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INTERVIEW 12

CASE STUDY 42

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LogisticsTimes www.logisticstimes.net

August 2011

Independence Day Special

Idea of freedom I

NDIA'S MOST VALUED LOGISTICS MAGAZINE

Logistics industry strongly underlines a host of irritants holding them back from adding wings to their business...

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Logistics Times

CONTENTS

All about Transportation, Distribution & Infrastructure Volume 2: Issue No.4 * August 2011 Editor in Chief Raj Misra rajmisra@logisticstimes.net Editor Ritwik Sinha ritwik@logisticstimes.net Consulting Editor Ramesh Kumar ramesh@logisticstimes.net Mumbai Bureau Rahul Kumar rahul@logisticstimes.net Sub Editor Neha Richariya Photographer Anil Baral Design Consultant S. Athar Hussain Designer Kausar Syed Circulation & Distribution Kamruddin SaiďŹ Legal Advisor Rakesh Garg Editorial Advisory Board Paul Lim Founder & President, Supply Chain Asia Vinod Singhal Brady Family Professor of Operations Management, Georgia Institute of Technology, College of Management Kate Vitasek Faculty, Centre for Executive Education The University of Tennessee Prof. K S Pawar Nottingham University Business School Prof. Samir Srivastava Associate Professor, IIM-Lucknow Sanjay Upendram Founder & Chairman, Amarthi Management Consulting Swaran Singh Soni Consultant (Oil Industry) Arif Siddiqui Chairman, Coign Consulting

Marketing & Sales Outthink Strategies Ph: 65177214, 26412476, 9818097385 Email: sales@logisticstimes.net

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COVER FEATURE

Idea of freedom

Logistics industry strongly underlines a host of irritants holding them back from adding wings to their business...

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Edit Note

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News Briefs

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Infrastructure

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Curtain Raiser

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12 INTERVIEW

R C Dubey

16 Column ‘Scale’ it up!

y o

42 CASE STUDY

Filled trucks benefits

50 EVENTS CEAT India Road Transportation Awards 2011

EDIT NOTE

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Logistics and freedom The month of August coinciding with our Independence Day anniversary has a distinctive flavour of its own. Its certainly that time when conciously or sub-conciously we do indulge in questioning the merits and demerits of our eco-system and probe the possibilities of how to get better.

Must confess, it was on the insistence from an industry friend that the idea of attmepting an independence day special took roots which entailed asking industry representatives to vent out their feelings on hurdles they would like to see removed urgently. I found the idea unique because of two reasons. I can’t recall any other publication in this space having ever attempted this kind of theme and secondly, it has given us the chance to sustain our quality pitch after very encouraging repsonse especially to past three editions dealing with warehousing, exports and that first of its kind first hand account presentation of conditions on Indian highways last months.

The result is in your hands and you would probably notice a composite canvass of opinions underlining shackles which are holding back this sector to move to the next level. Hypothetically speaking, if I have to convert the views expressed in the cover feature into a survey result, then the two major hurdles cited are – infrastructural inefficiencies and lack of progressive regulatory provisions. Delay in implementation of GST is the most pronounced case in the point and it is probably hurting the players most who are looking at its roll out with high hopes. Some industry representatives have also strongly pointed out the overall non-chalant attitude of the government agencies to acknowledge their critical contribution to the economic activities as the major hurdle.

“There is no recognition for us”, is the sore point.

The increasing gap in the demand and supply of skilled manpower is another serious bottleneck which, in fact, is assuming a scary character with each passing month. And everybody seems to be clueless as how to surmount this problem. Imagine a scenario wherein you don’t have enough drivers to run your commercial vehicles. The overall lack of enthusiasm in adopting IT-based processes has been cited as another niggling point. And so is the lack of a human face especially in terms of treatment meted out to the bottom of the pyramid lot. The point is: there are attitudinal problems within also which need to be surmounted if the players intend to exist, operate and grow in a free environment. Leaf through the cover feature to undertsand what freedom means to the logistics and supply chain industry…

The interview of R C dubey, president of Assocation of Container Train Operators (ACTO) is another major highlight of this edition. In spirit terms, the interview more or less hinges on that larger freedom issue. Encouraged by government’s policy, some private players (14 of them) jumped on the board four years back but the going so far has been far from being hassle free. Setting up terminal network is that most critical challenge which is holding them back and this is likely to remain just that for quite sometime.

Waiting for your feedback.

Ritwik Sinha ritwik@logisticstimes.net

LOGISTICS TIMES August 2011

NEWS BRIEFS

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Perspective plan ready for DMIC According to Minister of State in the Ministry of Commerce and Industry, Jyotiraditya M. Scindia, the preparation of the perspective plan for the overall Delhi Mumbai Industrial Corridor (DMIC) region is complete.

Scindia apprised Lok Sabha recently that as many as seven investment nodes/industrial cities have been taken up in the first phase of the development of DMIC. These include: Pitampura-Dhar-Mhow investment region in Madhya Pradesh; Ahmedabad-Dholera investment region in Gujarat; Dadri-Noida- Ghaziabad investment region in Uttar Pradesh; Manesar-Bawal investment region in Haryana; Kushkhera-Bhiwadi-Neemrana investment region in Rajasthan; Igatpuri-Nashik-Sinnar investment region, and Dighi Port Industrial Area in Maharashtra. As per details provided by Scindia in the written reply, a draft note for the Cabinet regarding the financial and institutional structure for the development of new industrial cities in the Delhi Mumbai Industrial Corridor (DMIC) has been circulated for inter-ministerial consultations. The cost of the project will depend on the cost of land, cost of infrastructure development such as land development cost, trunk infrastructure development cost etc.

Inching close to double digit GDP ratio According to a sectoral paper recently released by noted global consutancy and research firm Frost & Sullivan, Indian Autmotive industry is poised to enhance its GDP share close to double-digit mark in next three years. The paper earmaks that the Indian Automotive industry’s contribution to the Indian GDP has grown from 6.9 percent in 1992-93 to 7.6 percent in 2009-10, and is likely to increase to 9.9 percent by 2014-15. The

TCI profit up by 9.71% Late last month, Transport Corporation of India (TCI) declared its financial results for the quarter ended June. The company has reported Rs. 187.1 mn profit before tax for the quarter compared to Rs. 173.8 mn for the quarter ended June 30, 2010. Net profit for the quarter stood at Rs. 134.4 mn - up from Rs. 122.5 mn over the corresponding quarter of the previous year. Income from operations for the quarter 2011 was Rs. 4159.1 mn - an increase of 5.71% over the corresponding quarter of the previous year.

LOGISTICS TIMES August 2011

paper further maintains that the automotive industry is highly vulnerable to fluctuations in the economy which became evident when the industry declined by 4.7 percent in 2008-09, when the GDP growth dropped from 9.0 percent in 2007-08, to 6.7 percent in the given fiscal. Meanwhile, the Indian automotive industry recorded sales of 15.5 million units during FY 2010-11 (defined as April to March), with a growth of about 26.2 percent over the previous year. Passenger vehicles (Cars and Utility Vehicles) accounted for 16.0 percent of the total sales and demonstrated the highest growth of 29.6 percent over the previous year. Commercial vehicles accounted 4.6 percent of the total automotive sales and grew at 25.7 percent over the previous year.

Two wheelers accounted 76.0 percent of the total sales and had a growth of 25.8 percent over the previous year.

NEWS BRIEFS

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LOGISTICS TIMES August 2011

NEWS BRIEFS

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Major milestone for ‘TRUST INTEGRITY’ Tata Power’s cape size vessel ‘Trust Integrity’ attained a significant milestone by supplying coal to 4000 MW Ultra Mega Power Project at Mundra late last month. The cape size vessel owned by the Singapore subsidiary- Trust Energy Resources anchored at the Mundra Port on 27th July 2011.

‘Trust Integrity’ the 181,000 DWT tonnage cape vessel delivered from STX Shipyard, Korea carried coal from KPC / Arutmin mines, Indonesia to the Mundra port, during her maiden voyage. Speaking on ‘Trust Integrity’s’ maiden voyage

Freight growth Indian Railways have carried 313.32 million tonnes of revenue earning freight traffic during April-July 2011.

The freight carried shows an increase of 20.81 million tonnes over the freight traffic of 292.51 million tonnes actually carried during the corresponding period last year, registering an increase of 7.11 per cent. This was stated in a recent release of Ministry of Railways.

During the month of July 2011, the revenue earning freight traffic carried by Indian Railways was 79.66 million tonnes. There is an increase of 5.50 million tonnes over the actual freight traffic of 74.16 million tonnes carried by the Indian Railways during the same period last year, showing an increase of 7.42 per cent.

SMART TRUCK

Anil Sardana, Managing Director Tata Power said, “This is a significant moment for us and is aligned to our strategy of being an integrated power player. With this objective in mind, Trust Energy was setup to securitize coal supply and shipping of coal for our thermal projects. Trust Energy has a vision of becoming a world-class dry bulk shipping company with global standards in its operations, generating trust, dependability and reputation.”

The arrival of ‘Trust Integrity’ at Mundra reinforces the company’s fuel supply and logistics management integration, planned for the Mundra UMPP project. This further marks a new trend in India of transporting and receiving coal in large parcel sizes of up to 180000 MT in these cape vessels for captive consumption, thereby setting an industry benchmark in timeline management and smooth execution of large scale power projects.

LOGISTICS TIMES August 2011

Taking one more step to emphasise on green logistics, DHL and Blue Dart (part of the DHL Group) recently announced piloting Smart Truck technology in Bengaluru, India. This is the first deployment of this successful logistics innovation outside Germany. Created by DHL Solutions & Innovations (DSI), the DHL Smart Truck is an “intelligent” pick-up and delivery vehicle that combines a number of innovative technologies including a route planner. Launched in Germany in 2010, DHL Smart Truck reduced number of miles traveled by 15 per cent and length of average route by 8 per cent during its pilot stage, reducing both fuel consumption and CO2 emissions.

Piloted by Blue Dart in India, the Smart Truck technology is designed to provide solutions to urban logistic challenges such as traffic restrictions, density and clogging, while ensuring environmental protection and fulfilling customer need for on-time delivery. According to a company release, these “intelligent” pick-up and delivery vehicles compute delivery deadlines to calculate the ideal sequence for shipments, and use real-time GPS to avoid jams and optimise routings, thereby enabling flexibility and lastminute pick-ups. This allows the DHL Smart Truck to spend more time on the road to perform their pick-up and delivery services. The Smart Truck technology also enables a more efficient sorting process by synchronizing the data and physical flow, while real-time communications and visibility of services avoid ‘missed’ pickups and delayed deliveries. Together, this provides better customer service and a more cost-effective operation as a result of optimum use of vehicles with less wasted miles.

NEWS BRIEFS

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LOGISTICS TIMES August 2011

INTERVIEW

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}15 new terminals in next three years

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Four years back, the government had given green signal to private

container train operations in the country. Among other things, the idea was to gradually build a formidable platform to win back railways lost share in freight movement to roadways in the long run. But has this segment really got off from the starting line on a confident note? R C Dubey, President of Association of Container Train Operators (ACTO) shares with Ritwik Sinha the crucial trends in private contrianer train operations. Edited excerpts: LOGISTICS TIMES August 2011

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} We all know the fact that Railways had a lion’s share in terms of freight load 50-60 years back but then it gradually lost it to roadways. In 2007, government allowed private container trains which was unarguably also aimed at enhancing Railway’s share again in freight movement. I would like to understand from you, how the scene has evolved since then? Have private container train operators made that decisive mark which was envisaged or anticipated?

