Lt august 2014 net

I

LogisticsTimes

NDIA'S MOST VALUED LOGISTICS MAGAZINE

www.logisticstimes.net

QUICK CHAT ROBERT DE BRUYN

August 2014

EVENTS PPP SUMMIT

` 50 Logistics Times

Available on

Tablets & Smart Phones

Cover Feature

IWAI’s gameplan to transform waterways transportation

The new government is showing willingness to pursue river specific projects. Will it also propel the fortune of inland waterways for freight transportation?

Logistics Times

CONTENTS

All about Transportation, Distribution & Infrastructure

Volume 5: Issue No.4 * August 2014 Raj Misra

Editor in Chief

rajmisra@logisticstimes.net Ritwik Sinha

Editor

ritwik@logisticstimes.net

GM (Marketing)

Rajiv Sharma

Sub Editor

Neha Richariya

Photographer

Mohit Malik

Designer

Kausar Syed

Circulation & Distribution

Kamruddin Saifi

Legal Advisor

Rakesh Garg

Our Bureau Mumbai

Rahul Kumar rahul@logisticstimes.net

Bangalore

B Shekhar shekhar@logisticstimes.net

Chennai

N Raju raju@logisticstimes.net

Hyderabad

Sudhir Kumar sudhir@logisticstimes.net Editorial Advisory Board Paul Lim Founder & President, Supply Chain Asia Pawanexh Kohli CEO/Chief Advisor, NCCD Samir Srivastava Professor, IIM-Lucknow Prof. Akhil Chandra Institute of Logistics & Aviation Management Ramesh Kumar Member, National Committee on Supply Chain & Logistics, Govt. of India

Marketing Coordinator Ph: 011-22478538-39, 9811406654 Email: advt@logisticstimes.net Printer & Publisher Deepa Misra for

E-77, West Vinod Nagar, Delhi -110092 Tel: +91 11 22478538-39, Fax: +91 11 22471764, Mumbai: +91 9322811550 Printed at Personal Graphics & Advertiser Pvt. Ltd. Y -22, Okhla Industrial Area-II, New Delhi-110020

www.logisticstimes.net

24

IWAI’S GAMEPLAN TO TRANSFORM WATERWAYS TRANSPORTATION Edit Note

08

News Brief

10

PERSPECTIVE

42

22

QUICK CHAT

44

EVENTS PPP SUMMIT

38

HIGHWAY LIFE

49

EVENTS GMR-IGI AWARDS

EDIT NOTE

8

No More Water Testing

In all fairness, Inland Waterways Transportation (IWT) segment seems to be yet another ‘high potential, low realization’ story. Many developed and emerging economies have shown how to harness the potential of inland waterways and make it a vibrant component of their idea of a robust multi-modal structure. It’s a proved fact now that Inland Water Transport (IWT) is a fuel efficient (therefore a relatively cheaper mode) and environment friendly mode of transport especially for bulk goods, hazardous goods and over dimensional cargo. And India with its huge river, canals and creeks assets has the potential of developing an efficient inland waterways system which could take off some burden from the congested railways and roadways network. Unfortunately, not much has happened to suggest that we are moving in that direction.

Statistics tell the story. In India, the total cargo volume share of inland waterways is a meager 0.4 percent as against over 8 percent in China and the US and over 40 percent in the case of some European countries. Looking at the share statistics, anybody is entitled to conclude that we have probably not even taken those preliminary baby steps even as we have five notified national waterways and one more waterway is waiting for the final nod from the parliament ( pending for last six years). Nothing surprising, those who aggressively push the theory pertaining to the imperativeness of a robust multi-modal regime in the country will tell you that inland waterway is probably the most complex piece of the jigsaw. It is not to say that other modes do not have problem. But there are visible signposts of change. Take the case of railways for instance. There we have a Dedicated Freight Corridor (DFC) which is slated to commence operations in three-four years’ time and there is this larger hope that it would bring the desired transformation.

So how will the inland waterways story in terms of shaping up as a vibrant mode for freight transportation will unfold in the coming years? This is the moot question our cover feature is addressing this time with the Chairman of Inland Waterways Authority of India (IWAI) Amitabh Verma providing his response to all teething issues in a no-holds-barred style. In an hour long interview to us, Verma did not tend to duck on any issue and made no bones in admitting that inland waterways has by and large been a neglected sector, presenting the historical context as why this segment has got the least attention.

But he was equally assertive in stating that its time has come and it can’t be delayed any further. There are demand pull factors especially for commodities like coal because new power projects are coming up in the country. And this would be one of the dynamo to drive new development in inland waterways. The good news as Verma would like us to believe is that while IWAI is ready with a plan for further development in the existing national waterways (including some mega projects in which the World Bank would be assisting), the new government seems to be ready to display more political will for the cause. Leaf through the cover feature which tends to explain the gameplan of IWAI to drive the inland waterways development in the coming years…

Waiting for your response Ritwik Sinha ritwik@logisticstimes.net LOGISTICS TIMES August 2011

NEWS BRIEFS

10

Signs of revival After a prolong period of declining growth and sluggish investment, the industrial activities seem to be picking up and green shoots in manufacturing sector are finally visible.

The CII Associations’ Council Meeting concluded on 6th August 2014 in New Delhi released the findings of the ASCON survey conducted every quarter and presented the growth of the industrial growth for the April-June 2014 quarter.

The Survey indicates that the industrial activity in the country has posted a positive growth. This is a clear shift from the growth trends witnessed during the last quarter (Jan-March 2014), which presented a dismal industrial growth.

The positive growth in important sectors within the consumer durables including the vehicle industry, white goods industry, recording a growth between 5% - 10%, have largely been responsible for improving the overall industry growth. Sub sectors such as tablets, LED’s and LCD’s, smart phones have achieved phenomenal growth of above 20%. The passenger car segment also, for the first time in last two years, has grown between 5-10%. However, core sectors continue to remain under stress lying in the low growth category. The capital goods sector too, has shown stability in its growth (0%-9%), which also improves the overall industry sentiment.

The CII ASCON Survey categorises the growth range in four broad categories, namely excellent (>20%), good (10-20%), low (0-10%), and negative (<0%) and for this quarter covered 111 industry segments.

According to the survey, number of sectors showing high & excellent growth (10% and above) have increased from 15 in last quarter in Jan-March 2014 to 24 (21.42% of the overall industry segments surveyed) in the quarter April-June 2014.

Commodities such as LEDs/LCD, tablets, air conditioners, smart phones, sugar, ground nut oil, DAP and NP/NPK have shown excellent growth i.e. above 20 percent. Commodities such as 2 wheelers, motorcycles, refrigerators, washing machines, scooter tyre, tractor tyre, rubber hose, rape seeds and mustard LOGISTICS TIMES August 2014

seeds, biscuits, domestic cargo, fertilizer, industrial valves, nylon tyre yarn have recoded a growth between 0%-9 percent.

There is no change in the number of sectors that have registered a low growth rate (0-10%. 58 industry segments (51.78% of the overall industry segments surveyed) have reported a low growth rate (0-10 percent) in April-June 2014.

Commodities such as passenger vehicles, utility vehicles, tractors, textile machinery, industrial gases, Motors (LT), capacitors, Nylon filament yarn, machine tools microwave ovens, audio home theatre, personal computer, bus & truck tyre, industrial tyre, float glass, rubber footwear, drug pharma, alcoholic beverages, electricity, etc have fared low growth (0%-9%), whereas commodities such as commercial vehicles, newsprint, crude oil, power cable, auto component, pumps, energy meters, etc have registered a negative growth.

The good growth of automobile industry is driven by the excise duty cuts announced during the interim budget and its extension during the recent budget of the new government. The excise duty stimulus also comes as a respite to the capital goods sector as well as the white goods sectors.

In spite of overall marginal positive growth, 30 industry segments (26% of the overall industry segments, surveyed) continue to have a negative growth rate, a cause of worry. Further, core sectors such as steel, cement, natural gas, crude oil continue to remain under stress and in the low – negative growth category for the 5th consecutive quarter. This is due to lack of derived demand, stalled mining activities and delayed clearances of projects and investments and in these sectors.

NEWS BRIEFS

11

100% FDI in Railways Infrastructure Moving ahead with the economic reforms, the Union Cabinet recently fully opened up the railway infrastructure segment, like high-speed trains, for foreign investment.

The Cabinet approved a proposal to open up cash-strapped railways to foreign investment by allowing 100 percent FDI in areas such as high-speed train systems, suburban corridors and dedicated freight line projects implemented in PPP mode.

The FDI liberalisation in the sector would help in modernisation and expansion of the railway projects. However, FDI will not be allowed in train operations and safety.

According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore and allowing of FDI will help mop up resources.

The FDI liberalisation in the sector is expected to help in modernisation and expansion of the railways.

At present, there is a ban on any kind of FDI in railways sector except mass rapid transport systems. The move will also help in development of its infrastructure for industrial purposes.

With the FDI nod, the proposed Mumbai-Ahmedabad high speed rail corridor is expected to get a push. The construction of exclusive rail corridor for freight movement is also likely to get a boost.

