network and Hactl’s expertise in operating a world class air cargo terminal. CKS and Hactl (through its value added logistics subsidiary, Hacis) have a long history of cooperation, they were formerly partners in Hong Kong’s Marine Cargo Terminal. HDHL Chairman, Mark Whitehead said, “We are delighted to join forces with such a strong and professional partner, and are greatly excited by the many potential opportunities to expand our respective activities and geographic coverage.

Cargo Logistics I March 2016

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NEWS IN BRIEF

SHIPPING AND PORTS

Adani Ports at forefront

CONTAINER SERVICES GET A BOOST

I

Sima Marine India, specialising in container feeder servicing launched coastal container shipping services in India in ports such as Goa, Mangalore, Mundra and Kochi. Said C F George, Managing Director, Simatech Shipping Dubai and Sima Marine India, “The company sees good growth potential in the India coastal segment which has been untapped for a very long time now. We believe a consistent service with competitive rates can attract more coastal cargo movement which is now moving by road.” The government is promoting container coastal movement by offering incentives. By shifting cargo movement to sea from road, it not only helps decongest highways, reduce pollution but also offers cost effective trade, safe and fast service, George added.

n a bid to boost up company’s presence in India and abroad, Adani Ports is eyeing overseas acquisitions. In the overseas market, the company is eyeing expansion in Sri Lanka, US, Bangladesh and Europe. In India, the company will be expanding its presence in Maharashtra and West Bengal. According to the sources, Gautam Adani’s son Karan Adani who took the charge of Adani Ports on January 1 is leading the charge. Said one of the Executive close to the development on the condition of anonymity, “The overall objective is to make the group a trans-shipment port company.”

Another executive also echoed the same sentiments and said, “The idea is to model Adani Ports on the lines of international port operating firms AP Moller of Denmark and DP World of Dubai. The entire port play will be supported by logistics, infrastructure and cargo support from group companies.” Adani Ports recently got the nod from the government to club its three notified special economic zones (SEZs) in Gujarat to form a mega multi-product export zone spanning over 8,500 hectares. Earlier, the company also raised `750 crore through non-convertible debentures (NCDs) on a private placement basis.

`3,456.95 CRORE IN PROFITS Major state-owned ports performed handsomely in raking profits. Together the ports raked-up an operating profit of `3,456.95 crore in the fiscal up to January. Shipping Minister, Nitin Gadkari informed the Lok Sabha that a total cargo handling target of 644.35 million metric tonnes per annum (MTPA) has been set for 13 ports, including Kandla and Paradip, for the next financial year. “The operating profit of major ports stood at `3,456.95 crore in the current financial year up to January. In 2014-15 period, the same was at `3,610.50 crore,” said Gadkari. “During 2015-16 up to February 15, 2016, 70.56 MTPA has been added.

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Coming: Four new major ports

W

est Bengal, Andhra Pradesh, Maharashtra and Tamil Nadu will have four new major ports. The ports which will be built under public-private partnership (PPP) will attract an investment of `32,000 crore. Sharing this information in the Lok Sabha, Pon Radhakrishnan, Minister of State for Shipping said, “Four new major ports are proposed at Colachel, Tamil Nadu (at an estimated cost of `6,000 crore), Dahanu, Maharashtra (`9,000 crore), Sagar Island, West Bengal (`11,000 crore) and Dugarajapatnam, Andhra Pradesh (`6,000 crore).” Radhakrishnan further added, “In

addition, outer harbour projects are proposed to be taken up in VOC port at Tuticorin at an expenditure of about `11,000 crore and Paradip, Odisha at `5,000 crore. Apart from 12 major ports, which are under the control of the centre, there are about 200 non-major ports under the control of the respective maritime state governments.”

NEWS IN BRIEF

WEC Lines service for Liverpool SHIPPING AND PORTS

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utch company WEC Lines has started weekly calls at the port of Liverpool, providing a new option for shippers looking to access central and northern UK markets. The brand new service connects Liverpool with Lisbon, Setubal, Leixoes and Sines and vice versa, with other links to Ireland, Scotland, Morocco, Spain and the Canary Islands. WEC Lines said, “This is a major new development for us, offering a dedicated, faster and direct container service for our customers in the Iberian Peninsula, North Africa and the Canaries. We’re seeing growing demand to ship via Liverpool to provide better access to the heart of the UK. The additional supply chain benefits that Peel Ports are able to offer, from quayside services to trimodal transport options, have also been important in our decision. So, our hope is that this will just