The licenses were issued in 2007. And at that time, 14 new operators got the license. Licenses were of two types – one was pan-India and the other was route specific. In route specific, most companies bagged the license to move cargo from north India to ports in the west. Others had license for the domestic traffic because they did not have access to ports.

Let’s look at the backdrop of this initiative.

In the period between 1950-2000, railways share dropped to 30-35 percent primarily because it was pursuing a policy which underlined that they would carry only full train loads of cargo. And that being the case, the railways share of traffic got totally restricted to bulk commodities like cement, fertiliser, steel, coal, iron ore, etc.

All other commodities like general goods, FMCG products, automobile parts, machinery, etc. were passed on to trucks.

Now in 2007, this private container train policy was adopted because it was felt that if the segment is opened up, then private players would have a little more manouveribility to attract traffic back from road to the rail. Private players were allowed because even as CONCOR was there with a very major presence in terms of ICDs, terminals, number of rakes, etc., it is controlled by public sector norms and rules and there are some restrictions.

With the introduction of private players in container train segment, the idea was to catch small producers also.

Now let us see what has actually happened since then? These 14 operators on a cumulative basis have added about 140 rakes which are plying on all the

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Private players are making efforts.

You see 140 rakes can’t be kept idle.

They have to be filled and they have to be operated. Indian Railways has got thousands of sidings set up for fertiliser units, coal plants,etc. Now the talks are to convert some of those sidings into terminals or to be co-used. major routes of Indian railways. And they have captured almost 25 percent of the total container traffic which are moving on track in the country. This is not a bad number. But on the other hand, there are factors which have not given the desired growth. Firstly, the shortage of terminals. The terminals were almost non-existent for new operators.

The terminals were only operated by CONCOR. The other major problem was the difficulty in setting up terminals.

It entails grappling with issues like land acquisition, high cost of land, change of land use plan from agriculture to industry to infrastruture,etc. It meant connectivity to the railways while linking their terminal to the railways siding line. The process was time consuming. Railways had given them three years to set up their terminals.

And some terminals have come up but certainly not to the extent it is required.

But aren’t private operators accessing the terminals of CONCOR? Private operators can access CONCOR’s terminals by paying a handling charge.

For each rake, CONCOR charges for the use of their platform and crates.

Those deals happen on one on one basis.

Four-five private operators have access to their specified terminals. But it is not

mandatory for CONCOR to allow access to everyone. It is totally their discretion.

It’s a commercial understanding and not operational freedom.

These 14 operators are there. Tell me, how many new terminals thre have managed to create in last three-four years?

Actually in 2007, some terminals were already functioning like Garhi Harsaru (operated by a Singapore firm) which is now with Gateway District Park. The terminal at Loni was existing and there was another major facility at Ballabhgarh operated by ACTL. On that base, some new terminals have been added like Patli near Pataudi in Gurgaon, a center in Ludhiana by Gateway District Parks, and another one at Loni which belongs to Central Warehousing Coproration(CWC).

Two more are coming up soon – at Sonepat and Palwal.

There is hardly anything susbstantial to talk about in terms of terminal infrastruture given the envisaged potential.

Absolutely. If we are thinking of carrying general goods cargo which is being offered in small lots, say four-five containers, the unit of transportation LOGISTICS TIMES August 2011

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INTERVIEW

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still remains the train load. Container train would go only with 45 flat wagons carrying 90 containers. If 90 containers are not there, then operators have to pay for empty haulage and the operation become unvaible. In that sense, the absolute minimum essential requirement is: you should have a place where you can accumulate the containers till such time you get a number of 85 plus, and then you should have the facility to load there itself where aggregation is taking place.

At the other end also, you should have the same facility. In the case of importexport cargo, of course, you discharge the container at the port which goes to the ships. But in domestic cargo, and that’s where the real growth lies, the equation is different. For that you need a massive network of terminals even as all of them should not be very large like ICD at Tuglaqabad. You need small aggregation centers where you can aggregate on a hub and spoke method. You could bring those containers to a central point where you can load the whole train. This kind of planning is there but it is taking much more time. Also because setting up infrasturture is a very cost intensive process with the price of land being too steep. Additionally, land acquisition is increasingly becoming a contentious issue.

Going by your version, the scenario does not look too promising in terms of terminal addition in the medium term. Am I correct in my assessment?

Private players are making efforts. You see 140 rakes can’t be kept idle. They have to be filled and they have to be operated.

Indian Railways has got thousands of sidings set up for fertiliser units, coal plants,etc. Now the talks are to convert some of those sidings into terminals or to be co-used. For containers, you don’t need much except that it should be levelled ground, there should be a straight line and pavement can handle some crates and loading-unloading process.

It does not require much technical inputs and so sidings can do. Second is a lot of railways goodsheds have become

redundant because of the stoppage of piecemeal traffic. So those goodsheds they are allowing on a selective basis to the operators on the access charge payment formula. Third is ,of course, they are building their own terminals for which they are acquiring lands.

Two-three years down the line, how many private terminals you expect to come up in the country?

I think, given the efforts going on, you can expect addition of 15 new terminals in next three years.

The frequent hike in haulage charges is also cited as a major impediment. What do you have to say on this?

In today’s market and economic scenario, one can’t expect prices to remain stable for a long spell. Prices will vary and they will rise also. So to say that railways should never raise the freight is not reasonable.

The issue is that of frequency in rate changes.

It should not be changed with a frequency wherein there are two or even three revisions within a year. The operators usually have long-term contract with their clients and they should have time to adjust to price changes. It should be changed rationally and it should be

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pegged to factors like fuel price trends, wholesale price index, etc. It should not be arbitarary.

It is said that CONCOR’s monopoly has come to an end in container train segment. But is it really the case given their strong terminal network support?

CONCOR’s monopoly is not there in the sense that today the customer has the option to approach CONCOR or any other private operator depending upon what that operator is bringing to the table. Private operators are getting cargo from industry and trade because they are offering better service.

By better service I mean personalised service with added features like cargo tracking, cargo pickup from warehouse or delivering to the last point, etc. But if you talk in terms of volumes, CONCOR has lion’s share.

It is still carrying 80 percent of container traffic with 260 odd rakes. They have got a viable network. Just to cite an example, today if somebody has to book cargo for Selam in south India from Delhi, CONCOR can arrange it immediately.

The private operator will have to check whether it can take the train to the desired ICD. In terms of response time, CONCOR is far ahead.

Dedicated Freight Corridor (DFC)particularly JNPT- Delhi linkage was a major hope because this route is extremely congested carrying about 60 percent of the national importexport cargo. The hope was with this corridor, capacity constraints would be removed which will result in faster transit and lower cost of inventory.

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You spoke about route specific licenses earlier and a strong perception is that many players had bagged Delhi-Mumbai license with the view that the grand Dedicated Freight Corriodr (DFC) project would mean a boost for their business. But there are inordinate delays in the project. Is it a serious blow for those who took early position?

Dedicated Freight Corridor (DFC)particularly JNPT- Delhi linkage was a major hope because this route is extremely congested carrying about 60 percent of the national import-export cargo. The hope was with this corridor, capacity constraints would be removed which will result in faster transit and lower cost of inventory. Additionally, with double stack permitted, freight rates will be reduced.

Plus, you will be able to haul high capacity wagons – 25 tonnes axle load. It means you can carry 100 tonnes per wagon as againt 65-68 tonnes today. Now there have been delays in the project. I have

been recently told that they have got Japanese loan sanctioned and world bank has also given approved some loan for this project. And now they are going for the required additional land acquisition.

So probably in next four-five years, this JNPT- Delhi line would be ready.

There are certain segments like automobile which are growing at a very fast pace and some private carriers are eager to kicstart dedicated trains for their transportation both within the country and to ports for exports purposes. Government last year had in principal given green signal to such operations. What’s precisely happening there?

There are actually three policies which railways had announced last year. One was the Private Terminal Operations (PTO). Other was the port linkages and the third one was Special Freight Train Operators (SFTO) under which certain

commodities could be carried on special trains. The policy had clearly underlined that certain commodities like automobiles or edible oils can be operated by private opertors. They will have to procure the wagons, they will have to obtain license, define the routes and they will be given a rebate to compensate for the investment on the rolling stock. Private players are showing interest in that and some designs are being worked upon. I think a lot of automobile carriers are going in for designing of special wagons. But there are some pro and cons. Some players are thinking of using the containers so that after offloading the vehicle, they can use the container for general cargo. Some are thinking of using specifically designed wagons. But their problem is that they will not get return cargo. It will take sometime for this segment to shape up but it will definitely happen because demand is very high. All the leading players including market leader Maruti are very keen for this kind of service.

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COLUMN

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‘SCALE’ it up!

With ever increasing demand and growing awareness among consumers, it is becoming a challenge for companies to scale Nipun Kohli up and manage Senior Business Manager Supply Chain & Logistics the complexity of HCL Technology their supply chain.

Hence, companies need systems with high flexibility, which provide improved visibility, hence reducing the complexity in their supply chains. This requires two things -- development of a “collaborative For Retailers

LOGISTICS TIMES August 2011

sourcing” approach and establishment of an infrastructure allowing the exchange of information across the supply chain ecosystem.

As organizations evaluate different options, Total Cost of Ownership (TCO) is often at the top of their minds to lower costs by eliminating upfront capital investments and ongoing maintenance costs associated. Businesses are looking for an alternative solution with more flexibility, innovation and responsiveness.

SCALE provides them that alternative.

SCALE is an exquisite service model that collates some of the BoB (Best of Breed) supply chain tools for businesses

to manage uncertainty by improving visibility and maximizing profit. With SCALE, comes scalability, the company does not have to worry about the change/increase in demand as all the infrastructure is exclusively maintained at HCL which gives you a highly flexible and agile system with reliable output. This service offering is designed in the form of packages to enable companies use part of a service as well, For ex. Warehouse Management, Billing Service, Transport Management, Vendor Collaboration etc.

The need of the hour is to have an integrated supply chain which does not hamper Business growth for want of

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Templatised solutions for various verticals, for ex – Logistics service providers (Ambient & Cold Chain) Agility and Flexibility – Enables the system to be agile and flexible to provide resources when required.

For Logistics Service Providers:

infrastructure and IT resources with low upfront and operational cost and not affecting the time to market and a single point dashboard to measure the performance.

An ideal solution is to provide a secured and managed environment that customers (or groups of customers) can use to perform specific functions. The solution needs an option to increase and/or decrease computing capacity in the functioning of needs at any given moment and charging customers on a pay-per-use basis. This is ideal for SCALE through which customers of a specific ecosystem can perform secure transactions, exchange information and analyze it for trends, reports etc. without adding to the TCO. SCALE constitutes a number of features which help simplify different parts of supply chain:

SCALE combines software, services and industry-specific best practices to provide an end-to-end business solution. It enables the management of key risks and trouble-free highvolume sales by assessing the readiness of business processes, IT systems and underlying infrastructure. The unique business benefits SCALE bring in: • It Tracks customer order right after source • Integrates various constituents of the supply chain like Carriers, 3PL, Retailer, Manufacturer and Supplier.

• Provides complete visibility across the supply chain • Provides on demand service scalability • Reliability as it is managed by HCL which is an established player in the field.

LOGISTICS TIMES August 2011

CCOVER OVER FEATURE

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Logistics & idea of freedom

LOGISTICS TIMES August 2011

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F

reedom is nothing but a chance to be better,” thus spoke Albert Camus, the renowned noble prize winning French novelist of the 20th century who is broadly looked upon as a strong pillar of the existentialism school of thought. Clearly, the implication of the statement is all-encompassing in scope. Its afterall, the desire to excel which ignites the idea of freedom and to do that the foremost task obviously is to eliminate the existing hurdles.