The FDI proposal for railways was pending for some time with the Home Ministry resisting it, citing concerns with regard to rail infrastructure in border areas.

LOGISTICS TIMES August 2014

NEWS BRIEFS

12

44.5% manufacturing investment projects remained non-starter

Poor execution of investment projects in the manufacturing sector across India has resulted in serious cost-push worth over Rs 4.5 lakh crore as of financial year 2013-14 i.e. about 44 per cent of their actual costs of over Rs 10 lakh crore, noted a just-concluded study by apex industry body ASSOCHAM. These overruns vary from one month to as high as 50 months, placing the project viability at risk.

“Fund constraints, delay in land acquisition, environmental and other clearances together with a host of factors like delay in site handover due to contractual incompleteness, dearth of skilled workforce, use of primitive technologies, law and order problems are affecting the implementation of investment projects in India,” according to a sector-specific study titled, ‘Impact of delay in manufacturing projects,’ conducted

by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Investors also play a significant role in delay in implementation of projects due to a host of reasons like – inappropriate planning, change of ownership, lack of co-ordination with contractors and other stakeholders involved, observed the study prepared

by The ASSOCHAM Economic Research Bureau (AERB).

Private sector based manufacturing investment projects LOGISTICS TIMES August 2014

have majority share of about 65 per cent in projects that have registered cost overruns while public sector owned projects accounted for remaining share of 35 per cent.

Sector-wise, the steel sector has recorded maximum surge of 52 per cent in cost overruns followed by refinery (22 per cent), aluminum and aluminum products (six per cent), added the ASSOCHAM study.

While state-wise, Odisha has acquired maximum share of 27 per cent in cost overruns in manufacturing sectorspecific investment projects across India followed by Jharkhand (13 per cent), Andhra Pradesh (10 per cent), Karnataka (9.6 per cent) and Rajasthan (eight per cent).

However, Rajasthan has recorded highest surge of about 71 per cent in terms of cost escalation as per cent of actual cost of delayed projects followed by Odisha (70 per cent) and Jharkhand (51 per cent).

“The Centre needs to come out with a target-oriented road map both at authority and investor level to prioritize cleaning up delayed projects with focus on effective implementation,” suggested the ASSOCHAM study. “The Government needs to ensure time-bound execution of projects and limit the time-frame for clearance by concerned authorities and penalise them if they are not able to meet deadlines.”

Environmental, CRZ nod for Mundra SEZ

Adani Ports and Special Economic Zone (APSEZ) received the environment and coastal regulation zone

clearance from the Union Ministry for Environment and Forests, for its 8,481 hectares special economic zone in Mundra.

The clearance will now allow APSEZ, which operates India’s only port-based SEZ, to set up a mega desalination plant, an effluent treatment plant and intake of sea water, all of which constitute primary infrastructure to be provided for companies setting up business units in the special economic zone.

The Special Economic Zones are locations carved out from within the country, which are treated as deemed foreign territories from perspective of several economic laws. Industrial units in the SEZ benefit from complete waiver on import duty / excise duty / service tax for capital goods or raw materials procured. Special Economic Zones have been promoted from the point of view of attracting FDI as well as to promote export led growth.

ICD inaugurated at Tarapur Viraj Profiles, the $ 1.5bn leader in stainless steel long products, after its successful operations at CFS, Nhava Sheva has extended its logistics arm by setting up its Inland Container Depot –Vaishno Container Terminal at Tarapur, Maharashtra. Set up at an investment of Rs 90 crores, the Inland Container Depot (ICD) is located at Tarapur- Boisar, in Thane district, at a distance of 150 Kms from the Nhava Sheva Terminals and 128 Kms from Mumbai Port Terminal. The facility was inaugurated by V S Krishnan, IRS, Chief Commissioner of Central Excise, Service Tax and Customs.

Connected by rail and road with the Nhava Sheva Terminal , the Vaishno Container Terminal has paved yard of 11.4 acres for container stacking handling up to 5000 TEU’s per month, with adequate warehousing space of 33000 Sq.ft for Import/Export, LCL/FCL warehousing, as per requirement. State of the art container/cargo handling equipment, trained manpower and its close proximity to the gateway ports are some of the key points which will contribute towards the success of the ICD. Maintenance and repair (M&R) facilities are available for all kinds of repairing, cleaning and sweeping, along with world class safety and security systems.

The Vaishno Container Terminal apart from its

proximity to Mumbai Port Terminal and Nhava Sheva Terminal, provides customs clearance facility near the centre of production and consumption. Speaking on the inauguration, Neeraj R Kochhar, Chairman and Managing Director, Viraj Profiles Ltd., said , “ Being associated with manufacturing for a long time, we realize how important it is for businesses to focus on their core activities and not get distracted by routine tasks, which can be very time consuming and expensive.

As businesses get more globalized, competitiveness is key. Our mission is to provide one stop shop in logistics and deliver operational excellence to the manufacturing units in and around the area.”

LOGISTICS TIMES August 2014

NEWS BRIEFS

13

NEWS BRIEFS

14

DTDC kicks off its 25 years milestone celebration DTDC Courer & Cargo has entered into its 25th year of operations across the world and held a grand event in Bangalore to celebrate this feat recently. The year long celebrations kick started from Bangalore as DTDC had started its operations way back in 1990 from this very city.

In these 25 years, DTDC has shown tremendous commitment towards outstanding leadership and innovation for the development of the express network across the nation. Geopost group, a leading European Express Parcel Service provider is now a strategic partner with DTDC. Through this partnership, DTDC now has access to Geopost group’s international network and its most prominent operating brand DPD which covers the world’s major markets. The GeoPost Group consolidates the Express service subsidiaries of Le Groupe La Poste and is a major player in express services in Europe. It operates in over 230 countries on behalf of over 300,000 customers worldwide and is no.1 in France and no.2 at European level on the express parcel market.

DTDC has also taken on board IBM as an engagement partner as part of its 5 year endto-end business transformation program which aims at streamlining operations and processes while leveraging technology.

To mark the beginning of the silver jubilee celebrations, DTDC has created its signature theme song ‘Sapnon se Aage - The Supply Chain of Happiness Anthem’ which has been sung by stalwarts of the music industry, Shankar and Siddharth Mahadevan. The music has been composed by Raghu Dixit and the lyrics have been penned by Ankur Tewari and DTDC’s Executive Director, Abhishek Chakraborty. The song captures the essence of breaking barriers and fearlessly reaching out to the last mile and is an inspiration for every individual to have a dream and dare to deliver it. The song celebrates DTDC’s core philosophy of managing the logistics needed to help customers and stakeholders achieve their goals and fulfil their dreams, or in other words the ‘Supply Chain of Happiness’. The video showcasing 25 years of DTDC’s journey was launched at the Grand Event held yesterday in honour of all the people who have been part of DTDC’s 25 years journey.

To further augment the 25 year celebrations, DTDC LOGISTICS TIMES August 2014

flagged off a specially designed 18 seater fully branded vehicle which has travelled throughout the state of Karnataka to all the branches and franchisee offices located in the interiors. On its way to the offices in Belgaum and Hubli, the vehicle was accompanied by local folk dance troops and a huge procession of bikers, cars and buses that followed the DTDC branded vehicle to its respective destinations. Subhashish Chakraborty, Chairman and Managing Director, DTDC lead the procession which was succeeded by visits to local NGOs in both Belgaum & Hubli.

“A key part of the success of the DTDC network is the contribution of the people behind it. For 25 years, the employees and franchisees have dedicated themselves to helping our customers connect to the world. This is an amazing place to work, full of excitement and extraordinary challenges—no two days are the same.

Today, more than 25,000 of our team members mark this milestone with a spirit of service and dedication, ensuring that celebrating 25 years is only the beginning”, said Subhasish Chakraborty on the occasion.

NEWS BRIEFS

15

Celebi India gets new CEO Celebi Aviation recently announced appointing Murali Ramachandran as CEO,India.He will be responsible for aviation activities (particularly ground handling and cargo) of Celebi in India as well as in the Indian subcontinent. His main responsibility would be to stimulate the growth of Celebiâ&#x20AC;&#x2122;s presence and ground handling and cargo companies CEOs will report to Murali Ramachandran.

Ramachandran graduated from Institute of Hotel Management (National Council) and mastered on Management from Welcomgroup Management Institution. He started his career in 1990 and worked 13 years for ITC hotels and during this time carried out executive positions. He joined Jet Airways in Mumbai Airport as a General Manager in 2003 and later he was promoted to Senior General Manager in charge of all India Airports in 2006. He joined Kingfisher Airlines in 2007 as Vice President for Ground Services.

Ramachandran was promoted to Senior Vice President and at the same time was in charge of Cargo Sales and Services department in 2010. Prior to joining Ă&#x2021;elebi, Ramachandran was heading the airport operations

of Mumbai International Airport in the capacity of Executive Vice President, Operations.