be a first step towards increasing trade to important UK markets via the Northwest.” The company is considering further opportunities in reefer and consumer goods on the route. Ross Thomson, Sales Director, Peel Ports said, “We’re delighted to be welcoming a new line to Liverpool, especially as the business drivers for the service underline the overall proposition that we’ve set out for the port. The shape of UK logistics is changing, with the North-west providing shippers the chance to reduce costs, congestion and carbon emissions by getting closer to the end market. Testimonials from our existing customers were pivotal in securing WEC Lines’ support for launching a new service. Combined with the backing we have received for our Cargo200 initiative, we are building an increasingly compelling case for cargo owners and lines alike to choose Liverpool.”

Scheme to incentivise modal shift of cargo

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inistry of Shipping has launched a scheme called Scheme for Incentivising Modal Shift of Cargo (SIMSC). The incentives under SIMSC will be provided to the beneficiaries for undertaking transportation of the following categories of cargo through Indian flag vessels, River Sea Vessels or barges on coastal shipping and inland waterways routes. Bulk cargo pertaining to seven commodities namely fertilisers, food grains, marbles, tiles, sugar, edible salt and over-dimensional cargo would be eligible for an incentive at `1 per tonne per nautical mile upto a maximum of 1,500 nautical miles in each trip starting from origin and ending at the destination. The

number and type of commodities under this head are subject to revision by the Government from time to time. Transportation of any commodity in containers in Full Container Load (FCL) would be eligible for an incentive at `3,000 per TEU. Thus transportation of any commodity through forty feet or other larger sized containers would be incentivised based on number of times the said container size can be converted into TEUs. Transportation of vehicles through Ro-Ro Vessels would be eligible for the incentives at `300 per two wheeler vehicle, `600 per three wheeler vehicle and `3000 for other vehicles.

Around 132.95 MTPA is likely to be added during 2016-17,”added Gadkari.

AGEING FLEET A WORRY Recently-released Economic Survey 2015-16 noted that shipping sector in India needs major overhauling as it needed to change its fleet. In a startling revelation, it unveiled that as many as 42 per cent of the vessels have crossed 20 years of age and needs to be replaced. “The shipping sector has been passing through tumultuous waters in recent years... There is urgent need to increase India’s shipping fleet. With asset prices currently being serendipitously low, the time is right to acquire new generation ships to replace ageing ones,” Economic Survey 2015-16 said. There is a need for cheaper finance and longer tenure for funds in light of the fact that Indian ships are ageing and need to be replaced and asset prices are serendipitously low, Economic Survey 2015-16 noted.

MARITIME SUMMIT SEES GREAT POTENTIAL The first-ever Maritime India Summit (MIS) will witness Ministry of Shipping showcasing all its investable opportunities to domestic and global investors. According to sources, the shipping ministry will present over 200 detailed projects in the maritime sector (April 14-16, 2016 at Mumbai), targeting an investment of `35,000 crore to `50,000 crore. A senior official close to the development was quoted as saying, “We are going to showcase over 200 investable projects in maritime sector to the investors. We are targeting to attract an investment of `50,000 crore.” “We have identified over 100 road, rail connectivity and Inland Water Transport projects to attract investment in this sector. We are also planning to develop multi-modal logistics hubs for which investment will be sought,” the official further added. MIS will explore opportunities in ship building, ship repair and ship recycling.

Cargo Logistics I March 2016

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NEWS IN BRIEF/LAND

Highway Advisory System for NH-8 AAI has four of the best

A

ADDRESSING: Union Minister for Road Transport & Highways and Shipping Nitin Gadkari addressing Highway Advisory Services

