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LogisticsTimes www.logisticstimes.net

Guest Editor Issue

February 2012

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Auto Logistics:

Trends, Challenges & Way Forward

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NDIA'S MOST VALUED LOGISTICS MAGAZINE

Logistical inefficiencies are slated to emerge as the major stumbling block in responding to the multiplying demand pressure in the automobile sector this decade. Prem K Verma, CEO, TML Distribution and Guest Editor of this issue underlines the imperative measures and practices which need to be fast adopted to cope with the projected explosive growth pattern in the future...

Logistics Times

CONTENTS

All about Transportation, Distribution & Infrastructure

Volume 2: Issue No.10 * February 2012 Editor in Chief

Raj Misra rajmisra@logisticstimes.net

Editor

Ritwik Sinha ritwik@logisticstimes.net

Sub Editor Photographer Design Consultant Designer Circulation & Distribution Legal Advisor

Neha Richariya

Guest Editor Prem K Verma

Anil Baral S. Athar Hussain Kausar Syed Kamruddin SaiďŹ Rakesh Garg

Our Bureau Mumbai Rahul Kumar rahul@logisticstimes.net Bangalore

B Shekhar shekhar@logisticstimes.net N Raju

Chennai

raju@logisticstimes.net Sudhir Kumar

Hyderabad

sudhir@logisticstimes.net

Editorial Advisory Board Paul Lim Founder & President, Supply Chain Asia Prof. Samir Srivastava Associate Professor, IIM-Lucknow Prof. Akhil Chandra Institute of Logistics & Aviation Management

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

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COVER STORY Auto Logistics

Trends, challenges and way forword Edit Note

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News Briefs

10

Product

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16 PERSPECTIVE

REPORT

Will he make you smile?

DHL GCI

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46

E-COMMERCE

EVENTS

Click and Mortar

Excellence Awards

GUEST EDITORÊS NOTE

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Mission Impossible?

Indian automotive industry is well placed for an outstanding growth, economically and demographically to cater to ever increasing domestic demand and as well as the export opportunities. The changes this industry will witness in the coming decade will definitely influence the value chain of global automotive industry. It will also offer extraordinary and exceptional growth opportunities for all stakeholders associated with the automotive industry in India. We need to seize this opportunity with both the hands and strategize and mobilize our resources at the earliest.

As India seeks to stake its claim to become one of the world’s largest automobile markets, the moot question in the uppermost mind of all stakeholders / industry drivers is “Will the auto supply chain support this growth aspiration of the auto industry or will it subvert it”? Conferences after conferences, debates after debates this strong suspicion is engaging the mind space of every individual / corporate in the auto- logistics industry today. Will we be able to manage it? Yes, this is the fulcrum of all discussions we are dabbling in these days. As this seems to be the mother of all debates in our industry today and when team ‘Logistics Times’ approached me to spearhead this edition and focus on the burning issues being faced by the auto-logistics industry, I decided to respond to what can be simply called “all-pervasive fear psychosis.”

Automobile industry has indeed been one of the most sparkling sub-plots of India growth story and as indicated by the projection pundits, it will continue with high growth trajectory. As per the SIAM estimates, the vehicle market is expected to reach a volume of around 44 million by 2019-20. While some trends and challenges being faced by the logistics sector are common in nature and affect the supply chain efficiency of almost all industries but some are more related and have a direct impact on the auto logistics in India.

This suspicion is justifiable to some extent given the fact that the country is yet to witness the emergence of a sound and robust autologistics regime, something which we notice in many developed markets. I wouldn’t be rubbishing a critic completely if he says that even some basics have not yet fallen in place for auto supply chain. We are still heavily dependent on road transportation. While Railways have become much more receptive they still contribute to only 6% to the pie. Availability of skilled manpower is already an issue and things could go from bad to worse as regarding availability of trained drivers.

While I understand the merit of the lurking suspicion at this stage, I do not subscribe to the gloom and doom theory that we are proceeding to a breaking point. There are enough ways and means to build on to our auto-logistics deliverables’ strength and I am optimistic that a vibrant functional regime would emerge as we go deep in grappling with the challenges of the future. Collaboration might still be considered an “impractical fad” by some of the logistics gurus but constant pressure to improve cash to cash cycle time will compel organizations to even collaborate with their rivals. Government on its part needs to contribute significantly by bringing in supportive policy regime, whether it is providing industry status to logistics sector to make the industry competitive, an early implementation of GST which would bridge many a gap in this fractured system and taking a more cohesive approach towards building a multi-modal transportation module in the country.