From the standpoint of Indian logistics and supply chain industry today, Camus’ expression is like hitting the bull’s eye. Look at the logistics landscape and you will find a strong desire to get better driven both by the realisation and self-belief in capabilities as well as the market demand where high growth environment is only compelling to do more. That too in a qualitative manner- almost on a 24x7x365 basis. But also strong are the shackles which seem to be indomitable. Most of them are traditional in nature, have a vice-like grip and even as there is realistaion in all corners that they need to be shed away at all cost, somehow or the other things are not falling in place.

Being one of the last sectors to command serious attention after India changed its economic direction twenty years back, the problems in logistics and supply chain businesses have suddenly become more pronounced thanks to increased production and distribution activities. Just to cite an example, look at the case of exports. In last three years alone, Indian exports have grown by over $100 billion. And there are myriads of examples as how different commodities have significantly grown in volume in last five-seven years. Though the logistics players so far have shown that classic ‘in spite of ’ kind of resilience, the issue is what will happen tomorrow if the Indian economy continues to grow at a fast pace?

The collage of opinions presented in the following pages by senior industry representatives cutting across different verticals underline those critical bottlenecks which need to be elimianated to take logistics and supply chain sectors to the next level. No, the portrait is not all that gloomy and there are distinctive silver linings as pointed by some observers, but the clear and unanimous voice is to show urgency to unshackle the sector. Probably the time for the expression (through affirmative action) of the idea of freedom for logistics sector has arrived if the Indian growth story has to be backed by a rocksolid support system. To be precise, the support structure comprising transportation and distribution businesses existing in a progressive eco-stystem wherein the sector has the deserving recognition,fast-track regulatory mechanism, future ready infrastruture and upgraded process applications. Last but not the least, a human face too. ─Ritwik Sinha LOGISTICS TIMES August 2011

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Lack of private interest The warehousing, which manages The declaration of the warehouse as an infrastructure activity is the situation of surpluses a step in the right direction. Bank finances should improve with and scarcity, is an important suitable rates of interest and the terms of repayment. The PPP component in the supply chain for model and remunerative storage charges preferably determined the development of agriculture, by a regulator like the WDRA will boost the sector. industry and trade. But such an The warehouses need to be necessarily connected through a economic activity has not received good road network. The unavailability and the rising cost of the attention it deserves. The the land coupled with the resistance for the acquisition and public warehousing is mostly diversion of land for non-agricultural purposes pose major confined to foodgrains procured challenges to the rapid growth of the warehousing sector. The Dinesh Rai, under the MSP while the private State Governments need to play a proactive role in this important Chairman, WDRA players are not very active and area. The restrictions on inter-State movement of goods and the private investment has not come up in a big way in this the applicability of multiple taxes is also a major handicap for the pan Indian warehousing activity. This could be addressed area. The warehousing sector mostly suffers from the lack of professional management, modern technology and automation through the proposed GST Act which should come into force of operations and processes. As a result, while integrated bulk at the earliest. The recently introduced Negotiable Warehouse handling and transportation facilities and bulk storage in silos Receipts, and their trading in an electronic platform, will also are being done in developed countries, such facilities, despite the help break the national barriers and integrate the market. encouragement provided in the National Storage Policy of 2000, are yet to come up in a significant manner. The bulk storage and FREEDOM FROM logistics handling facilities would enormously save cost on account of inefficiencies & transactional handling, storage, packing, labour and transportation. costs, that beset the competitive While the production of foodgrains is one of the principal advantage of the patriots of the determinants of the national food security, the minimisation, 21st century working towards if not elimination, of losses during post-harvest operations, staging India at the helm of the processing and storage, is also equally important. The storage global business landscape, with the of foodgrains is a difficult task as it involves a complex system advent of a truly integrated supply comprising physical, chemical and biological activities. The need chain & logistics infrastructure for adequate scientifically-designed storage capacity at macro solutions company. Yes, companies and micro levelsto maintain adequate supplies of foodgrains Ajay Mittal, who have made brand India a across the country can hardly be over-emphasised. Additionally, CMD, Arshiya Intl. force to reckon with, today feel the cold storage for the perishable commodities, which has not developed on account of the traditional technology and high tied down when it comes to Logistics, adding acutely to their consumption and prices of electricity, need to adopt modern costs & marring efficiency. Arshiya International with the firm resolve to contribute to the India growth story has created a technology and practices to become economically viable.

The principal reason for the shyness of the private sector is truly “Integrated logistics infrastructure and service delivery the capital-intensiveness of the projects and doubts about its mechanism” reducing logistics and transaction costs of operating business viability on account of poor capacity utilisation and in India and really giving meaning to the word ‘Freedom’ in the logistics space. inadequate and unassured returns. Moreover, in the agricultural sector, there are smaller marketable surpluses of farmers who use their own facility at no cost for storage, lack of cost-effective facility in transportation, distance of warehouses from the production centres and lack logistics of storage-related facilities, “The public warehousing is mostly The infrastructure has such as, standardisation, confined to foodgrains while the been a much discussed grading, quality testing and packing. Since private private players are not very active subject with both the industry as well as policy investment is necessary and the private investment has makers. However, the but not attractive, the Government should improve not come up in a big way in this criticality of managing this infrastructure has the investor’s sentiment area.” probably not been through suitable incentives.

High transaction cost

Last mile struggle

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India needs to cash in emphasized enough and inefficient and inadequate “Airports are hampered by on the logistic industry fast track logistics infrastructure inadequate parking bays and through infrastructure development has an impact of creating single runway at certain airports, and better governance. bottlenecks in economic growth. cargo handling / customs clearance The main drivers that will fuel the growth in the Specific to the Air Express capabilities which have lead to logistics market include industry that offers doorthe upcoming freight to-door pickup and delivery, congestions and undue delay.” corridor project, building cross-border movement, customs clearance, and doorstep delivery service, the aspects of logistics hubs and warehouses, port development, upgrade of critical to the industry are speed, technology, investment by private players and also the impending reliability and an ‘end to end’ industry status for the logistics sector. service.

For the past years the industry has been facing the following challenges As the nation looks forward to that are a hindrance in taking the celebrating its 64th Independence industry to the next level: Day, I can’t help but reminisce on • Road infrastructure the accomplishments that have bottlenecks: Poor road made this country an economic infrastructure especially for last Malcolm Monterio Senior VP & Area Director, super-power to reckon with. The mile connectivity. With increasing DHL Express South Asia pace at which this great country is focus on upcountry and hinterland developing is un-rivaled, and serves markets, logistics providers struggle with infrastructure on to highlight to the world that India the last mile. The golden quadrangle for example has strong Kenneth Koval, is well on its way to being amongst infrastructure. However movement beyond that is required VP (Operations), the top nations of the world. With to bring goods from upcountry production sources to main FedEx Express India so much of change taking place shipment centres.

• Clearance & Customs Facilities: This include regulatory as across various industries at such a rapid pace, there are certain well as technological constraints resulting in delays. We see specific areas where development needs to be boosted. traction on this front with technological upgradation in the One of those areas is infrastructure, which is a vital ingredient to clearance facilities. Smooth implementation of these will be enabling commerce. Trade and logistics infrastructure in India a critical factor for our industry. Transition from manual to has not kept pace with the development of industry - resulting in automated clearance system should be seamless and with all a very high cost of logistics as a percentage of GDP. The need is for world-class and effective infrastructure to achieve sustainable stakeholder inputs considered.

• Poor Airport Infrastructure: Mumbai and non metro airport growth. While ports have their infrastructural bottlenecks, airports too are hampered by factors like inadequate parking infrastructure still continue to be a challenge.

• Some of the other issues hampering the sector are shortage bays and single runway at certain airports, cargo handling/ customs clearance capabilities which have lead to congestions of skilled manpower, complex tax laws and inefficient use of and undue delay in clearance of goods, thus impacting Indian IT. • All the above lead to delays and resultant high transaction consumer, producers, importers and exporters. Inadequate costs for Indian business seeking a competitive advantage cargo warehousing facilities and multi-modal links for local in the global market. Indian businesses are moving up the distribution are also factors that constrain air cargo operations value chain in terms of the offering as well as newer markets in the country. As India continues to spend relatively more on that they are exploring. Faster clearance at a lower cost will logistics due to inadequate infrastructure, a world-class and well connected network can significantly drive savings in terms of facilitate providing that competitive edge to these businesses.

• While we see development plans for all the above points we service quality, inventory costs and processing time. discussed, speed of execution is critical to see change that will Another much awaited event is the implementation of the GST, which will provide much needed freedom from the multi accelerate growth.

In addition, the Indian supply chain and logistics sector is mostly layered tax system, thus reducing the cost of products and unorganized, marked by the presence of small players, including services and streamlining processes that are currently slowing transporters, express cargo movers, courier operators, freight down distribution networks. We look forward to more such forwarders, container companies and shipping agents, which investments that will help build the nation’s infrastructure, as well as provide the freedom the industry needs to grow to its pose a threat to the organized growth of the sector.

Infrastructure lagging

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reforms, increased spending on infrastructure, and the overall economic growth driven by the domestic consumption and growing affluence. At present, the express industry in India is still Logistics in India has been unorganized and fragmented. The constrained and held under siege industry faces several issues like: by several external and internal • Infrastructure - plays challenges , the Indian Business an important role in development. houses and Organizations have Anil Khanna, Road infrastructure is a bottleneck for long struggled to overcome the MD, Blue Dart though over 70 % of freight same and compete with the evolved transportation in India is via roads. The National Highways and developed logistics economies (NH) form only 2% of the entire road network in India, but of the world. We have started to handle over 40% of the national road freight traffic, putting succeed also but still there are few Ajay Chopra, enormous pressure on the highway infrastructure. Of the things that need to change to truly CEO, DIESL planned 20km per day target of new road constructions, we unshackle us.. are achieving only 4kms. per day. a.

Freedom from bureaucratic delays in implementing Regulatory Changes that truly make the business seamless • Air express industry – in India looks promising. To enjoy the full benefits of integrated air express services, the government in the country - GST , a case in point. We need a complete needs to address restrictive civil aviation agreements, and honest implementation of GST and other accompanied cumbersome customs clearance procedures, and restrictions reforms is important. Also, Labor Reforms that bring control on investment in ground transportation operations. While the and clarity are a must.

Airports Economic Regulatory Authority is seriously looking b. Freedom from entry forms and controls across states in the into various matters related to airport economics, there is no country - they should be abolished. one to look at issues that governed the economics of the air c. Freedom from hidden costs and inefficient legacy systems of cargo industry, especially the way in which the airport operator Octrois and Cess etc levy charges and change them at will. Also airports in India d. Freedom from rampant Toll charges that impact freight should be made less stressful for cargo handlers. While India costs was witnessing major changes in airport economic reforms, e. Freedom from fragmentation and resulting lack of voice what had not been focussed on was the real role of airports. in power corridors - We need ONE regulatory body at Cargo had not got the necessary priority in India, which other Government level to address all issues of the Logistics Asian Giants had and continue to give it even today. If one industry : this is currently spread amongst Shipping/Road/ looks at the charges levied for air cargo movement, South infrastructure and other ministries Korea in the last 2 years had actually dropped rates by 20%, f. Freedom from inefficiencies and delays due to Infrastructure while in India it rose eight times. issues of Power and Roads - In terms of quality of infrastructure, India ranks behind war-torn countries such as • ATF - be given a ‘declared goods’ status to attract a uniform VAT of 4% across India. Today, excessively priced Jet Fuel Ivory Coast and Sri Lanka as per the recent World Economic (ATF) in India is a significant cost for air travel and operations.