LOGISTICS TIMES August 2014

EMERGING TRENDS

16

Global E-Tailing 2025

E-commerce and logistics globally set for growth Over the next ten years, online retail will gain even more importance than expected so far – not just in developed countries, but also in emerging markets. Logistics will play a key role: it provides companies important competitive advantages, such as deliveries within a few hours on the day of ordering, flexible receiving and return times as well as resilient logistics and value-added concepts in emerging countries.

This is one of the key findings of the “Global E-Tailing 2025” study, initiated by Deutsche Post DHL with participation of the trend research institutions Z_punkt and See More as well as numerous international experts from retail, logistics and academia. It is the first global scenario study on cross-border online commerce and its implications for the logistics industry.

In four scenarios the study shows what the electronic world of shopping around the globe could look like for consumers and businesses in the near future.

The different future projections are based on a detailed analysis of the most influential factors – from energy and raw material prices to technological, political and social factors to retail and consumption patterns. The scenarios also outline possible effects of changes to society’s value system by 2025.

LOGISTICS TIMES August 2014

more than today. We as a logistics company have a good overview on companies in various industries in almost all countries of the world.

That’s why we increasingly become an advisor and partner for success.”

The research examined selected developed and emerging markets around the world. Trend scouts also studied purchasing and logistics trends in 12 international metropolises – among them New York, Moscow, Bangalore, Jakarta and Lagos. These consumer insights anchor the scenarios in today’s world and increase their plausibility.

Today e-commerce makes up eight

In the first scenario, today’s emerging markets will be the engine

percent of the overall trading volume in Europe already. Depending on the scenario, this share could rise up to 40 percent in developed countries and up to 30 percent in today’s emerging markets. Jürgen Gerdes, CEO Post - eCommerce - Parcel at Deutsche Post DHL: “In the future, logistics will take over the role as an enabler for online retailers even

of growth 11 years from now. A strong global economy and a stable middle class will have established a true “Everywhere Commerce”.

Consumers will receive their purchases much faster than today, with Express shipments being delivered in less than 24 hours and measured in minutes. In a different scenario a highly developed digital

From a highly developed digital culture to Do-It-Yourself

EMERGING TRENDS

20

culture has evolved, in which almost all products will be sold online and consumers will receive support by avatars. To protect manufacturers from counterfeit, logistics companies will offer protected supply chains.

However, the study not just portrays positive future projections of worldwide e-tailing, but also possible crisis scenarios. Scenario four outlines how the worldwide consumption patterns develop after the global economy will have suffered another financial crisis and energy and raw material prices have risen considerably. Under these circumstances, people could adopt a Do-It-Yourself mentality instead and sharing models instead of the “all new” approach.

Changed consumer behavior influences retail sector

The scenario analysis is supplemented by multiple essays from renowned logistics experts: Prof. Dr. Dirk Moschett of Fribourg University in Switzerland underpins the necessity for all of society to bundle supply flows more efficiently. Professor Geritt Heinemann, of the University of the Lower Rhine elaborates in his “E-Pace” contribution on the importance of timing for the success of online retail. Professor Shashi Matta of Ohio State University analyses how changes in consumer behavior, e.g. trends such as sustainability or crowdshaping, affect online retail. Best practice solutions, which Deutsche Post DHL already implemented for electronic retail, showcase the range of solutions and service in logistics.

All scenarios and contributions have in common that the competition in electronic retail, whether on global, national or regional level, will become more intense. Jürgen Gerdes: “We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector – online and offline – is changing and LOGISTICS TIMES August 2014

Over the next ten years, online retail will gain even more importance than expected so far – not just in developed countries, but also in emerging markets. Logistics will play a key role: it provides companies important competitive advantages, such as deliveries within a few hours on the day of ordering, flexible receiving and return times as well as resilient logistics and value-added concepts in emerging countries. that logistics will be a focal point of these change processes.”

Deutsche Post DHL’s strategy 2020 including the pillars Focus, Connect and Grow shows that the Group is in an excellent position for these developments. A part of this strategy is to expand the group’s leading position in e-commerce related logistics – in Germany, Europe, and beyond. An essential

pillar of this expansion is the division Post - eCommerce - Parcel.

“As the most international company in the logistics industry, we’re destined to establish our successful e-commerce related B2C business in non-European markets. We see huge potential to become the world’s leading provider for e-commerce logistics in a few years”, emphasizes Jürgen Gerdes.

Brand Differentiation to Revolutionise Global Luxury Car Market by 2020 Original equipment manufacturers (OEMs) in the increasingly competitive global luxury car market are exploring new means of differentiating and positioning their brand in a bid to gain an edge over the competition. Luxury automotive OEMs are also adapting to various emerging social as well as technology trends to keep pace with consumer demand. For instance, smaller, fuelefficient luxury cars are gaining popularity since size is no longer the key definition of a luxury vehicle.

New analysis from Frost & Sullivan, Future of the Global Luxury Vehicle Market, finds that compact sedans, SUVs and crossovers will be the next big thing as the line between luxury and premium vehicles blurs. More mass market OEMs are launching luxury models while traditional luxury OEMs are stretching downward by offering models in smaller segments.

Often these models are available at a lower price point. The need to reduce product development costs has also led to increased platform sharing between mass and luxury cars.

“OEMs have to strike a fine balance while differentiating between volume and luxury models. While brand perception, price and buyer’s experience remain important; cutting edge technology under the hood, improved connectivity inside the car, and bold aerodynamic design are factors that give a luxury car something extra that elevates and

Compact sedans, SUVs and crossovers will be the next big thing as the line between luxury and premium vehicles blurs. More mass market OEMs are launching luxury models while traditional luxury OEMs are stretching downward by offering models in smaller segments. sets it apart from the crowd ,” says Frost & Sullivan Automotive and Transportation Research Analyst.

One differentiation strategy is to offer value-added features such as 3-D video display graphics and collision-avoidance systems as standard fitment in luxury models.

Connectivity and autonomous driving too are evolving into key parameters by which a brand will be judged in the future.

“Entry level luxury cars that offer unparalleled smart mobility technologies and connected services will make inroads into the

global market, especially since Gen X and Y are expected to account for a majority of the luxury sales over the next few years,” notes the Analyst. “Luxury makers like Daimler and BMW are introducing the CLA sedan and 3 series models at around $30,000 in anticipation of this trend.”

Further, luxury OEMs are investing in data mining and analytics to enable a seamless transition from online to offline tools and deliver a unique digital brand experience for customers in the luxury vehicle domain.

LOGISTICS TIMES August 2014

EMERGING TRENDS

21

QUICK CHAT

22

“Our emphasis is on superior after sales service” BITZER, the world’s largest private compressor manufacturer, has recently shown the signs of expanding its wings in the Indian market.

The company has been present in the country since 2007 and now believes it has built up a base to cater to the different business segments.

Robert de Bruyn, Managing Director of BITZER (India) speaks on the broader growth strategy which the company has planned in an exclusive chat with Ritwik Sinha. Excerpts: The growth rate in India has considerably dipped in the recent years. In this kind of environment, businesses tend to cut down on expenditure including those on advanced machinery. What is your assessment of the situation and how would you explain your own India strategy?

The response which we have been receiving from our customers and prospective customers has been quite positive. We are a high technology, old German family business and our engineering products are considered to be quite exceptional all over the world. When we came in India as a subsidiary unit, the first thing we realized was that we need to have a very vibrant after sales division.

We ensured that customers who are purchasing our equipments must quickly get all kinds of maintenance and repair service from us. And as part of that strategy, we have opened service centers at a host of strategic points in India – Kolkata, Banglore, Mumbai and New Delhi. Today we have offices in all the major cities.

Our prospects for further growth are very positive and we are satisfied as we believe that we are on the right path.

LOGISTICS TIMES August 2014

23

You asked about how we have faced the economic blip here? My feeling is that BITZER did not participate there. During this spell, we have been largely busy in laying out our infrastructure and understanding the domestic market conditions.

So you remained untouched by the blip because you had a low base…

Of course. But as I said our growth has been particularly been driven by the precision which we maintain in after sales. The brand center will not be used for any commercial activities, as BITZER will continue to sell only through its authorized distributors and OEMs. The demo center will provide an opportunity to increase our interactions with end customers and enable them to experience the entire range of BITZER products under one roof.

The BITZER Group is the world’s largest independent manufacturer of refrigeration compressors with sales companies and manufacturing facilities for reciprocating, screw and scroll compressors and pressure vessels all over the globe.

As a company, how much is BITZER aligned with the requirements of players in the logistics and supply chain space especially in emerging economies like China and India?

In the emerging economies, a clear development is the growing demand of cold chain systems.

We are focusing very heavily on this sector. For example in India, companies like Coldstar, Crystal, etc. have already become our major customers. It is very important to understand that cold chain means the transportation from the farm gate to the retail point and BITZER with its range of products have an important part to play.

How strategically important is Asia for your business?

It has become very important

We have opened service centers at a host of strategic points in India – Kolkata, Banglore, Mumbai and New Delhi. Today we have offices in all the major cities. Our prospects for further growth are very positive and we believe that we are on the right path. accounting for 30 percent of our sales and India is a part of this story.

We have a big manufacturing unit in China where we are positioned for past 20 years.