All in all, ‘Mission Impossible’ all right as it seems today but I have no doubt in my mind that Ethan Hunt would ultimately crack it, and believe me, there are plenty of them amidst us today who will rise to the occasion and take this challenge.

Hope you would enjoy reading this edition.

Prem Verma LOGISTICS TIMES February 2012

NEWS BRIEFS

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Sharp Decline in Industrial Output Industrial production grew by just 1.8% yearon-year in December 2011 due to contraction in mining and capital goods sectors and a lower manufacturing sector growth. Factory output growth, as measured by the Index of Industrial Production (IIP), was at 8.1% in December 2010.

Output of the manufacturing sector, which constitutes over 75% of the index, rose at a lower rate of 1.8% in December compared to a growth of 8.7% in the same month of 2010, according to the official data released recently. Besides, capital goods sector witnessed a contraction of 16.5% against a growth of 20.2% in the same month in 2010.

Mining output, too, contracted by 3.7% in December against 5.9% growth in the year ago period. However, power generation witnessed a good growth of 9.1% in December 2011 compared to 5.9% in the year ago period.

During the month, 15 out of 22 industry groups witnessed a positive growth. During the month output of basic goods went up by 4% against 7.8% in the year ago period. However, intermediate goods witnessed a contraction of 2.8% against 8.1% growth in December 2010. During the AprilDecember 2011, the IIP growth stood at 3.6% against 8.3% in corresponding period a year ago.

Besides, the IIP figure for November, 2011 has been revised to 5.94% from the provisional estimates of 5.9%. Commenting on the IIP figures, Planning Commission deputy chairman Montek Singh Ahluwalia said that the numbers are expected to bottom out in the third quarter and revive in the January-March period.

“I thought the third quarter would be a kind of bottoming out quarter. We have to see whether that really works out,” he said.

Asked if the IIP numbers are likely to pick up in the subsequent months, he said, “I hope so”.

During December 2011, consumer goods witnessed a 10% upswing, as against a low growth of 3.5% in the corresponding

month of 2010. Furthermore, consumer durables production increased by 5.3% compared to a growth of 7.8% in December 2010. During the month under review, output of consumer non-durables also shot up by 13.4%. The segment grew by a mere 0.6% in December 2010.

The lower industrial output growth in the month was on expected lines as the eight core industries had registered a muted growth of 3.1% growth in December, mainly due to slackening output of crude oil, steel and natural gas. The core sector grew by 6.3% in December 2010. The eight industries together contribute 37.9% to the overall IIP. Earlier, the Central Statistical Organisation (CSO) had estimated the Indian economy to grow at a slower pace of 6.9% in the current fiscal, against 8.4% in 2010-11. The decline in IIP numbers, experts said will make a good case for further rate cuts by the Reserve Bank of India (RBI). Last month it cut cash reserve ratio (CRR) by 50 basis points to 5.5%.

FIPB nod for Amazon logistics unit Amazon, the world’s largest online retailer, has won government permission to set up a logistics unit in India, an important step as it systematically prepares for entry into one of the world’s most lucrative markets.

The Foreign Investment Promotion Board (FIPB) has allowed Amazon Asia-Pacific Resources to set up a wholly-owned subsidiary that will provide courier services, a key component of the backend for any online retail operation. Amazon will invest Rs 15 crore in the subsidiary, a government release said. The approval was granted on January 20.

LOGISTICS TIMES February 2012

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Operations begin at Khurja FTWZ Arshiya International Ltd. has announceed the operational launch of its 135 acre Free Trade & Warehousing Zone (FTWZ), in Khurja, UP near the confluence of the planned eastern and western freight corridors. FTWZ is a part of the Arshiya’s 315 acre mega logistics hub which also includes a 50 acre rail siding and 130 acre Domestic Distripark (DDP) which will be operational soon. This will be the flagship state-of-theart logistics infrastructure in the north to service the massive manufacturing belt. It will enable efficient warehousing, value optimizing and distribution of EXIM and domestic cargo.