Forum’s Global Competitiveness Index.

ATF rates in India are priced much higher than international benchmarks.

• Re-introduction of tax exemption on aircraft and engine lease rentals - Aircrafts given on lease by foreign companies The logistics performance of any economy needs to be assessed come with a net of taxes arrangement, i.e. tax, if any, on in totality, by examining the quality of service provided and the aircraft lease rental cost incurred. As part of income is to be borne by one of the fastest growing the lessee. The Income economies worldwide, the “Cargo had not got the necessary tax Act provided for logistics industry in India is bound to have high growth priority in India, which other Asian income tax exemption to foreign companies potential as key user industries Giants had and continue to give it on lease rentals paid gather growth momentum. by an Indian company The growth in the industry is even today.” subject to the Central largely driven by the increase Government approval. in trade, government policy full potential and put India on the world map of countries with outstanding facilities.

6 shackles

Not a priority

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to completely pass on these This exemption was costs to customers. withdrawn by Finance “The vision is narrow; the processes Act 2007 which has as a result increased the are antique and the logistics cost of air operations. industry, a slave of its own created The re-introduction of inefficiencies.” the exemption section I think the biggest bottleneck 10(15A) in the Income affecting the logistics tax Act will give some sector today is the absence of an relief to the highly saddled aviation industry with multiplicity industry status. The conferring of of taxes on its air operations. industry status will give the much needed boost and impetus to the highly fragmented and deregulated logistics sector. Currently, 80% of I would like to talk about the major the industry is being accounted impediments from to different by the unorganized sector. perspectives - one for international The logistics sector in India is business and the other for domestic distinguished by high logistic costs business.

Vineet Agarwal, and very low operating margins.

International Joint MD, TCI The logistic cost is estimated to be The one major challenge is the inadequate airport cargo around 13% of the GDP. infrastructure. While the passenger One of the key causes of concern for the logistics sector is Sanjiv Kathuria, terminals have seen major up- inefficient and inadequate infrastructure. Besides this, shortage Country Director (Sales & Marketing), TNT India gradations in some cases like New of skilled manpower is another hurdle which is affecting the Delhi, the cargo handling facilities optimum realization of the logistics industry. The Government at the dedicated cargo terminals need improvement to keep should join hands with industry associations to undertake sector up with the burgeoning demand. There is definitely scope for specific projects and develop training institutes to train drivers about vehicle maintenance and road safety norms. We also wish improving the cargo work flow as currently the location of cargo complexes and where customs are located and where the that the government as well as other logistics players give more cargo planes are parked in our airports cause delays and there attention to middle level infrastructures like multi modal logistics is a huge scope for improvement there and this would help in parks, cold chain, cross docks, toll collection system, check posts, etc. faster clearances and movement of shipments.

The second is the use of technology i.e. strengthening of EDI - fast and error free implementation of EDI would ease paper “We need to be the change we wish work and improve the speed of transactions helping the flow to to see in the world” quoted Mahatma become smoother and faster.

Gandhi, the great proponent of Domestic the Indian Independence struggle.

The delay in the implementation of GST is a major dampener.

How true are these words even The current impasse with lack of clarity on the way forward has today, in the context to the Indian not helped the industry. Decisions on warehouses, investments logistics industry! in network strengthening among others have been hampered Traditionally logistics has been as a clear picture has not yet emerged on the contours of the viewed as movement, warehousing, proposed GST. storage and transportation of While the road infrastructure has improved, the complexities of Pranil Vadgama, goods, in general, a support service inter-state documentation prevent smooth and fast movement.

President, CHEP India to business. The vision is narrow; The stopping at state borders and waits at crossings add to as much as 50% of the total travel time. Congestion on the major the processes are antique and the logistics industry, a slave of traffic lanes is also a challenge as also the introduction of toll its own created inefficiencies. Can we unshackle the chains of all these bondages and achieve freedom? Today we need to fares is a burden which is a significant impact on our costs.

Some issues which are common to both are the acute unavailability change the lenses of our vision and drive logistics as an enabler of qualified and trained manpower. Inflationary pressures led by of business, walking hand in hand in generating business and the hike in diesel prices has a direct and cascading impact on in turn revenue for the organization. We need to rid ourselves the logistics industry which is the hardest hit as it is not possible of the anarchical processes mired in inefficiencies, bureaucracies

No formal status

Faultlines in work flow

Narrow vision

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and red- tape and change to the modern way of thinking where your competitors are your closest collaborators, rules and regulations are a way to optimize operations in driving quality and effectiveness rather than view them as bottlenecks and the government, a vehicle towards making India a developed and successful country.

The way forward is Standardization across the supply chain, be it warehousing, material handling equipment, truck bodies, racking and pallets. Every thought leader rants about the external environment impacting the functioning of any organization, but how many really drive to collaborate rather than compete.

We need to change our mindset and collaborate, be it with our suppliers, our competitors, our logistics service providers and our retailers. Adopt technologies that will bind all these components together into one efficient eco system. We need to be the change that will take us towards the next evolution in the logistics industry. Are you listening?

Endless wait When it comes to irritants which have kept the logistics industry chained to a considerable degree, my list is quite long. But here I would focus on regulatory provisions.

From express industry’s perspective, we sincerely hope that the postal amendment bill should become a reality soon. It has been hanging R K Saboo, fire for a long time and everybody Chairman, EICI is concerned about it. We expect the bill to be progressive in nature, bring positive changes and create level playing field between the private players and the department of post.

GST is another case in point wherein delays affect the industry sentiments and performance. Just look at the eco-system we have to exist and operate in. Currently, movement of goods from one state to another almost amounts to journeying between two countries. This trend needs to go fast and here GST seems to be the right solution. But this again is getting delayed and one does not know when it will see the light of the day.

imagine, two percent of national highway is carrying 40 percent of freight traffic. Nothing surprising, we have to continuously grapple with irritants like congestion and extremely slow movement.

While physical infrastruture is one part of the problem, what adds Vineet Kanaujia, to the woes is presence of poor GM (Marketing) processes in managing freight Safexpress movement on roads.

There are unnecessary checkposts and regulatory barriers which make the entire movement so slow that it erodes our productivity.

We certainly need to get rid of this scenario as fast as we can and move towards creation of world class road infrastruture which should be future ready in the real sense of the term. That is, it should be in alignment with the projected demand for at least next one decade.

Who cares for drivers?

While we keep on pontificating about bad infrastructure, archaic processes and lack of technological applications in our operations, in my opinion the gravest problem is none of these. The mother of all issues is the pitiable condition of the drivers community. The hands which command the movement of over three million heavy commercial Vipul Nanda, vehicels on Indian roads are most CMD, Mercurio Pallia neglected one. This community which plays such a vital role in making things happen when it comes to logistics operations, simply has no voice.

I think, giving the rising demands of heavy commercial vehilces due to economic growth which entails we would be needing increasing number of drivers in the future, government must step in urgently. The shortage of drivers has already started pinching all of us and could snowball into a major crisis if a better ecosystem is not created for them with government taking the lead and private players supporting those intiatives. The government There are a host of obstacles which we need to remove to take needs to spearhead the move to create more training schools, proper parking bays and logistics business to the next motels on highways, better level. But if you ask me to pinpoint the biggest of them, “While physical infrastruture is one safety regime for road and we have then my reply would be part of the problem, what adds movement to ensure that adequate the poor condition of road to the woes is presence of poor social security is provided infrastruture. The absence of world class road infrastuture processes in managing freight to them. As a society, we need to change our views is a vital missing link which movement on roads.� on them and treat them perceptibly slows down our more respectfully. growth and development. Just

Future ready infrastructure

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Simplified process needed

requirements – it could be less than two degree, or two to eight degrees, etc. This vertical is growing very fast and we need to have the precise temperature controlled solutions at the airports. Similarly, the courier vertical is also growing very fast. But not all airports have dedicated courier terminals.

I have a wishlist. There is an Indian Air Cargo Programme - a joint council where there is equal representation of forwarders and the airline community, six from each side. And it is under the umbrella of IATA. Under this Indian Air Cargo programme, CAS can be brought into India. CAS is the single accounting system for the industry.

So it will bring about standardisation of terminologies.

Currently, different airlines are using different terminologies even in invoicing. Then there is complicated multi-layered tax structure in India.

If CAS is implemented, interpretation would be uniform across the industry. For the forwarders, they won’t need to cater to all airlines for payments separetly. After verifying one consolidated all carrier invoice, they make one single settlement. CAS is present in all happening markets in the world and it is time, it is implemented in India also.

“Currently, different airlines are using different terminologies even in invoicing. Then there is complicated multi-layered tax structure in India.”

Along with this year’s Independence Day, India looks also back to 20 years of economic liberalization. Ever since then we have seen strong growth rates Carsten Hernig, in imports and exports and an Regional Director expected average yearly GDP (South Asia & Middle east) growth of around 6.5% gives a Lufthansa Cargo rather positive outlook for the years to come. In the last three financial years, which did include global crisis as well as boom years, air exports have grown by 22% and Imports by 29%.

As Air Cargo is an important economic engine, we need to work towards simplification of processes to remove bottlenecks as processes can equally contribute like investment and infrastructure. At many stages improvements have already been realised, but there is still a long way to go. These improvements will enable the entire trade to reduce logistics costs and improve efficiency of transportation. To name a few to tackle: Active enabling of Shipper Built Units, simplification of part shipment clearance, e-freight and paperless information/documentation flow, hub- and trans-shipment concepts, electronic billing etc. So let us see what the next 20 years will bring in terms of further improvements – however, one thing is for sure, the logistic industry has to take the responsibility to drive the change constructively and cannot wait for anybody else to come up with ready made solutions: Independence goes along with responsibility.

Uniformity lacking I would say that we exist in an ecosystem which is full of challenges.

And there are plenty of challenges across India - different challenges at different airports. We have markets within the country which are so different and same holds true for the product verticals. And, therefore, the airport infrastructure Keki Patel, Cargo Manager must cater to those product (India & Nepal), verticals. Just to cite an example, Emirates SkyCargo look at pharma vertical. The movements of pharma products require temperature controlled handling. The temeprature control ranges are given by customers’

Poor storage Currently at 3.3 million kms, India’s road network is the second largest in the world but in terms of density, it is just 2.7 km / 1000 person well below world average of 6.7 km, leave alone the quality of these roads!

What is more perturbing is that India ranks 47th in the Logistics Anil K Choudhary, Competitiveness Scale of World MD & CEO, National Bulk Bank as compared to the 27th Handling Corporation position of China. Also, the cost of logistics to GDP over around 10% which is much higher than the developed countries (5%-7%). In case of agri, the logistics cost is even higher at 15-17%.

Logistics inefficiencies affect every domain of the economy. In a country where 1/3 of the population is at below sustenance level and where over 2/3 are dependent on farming and allied activities, higher efficiency in food and agri logistics would bring significant impact. The lack of infrastructure and storage facilities adds to the woes of this sector.

Logistics management of foodgrains is tricky considering their perishable nature. With higher production, varying consumption patterns, limited handling facilities as well as limited infrastructure LOGISTICS TIMES August 2011

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for bulk handling, the problem has become more critical.

Out of the total warehousing space available with public sector units (CWCs & SWCs), foodgrains occupy only about 50% of the space (CWC 41 % and SWCs 60 %) and 24 lakh MT of open plinth storage space that is available is not suitable for all season storage.

The answer to the perennial problem in storage and warehousing infrastructure is to create a conducive environment for private investment.