Any possibility of BITZER looking for manufacturing opportunity in India?

It is a little early right now. But I can anticipate that at some stage we may contemplate setting up a manufacturing unit here. It certainly would be based on our analysis of volumes. But the market is growing very rapidly and there might be the need of local manufacturing in the future.

Do you have a five-ten years

gameplan ready for India? Is there any particular number you would like to chase?

We certainly have a very longterm plan for India. And a clear emphasis for us would be to train local workforce which should be attuned to the technological changes happening in the world as well as changing demand of the customers. As for numbers, we have been growing at an annualized rate of 36 percent in the Indian market and we believe this robust trajectory will be maintained in the coming years as well. I don’t see any reason why it will change. Development in logistics and air-conditioning would be major growth areas.

LOGISTICS TIMES August 2014

COVER FEATURE

24

❛ IWAI’s gameplan to transform waterways transportation

❛

LOGISTICS TIMES August 2014

25

Statistics tell the story in no uncertain terms.

With a meager share of just 0.4 percent in the total cargo movement within the country, the Indian Inland Waterways story hardly seems to have any punch. The realization is more painful when one analyses the trends in countries like China, the US (both with 8 percent share trajectory) and some countries of Europe where their share in the pie is as hefty as 40 percent.

Simply put, a colossal missed opportunity for the country.

But with a new government in saddle and showing willingness to undertake river specific projects to harness the potential of countryâ&#x20AC;&#x2122;s waterways in all possible aspects, will inland waterways as a mode for freight transportation be also pushed to the state of vibrancy?

Amitabh Verma, Chairman, Inland Waterways Authority of India (IWAI) exudes confidence that inland waterways transportation is all set to shun its image of a neglected segment and there would be plenty of actions in the coming years. In an exclusive conversation with Ritwik Sinha, he explained the broader direction and strategy which the authority would pursue going ahead. Edited excerpts:

LOGISTICS TIMES August 2014

COVER FEATURE

26

I am afraid, probably I am beginning this interview on a negative note.

The perception about Inland Waterways Authority of India (IWAI) is not all that positive in the market.

Nobody is ready to call you a very pro-active organization which has successfully spearheaded the task of developing India’s inland waterways systems in a way that it should significantly contribute to the national economy – something which it is quite capable of as the examples of some other countries show. How would you respond to it?

Amitabh Verma Chairman IWAI LOGISTICS TIMES August 2014

To respond to this question, we need to look at the background first. Like many other countries, water transport has been a very traditional mode of transport here as well. It was used by the Britishers, the Mughals, and much before that. People have been using this traditional mode of transport and there are plenty of stories about this. But somewhere in our zeal for modernization and progressive approach in the modern era, we started to see growth in terms of how well is railways network established, how good the airport system and highways are. Since these modes were believed to have been the speed factor in their favour vis-à-vis waterways, they got more attention from the government.

As chairman of IWAI, I find no issue in these sectors getting so much of government focus. But that also led to the neglect of Inland water transport sector. And while railways network improve turned out to be consistent process since independence, the IWAI was set up much later, in 1986. And between 1986 to 2010, the total investment in improving inland waterways transport has been a meager Rs 1100 crore. It was only during the eleventh five year plan that focus on it increased substantially. But still if you compare that with investments which have been made in China and Germany, we are lagging far behind. Germany for example has 7300 km of waterways but 15 billion euro was budgeted in a single

27

year recently. In China, in last five years $15.6 billion has been invested in inland waterways. So we need to upscale the investments in this sector. That should be our first priority. And this is more important than ever before now that the demand is growing exponentially of bulk commodities.

How would you explain the existing physical structure of inland waterways in the country today?

As of now, we have five national waterways declared. There is a cumbersome process of declaring national waterways since every waterway has to be declared by a law made by the parliament. There is a long legal process wherein the consent of the state government is also required because water is a state subject. But coming to the present structure, we have 5 national waterways declared so far. NW1 stretches from Allahabad to Haldia on the Ganges and its length is 1620 km; NW2 from Dhubri to Sadiya which is about 890 km; NW3 is the backwaters of Kerala running stretch of 205 km from Kochi to Kollam.

These are the three waterways which are operational - may be somewhat under utilized but they are functional.

NW 4 and NW5 were declared in 2008.

No dredging work has started as yet.

But we have sanctioned projects in NW 4 which is about 890 km running from Kakinada in Andhra Pradesh to Puducherry. There we have sanctioned a project for the revival of Buckingham canal which is a stretch of 37 km as of now. There are some issues with the state government regarding the availability of the land for construction of terminals, dumping sites and some CRZ clearance is required. It will be sorted out in two months and then the work will start. And then NW 5 which is Mahanadi Delta and the Brahmani river in Odisha. It is from Paradip, Dhamra to Talcher. We have already signed MoU with Odisha government, Paradip and Dhamra ports. The deal was inked on 30th June and the role and responsibilities of all the four

concerned parties including IWAI have been listed out. I believe the work in this project will take off in three months. And that is also going to be a very viable stretch because you have a lot of industrial units, power plants around Talcher and Kalinga Nagar.

Then NW 6 is under process of being legislated – Barak river in Assam. It is 120 km stretch. So these are the six waterways – one is still to be notified; two notified and preliminary work is about to commence (by December) and in the remaining three, some movement of cargo is happening and we are trying to develop them further.

❛

And what’s broadly the volume of total cargo transported through

been on water navigation and it has not been treated as a national priority.

The water related issues which are important to us relates to drinking, industrial use, hydro-electricity, irrigation but not transportation. Only some of the coastal states seem to have understood the importance of water movement - Odisa, Tamil Nadu and Kerala are in that category. Other states have by and large not utilized the water for navigation purposes. In the last ten years, we have found that a lot of construction happened over the waterways which are clear obstacle for free navigation in the future. So we have written to state governments asking them to classify their rivers, at least maintain any construction happening

The total cargo moved by inland waterways in the country is in the range of 55-60 million tonnes. It is quite low if we compare it with other countries.

The share of inland waterways is 0.4 percent in terms of total cargo volume transported in the country using all modes. In China, this share is 8.3 and about 8 percent in the US. And over 40 percent in Germany and Netherlands. inland waterways every year?

It is in the range of 55-60 million tonnes. It is quite low if we compare it with other countries. The share of inland waterways is 0.4 percent in terms of total cargo volume transported in the country using all modes. In China, this share is 8.3 and about 8 percent in the US. And over 40 percent in Germany and Netherlands.

How would you explain the structural problems? One perception is that the state governments are not very enthusiastic about it.

I would say the overall focus has not

over them and maintain the prescribed horizontal and vertical clearances so that in the future if we have to use them for navigational purposes, the potential still exists.

I have heard you before and you seem to be in favour of allowing IWTA to operate like National Highways Authority of India (NHAI) . What’s the rationale behind that?

Declaration of a national waterway and declaration of a national highway are mentioned in the seventh schedule of the constitution. There is entry 23 LOGISTICS TIMES August 2014

COVER FEATURE

28

Maps of existing National Waterways

LOGISTICS TIMES August 2014

29

LOGISTICS TIMES August 2014

COVER FEATURE

30

for national highways, 20 and 24 for national waterways. While the entry for national highways stipulates that a highway can be declared national highway under a law made by the parliament, in the case of national waterways it does not say under a law made by the parliament. It rather says by law made by the parliament. So there is a small distinction. I don’t know why this distinction is there but in the view of the law ministry is that it has to be done by the law of the parliament every time. We are trying to look at it and review the whole procedure again.

If that happens then entire procedure will get slightly simplified and maybe then the government will notify some more waterways. Otherwise the process is so long it works as disincentive. NW 6 is waiting for the final parliamentary clearance for last six years.

The new government is clearly speaking about initiating a host of rive specific projects. Do you expect Inland Waterways to also pick up the momentum and get to a position of prominence which it deserves?

This government is definitely showing more political will to start movement on the waterways. There is focus of the government in interlinking of the rivers also which we feel is important because the standalone national waterways do not have much meaning unless you have feeder waterways coming and linking it. So we are trying to work on the proposal to set up the grids for the national waterways movement. For instance, for national highways you have state highways as the feeder. So we develop the concept of state waterways where smaller barges can move, they will join the national waterways, there can be trans-shipment, the cargo should move to the bigger barge and then they move to the port.

Apart from the political will, there is also demand. There are many who firmly believe and I am one of them, that the pace at which the railways has been growing it can’t cater to the LOGISTICS TIMES August 2014

growing demand of the infrastructure companies like the power plants, steel plant, fertilizer and cement plant and even foodgrain movement. So the bulk movement requirement is such that it can’t happen through the rail network and the road network in the coming years. For example, in the Ganges belt alone you will have about 21 power plants in the next seven-eight years.

Ten already exist and 11 have been sanctioned. And their coal requirement can’t be met by railways alone. It has to be waterways network. Railways infrastructure set up is expensive, rehabilitation and relocation of the population is involved, environmental clearance is required and land

❛

But have we decided to do something at the eleventh hour when demand pressure is forcing us to look at a neglected option?