Falling under the premise of the SEZ Act, FTWZs offer immense benefits to companies with import, export, re-export and trading activities out of India. Arshiya’s FTWZ in the north will empower manufacturers to substantially bring down transactional cost and boost EXIM, facilitate imports through implementation of vendor managed inventory and encourage exports by enabling quality check & consolidation before organized shipment. Overall, FTWZ will substantially bring down EXIM cost through many fiscal, regulatory and operational benefits, thus providing flexibility towards end-distribution through duty deferment, higher inventory visibility, reduced buffer stocks and overall lower product costs. India’s & Arshiya’s first 165 acre FTWZ in Mumbai has received phenomenal response since it became operational in December 2010 and is currently servicing over 200 companies across sectors such as FMCG, retail, pharmaceuticals, chemicals, manufacturing, heavy engineering, automobile etc. FTWZ in Khurja will enable Arshiya to offer a plethora of benefits to companies with EXIM movement between north-west such as cost effective bonded movement through Arshiya Rail, duty deferred storage of imports, immediate export benefits for companies in the north.

Also proximity to planned eastern and western freight corridors will allow convenient access to ports through rail.

Arshiya’s Domestic Distripark (DDP) spread over 130 acre, will provide an efficient hubbing zone in northern India for centralized warehousing, value optimization, consolidation and

movement through rail. Arshiya DDP is further benefited by the adjoining presence of the modern rail siding spread across 50 acre with six rail tracks and owned locomotives for consolidation and movement through rail.

Commenting on the operational launch Ajay S Mittal – Group Chairman & Managing Director of Arshiya International Ltd said “The launch of Arshiya’s FTWZ in Khurja, UP has enabled Arshiya complete the North-West belt of its planned pan-India footprint. Now we will be able to provide tremendous value and cost savings for the heavy EXIM cargo movement in this belt by offering warehousing, value optimizing services as well as movement through Arshiya Rail. Our expanding footprint of logistics infrastructure with FTWZ, DDP & Rail and integration with our asset light services like freight forwarding, transportation etc develops a whole new dimension in our ability to provide integration, flexibility and savings for our global and Indian customers. Khurja infrastructure is another step towards our ability to leverage India as a global distribution and value addition hub.”

Blue Dart sales at Rs 1,489 cr BlueDart Express Limited declared its annual financial results for the year ended December 31, 2011, at its Board Meeting held in Mumbai last month. The company has posted Rs 122.24 cr. profit after tax for the year ended December 31, 2011. Income from operations for the year stood at Rs1,489.60 crore.

Anil Khanna, Managing Director, Blue Dart Express Limited said, “The 2011 results have been in sync with our outlined expectations for the year. Going forward, we are committed to remain the ‘Express & Logistics Provider of Choice’ for Indian industries.

While continuing to be the `Trade Facilitators’ in the country, we shall continue our focus on addressing specific needs of the customers delivering customized solutions.”

During the year 2011, Blue Dart hasreported handling over 98.85 million domestic shipments, 0.81 millioninternational shipments and over 423,200 tonnes of documents and parcels acrossthe nation and 220 countries worldwide.

LOGISTICS TIMES February 2012

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Floriculture industry to cross Rs 8K crore Growing at a compounded annual growth rate of about 30 per cent, India’s floriculture industry is likely to cross Rs 8,000 crore mark by 2015, apex industry body ASSOCHAM recently maintained in a release.

Currently, the floriculture industry in India is poised at about Rs 3,700 crore with a share of a meagre 0.61 per cent in the global floriculture industry which is likely to reach 0.89 per cent by 2015, according to a study titled, ‘Indian Floriculture Industry: The Way Ahead’ released

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

Besides, the global floriculture industry is likely to cross Rs 9 lakh crore mark by 2015 from the current level of about Rs 6 lakh crore and is growing at a CAGR of 15 per cent, said the ASSOCHAM study.

With a share of about 65 per cent rose flower industry in India accounts for over Rs 2,400 crore of the overall floriculture industry and rose accounts for 75 per cent of the global floriculture industry, said the study.

Rising demand from tier II and III cities apart from urban centres is likely to spur demand for roses this Valentines’ Day as price of export quality cut rose is likely to quadruple from its current average ruling price of about Rs 15 to Rs 20 per stem, apex industry body ASSOCHAM said.

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) interacted with about 250 rose merchants including the cultivators, exporters, wholesale flower dealers and florists in Bangalore, Chennai, Delhi, Mumbai and Pune to gauge the scenario vis-à-vis business of rose flower during the

Valentine’s week considering India is also world’s biggest rose grower.