India lags far behind developed countries when it comes to efficiencies in the overall logistics management system. What is required is an integrated supply chain that can put stops on leakages in the system and deliver on reduction of wastages and losses. Along with new storage infrastructure, modernizing the existing facilities would induct efficiency; reduce space constraints and enhance food security in true sense of the term.

international boundaries, difficult to permeate. In a four - five day long truck journey between Mumbai and Delhi, at least 40% of the time is spent just in crossing state borders. Apart from this each state has its own RTO norms, taxes and documentation. We need to convert them into borderless states through initiatives like GST and Pradeep Tewari, uniform documentation norms.

CEO, Credence This will translate into reduction of hidden costs and hence huge savings, thereby giving us a sense of freedom in our logistics operations !

Lack of human face

Unfulfilled Promises I had started attending conferences and industry meeting in 2001, and now we are in 2011. In these ten years some of the promises that have been continually made by the various government departments and industry bodies are: a.

Infrastructure will improve. b.

New Projects will Anil Arora, be delivered on time.

MD, M J Logistics c.

Logistics will get Industry Status. d. GST will be implemented. e. 3PL companies will join hands to form an association.

Based on these promises we planned projects, raised finances, made commitments, and were expected to deliver. However if they remain unfulfilled, we are left with no options but go back to the drawing board, do a reality check and often cut a sorry figure. We as an industry lose credibility and most important to have to put in the same or more effort again and again to recoup for lost time. So my wish is if we cannot keep a promise we should not make them in the first place. Rather before we make any new promises, all the stakeholders should do a reality check on what we committed and what we delivered!

States or countries?

The Republic of India is divided into 28 states & seven union territories.

Currently it feels as if each of these are different countries with water tight LOGISTICS TIMES August 2011

TS Narasimhan Executive Director, DARCL

Logistics space is quite large at 90 billion USD (roughly `4 lac Crores).

60% of the logistics element is transportation by road and rail. I would call Road Transport as spine of logistics, which is omnipresent and widespread. Be it first mile or last mile reach or in-plant movement or over dimensional cargo movement or connectivity, the spine plays the crucial role. Is the spine resilient enough in today’s

context? No regretfully.

There are various levels wherein the impediments to growth needs to be addressed... (1) organizational level (2) sector/ Associations/ Apex Bodies level (3) Governmental level. But there is another critical issue which we often ignore-lack of human face. As per reports, China used to have maximum number of road accidents in the past. But now India has overtaken with 140000 deaths per annum. One can imagine the fate of dependents of the deceased ones; compensations, livelihood, so on and so forth. 40% of these accidents are attributed to heavy vehicles as per reports. The sector should be able to check this with the help of NGOs through training programs to mitigate the avoidable irretrievable loss of humongous numbers. We need to enhance the dignity and value of human lives and as we do this we start breaking the shackles.

Another dimension of the human face is “If we cannot keep a promise we the Terrestrial pilots should not make them in the first or captains, what we place. Rather before we make any commonly call as Drivers – a re- look at their pay new promises, all the stakeholders packets for the work should do a reality check on what we they do and deliver.

Before it is too late this committed and what we delivered!” needs to be done, as the

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functional scenario. Earlier sector has already started the participating agencies experiencing lack of trained “The biggest challenge in market like namely exporter, buyer, and experienced drivers and helpers. It is however, ours is to handle complex demand/ agent and airline required to have a personal or heartening to learn that supply chains in wide geographical telephonic interaction only. today be it Training institute spheres of our country.”

Similarly the entire logistics or Apex Bodies, talks have operations were being come up to that level; handled physically at the hopefully this takes off! airport or in the offices. However, Logistics Sector is already on the growth trajectory with will in the changed time with the gain momentum as manufacturing the getting the timely boost. induction of automation, emails, Logistics, to sum up requires transparency, technology upgrades internet, fax, video-conferencing, on tracking, distributive justice to get the human face, and fair etc, the multiple organs of a treatment to be meted out by Industry or Manufacturing sector, function can be interwoven into duly taking cognizance of Competition Act to get rid of one one smoothly and timely. Presently sided agreements. except for handing over the goods at the airport, no agency needs to visit the other as the coordination, Sunil Kohli filing of shipping bills, issuance Logistics Industry being highly MD, Rahat Cargo of TC, bookings, uplift status connected with the core sectors becomes more and more vulnerable and shipment-tracking, etc can be undertaken through the net to any initiative being taken in the inputs. At the airport, by and large, the multi-window clearance system has been dispensed with. Undoubtedly there have been development of this sector.

Government should define the revolutionary changes during the preceding years and efforts are blueprint for the most effective on by all the stakeholders to further eliminate the bottlenecks and efficient logistics infrastructure and deterrents in order to achieve a hassle-free accomplishment to support a balanced growth, of the functions at all ends.

Samir Gandhi It is also felt essential that all governmental agencies viz Customs, considering the anticipated freight CEO, Warehouse Custodian, Ground Handler etc should always treat fl ow by 2020, demarcating land Gandhi Automotion for logistics parks mainly along the the shipper & forwarding agents as their trade partners and hence every possible assistance and cooperation’s need to be extended proposed DFC routes.

Secondly, it should ensure better coordination between national to them. After all, every agency is functioning to achieve the goal and state level bodies responsible for developing logistics of “Export growth”. infrastructure. The most urgent measure required would be the implementation of GST at the earliest and ease in the regulatory India’s automotive sector is one of hurdles. the fastest growing, contributing Finally, the government should create an environment to significantly (approx 5%) to our encourage automations in the industry so that more and more GDP (likely to grow to 10% as per LSPs are encouraged to adopt modern & mechanized methods Automotive Mission Plan by 2015of handling cargo. Use of Dock Levelers, Scissor lifts and 16). With the growth taking place Taillifts for loading and unloading indirectly works towards at rapid pace, it has brought lot of bringing in efficiency and helps LSPs to maximize their return challenges to meet ever changing on investments. This Independence day the Industry would demand of our customers. The certainly look towards the government, to be released from the Kalpesh Pathak growth coupled with entry of most chains to soar high.

Asst. VP (SCM) of the global players in Indian Fiat India market has set new standards We all are aware that in the old days, each aspect of a job, whether of competition with increased pressure in terms of product related to air export/import or otherwise, was being handled innovation, quality, technology and services in shortest possible lead time as well as competitive cost. solely by human intervention. Thus the accomplishment of assorted vital functions consumed considerable time with plenty The biggest challenge in market like ours is to handle complex of rooms for lapses. However, with the advent of automation, demand/supply chains in wide geographical spheres of our the situations began to ease providing considerable comforting country. No doubt logistics industry has certainly progressed

Growth imbalance

Freedom of movement

Treat us as partners

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which has helped automotive industry to grow faster than overall industry growth. However, we have a long way to go to make it best in class on global scale.

On external challenges front, logistics industry needs to have a freedom for movement itself. There are constraints which are slowing down the logistics movements impacting industry in cost and time. Obstacles such as complex tax structure, hurdles in inter-state movements, improving but still lagging infrastructure (especially Ports , Roads, Rail) ,state levies like octroi, entry tax etc. There is an urgent need to look at these obstacles at policy level to find effective solutions which will help logistics industry to move faster which in turn will help country grow faster.

Having a separate ministry for Logistics at central level will be a good idea for effective co-ordination and policy making which will certainly benefit our country. (India’s logistics cost as % of GDP is certainly higher..!!! Don’t want to quote the % and join already going on debate and difference of opinion on this topic as to what % we are spending) While on internal challenges, we need to have win-win relationship between all stake holders in logistics industry. With input costs for logistics industry showing only upward trend, it is hard to remain cost competitive only based on traditional relationship and negotiation tactics. It is high time all stake holders in logistics industry come together and bring in mutually beneficial efficiencies. We all know, earlier we make a beginning better it is for all of us. Nevertheless this journey has begun, we need to take it to OVERDRIVE.

Skilled man power deficit

In India, logistics cost in automobiles industry accounts for 2-3% of sales whereas in auto components industry it’s around 3-4%. Indian auto logistics industry is estimated to be at INR34.71 billion in 201617. Reverse logistics cost in Indian auto and auto components industry S. Jairam is estimated to be around 0.5-1% Executive Director, of auto and auto components Schnellecke - Jeena Logistics India industry. About 90% of the auto component industry outsources their logistics requirement to 3PLs. There are various resource constraints in India, which always acts as serious hindrance to the growth. The focus of GDP growth ranging from 6 % to 11 % and now seeing a target of 8 % has lots of odds like high interest rates, rising fuel prices and higher input cost. The most critical factor that supports or make things happen is human resource with an innovative approach.

The only thing that’s constant is change and yes its imperative to have right talent with better options to look into the options and evaluate the same with a commercial balance with offering value across the chain.

The growth in the economy and the size of the Indian market are the twin engines that are driving auto growth in India. However to support this growth there will be a major requirement of skilled manpower at all levels In developing this manpower both Government and Industry For me, freedom in a logistics have a role to play. Vocational courses around supply chain perspective would mean enhanced management can be introduced in university level in order to reliability and freedom from provide a basic level of skill to potential employees at the entry infrastructural bottlenecks. level. The courses and the training of the faculty could be jointly India will be celebrating its 64th worked out with industry players and organizations.

Independence Day and has A specialized university level programmers developed in sync progressed to become a leading with industry requirement focusing and nurturing right talent can contribute as an important catalyst to growth and building economy of the world today.

With India becoming an economic of a prosperous nation, hub, millions of jobs have been There are initiatives form private sector, who offer customized Lars Sorensen created providing several citizens solution to their customers. However, to obtain the talent and CEO(South Asia)-DAMCO ensuring the right amount of moulding require understanding personal economic independence.

The logistics sector has been at the forefront of this and has the intrinsic requirement of the customers, cost time and capital.

A possible accreditation from the university and exclusive played a key role in enabling industries to flourish. training centers can make However, our freedom things better. continues to be subject to the infrastructural “We can achieve our full potential Today there are several approaches and challenges and we can as a dynamic and entrepreneurial advanced paradigms the companies achieve our full potential nation if the government fast tracks follow for the product as a dynamic and entrepreneurial nation if the investments in building a robust distribution. In the coming days the companies will the government fast tracks infrastructure.” be able to consolidate the investments in building their positions keeping a robust infrastructure.

Infra blues

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in mind the geographical “It is the private sector that really With supply chains getting more and more complex, location, infrastructure needs to start doing its bit in an CEOs/CXOs need to support for both domestic and global market. Effective urgent, sincere and committed realize the optimization their resources through use of transport system manner. Firstly the private sector of strategic alliances and and use of technology needs to urgently improve their partnerships that will help with globalization making reduce their overheads, the world a smaller place, governance.� costs and improve logistics and supply chain efficiency and service delivery. Logistics should be seen as a management will always remain one of the key growth drivers. profit enabler rather than as a cost head. Finding talent pool is a major challenge for the sector. There need to be more vocational programs for middle tier personnel.

I notice three major bottlenecks which need to be urgently eliminated. They are: When considered from a global Attitude problem - When you context, the Indian Logistics use the word logistics to introduce industry is still in nascent stages yourself or your business, the of development though it is on a first impression they get is that definite and steady path of moving we are transporters and truckers. towards a mature, sophisticated and In response to my introductory consolidated industry. The only way email regarding offering logistics Vaibhav Rathi it can go along smoothly is if we all solution, the fi rst question I am MD, Satvik Logistics work in the true spirit of publicbeing asked is what is my fleet size.

Amrit Pandurangi private partnership in removing This has to change. Logistics today has a very larger perspective Senior Director, Deloitte the key bottlenecks. When looked and trucking is a very small part of this vertical.