Believe me, in last three-four years some considerable initiatives have been set afoot. But the projects have their own gestation period and its only when they start producing results that they will get noticed. We at IWAI did not look at business development as our role till three years back. In the country you have railways board, Airport Authority of India, National Highways Authority of India and Inland Waterways Authority. The NHAI gets the highway constructed and then it does not bother about developing business on that

This government is definitely showing more political will to start movement on the waterways.

There is focus of the government in interlinking of the rivers also which we feel is important because the standalone national waterways do not have much meaning unless you have feeder waterways coming and linking it. acquisition is needed. Inland waterways, on the other hand is much cheaper. The maintenance of waterways infra is also cheaper. And whatever is created in the railways infrastructure, a lot of that has to be transferred to the passenger segment. But in the case of waterways, a very small chunk would be meant for the passenger movement. So if you undertake a cost benefit analysis, you will find that it is more economical and there is a demand. There is no option now rather than developing it aggressively. And that is why the government is rightly placing its focus on inland waterways transport system.

because people out there in the market know how to make use of it. But in the waterways, we don’t have the luxury of the same pattern. We have to also promote business here. We have to indentify the companies which want to move the cargo on that stretch, we have to identify the operators who can move the barges, we have to facilitate a tieup between them and ensure that there is a long term commitment for cargo movement. Unless there is a long-term commitment from a shipper, you will not have operators investing in barges.

The cost of one barge with a capacity of about 2000 tonnes is about Rs 9 crore.

So if any operator wants to have a fleet

31

of say 10 barges, his investment would be Rs 90 crore and he will never shell out this kind of money unless he has longterm commitments. To demonstrate the success or the feasibility of this on the waterways, Inland Waterways Authority took up the coal movement for the Farakka powerplant of NTPC. There the infrastructure has been built by a private player. They have installed a trans-shipper in the Bay of Bengal.

The coal comes from Indonesia, it is transferred to the trans-shipper, placed in the smaller barges which move to Farakka where there is a hopper. Coal is put on the hopper through the conveyor belt and gets to the stockyard of NTPC. On the similar model, we are trying to develop the coal movement for Barh plant of NTPC. On the Ganges itself you will have two such business development proposals which have been facilitated by the IWAI. After Farakka success story, a lot of enquiries have come to us and interested parties want to know how they can move their commodities in a similar manner. We are trying to activate prospective barge operators, who will be willing to put in their money, especially the merchant navy personnel who have quit sailing and now on shore. They are experienced people, they have the technical know how, they have sufficient amount of money too. We are also talking with bankers and financial institutions to ensure that they take up the financing of barge construction in a big way in the country.

You are also probably talking to the World Bank to set afoot some large scale projects. Please share some details.

NW 1 runs between Allahabad and Haldia and so far we have been able to develop from Haldia to Buxar which is just short of Varanasi. But beyond Buxar to Varanasi and Varanasi to Allahabad, developing the route has been slightly difficult though we maintain about 1.2 meters of depth. But we need to enhance the depth level and for that we need to construct two barrages each

between Buxar to Varanasi and Varanasi to Allahabad. The construction of these four barrages would require huge expenditure. But a lot of infrastructure projects are coming up along this route. For instance, NTPC is setting up a plant at Kathua. We also need to link Sahebganj in Jharkhand to load coal and other minerals. So putting up more terminals will be important. We are working on a proposal to put some more terminals on NW1, construct four barrages and to deepen the fairway and maintaining 3 meter depth throughout the Ganges in about fourfive years time. And then maintain a sound navigational assistance system

❛

That was the project with the World Bank. I would like to understand from you, has any estimate been made pertaining to the total quantum of investments which may be required over a period of next five-ten years to ensure that inland waterways become a more robust mode of transportation?

We had given a project to RITES about a year back. And they have presented their report. Based on that, we have made a plan for a national waterways grid. NW 3 and NW4 which are in Kerala and Tamil Nadu respectively can’t be interlinked with the other waterways.

But the remaining waterways NW1,

We have already done a basic calculation which earmarks that investments worth Rs 24,000 crore will be needed in the next eight years to give the desired facelift to our waterways infrastructure.

This would also be able to attract Rs. 60,000-70,000 crore of private investment – in construction of barges and some terminal construction would be proposed under the PPP model or we may ask the private players to do it independently.

like providing river information system facility, electronic navigation chart, etc.

All this will require huge amount of investment – roughly about Rs 5000 crore. Initial assessment which we had made entailed investment of Rs 4200 crore. We posed this project to the World Bank which in principal has agreed and has sanctioned a $15 million advanced loan. We have already constituted a project management unit, advertised for the appointment of consultants, the DPR should be ready by March 2015 and then we would actually get to the implementation part.

NW2, NW5 and the proposed NW6 at the Indo-Bangladesh protocol route could be part of it. We have already done a basic calculation which earmarks that investments worth Rs 24,000 crore will be needed in the next eight years to give the desired facelift to our waterways infrastructure. This would also be able to attract Rs. 60,000-70,000 crore of private investment – in construction of barges and some terminal construction would be proposed under the PPP model or we may ask the private players to do it independently. So this proposal is presently under the consideration of LOGISTICS TIMES August 2014

COVER FEATURE

32

the government.

Leading countries/region in IWT utilisation

So Rs 24,000 crore of investment will come from the public sector and this you believe will propel the private sector to come forward aggressively?

That is what we have proposed. There is no final decision of the government on that but there is a RITES study and on the basis of that we have made this conclusion meant to galvanize six waterways. If additional waterways get declared in the future then obviously the expenditure will increase. But to provide rail, port and road connectivity with the inland waterways system, we need an investment of Rs 24,000 crore in next eight years and we believe that the private sector will also pitch in big time.

You must be in constant touch with the private sector players. Tell me, do you really believe that they could get so enthusiastic as to put on the table an investment of over Rs 50,000 crore which you are talking about?

I can tell you that we are receiving enquiries on every day basis now. And this trend has gone up especially after the arrival of the new government.

On the financial front, what kind of special scheme you can suggest for private operators in terms of assistance from the banks and the financial institutions?

In the waterways transport segment, four category of players are involved.

One is IWAI which will develop the waterways, provide the terminal facilities and the navigation aids.

Second is the shipper who wants to move his cargo and he should be willing to make a long-term commitment.

Third is the barge operator who has to construct his barges since they can’t readily come off the shelf. And then for the construction of the barges, you need finances. And here banking and lending agencies have a major role to play. There are certain issues in this LOGISTICS TIMES August 2014

❛

I can tell you that we are receiving enquiries on every day basis now. And this trend has gone up especially after the arrival of the new government.

as we had seen issues in the financing of national highways and power plants earlier. There are certain restrictions on the insurance part, margin money required, repayment period, etc. We are closely examining these issues and looking for permanent solutions. We believe we will require 400-500 new barges in the market in next four-five years.

You have broadly spoken about next eight years roadmap. Tell me, in realistic terms what all can be initiated in next three years?

In next three years, NW5 that is in Odisa, you will have Dhamra, Paradip connected till Kalinganagar. It will be fully operational and work would be started to connect Talcher with private players also putting up their infrastructure. Secondly, in NW4 which

is between Kakinada to Puducherry, we have already sanctioned the project and we would be starting the work by December – 37 km stretch would be further expanded. In NW3, the patch which has not been covered will be completed by June 2015. We already have 13 terminals there. NW1, the World Bank project would start from April 2015. In next three years, I expect 50 percent of this project would be over – construction of barrages would have happened.

So you are hopeful that some signposts would emerge in next three years?

It has to happen, there is no other option. Otherwise you will have a situation wherein you will set up your power plants and they will all operate below their capacity.

OPINION

34

A Feasible Solution Inland water transport (IWT) in India forms a miniscule part of the total transport network even though India is endowed with a large number of perennial rivers, which can become navigable.

IWT is the most energy efficient, economical and environment friendly mode of transport for the movement of cargo. The annual cargo moved by IWT in 2000 was about 1.5 billion tone kilometers out of the total cargo market of 1000 billion tone kilometers, which makes a modal share of mere 0.15%.

The Inland Waterway Authority of India (IWAI) was formed in October 1986; nearly 30 years have passed and regular cargo movement on NW1- Ganga-Bhagirithi-Hoogly river system – considered the country’s most important inland waterway, is yet to start in right earnest.

At present 55 million tonnes of cargo is being moved on IWT, which is 0.5% of the total cargo movement in India; as compared to this China moves 8.7%, US 8.3%

Dr. Veni Mathur Ex-faculty, IIT, Delhi Dean, Million Minds

cargo).(Refer to the chart above) Other examples are –

X Coal for thermal power plants on Ganga and Brahamputra X Coal for NTPC – Farrakka project X Cement from Farrakka to Nabadweep, Bhagalpur and Patna X Cargo for Hydel-power projects in Arunachal Pradesh X Shift of hazardous cargo like POL products from road During a study carried out on feasibility of movement of cargo

2. Increased deforestation causing erosion and deposition of silt on the river beds 3. Non availability of adequate navigational aids resulting in unsafe passage and high travel time 4. Adequate terminal facilities for loading and unloading are non existent 5. Gradual deterioration of waterways due to lack of conservancy measures 6. Need to integrate inland waterways with national highways or rail network Several committees including the NTPC report strongly highlighted the need to improve IWT system.