Fall in the value of rupee against major currencies is the prime reason behind this upsurge in demand for roses in international markets of Australia, Germany, Greece, Italy, New Zealand, the Netherlands, the United States, the United Kingdom and other countries of Europe and the Middle East.

While, growing demand for roses from cities like Ahmedabad, Chandigarh, Hyderabad, Surat, Kanpur, Lucknow, Patna among others is driving the high demand for roses in the domestic circuit.

TCI’s Q3 PAT surges by 14.21% Transport Corporation of India (TCI) has announced its financial results for the Quarter ended December 31, 2011. The company’s total revenue for Q3 registered a growth of 4.96% rising to Rs. 467 crores from Rs. 444.93 crores in the same period last year. EBITDA margin during Q3 increased from Rs 34.03 crores to Rs 38.57 crores over corresponding quarter last year. Revenues/other Income for the period included profit of Rs. 198.08 lacs and an exceptional item provision of Rs. 125 lacs on the closure of its joint venture for a ship.

LOGISTICS TIMES February 2012

The company’s total revenue for the nine months ended December 31, 2011, rose by 4.28% to Rs. 1,336.08 crores from Rs. 1,281.29 crores in the same period last year. The company’s PAT rose by 5.50% to Rs. 40.69 crores from Rs. 38.57 crores in the same period last year.

Keeping in view the overall performance, the Board of Directors has decided to make payment of Interim Dividend to the Shareholders @ 20% whose entitlement shall be decided on the basis of RECORD DATE to be fixed in consultation with Stock Exchange.

NEWS BRIEFS

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Record year for DP World

Global marine terminal operator DP World recently announced another record year for container handling, with over 54.7 million TEU (twenty-foot equivalent container units) handled across its global portfolio in 2011, an increase of 10% against the prior year. According to a company release, the growth across DP World’s portfolio was driven by an exceptionally strong performance in the UAE region which delivered volume growth of 12% handling 13.0 million TEU for the year. The UAE region has gone from strength to strength during 2011 with each quarter delivering yet another record performance culminating in 16% volume growth in the final quarter of 2011.

Alongside this excellent performance in the UAE region, the strong results came from Asia Pacific, Africa and the Americas region together with the addition of new capacity from terminals in Karachi, Pakistan and Vallarpadam, India both of which opened in early 2011. Chairman, Sultan Ahmed Bin Sulayem commented on the record performance:“DP World delivered another strong performance in the final quarter of the year despite the macro economic uncertainty. These results are a reflection of our continued focus on those regions which are seeing strong trade growth in addition to the continued focus by

all our terminals on providing customers with a first class service when they call at DP World terminals.

“Our flagship terminal in the UAE has yet again exceeded all expectations delivering another record year as it continues to position itself as the gateway port of choice to handle cargo destined for the Middle East, India and Africa regions. Whilst uncertainty continues to affect the global economy, our business is still performing well. We made good progress through the fourth quarter of 2011 and we will achieve 2011 full year EBITDA in line with expectations. Lower than expected net financing charges will benefit reported profit before tax.” Chief Executive Officer, Mohammed Sharaf added:“Whilst this uncertainty remains as we enter 2012, we continue to concentrate on delivering an improved operational and financial performance over 2011 reflecting our focus on both faster growing emerging markets and delivering an enhanced offering to our customers.

As we look ahead, we continue to remain confident about the long term outlook for our industry. We believe our continued investment in existing and new terminals around the world will ensure our portfolio is best positioned to meet the expectations of our customers and their future requirements.”

LOGISTICS TIMES February 2012

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Rail freight services between Poland and UK DB Schenker Rail has announced strengthening rail freight services between Poland and the UK with the planned introduction this September of a second weekly service between the two countries. The announcement was made during a reception at the Embassy of the Republic of Poland in London, on Thursday 09 February, held to promote enhanced rail freight trading links between Poland and the UK. The doubling of train capacity demonstrates that DB Schenker Rail has been successful in developing a new rail freight corridor across Europe between Poland and the UK. Further services

3,700 lorry movements and over 135,000 lorry kms per annum from Europe’s road network. The first service, which was introduced during November 2011, has operated on-time since its introduction.