Touche Tohmatsu India at impartially, it appears that the Land acquisition - The land use for logistics and warehousing is not been clearly defined by the government. If we need to bottlenecks are perhaps more from the private sector than the procure agricultural land and then make a CLU in that land, then Government side.

There is,of course,much that the Government can do to push there is no set procedures and classification.

Infrastructure and Banking - Since logistics is not classified the industry ahead - for example it can accelerate reforms (GST under infrastructure spending, the banking sector is not inclined and inter-state movements for example), accelerate development (of roads and railways, inland waterways and ports/ airports) to extend credit facilitieswhich is very serious hurdle. and introduce industry-friendly policies (for example, more equal partnership with Railways).

At the same time it is the private sector that really needs to start Supply Chain & Logistics is the doing its bit in an urgent, sincere and committed manner. Firstly sector which has the potential to the private sector needs to urgently improve their governance grow at a rapid pace surpassing (for example, on the road pay levies and tolls and not bribes; use all other sectors. The sector can cheques instead of cash). change the entire landscape of how Secondly they need to pay attention to safety and not just profitability (ensuring that truck drivers do get rest and are not business is done in India.

But, Infrastructural bottlenecks driving when drunk; maintaining vehicles better, warehouse and government regulations are equipment are not ancient) and invest heavily in technology (in impacting growth of the sector. warehouses and tracking for example).

Delayed implementation of GST Like in many industries in the country, the good dose of Gautam Dembla increases costs to both corporate, enterprise that we have ensured that there are many successful Director, SPEAR Logistics government and inevitably to the small and local players in the Logistics industry.

But unfortunately, the same factor is also becoming a bottleneck consumer.

Granting of industry status and incentives for an initial period for making large investments and improving governance in to the logistics sector can boost investments and bring in the the industry. Industry alone can now self regulate and learn to much needed impetus. A regulatory body should be created by balance the encouragement of local enterprise with behaving like a large mature industry. the government to look into the concerns of this sector.

Not merely transportation

Self regulation

Erroneous perception

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Scope for consolidation It is common understanding that several segments of logistics including trucking, freight forwarding and other such services segments are quite fragmented encouraging commoditization of services and resultant low margins.

This is creating an opportunity for value creation through Gagan Seksaria Associate Director, consolidation mainly led by global Transportation & Logistics, strategic players and private equity KPMG funds who are quite keen to invest in this sector in India. One of the important realizations that this M&A activity is throwing up is that investors are attaching a significant premium to companies with well managed books of accounts, firm controls and a general vision to create long term financial value for themselves against the temptation for short term tax management.

Problem in execution

narrow, surface quality of the roads leaves much to be desired and over 40% of our villages are said to be not having proper roads.

The Planning Commission estimates that India needs an additional $500bn over the next five years itself to finance infrastructure. A large percentage of that will have to come from the government. However, government finances are not in good shape. Play there are capacity constraints in managing and executing infrastructure, especially at the state level. There is also a shortage of skilled engineers and technicians, which severely restricts rapid infra roll-out.

Till very recently, the government dominated the infrastructure space, and private investment was negligible. Even now, there are many areas of infrastructure that are not open to private investment. Also, governments continue to subsidise charges for water, road use and power consumption though they lose crores on these. Government needs to have stable and uniform policy on infrastructure for private sector to invest and change the pace of development. Government also need to remove all hurdles for foreign investment in the infrastructure sector The major problem in India lies in execution. All projects are wrought with delays and cost overruns due to improper planning, bad engineering, poor quality of material and workmanship – all of which get covered by the government red tapes. Information Technology can play an important role to address this issue.

If there is one industry where delays and cost overruns and poor quality are order of the day, it is the infrastructure sector in India. Even with 64 years of independence. Our governments Freedom – The condition of have failed to provide this basic being free of restraints has long necessity for the growth of the eluded the logistics sector. Over logistics sector and the economy.

Theru Vengadam the period, its functioning has been Bad roads, very poor connectivity, MD & CEO, cramped by obstacles like poor inadequate development of various IFS Solutions India infrastructure, excessive regulatory modes of transports like railways, entanglement and unskilled inland water, insufficient sea and air port capacities – all stare workforce. Despite the odds the in our face every day in every part of this country. No wonder industry has constantly performed the analyst say the cost per logistic transaction is very high, Amit Maheshwari well and has maintained a robust compared to other developing economies in the world.

CEO, Softlink Logistics growth rate. Logistics service While China is a great success story with an infrastructure planned Solutions providers have shown tremendous and executed for future requirements in the present – even other smaller economies like Thailand have far better infrastructure resilience in conducting business in an environment that is not rapidly put in place by their governments. It is interesting to conducive to growth.

Although logistics companies have fared well against great odds, note sixth largest economy in the world is also perhaps one of the least connected regions in the world. Poor connectivity, their general attitude towards information technology has gravely bad roads and inadequate rail infrastructure to carry goods affected their efficiency and performance capabilities. The level of awareness and adoption from ports to warehouses information technology and points of consumption “Although logistics companies of in the sector has been result in delays in risks. have fared well against great abysmally low. The firm The lack of efficiency of the road transport in India odds, their general attitude and long established tradition of considering impacts the economy heavily towards information technology information technology with over 60 percent of the goods depend on surface has gravely affected their efficiency as an expense rather than an tool for development transportation. Even our and performance capabilities.” and expansion has been highways are congested and

What’s ‘IT’?

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the root cause of logistics “Freedom means unrestricted inefficiencies. movement of goods without Recent times have seen a gradual but sure departure having to wait at state borders, from this traditional without getting stuck in traffic mindset. The sector is witnessing a attitudinal jams, and escaping unwarranted change vis-à-vis information interventions.”

Achal Paliwal technology, as companies Head-Outbound begin to understand the stuck in traffic jams, and escaping Logistics, Honda Siel role of information technology as a ‘Key Differentiator’. unwarranted interventions of Cars India Real competitive advantage can be acquired by logistics Road Transport authorities, thus companies only through the route of information technology. reaching the destination, on scheduled time.

Though a beginning has been made, there is a need to bring On-line waybill entry system initiated by few state governments about complete transformation en-masse in the attitude of the and improving road infrastructure provide some respite. On the sector towards information technology. With more awareness other hand,continued traffic mismanagement and increasing and greater adoption of information technology the sector can intervention of road transport authorities to extract additional FREE itself from the shackles of inefficiencies that afflict it. revenue from helpless drivers, are serious dampeners.

Collaborative route

The long list

I am happy that logistics sector in India has started getting adequate attention, which it deserve. Logistics professionals are now considered as specialists, rather than a generalist in this country. The real value addition by making product available at right place, right time and at right cost, is being recognized. The need for Sunil Nair change in the way logistics is done, is Director, ImpelPro SCM Solutions emerging. The realisation that, merely making a good quality product is not sufficient, it needs to reach the consumer is there now.

I would love to see a major collaboration initiative in this country.

A horizontal collaboration which brings in two or more Logistics Service Providers (LSP) together to work on various initiatives which can take the Indian logistics to the next leveldefined below: - Initiative where in all the major challenges are presented, discussed and resolved to the root.

- Initiative where consolidated volume benefits are taken.

- Initiative where LSP uses more of cooperativeness rather than assertiveness.

- Initiative where unjust practices have no room.

- Initiative where strengths are used/shared rather than weaknesses getting misused.

- Initiative where both LSP and Client wins.

- Initiative where Collaboration wins over Competition.

Freedom from Odd time calls regarding detention of trucks at tax checkposts; freedom from bandhs, hartals and other restrictions on truck movement; freedom from delayed trains, flights, ships & tyre punctures; freedom from always looking-to-West for theories & then re-engineering to match Indian scenarios; freedom from Deeso Manjilo the situation where only people Consultant who didnt get other jobs join for SCM/Logistics roles; freedom from the situation that no CSCO’s become CEOs of organizations; freedom from the media ignorance about Supply-chain & Logistics; freedom from the ignorance about Data Integrity as well as Personal Integrity; freedom from Training-not-Available & People-not-Available situations; and finally freedom from attitude that “Supply Chains are always cost incurring”.

Barriers irksome

Traffic mismanagement First thought, which strikes my mind about freedom from Logistics perspective is, freedom of movement of goods. To me, this means unrestricted movement of goods throughout the country without having to wait at state borders, without getting LOGISTICS TIMES August 2011

R. Swaminathan President, NTC Logistics

procedures, red-tapism, etc.

Lack of inter-modal connection between port to express ways is a big issue. And then we have this cumbersome state barriers and border issues which are holding us back to a considerable degree to provide efficient services.

We certainly need an uniform national road transport policy.

Furthermore, we need to get rid of complex tax structure, multi EDI systems, complex customs

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Freedom from roadblocks

“A common single national authority would greatly help in reducing the logistics cost to the nation and facilitating best practices like JIT etc.”

What is freedom? What do we mean when we are really free? I believe freedom is the ability to Rajan Agarwal move around both people and Director, Rinku goods for any purpose without any Commercial Carriers hurdles or roadblocks?

When we talk about Logistics Perspectives, there are roadblocks everywhere, be it in through poor or lack of infrastructure or law enforcement or the structure (or rather unstructured) nature of the industry. Freedom in true sense would mean Freedom from All Roadblocks so that the goods and people can be moved freely.

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Dedicated national authority

India’s logistics sector contribution to the GDP is a significant 13 per cent with around 57 per cent cargo moving through road transport which still Surendra Sharma remains fragmented. From the different Shipping Consultant rules and its interpretation in various states to the long queues at octroi nakas and toll booths, the logistics industry continues to perform with major impediments. With 95 percent of India’s foreign trade by volumes also moving through seaports, efficient congestion free connectivity covering Origin – Destination is a basic prerequisite for seamless logistics. A common single national authority would greatly help in reducing the logistics cost to the nation and facilitating best practices like JIT etc.

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BEST PRACTICE

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Case Study y

Filled trucks benefit supply chains and the environment

According to the US National Private Truck Council, approximately 28 percent of trailers on American highways are currently running empty, resulting in high costs to companies, the economy and the environment. Two progressive companies — Macy’s Inc., one of the USA’s premier retailers, and Schneider National, a leading provider of transportation and logistics — are among more than 30 companies coming together with a new sense of urgency to solve this simultaneously age-old and yet contemporary issue. Together, Schneider and Macy’s are realizing both financial and environmental gains by filling empty trailers with the help of the Empty Miles Service, an innovative online solution developed jointly by the Voluntary Interindustry Commerce Solutions Association (VICS), GS1 Canada and GS1 US. VICS is a member driven, notfor- profit association that, for over 20 years, has created best practices and standards-based LOGISTICS TIMES August 2011

solutions for the consumer goods sector.

In 2009, VICS launched an Empty Miles Service to enable its members to match their empty trucks and trailers with other pre-qualified shippers or carriers that can use the space for shipments. This service brings together retailers, manufacturers and carriers to collaborate and mutually benefit. It is an industrywide solution that directly supports companies’ supplychain optimization and sustainability strategies.

The ambitious Empty Miles Service is also an affiliate member of the United States Environmental Protection Agency (EPA) SmartWay Transport program and is aligned with the goals of the sustainable goods movement. Their strong relationship allows members to link to EPA/SmartWay from the Empty Miles home page.

GS1 identification keys and barcoding standards, such as the Global Location Number (GLN), were used in the

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implementation of the Empty Miles Service to ensure that all participants are using a set of common identifiers, and thus can communicate clearly and efficiently.