T

he Minister of Road Transport & Highways and Shipping Nitin Gadkari recently launched the Highway Advisory System (HAS) as a pilot project on the Delhi-Jaipur Highway (NH-8) in New Delhi. HAS is a free-to-air information distribution system that uses radio to make the travelling experience on National Highways safer, faster and hassle-free. Under the project real time highway information will be gathered from concessionaires, patrol vehicles, toll plazas and traffic marshals. This information will be transmitted to HAS control centre using mobile applications, telephones and sensors. HAS control centre will collect data, process and analyse it, generate alerts and send it to be broadcast by All India Radio (AIR). Information and alerts will be broadcast over AIR’s Delhi, Alwar and Jaipur FM stations. 22 bulletins will be issued every day including safety awareness content along with live traffic updates on NH-8. Speaking on the occasion Gadkari said, “Government is committed to reduce fatality due to road accidents by 50 per cent. HAS is an aid that will help to achieve this target. By giving information about traffic conditions on the highway, accidents, weather and meteorological information and information on highway amenities, the system will help to reduce road accidents and also fatality resulting from these accidents, and make travel faster and more convenient.” The current project will be implemented in three phases. While Phase-I has been launched, Phase-II will be expected to augment the broadcast infrastructure to cover the entire stretch of the highway, install sensors to gather additional real time traffic information, broadcast in both analog and digital radio mode and perform impact measurement through an external agency. By Phase-III, HAS services will only be in digital broadcasting mode and there will be monitoring and third party audit.

Electronic weighing machine on toll plazas

T

he Government has planned to install electronic weighing machines at all toll plazas on national highways to prevent and detect overloading of commercial goods transport vehicles. National Highways Authority of India (NHAI) has mandated Indian Highway Management Company Limited (IHMCL), a company promoted by NHAI, to install Weigh-In-Motion (WIM) bridges

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March 2016 I Cargo Logistics

on public funded fee plazas. For private investment projects necessary instructions have been issued by NHAI for installing WIM. The approximate expenditure expected to be incurred for 300 toll plazas for five years is `985 crore. The project is likely to be completed by September 2016.

irports operated by the Airports Authority of India (AAI) received a major boost when four airports – Jaipur, Lucknow, Goa and Trivandrum – were recognised as the best amongst the top five airports in the category of 2 to 5 million passengers per annum (mppa) across the world. Based on the results of a survey carried out by the Airports Council International (a global non-profit organisation of Airport Operators) on Airport Service Quality (ASQ), while Jaipur Airport was rated as the top in the world in the 2 to 5 mppa category, Lucknow Airport was rated as the second best in the same category. Jaipur Airport was rated as the best airport by “Regions and Size” in the Asia Pacific Region in the category of 2 to 5 mppa. AAI’s Goa and Trivandrum Airports were at fourth and fifth position in the same category. In the category of airports up to 2 mppa, AAI’s Srinagar Airport was rated as the second best airport in the World. Of the 11 airports where ACI’s ASQ survey was carried out, AAI’s airports were rated above the world average i.e. 4.13 on a scale of 5.

Jaipur Airport

NEWS IN BRIEF/LAND

KIFTPL organises business trade meet

K

ashipur Infrastructure & Freight Terminals (KIFTPL) a joint venture (JV) between Indian Glycols Limited and Apollo LogiSolutions Limited organised its first business trade meet in Kashipur. This strategic JV has developed the firstof-its-kind private freight terminal in Kashipur, Uttarakhand spread on over

41 acres of land, to cater to the logistics requirement of region. Inaugurating the meet, Executive Director India Glycols Limited M K Rao explained the importance of organised logistics mechanism for industries. Captain Shantanu Bhattacharya from Apollo LogiSolutions

Sanitation facility for students

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nder its corporate social responsibility initiative, Central Railside Warehouse Company Ltd (CRWC) identified a school in Langra village, Haryana. CRWC found that the village which is nearly 50 km from the Delhi, still lacking in sanitation facilities and constructed a toilet block with six toilet and wash facility. The facility has been developed and handed over to the government school in the village with the help of implementing agency- SATHEE. K U Thankachen, MD, CRWC, handed over the newly created infrastructure to the school authorities at the function held in the school in the presence of school children and the villagers. During the function, the importance of “Swachhta” and “Save the girl child” was highlighted.

HELPING HAND: K U Thankachen MD, CRWC along with senior officers of CRWC, school staff and students of G S S School Langra Haryana at the inauguration of the toilet block

Limited briefed the trade about facilities and highlighted that PFT would serve as a complete dry port facility and will have three dedicated lines to handle coal or bulk, liquid bulk and container handling. PFT will handle exim and domestic containers and will offer door to door package services. Equipped with a warehouse, Custom notified area and state-of-the-art logistics infrastructure facilities, this PFT will serve the cargo rich hinterland of Kashipur and nearby regions. D S Kapoor, CEO, KIFTPL focussed on the cost savings for industries in the region through KIFTPL. The event was facilitated by the trade and key representatives from major industrial set-ups of the region including Century Papers, Flexituff Industries, Polyplex, Kashiviswanath Steels, etc. who were present at the Meet.