This train will also become the second regular rail freight service to use the High Speed 1 rail route, the only European sized railway in the UK. As such, the train can be loaded with European sized curtain sided swap bodies, enabling greater volumes to be moved by rail and encouraging modal shift from road to railway.

are forecast to be introduced with the objective of operating five freight trains per week between the two countries being achieved during 2013.

Speaking to an audience of potential users of rail freight services from Poland to the UK, Alexander Hedderich, Chief Executive of DB Schenker Rail, said: “DB Schenker Rail is a pan-European rail freight operator and the strengthening of our services between Poland and the UK clearly illustrates the success our strategy for European rail freight growth is having.

Through effective trading corridors such as this one we are able to provide customers with the economic and environmental solutions that enable their use of rail freight to increase.”

The additional train service, which operates from Wroclaw in Poland to Barking near London in the UK, will remove

Alain Thauvette, Chief Executive of DB Schenker Rail UK, said: “The introduction of this second service from Poland to the UK will utilise DB Schenker Rail’s pan-European rail freight network, offering customers integrated logistics solutions across the whole of Europe, while removing 3,700 lorry movements from the road network. By continuing to develop our service offering across Europe in areas where there is firm customer demand, we expect to increase further our use of the Channel Tunnel and High Speed 1.

The European rail map for our customers in both Poland and the UK has got a little bit smaller. We are confident that we can continue attracting further customers to this trading corridor to deliver our objective of five rail freight services per week departing Wroclaw for the UK.”

LOGISTICS TIMES February 2012

Boeing Delivers Two Freighters To Korean Air Boeing delivered Korean Air’s first 747-8 and 777 Freighters on February 6, 2012. With the milestone delivery, Korean Air becomes the first airline in the world to operate both the 747-8 and 777 Freighters.

“We are very proud to become the first airline in the world to have the combined strengths of these two freighters in its fleet,” said Yang Ho Cho, chairman of Korean Air. “Our cargo fleet is being improved by these fuel-saving planes. They can help reduce carbon emissions by 17 percent and this supports our goal to be a responsible citizen of the world.”

Korea’s flagship carrier is the first Boeing customer to order both variations of the new 747-8 airplane and is also a key supplier partner on this new airplane program.

“Boeing is honored to celebrate this historic delivery with YH Cho and the Korean Air family,” said Jim Albaugh, president and CEO of Boeing Commercial Airplanes. “It is hard to imagine reaching this day without the leadership of YH and his vision to transform Korean Air into one of the best global airlines in the world.”

Korean Air plans to operate the 747-8 Freighter on its transpacific route, with stops in Osaka and Narita, Japan, Los Angeles and San Francisco. The 777 Freighter is Korean Air’s first twin-engine freighter and will allow the airline to open into new markets in Europe, including Vienna, Frankfurt and London.

Impatex changes name Impatex Computer Systems – the UK’s longest-established provider of Customs processing software – is changing its name to Impatex Freight Software Ltd. As the company has not supplied computer hardware for over 10 years, the new name better reflects its mainstream activities of developing, supplying and supporting Customs and freight forwarding software.

Impatex currently provides two products: ICE (Integrated

Customs for Europe) is a heavyweight Customs processing solution aimed at major ‘corporate’ forwarders handling large volumes of Customs clearances.

ICE is progressively replacing the market-leading Customs Manager system which handles over 50% of all frontier entries in the UK, and large volumes of inland clearances..

NetFreight meanwhile is Impatex’s browser-based combined forwarding, Customs, warehousing and CRM system, which caters for small- and mid-size users. NetFreight is now in use with almost 100 forwarders in the UK and USA.

LOGISTICS TIMES February 2012

NEWS BRIEFS

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PERSPECTIVE

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Will he make you smile?

For logistics service providers today, one looming question just now is: Will Budget 2012 get you what you need, never mind Howard James-Scott what you want?

MD & CEO Big Bear Enterprises Firstpost a short while ago reported that the chances of seeing a reformist budget are high in March. The story stated, “… it makes more sense for Pranab-da to bite the reforms bullet this year rather than next, given that 2013 will be too close to the general election, which the Congress would like to use as a platform to project Rahul Gandhi into office. That is likely to be a blockbuster year for welfare policies and giveaways. In effect, therefore, Pranab-da has a very small window to get his reforms act together.”

Without a doubt the demand for services continues to grow, integrated supply chain, as well and transport and logistics sectors see continuous, significant growth and we are all searching for tips and hints on how Budget 2012 will pan out! Will the FM ‘gift’ us for 2012 or will we continue much as during 2011?