As charter members, Macy’s and Schneider National are using the Empty Miles Service to explore new ways of working together. In turn, they are contributing to their respective company’s business goals while elevating the collective focus of the transportation industry to limit the impact of empty miles on the environment.

Traditionally, carriers and retailers try to fill backhaul opportunities by manually searching within their own company and through their external network – a process that may take hours and too frequently produces poor results. With the Empty Miles Service, carriers or private fleets (lane publishers) can post their empty trucks/trailers and routes, while shippers (lane subscribers) can post their transportation needs. By participating in the Empty Miles Service, each company has an opportunity to reach new trading partners’ lanes or a carrier’s lane. Using the Empty Miles search engine, companies with empty or partially empty trailers can search for partner companies to sell or utilize the next leg of a transportation lane.

From the beginning, Schneider national decided to really utilize the service instead just posting and waiting. They made a strategic decision to ‘do it right’ and feel their efforts are paying off. By working closely with Macy’s, Schneider has been making headway in growing its average weekly loads.

Macy’s is also an organization committed to improving sustainability at every level, and the Empty Miles Service created an opportunity for them to limit the environmental impact of their day-to-day business operations. One member of their logistics team qualified the project as a “win-win for Macy’s and Mother Earth.”

Macy’s is now challenging all of its suppliers to get involved with the Empty Miles Service. Early in their Empty Miles partnership, Macy’s and Schneider outlined a cost structure and service-level requirements that made sense for both companies. Schneider has not only met but also exceeded Macy’s expectations.

The companies plan to continue to strengthen their carrier relationships and leverage the Empty Miles Program to further eliminate inefficiencies and drive their mutual commitment to sustainability.

In addition to giving back to the environment, the Empty Miles Service makes sense from a financial perspective. Trading partners can now share capacity in ways that help everyone benefit. The original carrier recovers revenue that would have been lost with an empty trailer and the shipper saves by shipping its freight at competitive rates. For example, by identifying round-trip opportunities where one lane is available, Macy’s determines where it might be able to partner to fill empty trucks

or trailers. The net impact: Macy’s is eliminating trucks on the road for sustainability results and shipping at competitive market rates.

They are dedicated to this program and its ability to support operational efficiency, and as of Q4 2009, had seen an increase of 30 backhaul loads per week, or a projected 1,500 loads per year, at competitive market rates. For each lane opened, Macy’s reduced annualized transportation costs, on average, by $25,000. Schneider, meanwhile, had eliminated 61.65 tons of carbon dioxide, 147.24 tons of particulate matter and 1.47 tons of nitrous oxide while saving 5,554 gallons of diesel fuel and increasing dedicated backhaul revenue by 25 percent on accounts using the Empty Miles Service as of that same period. Eliminating 11 percent of its empty miles and moving 22 percent more backhaul freight with member shippers has led to significantly reduced costs. Based on improved capacity optimization, Schneider is able to offer more competitive rates and still offer the premium service that shippers expect Both companies agree that filling empty miles with the VICS service is good for the economy, good for the environment, and healthy for those companies that know how to leverage it effectively.

Courtsey: GS1 India (GS1 India is a not-for-profit standards body set up by the Ministry of Commerce, Government of India and leading Chambers of Commerce comprising CII, FICCI, ASSOCHAM, IMC, FIEO besides BIS, IIP, Spices Board and APEDA to educate and assist Indian Industry in adoption of global standards used in supply chain management for facilitating faster movement of physical goods and related information flow electronically. It is affiliated to GS1, Brussels which oversees more than 100 GS1 organisations worldwide.)

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INFRASTRUCTURE

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Road accidents, economic burden

Circa 1964. Yes, the historical year in which the Republic of India’s first Prime Minister Pandit Jawaharlal Nehru had breathed his last and the nation was in a sort of limbo wondering “After Nehru, What?” Lal Bahadur Shastri, the man who held the railways and transport portfolio in the Nehru cabinet, ultimately took charge of the mourning nation. Why do I recall these historical moments? Well, it was reflection of various accidents that I had witnessed on the Indian highways during the recent 8-month long, 10,000 km journey in trucks and trailers. Not that I was an eye witness when these ghastly incidents happened, but invariably saw the aftermaths of these life-snatching events. Second reason was the recent visit to Teen Nehru Memorial Library in Delhi to check out what was India like 50 years ago through magazines and newspapers.

Ploughing through one of the venerable LOGISTICS TIMES August 2011

business and economic publications, The Economic Weekly (August-September 1964 issues), I stumble upon the simple, but effective road safety campaign of Burmah-Shell. “Blind man at the wheel” screams one particular advertisement with a grab of a driver’s pair of eyes at the bottom and a crisp copy. Yes, copyheavy, but effective. It reads: “Blinded.

By the dazzle of oncoming headlights. In those blind moments, a life can be lost.

When driving at night, dip your headlights for oncoming traffic. Always light up in good times. When it is misty or rainy, put your lights on even doing daytime to let others see you. You wouldn’t drive blind.

Why blind others?” Marvellous. Another campaign, memorable again, talks about “Monsoon roads are banana peels”.

Road accidents are a leading cause of death and injury worldwide. By 2020 the World Health Organisation (WHO)

projects that road crash injuries will be the third highest threat to public health, outranking other serious public health problems such as tuberculosis, diarrheal diseases, HIV/AIDS, and lower respiratory infections. In South Asia along, road traffic fatalities are expected to increase from 135,000 in 2000 to 330,000 in 2020 (World Report on Road Traffic Injury Prevention, WHO, 2004). That’s a 144 percent increase in deaths from road crashes, points out the World Bank.

Accidents are particularly prevalent in low and middle income countries – 85 percent of the world’s road deaths occur in developing countries. The South Asia region has a one fifth share in these fatalities.

As a nation’s economy grows, the number of motor vehicles increases. This means death and injury from traffic accidents are likely to increase, since motorized

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INFRASTRUCTURE

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traffic competes with slower moving non-motorized traffic for road space, especially if measures are not taken to mitigate the problem. In South Asia, motorized traffic has been increasing at a rapid pace, typically over 10 percent annually in major urban areas, adds the Bank.

According to the World Bank report, road accidents disproportionately affect the poor, making road safety an economic development imperative. Most of the victims of road accidents aren’t even in a motor vehicle. Pedestrians, cyclists and motorcycle riders are the most vulnerable road users and account for the majority of traffic deaths in low and middle income countries.

In Dhaka city, Bangladesh, pedestrians alone comprise almost 75 percent of road accident fatalities.

In Delhi, India, pedestrians and bicyclists account for around 55 percent, and pedestrians, bicyclists and motor cyclists account for over 80 percent of the total road traffic deaths. The pattern is similar in Colombo, Sri Lanka, where

LOGISTICS TIMES August 2011

the figures are 45 percent and 80 percent respectively.

Talking about cyclists, yet another Burmah Shell road safety campaign of 1964 displays a mangled cycle on the road with the caption, “He’s just learnt his last lesson” and then the body copy reads as follows: “He’s not alive any more. You can learn these simple cycling lessons. And live.” It ends with a simple, but effective tagline: “Road safety is a matter of life …

And death.” Well, said.

Road accidents are an economic burden, and pose a major challenge to the health care system, avers the Bank. The economic cost of road crashes and injuries is estimated to be 1-1.5 percent of gross national product (GNP) for low and middle income countries, about US$ 65 billion which is more than they receive in development assistance. Critical and often scarce health care resources get consumed by road crash cases. This hurts a country’s ability to respond to other health care needs. Road traffic injuries also place a heavy burden on the household finances of the victims and their families.

Many families are driven deeply into poverty by the loss of a breadwinner and the added burden of disabled members.

Road traffic fatalities have been increasing at about 8% annually for the last ten years and show no signs of decreasing, claims Dinesh MOHAN, Volvo Chair Professor, Transportation Research and Injury Prevention Programme, Indian Institute of Technology Delhi.

Two modelling exercises have attempted to predict the time period when we might expect fatality rates to start to decline in a range of countries. Cropper and Kopits predicted that fatalities in India would reach a total of about 198,000 before starting to decline in 2042 and Koornstra predicted an earlier date of 2030 for the peak traffic fatalities in India.

If we assume that the present growth rate of 8% per year declines in a linear manner to 0% by 2030, then we can expect about 260,000 fatalities by 2030.

Neither of these projected dates (2042 and 2030) can be accepted as road safety goals for the country. ─ Ramesh Kumar

Frost & Sullivan workshop in Goa The Indian economy was one of the least-affected and among the fastest to recover from the recent (2008-09) global economic crisis. Impressive performance of the key industry sectors, both from the manufacturing and service segments, is the primary reason for the continuing, strong economic growth of the country.

Key manufacturing industry sectors such as automotive, electronics, engineering, pharmaceuticals, food processing, and textiles, apart from the retail sector, have been contributing significantly to this growth.

In its annual Economic Survey, released in early 2011, the Indian Finance Ministry gave strong assurances that the country could remain on its high growth trajectory, witnessing an economic growth close to 8.75 percent in the coming fiscal year.

Driven by such impressive potential growth of the economy and industry sectors, the Indian Logistics Market recorded revenues of about $82.10 Billion in 2010, witnessing a growth of about 9.2 percent over the previous year.

The Logistics Service Providers (LSPs) operating in India have significant global growth opportunities, considering the rapidly-rising international trade volumes of the country. In addition, the steadilyexpanding domestic market for various industries ranging from consumer products and food products, to automotive, telecom, electronics, and pharmaceuticals, is sure to maintain the Indian landscape as an attractive destination for several multinational LSPs seeking long-term growth.

With key manufacturing industries in the country such as automotive, engineering, pharmaceuticals, and food processing increasingly expanding their orientation towards global markets, the LSPs serving companies in these industries are likely to witness high growth trajectories in revenues.

India’s improving bilateral trade relations with all leading global economies (US, China, France, Russia, etc.) are definitely expected to provide more growth

opportunities for the Logistics Sector in India.

Cost saving, improvement in delivery timelines, and a preference to let professionals handle the logistics functions, are the top reasons for outsourcing logistics functions by the enduser companies (manufacturing) across industries. However, LSPs performed significantly below customer expectations on key parameters such as ability to deliver on time, security, and damage control of goods, process improvement capabilities, and nationwide reach, as reported by the end users in Frost & Sullivan’s Annual Indian Logistics Industry Benchmarking — Voice of the Customer Study.

Further, more than half of the end users reported that they are not satisfied with the performance of 3PL service providers, since they did not achieve any notable improvement in the company’s logistics performance. As a result, almost twothirds of end users employ multiple LSPs and about 80 percent have only 1-year contracts with their LSPs, indicating high propensity to switch service providers.

Frost & Sullivan’s studies covering various segments of the Indian Logistics Market identified that there is a massive difference in perspectives between LSPs and end users regarding the future needs and challenges in logistics functions across industries.

Hence, with an intention to aid the logistics fraternity, the first exclusive Strategy Workshop on the Logistics Industry, ‘Future Supply Chain Strategies’, which was conducted in 2010 by Frost & Sullivan’s Transportation and Logistics Practice, had established a unique platform for the LSPs and end users to deeply explore the state of supply chains in key industries, identify the challenges, ways to address them, and above all, envision the potential strategies for future supply chains of these industries.

This year’s workshop titled “Future Supply Chain Strategies — THE WAY AHEAD” would serve as a platform to bring together all logistics end users and service

providers under one roof and discuss the need for a combined effort from both the groups through collaborations, trust, and building relationships.

Investments made through collaborations between service providers and end users would result in visibility, real-time information, and lead to the ideal future supply chain. This workshop aims to deliver a roadmap for the ideal future supply chains of key industries.