The Parliamentary Standing Committee has recommended Rs. 10.500 crores investment for developing IWT during the 12th plan, for creation of infrastructure and modernization of existing waterways.

However, if a SWOT Analysis is carried out, then the situation becomes clear and solutions can be found for developing IWT sector to

Rail with Coastal Shipping or IWT from Okha in Gujarat to Pandu in Guwahati – FLY ASH MOVEMENT MODE

TRANSPORT COST (Rs)

TRANSPORT COST (Rs)

TONNES

TKMS

Coastal Shipping & IWT

1793

0.30

Rail

1828

0.65

Source: TCS (2004) and Europe 7% of cargo on inland waterways.

It has been proved that IWT has a cost advantage over rail and road, especially for the movement of bulk cargo (cement & coal) and project related ODC (over dimension LOGISTICS TIMES August 2014

on NW1 and NW2, the following constraints were identified – 1. Diversion of water for irrigation and other industrial needs reduces the flow of water in the rivers causing in reduction of depth

accelerate the economic growth.

Strengths:

X India has 14,500kms of inland waterways comprising of rivers, lakes and canals and IWT could play a major role in augmenting

37

the transport infrastructure.

X IWT is very cost effective: to develop 1km of highway the cost is Rs. 6 crores, with much less amount 100kms of waterways can be developed.

X Ideal for the movement of hazardous cargo: Kerala Shipping and Inland Navigation Corporation is planning to move all POL products by waterways due to heavy losses in road accidents X IWT has an advantage over railways and roadways in terms of energy consumption; the ratio works out to be 1; 1.5; 4 respectively.

X With a small increase in depth, the carrying capacity on IWT can be doubled X In case of accidents the loss to human lives is the minimum on IWT as compared to other modes X IWT has six floating and eight temporary terminals while Dhubri, Jogighopa and Tezpur are under construction.

Weaknesses:

X No night navigation and communication facilities and freight handling facilities at the terminals X No proper channel marking and creation and maintenance of adequate depth, which cause damage to vessels.

X Weak bundling techniques used that washes away with strong

current.

X Difference in levels of terminals and approach roads making moving of cargo difficult.

X Lack of infrastructure fails to attract private investment X Stiff competition from rail and roadways are key deterrents.

X There is need to set up IWT training institutes to train the manpower.

Opportunities:

X Mechanical loading and night navigation facilities would help reduce time for movement.

X Improved connectivity and employment opportunities and development of Project Influence Area.

X For Assam, the development of NW 2 would become a major source of transportation and growth.

X There is need of Multi-agency involvement for providing door to door services.

X The India-Bangladesh Protocol on Trade and Transit has been in force for more than 40 years: it should be utilized for movement of cargo.

X In April 2008, India and Myanmar signed an agreement for construction and operating a multi-modal transport facility on the Kaladan connecting Myanmarâ&#x20AC;&#x2122;s Sittwe port with Mizoram: there is need to carry it forward.

X More such agreements need to

be made with China, Nepal and Bhutan for the expansion of waterways.

X The water Transport Policy should include replacement of age-old conventional vessels by state-of-the-art vessels.

Challenges:

X High investment cost: cannot be recovered from beneficiaries.

X Negative FIRR when a feasibility study is carried out: need for huge subsidy by Government.

X Between Farraka and Patna, from November to April, LAD decreases due to heavy silting.

X Water level low between November & February in Brahmaputra River.

The marketing strategies aimed at converting opportunities into strengths and overcoming the threats to IWT sector is the need of the hour. Increasing the tonnage should be an important marketing strategy rather than increasing the freight rate; this will reduce the subsidy burden on government.

IWT represents an opportunity to keep the process of production smooth without any choking as barges provide an opportunity of maintaining mobile buffer stock.

However, if inland waterways are developed with the necessary infrastructure such as fairway, terminals and navigational aids, the IWT mode could become quite competitive and attract considerable cargo.

LOGISTICS TIMES August 2014

HIGHWAY LIFE

38

What’s Your Shoe Size, Rajkumar-ji?

Who is Raj Kumar? Why am I worried about his footwear dimensions?

Relevant questions to start with. Actually, this is an irrelevant query today.

Why? Until 26 June 2014, he - like you and I - had two hands. Two legs etcetra etcetra. Today, we are not on the same page. He has two hands, of course even this day. But, not two legs. Then? He is handicapped. Half of his left leg beneath the knee is missing. Yes, he has no feet. Just a stump does reach the zameen (ground). No toes, obviously. That's the reality.

What happened?

In the early hours of June 26, 2014 Raj, driving a Tata truck with ACC cement from Rahul Gandhi's Amethi constituency to a buyer in Etawah - the karma bhoomi of former Uttar Pradesh Chief Minister and a powerful political neta and, above all, the father of current Chief Minister Akhilesh - met with a dastardly accident on National Highway 2 near Etawah.

In the bargain, his legs got crushed, warranting amputation. As far as his right leg is concerned, the big toe and adjacent ones got detached and the status is still unclear as it is bandaged on the day of my visit (August 1) to him at JK Hospital, on the Farukhabad road (NH92).

So, henceforth, it would be difficult for this 33 year old resident of Auriya - 50 km from Etawah where he lives with his wife, two kids, parents and two brothers (one elder and another younger) to earn his livelihood by driving trucks for New Gupta Transport Company of Etawah again. Does he want to?

“Enough (of his truck driving),” interjects his wife, Sangeeta, with a scorn and holding four year LOGISTICS TIMES August 2014

Ramesh Kumar

daughter Gowri on her shoulders, standing next to the handicapped husband, whom she married 12 summers ago.

What irks Raj and his parivar is the alleged apathy of motor maliks post accident. “They (motor maliks) don’t care... We don’t exist for them if we can’t drive (their trucks),” blurts out the occupant of Bed No.12 on the second floor of the private hospital, remotely linked to the UP Chief Minister, in a fit of self-pity. It appears to be one of the finest private hospitals in Etawah, but the catch is that it has just one physician in the form of owner Dr. Manoj Yadav, whose medical degree is just basic, it is alleged.

A large section of patients in this premises, however, speak positively about him because of his ability to get the best available doctor anywhere in Uttar Pradesh to treat the patients of JK Hospital. How he achieves this ‘stardom’ is a different story altogether. But our man, Raj, is happy that his ‘pain is bearable’ ever since he moved out of Kanpur and Lucknow government hospitals to this private one a few days ago.

Who is going to pay his medical bills? Raj looks at his brother in law, Brijesh. “We are pooling whatever we have in the family and trying to meet the expenses,” and hastens to add that it is getting tough to meet the financial needs.

Jaishankar Sharma, convener of All India Drivers Welfare Trust, operating out of Sultanpur, Uttar Pradesh emphasizes the need for motor maliks to be generous towards their own drivers: “How can they disown their wards in such critical situations? (The) Motor malik should underwrite every single medical expense of Raj. Yes, I know it would be something they will hesitate to do. But helping the accident victim is the right thing to do.” Fifty plus Sharma, himself a truck driver with various companies such as Chetak Logistics, KM Trans etc in the past, has been spearheading a movement to bring all truck drivers under the single umbrella and fight for their genuine cause: right pay, right treatment and reduce harassment on highways by authorities at every state level. As of today, his Trust boasts of over 300 drivers on its roster and his aim is to achieve 3,000 at least over the next 12-18 months.

It is Sharma who alerted me to the case of Raj Kumar during my recent visit to his village, near Sultanpur, Uttar Pradesh. “It is utter nonsense to say there is a driver shortage. If the right wage is paid to drivers, they will get more drivers than they actually need. If motor maliks run away leaving drivers to fend for themselves, who will like to be a driver,” demands the saltand-pepper haired, moustacheless former truck driver.

Returning to the issue of accident insurance coverage for truck drivers, he nonchalantly rejects my proposal that drivers should invest in their own welfare and not depend upon motor maliks. Is he ready to keep his driver fraternity twiddling their collective thumbs if motor maliks refuse to bite the bait? Are his flock not losing out on their livelihood?

He promises to mull over my “take care of yourself ” initiative.

39

Amputation is no small issue and private hospitals are not charity medical institutions. They will demand their pound of flesh for treatment. What’s Raj family source of income? A few acres of land where parents and elder brother sow and harvest grain. For sale?

No, pat comes the reply. It is for captive consumption so that the family does not have to worry about daily roti and dal at least. Raj confesses that he has been working with the New Gupta Transport Company for almost a decade and gets a regular salary and incentive on trips. Younger brother works in Delhi and expecting any support from him is out of question. Bachelor brother in law Brijesh, working in a shoe factory earning Rs.7,000 every month, working a 12 hour daily shift, is digging into his own savings to assist his sister’s husband. “How can I disown my own didi (sister) when she is in distress?” asks the lean and emaciated young lad, who has been away from work to attend to his jijaji since the day of fateful accident day.