STATS

Source:INDIAN PORTS ASSOCIATION

TRAFFIC HANDLED AT MAJOR PORTS

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STATS

INTERNATIONAL FREIGHT

Source: AIRPORTS AUTHORITY OF INDIA

C Cargo argo ar go L Logistics ogis og isstitics cs I M cs March arch ar ch 2 2016 016 01 6

4411

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Source: AIRPORTS AUTHORITY OF INDIA

DOMESTIC FREIGHT

Continued on page 44

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March M Ma Marc arc rch h 20 2016 016 6IC Cargo argo ar go L Logistics ogis og gis istititics cs

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TRAFFIC HANDLED AT MAJOR PORTS

Source:INDIAN PORTS ASSOCIATION

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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 supSRUW DQG SURIHVVLRQDO VWDII PHPEHUV ZLWK IXOO ÀHHW RI YDULRXV YHKLFOHV

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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WOMEN IN CARGO

“There is so much to explore and learn� Paramjeet Kaur Brar has her hands full at Jeena and Company, one of the largest Indian freight forwarders in the global market. She assists the country head of air freight and the country head of sales and marketing in the organisation. In addition, she is the All-India Coordinator - Sales Lead. Even after 15 years in the business, Ms Brar tells C&L that the dynamic nature of the industry is what keeps her attracted to her job How did you become part of the air cargo industry? What motivated you to join the business? After having worked with the media and a travel company, I joined cargo industry to take up a more challenging role and build my career in this challenging industry. The dynamic nature of this industry has been the sole motivator as I like to do new things and happily ready to take up new challenges.

How long have you been working in the air cargo industry? Are you specialised to handle goods like perishables or dangerous goods? I have been in this industry for more than 1 years and have handled shipments of both air freight and sea freight. I also handled multiple desks where I had to visit customers for service feedback, payment follow-ups and sales. Through all this I have got the experience of managing various business-related situations and learnt how to handle complex situations successfully while retaining business.

What are some of the challenges you’ve faced working in this industry? Time management is a critical factor of our industry and every customer expects their shipments to be delivered as per the committed time frame. owever, at times due to external reasons, shipments get delayed creating DQ[LHW\ DQG GLVVDWLV¿HG customers. It is always a challenge to keep these customers with the organisation even after a particular experience.

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March 2016 I Cargo Logistics

2XU LQGXVWU\ ZRUNV URXQG WKH FORFN DQG WKH TXLFN ÀRZ RI information to the other end is very important, especially to countries in different time ones like USA. My family support has made this easy and I have gracefully handled many AO (aircraft on ground) shipments.

What do you like most about working in this industry? There is so much to explore and learn. There are unexpected challenges but the level of satisfaction one gets after a shipment is delivered in time is something to cherish. One has to remain updated with the latest market information, knowledge and change of regulations globally.

How has the air freight industry changed since you joined? There have been many noticeable changes compared to the last decade. The trend is changing and instead of getting rates by email, many potential customers prefer e-bidding. ow, a customer keeps himself updated and is aware of the cargo handling process and other related information. Technology is playing a big role in the full chain of cargo documentation and information. Updates of online information are saving time and providing real time information to all stakeholders.

What are some of the developments we can expect in the near future? 7KH XVH RI PRUH DQG PRUH WHFKQRORJ\ EDVHG LQIRUPDWLRQ ÀRZ between forwarders and carriers and other stake holders -commerce will also play a big role in the air freight industry.

With more and more regulations and standards in an already complex business, do you think that the freight industry be able to keep up? hy not ith time, the industry has to opt for new updated regulations. After all, these are made for our security and to maintain standards. Rules and regulations are there in every industry.

What advice would you give to women looking to build a career in air cargo? I am happy to see that day by day the contribution of women is going up in our industry. This industry has a lot of opportunities for all and it is same for women professionals too. ith a positive attitude and dedication, any woman can achieve the desired goal.

Highest Standards of Excellence ensured at each level of operation

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Room No: CE-05, First Floor, Import II Building, Cargo Terminal, IGI Airport, New Delhi - 110037 INDIA Tel:(+91 11) 25601310 Fax:(+91 11) 25601320, E-mail: sales.delhi@celebiaviation.in, Website: www.celebiaviation.com

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