In its endeavor, Frost & Sullivan will facilitate ideation and evaluation among participants regarding the emerging focus areas for future supply chains, the best possible methods of collaboration between LSPs and end users, and desired practices for supply chain optimization.

The workshop will also focus on development of the roadmap comprising the next level of practical, feasible, and sustainable supply chain models essential for organizations.

The workshop will take off with a thought-provoking session on ‘Frost & Sullivan’s Perspectives on Future Supply Chain Strategies’, which would provide strategic insights from our studies on the key logistics challenges that require collective efforts by LSPs and end users, and the critical aspects to be focused upon to build a roadmap for efficient and sustainable supply chains for the future.

The event will be graced by top logistics executives from leading end-user companies such as Tata Motors, Fiat Auto, Volvo Eicher Commercial Vehicles, Federal Mogul, Pricol, Acer India, Moser Baer, Alcatel-Lucent, GlaxoSmithKline, Cadila Healthcare, Piramal Healthcare, Torrent Pharma, Spencer’s Retail, Mahindra Retail, LifeStyle International, Nilgiri’s Retail, etc. Leading participant organizations from the LSP side include TNT, APL, TCI, Uniworld Logistics, etc. All leading media organizations in the logistics and supply chain domain, including Logistics Times, Cargo Connect, LOG.India, Logistics Week, and TransREporter, among others would also be present at the event.

Authored by: Srinath Manda, Program Manager, Transportation and Logistics Practice, South Asia, Middle East and North Africa, Frost & Sullivan

LOGISTICS TIMES August 2011

CURATAIN RAISER

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SPECIAL FEATURE 48

Rajinder Singh Bhasin

Transport Personality of the Year 2011 CEAT felicitates the winners of India Road Transportation Awards 2011.

Partnership with Ministry of Road Transport and Highway, Government of India.

India Road Transportation Awards 2011Â. To recognize and felicitate the road transport industryÊs achievers, this is IndiaÊs first and only fleet excellence awards. This year CEAT received 732 entries out of which Mr. RAJINDER SINGH BHASIN of JANTA ROADWAYS Pvt. LTD from CHENNAI selected by the Jury „The TRANSPORT PERSONALITY OF THE YEAR - 2011.‰ For his outstanding performance and contribution to the Road Transport Industry.

An initiative of CEAT to recognize and felicitate the road transport industryÊs achievers, this is IndiaÊs first and only fleet excellence awards. CEATÊs India Road Transportation Awards seeks to reward excellence and innovative thinking in the various aspects of road transportation. It attempts to ensure fair play in the selection of award winners and does not have parameters of size and scale. This means the only consideration for winning is the power of innovation.

This year CEAT received 732 entries for various categories out of which the Transport Personality of the Year - 2011 Mr. Rajinder Singh Bhasin of Janta Roadways from Chennai was selected anonymously: Besides various categories National and Zone wise for Operational excellence, Environment conservation, Customer Experience, Personnel Management and Youth Entrepreneur Achievers were awarded An eminent Advisory board was set up to advice on the awards process and on how best to provide recognition and enlistment of transportation industry with an Independent jury consist of eminent personalities has been set up, who will screen, tabulate score and select the finalist. The process validators & official tabulators will be Ernst & Young Pvt. Ltd.

LOGISTICS TIMES August 2011

Mr. Rajinder Singh Bhasin is a visionary who diligently brought about meaningful and revolutionary changes in transportation and logistics industry. A man of extraordinary caliber climbed the ladder of success with discipline and determination in his approach.

Today he has an experience of over 46 years in transport field besides a strong network and reputed market presence. Welcoming all with a warm smile and friendly nature, he is an efficient resource to his customer, an able leader to his organization and a friend and counselor to driver and his staff.

Mr. Singh believe every problem is a challenge; every challenge is an

opportunity and experience. AS a leader he ensure his company practices integrity in all situations thereby setting an example for every one to follow. Ispiteof an enterprenure, he always had empathy towards truck driver. He always worked to improve the life style of the driving community. This passion lead to the inception of „ The Institute of Road Safety and Trucknowledgy‰ in 2004 - an efforts that was ahead of its time.

The Trail of Excellence Janta Roadways from its incorporation it has been offering assured unmatchable high quality service to its customers and recognized for being the most reliable, safe and efficient transportoperators offering unique facilities and logistic solutions.

Keeping pace with indiaÊs rapid growth and consumer seeking aesthetic values, it hold various

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training program to incorporate fair policies and transparency at workplace. Most importantly, it offers innovative solutions to its customers so to enhance their productivity by transporting their goods on time and in damage free condition.

Janta Roadways offersmart managed fleet with various advantages for customers to experience. i.e. smooth communication process, modern management practices, smart trained drivers and modern state of the art workshop for vehicle maintenance, 24hours help line with office at Chennai, Bangalore, Bhubneshwar, Delhi Gurgaon and Pune. Environment friendly fleet with GPS tracking system option and these company owned 170 trailors are being driven by the experienced professional team of drivers. This gives its customers the assurance of safest and most

efficient vehicle transportation services available today.

Janta Roadways operates from South to North, west and Eastern part of the country. Communication links are being provided network which is integrated the computer installed at its branches to update the informations.

This not only helps the customers to know the exact status and location of their cargo but also make the company a technology leader in the industry. Another feather in its cap is that the company has expanded its wings in the field of Tourist Taxi under the brand of CooCab.in for corporate, hotels / Airport counter, Aviation crew and package tours.

Excellence and How Flexibility, Innovation, Modern Technology value and timely deliveries. These qualities have always been USP of Janta Roadways and the reason behind its success. Even today, it

MILESTONES

by the rules of No Heavy Weight Vehicle Entry during day

It is the 1st ISO 9001:2000 certified company for‰ Services for

time.

Road Transportation of Vehicles and Goods.‰

In 2003, filed the historic case in the Supreme Court against

vehicle overloading that was finally awarded in my favour in 9 Nov, 2005.

training for the drivers from the Industry.

the development of 1st Covered Car Carrier Container

The example of India‰ at Istanbul (Turkey)

2007, Paper Presented on „ Driver Shortage‰ at Amstradam 2007

& Janta Roadways. Now, It has become a practice in car

2007, Paper presented on Road Transport Industry- Issues 2007 and Challenges at JK Tyres Customer Meet, Mysore

2003, The Bus Chassis come with maximum length of 10.75 2003

2009, Presentation on Driver Shortage at CEAT PRO Chennai 2009

mtr. Collaborated as Knowledge Sharing Partner with Tata

2003, State Coordinator All India Confederation of Goods 2003

Motors to develop 12 mtr Chassis. Now this is the parctice

2008, Modified suspension system to reduce the Chassis 2008

Vehicle Owner Association

height by 75mm to increase stability & safety. This Modification was with Eicher for the Maruti Udyog for safe 2010, Working on Prototype design with Echier of LCV to 2010 deliver the Cars in the day time in the Cities & also abiding

2003 -2005, -2005 President of Chennai Goods Transport Association

vehicle transport.

2005, Paper Presented on „Driver Training put into practice.

2005

for Lancer were Estra Fabricator, Lancer, Hindustan Motor carriers

Started „The Institute of Road Safety and Trucknowledgy‰ to develop and impart specialized and professional

1998, 1st Covered Car Container Carrier was introduced 1998 for the transportation of Lancer Cars. The collaborators in

2006 - till date, Collaborating For Standardization of the Car Carrier Trailer with SIAM.

home state while issuing the National Permit.

2005, Submitted Draft National Road Safety Policy to the 2005 Director of Road Transport & Highway.

detention at the state border for delay and In 2003 the State governments agreed to accept the Demand Draft at the

2005, Submitted the Draft National Road Transport Policy 2005 Suggestions to the Ministry of Highway and Road Transport.

In 2001, 2001 States insist on the Submission of Demand Draft at the State Border on entry into the State and charge penalty,

continues to work hard and raise its benchmark to deliver optimum results to its customers. The company doesnÊt believe in „ One size fit all Solutions‰ instead it offers its customers tailor-made services to meet their precise needs. It believe that high growth companies understand that innovation is what drive growth and it can be only achieved by continuous progress and passion towards work.

Ceat India Road Transportation awards seeks to rewards excellence and innovative thinking in the various aspect of Road Transportation.

No wonder the IRTA jury found Janta Roadways Pvt. Ltd. A clear winner in all aspects of transportation including qualities like passion for performance and caliber in the areas beyond business for his contribution for betterment and development of the Transport Industry.

1998- Founder President of All India Interstate Lorry Owner 1998 Association

2010 Celebrated the INTERNAYTIONAL DRIVER DAY on 14th April first time

LOGISTICS TIMES August 2011

EVENTS

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Electronics Industry Supply Chain Forum

CII Institute of Logistics organised Electronics Industry Supply Chain Forum in Delhi on 22nd July. “Extended Innovations, Extended to SCM,” that was the thematic crux of the day long forum. The critical issue discussed was: how should supply chain players prepare themselves to cater to the demands of the fast growing electronics industry which is slated to become a staggering $400 billion industry by 2020 from the existing base of $50 billion. Some of the important speakers at the forum were: Sukumar Narasimhan, Sr VP Supply Chain, Reliance Industries; Anshuman Singh, MD & CEO, Future Supply Chain; Harpreet Duggal, Sr.VP, Genpact; Tej Nirmal Singh, Director (Logistics), Ericsson; Rex Fryhover, Country Logistics Director – India, Nokia; and Abid Hussain Head - Supply Chain, Honeywell.

LOGISTICS TIMES was media partner of this event LOGISTICS LOGISTI TICS TIMES August 2011

CEAT India Road Transportation Awards 2011

EVENTS

51 1

It is an initiative of CEAT to recognize and felicitate the road transport industry’s achievers, this is India’s first and only fleet excellence awards. This year CEAT received 732 entries for various categories out of which the following six winners were selected:

Transport Personality of the Year Rajinder Singh Bhasin of Janta Roadways from Chennai

Chandra Mohan of Namakkal Transport Company won awards in two categories-Operational excellence & Environmental conservation as well as Customer Experience

Operational excellence & Environmental conservation was bagged by Ramesh Agarwal of Agarwal Packers & Movers from North Zone

Personnel management award was given to Vipul Nanda of Mercurio Palia from North

LOGISTICS TIMES August 2011

EVENTS

52 5

Captains of Logistics

CII institute of Logistics and Drive India Enterprise Solutions Ltd. (DIESL) organised the inaugural round table conference in New Delhi last month. The Conference was part of ‘Captains of Logistics’ - a series of multi city roundtable conferences attended by thought leaders of the industry from respective regions contemplating the various challenges faced in the logistics arena. The roundtable conference was presided over by Ajay Chopra, Chief Executive Officer, DIESL, and the panel included G Sundararaman, Vice President, JCB, Sunil Kumar, Director - Value Chain Execution Solutions, Oracle India & Nihar Barot, Head - Logistics Distribution & Planning, Sony India.

Award for Indian unit

Emirates SkyCargo recently awarded their India team, Emirates SkyCargo India, as the best performers worldwide for the financial year 2010-11 amongst all their teams worldwide. The team was felicitated in a brief ceremony held in Al Bustan Rotana Hotel, Dubai. The India team of Emirates SkyCargo was awarded for their outstanding work in aggressively promoting and educating the trade about e-freight in the country. In the last year, they carried out successful e-freight shipments from all the major cities in India. They also started offering interline capacity of three tonnes from Lucknow. The team had also been putting continuous efforts to consolidate their agents’ network throughout the country.

LOGISTICS TIMES August 2011

RNI No. DELENG-17848/2010-TC