Did anyone from New Gupta Transport Company lend any financial assistance? Says Raj: “As of now we received two times Rs.5,000 from the company.... Arun Kumar Guptaji (owner) himself came a few days ago to give this money.”

Someone from the large crowd of patients and their parivar in the 50plus bedded ward surrounding Raj’s bed raises the pertinent question: “This is no sarkari hospital.

Everything costs. This man (Raj) is in the hospital for several weeks.

How Rs.5,000 or Rs.10,000 will suffice?” Any accident insurance cover arranged by New Gupta Transport Company? Raj is unaware of any such thing. “Did you ask the Guptas at any point of time?” I ask pointedly. “I never had any accident.

Nor other drivers in the company had accidents so far.

That’s why the question of raising

this insurance issue did not arise,” says Raj matter of factly. Ignorance or Idiocy, can’t figure out. Or outright exploitation by motor maliks?

It is no secret that a major chunk of motor maliks (fleet owners) are marginal ones – owning vehicles in single digits and therefore operating not professionally in the strictest sense of the term. The question of insurance cover for drivers is too farfetched for them.

Or simply they don’t care, given the cost considerations. However, oil marketing companies (IOC, HPCL, BPCL) try to boost their fuel sale (diesel) to trucking companies – irrespective of their size – by offering a small insurance cover to drivers. Again, it is a touch and

go affair. Not with the seriousness which driver safety requires given the mammoth task.

The role of these ‘soldiers on Indian highways’ is least recognized or appreciated. Safety of drivers, cargo and vehicle has to be implemented in a ‘mission mode’. Nothing less will serve the purpose. Studies are galore of what impact accidents on highways has on GDP. Again, it is repeated ad nauseam that driver fatigue – absence of rest room facilities for them on highways – is a serious menace which leads to loss of limbs or lives of drivers and others as well. All talk, no action.

This has to change across the spectrum.

Perhaps it is time for some serious action. No HCV should be LOGISTICS TIMES August 2014

HIGHWAY LIFE

40

permitted to ply on Indian roads – state or national highways – without an insured driver at the wheels.

India Inc, the ultimate beneficiary of HCVs for movement of their raw materials and finished products, should be asked to comply and ensure that no contract should be given out unless and until the prospective transporter signs the Service Level Agreement (SLA) that includes a ‘No insurance cover for driver, No load’ clause. This driver insurance-specificity is necessary because every single consignment is insured before it leaves the factory gates and similarly every single motor malik doubly ensures his vehicle is insured. Risk mitigation of cargo and vehicle is taken care wisely.Only the poor and illiterate truck driver is duped with no cover. Ideally, insurance companies should explore adding a specific additional premium to the value of consignment being insured.

Higher the value of consignment, higher should be the premium for the driver too. Why not trip-specific insurance cover by insurance companies – like passenger or air or ship cargo on per trip/voyage basis?

State level RTOs should be compelled to check lapses on this issue instead of chasing trucks to line their pockets and their masters – political or otherwise. Oil marketing companies – state owned or otherwise – should be mandated to gear up to create Driver Rest Room Facilities (DRRFs) every 250 km on highways. Given the fact that the government has been collecting cess on the sale of fuel for ages, specific amount should be earmarked for creation of such DRRFs across the length and breadth of Indian highways. Setting up of such DRRFs alone won’t

suffice. These should be monitored on a regular basis. Otherwise, all these DRRFs will be converted into a free godown/warehouse by unscrupulous dealers, thus making the investment unwise and the objective not getting fulfilled.

Talking about accidents, postmortem of accidents is still in its infancy in India. It is reported that an accident occurs every third minute on Indian roads. How much of this data is captured and is a moot point. Why a driver like Rajkumar, carrying ACC cement on Indian highways, has to worry about who’s going to foot his medical bill when hospitalised? Just labeling the truck drivers as “soldiers on the Indian highways” is sheer baloney.

Truck drivers, without whom the entire nation would come to a grinding halt, should be given a proper and adequate medical facility and insurance cover.

Like the army personnel, our own ‘soldiers on Indian highways’ should get proper treatment at the so-called trauma centres. When drivers like Raj loses a limb thus making him unfit to continue the driving profession, there ought to be a rehabilitation program with the articipation of all stake-holders.

This is where the new government’s skill development agenda can be put to better use.

At a time when the entire transport fraternity is crying hoarse that approximately 20=25% HCVs are lying idle for want of drivers, it behoves that motor maliks and transporters should look into the basic and simple task of how to improve the living and working conditions of truck drivers earnestly.

Just submitting a memorandum to the Ministry of Road Transport & Highways and or holding day long seminars/workshops is an act of

tomfoolery.

The unorganized transport fraternity needs directions from India Inc via stringent SLAs to begin with.

Positive changes certainly creep in when norms are tightened and more importantly, implemented.

Yes, of course, the government at the Centre and States cannot wash away their responsibility of safeguarding the drivers’ welfare. Forget about they being truck drivers. Remember they are citizens of mera Bharat mahaan too.

By the way, Raj Kumar’s motor maliks – Arun Kumar Gupta and his son, Monu – promised this writer that they would fit the driver with Jaipur foot at their own expense and accommodate him in a desk job at their MRF tire dealer showroom in Etawah. Yes, they assured that as and when Raj Kumar’s insurance claim – yet to be submitted – is processed and money received, the same would be given in full to the man, who has been serving the New Gupta Transport Company for almost a decade.

Yes, they are all verbal promises today. But a positive ones. In these trying times, none can afford to be pessimistic. Life has to be lived.

As a motor malik. As a truck driver.

As a citizen of this country. Besides, ACC whose consignment was being ferried at the time of the accident should also chip in to assist Raj to be on his feet. This has to happen at the top notch level. Turning a blind eye saying that such accidents are not ‘my concern’ will be too churlish.

On second thoughts, Raj Kumar may need a proper pair of shoes to cover the Jaipur foot in the near future. So, it is necessary to get his size.

Raj Kumar-ji, what’s your size? I wish to buy one pair for you…

The writer is the author of 10,000 KM on Indian Highways, Naked Banana! and An Affair With Indian Highways. He also runs KRK Foundation, a registered Trust, focused on improving the working and living conditions of truck drivers and their families living in remote villages of India. He is reachable at ramesh@krkfoundation.org LOGISTICS TIMES August 2014

PERSPECTIVE

42

Green strategy for a supply chain As the impact of climate change and global warming on businesses are widely acknowledged and discussed in recent times, companies are increasingly concerned about environmental and social impact of their operations. Business communities across the globe are facing major challenges arising from resource-constraints and, rising energy and fuel prices causing irreparable damage. Many developed countries have set an ambitious target to significantly reduce overall carbon emissions in next few years, and accordingly impose regulations for industries to minimize their environmental impact. However, developing economies such as India and China have so far resisted for any mandatory restrictions on carbon emissions arguing that it would stifle their economic growth. Considering the fact that the carbon emission is anticipated to rise three fold by 2030 in developing countries, it would not be surprising if in next few years, government policies to reduce carbon emission would become more stringent.

In developing countries like India and China, companies need to be proactive in preparing for environmental challenges, and devise effective strategy to deal with these upcoming challenges.

Many operational activities responsible for carbon emissions may not always reside in the boundary of the organization, and therefore developing the green strategy LOGISTICS TIMES August 2014

Dr. Niraj Kumar Lecturer, Supply Chain Sheffield University

without understanding the complete supply chain could not be beneficial in long run. Managers need to think beyond their organizationâ&#x20AC;&#x2122;s boundary to accumulate or integrate network resources and develop critical collaborative capabilities across the chain to successfully encounter the environmental challenges. It has been acknowledged by many scholars that the opportunities to maximize the impact of green practices mostly lie at the beginning of the product life cycle. As early we incorporate green practices in the chain, the cumulative life cycle cost of the product would diminish.

Product life cycle perspective from design to disposal stage should be taken in consideration while discussing the green strategy for the organization. However, it is an

43

impossible task without establishing collaboration and sharing green goals with partners in both upstream and downstream of the chain.

Collaboration with multiple stakeholders in the supply chain is essential to implement green practices at the early stage of the chain. The prime company in the chain can initiate the collaboration process, but everyone needs to be on-board to find innovative ways to reduce carbon footprint, environmental impact and waste stream.

For example, green processes such as eco-design and reverse logistics involve cooperation with suppliers and customers. Longterm collaboration not only overcomes challenges in emission data sharing, but also provides innovative ideas to create win-win situation for all partners involved.

Instead of designing separate policies for environmental goals, suppliers and manufacturers of the product can collectively work on a collaborative policy to reduce overall environmental impact, increasing triple bottom line benefits for all involved. Developing low carbon or green supply chain can add to revenue generation by cutting carbon emissions, making processes more efficient and decreasing surplus energy consumption bills.

Supply chain managers should

Many operational activities responsible for carbon emissions may not always reside in the boundary of the organization, and therefore developing the green strategy without understanding the complete supply chain could not be beneficial in long run. identify the potential areas of collaboration where they can align, share or collaborate some of their resources with their suppliers to achieve environmental goals.

This collaborative arrangement could be on the basis to improve environmental performance of the chain to gain competitive advantage in long term.

Green practices should not only be confined to the internal environmental management system but should be extended to suppliers at multiple tiers to incorporate potential green interventions at the appropriate stage in the chain.

A collaborative strategy could be developed to reduce the waste and carbon emissions in the supply chain by re-engineering, re-manufacturing, re-furbishing and re-using.

Strategy to incorporate the â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122; component in sourcing can also

act as a catalyst for improving the competitive advantage of the company by building its green credentials, developing better public image and reputation among stakeholders. Green sourcing is not just about finding new sustainable technologies or sourcing from green suppliers, it can also help in reducing waste throughout the whole supply chain by lowering the usage of raw materials and benefiting from the recyclable materials allowing them to meet their cost reduction goals, and improving their financial results.

Managing a number of economic and political challenges to decarbonize the economy whilst alleviating the on-going impacts of double dip recession, would be easier said than done. However, developing the green strategy at the supply chain level could be the right step forward.

LOGISTICS TIMES August 2014

EVENTS

44

PPP Summit

Nitin Gadkari, Union Minister for Road Transport, Highways and Shipping, has questioned the wisdom of inviting tenders for road highway projects before acquisition of land. Part of the blame must rest with the private sector which bids in the tendering process in the absence of land and forest clearances, he said, while inaugurating FICCIâ&#x20AC;&#x2122;s India PPP Summit 2014.

Gadkari said that all grey areas pertaining to road infrastructure projects will be resolved before August 15 this year. At the same time, Gadkari proposed to convene a meeting with construction companies and banks where the Minister will impress upon them the need to reduce the NPAs of banks on account of road projects.

The Minister also announced that for 300 new road projects, Detailed Project Reports will be procured LOGISTICS TIMES August 2014

in advance to cut down the vetting time. Alongside, a 10-year shelf of projects will be created to bring down time overruns which are mainly responsible for cost escalation, thereby affecting the commercial viability of projects.

Dr. Arvind Mayaram, Finance Secretary, underlined the need for bidding out projects only after all statutory clearances are available.

The problem, he said, is not with the bidding process itself but arises due to very vigorous bidding by the private sector which overestimates its capacity and is unable to assess the potential of project on a 30-year basis.

Another issue, Dr. Mayaram said, was of over exposure of companies in project construction, and added that 12 to 14 companies repeatedly bid for projects, stretching their resources thinly in the process. In this

context, he said there was a strong case for creation of joint ventures even with foreign companies as the portfolio of infrastructure projects was a huge US$ 500 million.

The summit was also addressed

by K Ramchand, Chairman, FICCI Infrastructure Committee & Managing Director, IL&FS Transportation Networks Ltd; Dr. A Didar Singh, Secretary General, FICCI; K K Kapila, Co-Chair, FICCI Infrastructure Committee and CMD, ICT Pvt Ltd; Capt. B V J K Sharma, Co-Chair, FICCI Infrastructure Committee and Joint Managing Director & CEO, JSW Infrastructure Limited; Sudhir Hoshing, CEO - Roads Business, Reliance Infrastructure Ltd.; Athar Shahab, CEO - Infrastructure & Real Estate, Vedanta Group and Asim Tewari, CEO, Bharat Road Network Limited.

45

National Cold Chain Summit 2014

Indian Chamber of Commerce with active support from Ministry of Food Processing Industries Government of India (MOFPI), organized the “National Cold Chain Summit” in Guwahati, Assam on 11-12 July, 2014 at NEDFI House, Guwahati. The Summit was supported by NHB, NCCD, WDRA, APEDA, NABARD, Danfoss & Alfalaval.

The summit brought all the key stakeholders from the cold chain sector under one roof for reviewing the challenges and needs of cold chain in India. The summit created a platform to relevant stakeholders for business collaborations and networking. The technical sessions were focused on some of the major policy issues such as Basic infra-

structure, Connectivity issues, Market Investment attractions & Latest Technologies and major opportunities and challenges faced by the sector. Special attention was given to India’s North Eastern Region.

This one of a kind forum provided tremendous opportunity to the Agri business sector in India (especially north East), food processing industries and farmer groups at a large to share their views and concerns directly with the government representatives. It was also an opportunity for the government officials to inform the participants about the steps that have been taken in order to develop the sector. Also, new policies and schemes were discussed in detail. The summit witnessed more

than 300 participants from all parts of North East and India.

The summit was addressed by General (Dr.) Vijay Kumar Singh, Minister of State, Ministry of Development of North Eastern Region.

Along with him there were other eminent speakers from various government departments such as Nilamani Sen Deka, Minister, Parliamentary Affairs, Government of Assam; Siraj Hussain, Secretary, Ministry of Food Processing Industries; Vinod K. Pipersenia, Additional Chief Secretary, Agriculture, Cooperation & Irrigation Department, Government of Assam; J.P Meena, Additional Secretary, Ministry of Food Processing Industries; N.C Mistry, Additional Managing Direc-

LOGISTICS TIMES August 2014

EVENTS

46

tor, National Horticulture Board, Pawanexh Kohli, Chief Advisor of National Centre for Cold-chain Development , Tarun Dey Director Warehousing Development & Regulatory Authority and many more.

Apart from the government bodies there were speakers from the industry side such as Nagahari Krishna L, Director Strategic Initiatives and Industry Affairs, Danfoss IndusLOGISTICS TIMES August 2014

tries Private Limited; Pankaj Mehta, Country Head & Director Carrier Transicold; Pankaj Joshi Chief Executive Officer, Kelvin Cold Chain Logistics Pvt. Ltd.; Mahendra Agarwal, Founder & CEO, GATI Ltd.; and Himanshu Seth, Alfa Laval, India Pvt. Ltd. Prior to the summit, on 11th July 2014, ICC organised a Field Visit for the delegates to Rain Tower Cold Storage in

Shillong and Sohalia Strawberry Farm in Shillong. This unique field visit helped the delegates to experience the nature of cold storages in the North Eastern Region and the technology used by them. Also, the delegates were encouraged to visit a Strawberry Farm and interact directly with the farmers, the challenges they have been facing and their requirements from the state and central government.

47

LOGISTICS TIMES August 2014

EVENTS

48

Logistics Conclave -2014

PHD Chamber of Commerce and Industry organized Logistics Conclave -2014 on 21st of July at PHD House, New Delhi .The conclave was attended by more than 200 delegates from different parts of the country & and it was well appreciated by the Industry.

There were more than 20 speakers from both the government and the private sector who shared the current developments and major challenges in the field of Multimodal transportation, Cold Chain & Warehousing and discussed the way forward for the Indian logistics industry.

LOGISTICS TIMES August 2014

Dinesh Rai, IAS (Retd) , Chairman, Warehousing Development and Regulatory Authority (WDRA), Govt. of India who was the Chief Guest at the Conclave laid emphasized on the need for cost effective solutions required for the logistics and supply chain which will be beneficial for the manufacturing sector. Other important speakers were: Dr. Santosh Kumar Sarangi, IAS, Chairman cum Secretary, Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Commerce & Industry, Govt. of India; Alok B Shriram,

Senior Vice President, PHD Chamber; R.S. Bedi, Chairman, Task Force on Logistics Management, PHD Chamber; B.N. Puri, Executive Director, Asian Institute of Transport Development; M.S. Mathur, Executive Director / Traffic/ PPP, Ministry of Railways, Government of India ; Vinod Nautiyal, Chairman and Managing Director, EXPAN Logistic; S.L. Sharma, President, The Air Cargo Agents Association of India (ACAAI) and Vanish Ahluwalia, General Manager- -Northern Region-NVOCC, All Cargo Logistics Ltd.

49

GMR-IGI awards-2014 recognises the best in the Aviation Industry

At a glittering ceremony on Friday (25th July), the GMR led consortium Delhi International Airport (Pvt) Ltd. (DIAL) presented the third edition of the GMR-IGI Airport Awards recently.

The Awards have been instituted with the aim of recognizing the key performers in the Indian aviation industry who work relentlessly to keep the airport operations running 24X7. GMR-IGI Awards 2014

were given across 28 diversified categories with two special recognition awards at a gala function held at the Kingdom of Dreams, Gurgaon.

Speaking on the occasion, the GMR LOGISTICS TIMES August 2014

EVENTS

50

Airportâ&#x20AC;&#x2122;s Business Chairman, Srinivas Bommidala complimented the entire Community for the excellent results achieved by DIAL. The award function had some breathtaking dance sequences LOGISTICS TIMES August 2014

by well-known choreographer Terence Lewis, who enthralled the viewers with some popular Hindi film numbers.

Bollywood Badshah Shah Rukh Khan made a surprise entry and did a jig with

the ace choreographer. The show was compered by Indian singer, anchor and model Shibani Dandekar and well known anchor Hussain Kuwajerwala..

RNI No. DELENG/2011/39329

Regd No.: DL(E)-20/5380/2014-16