For those of us that are supporting the agricultural sector with transport, logistics and value added service we certainly hope the government continues its drive for reforms in that arena. The fact is that agriculture continues to cry out for reform and for investment from inside, and outside, the country. This is certainly a vote winner for anyone who can push through new and innovative LOGISTICS TIMES February 2012

initiatives during the next two years, a big plus for the economy and, therefore, the government who have in recent years been seen slow to react to the clear cut, righteous demands of this sector.

Investments in agriculture will be particularly welcome because they will

go a long way in reducing wastages, improving output and most importantly, curbing food inflation.

Rail operations are a major area requiring investment and innovation with no shortage of private organisations showing their determined interest in moving things

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forward. Will the government support this demand and bring forward some reforms and allow additional funding for the growth?

Containerisation and large scale movement across the country continues to be hampered through the lack of clear, financially supported, freight strategy.

Forward thinking companies like Arshiya are moving ahead with great efficiency and much of their own investment, let’s hope the government sees fit to join in! A sizable share of the containerised traffic moves on the Mumbai – Delhi via NCR route and Arshiya have been able to develop a strategy that places them at the forefront of the business development but they will still need support from the GoI. They have already produced their FTWZ in Panvel Mumbai and, hopefully, soon to come is Khurja near Delhi.

Fuel for our trucks and other equipment will continue to haunt us throughout the year, skyrocketing fuel prices are creating significant costs for truckload carriers that cannot be fully recovered through existing fuel (hike) surcharge formulas. The

Fuel for our trucks and other equipment will continue to haunt us throughout the year, skyrocketing fuel prices are creating significant costs for truckload carriers that cannot be fully recovered through existing fuel (hike) surcharge formulas. inherent problem with these fuel surcharge formulas is that they are based on loaded miles only as any additional charges are levied against clients where possible.

All truckload carriers (other than dedicated contract carriers) have an inherent number of miles that they must run empty when dropping off one load and picking up the next load.

Some carriers manage this very well by optimizing their customer shipping and delivering points.

Large carriers have enough customer diversification that they have plenty of loads to choose from. All carriers, though, pay for the fuel they use for every mile that they run empty. For many however

this is tough business.

Although I try not to allow things to disturb my sleep – unlike the FM - “The Finance Minister’s candid admission on subsidies affecting his sleep will only be cold comfort to public sector oil companies which have been battling the fuel pricing issue for some years now.”

For the most part this sleeplessness is caused by relationships with the fuel organisations rather than with those of us that need support and who are actually responsible for feeding, clothing and caring for the nation by providing cost effective transport and logistics solutions that continue to makes commodities affordable.

LOGISTICS TIMES February 2012

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GCI 2011 DHL Global Connectedness Index (GCI) was released last month and the report ranks as many as 125 countries based on the analysis of the breadth and depth of a country’s integration as manifested by its participation in international flows of products and services, capital, information and people. India has been ranked at 49th slot in the report which strongly underlines that global connectedness has enormous room to expand. Here are the excerpts from the chapter- '2011 DHL Global Connectedness Index Results':

2011 Scores and Rankings Figure 3.1 displays the overall 2011 DHL Global Connectedness Index scores and ranks, and highlights the composition of each country's score based on the depth and breadth of its connectedness. Depth and breadth are both scored on a scale of 0 to 50, so that when they are added together, overall global connectedness is measured on a scale of 0 to 100.

The top 10 ranks in the 2011 DHL Global Connectedness Index were occupied, in descending order, by the Netherlands, Singapore, Ireland, Switzerland, Luxembourg, United Kingdom, Sweden, Belgium, Hong Kong (China), and Malta. These leaders in terms of global connectedness are a diverse set of countries, spread across Europe and Asia, and ranging from the world's sixth largest economy (United Kingdom) to LOGISTICS TIMES February 2012

one of the smaller independent nations (Malta). The diversity of the leading countries in the index is amplified when one looks at the top 50 countries, which include representatives from all six continents covered in the study. These patterns indicate that the benefits of connectedness are accessible to a broad range of countries—much broader than the small trading hubs that lead most other globalization indexes.

A common thread, however, among the leading countries in terms of global connectedness is their high level of human and economic development. All of the top 10 countries were classified by the United Nations Development Program (UNDP) as having "Very High Human Development," and all except for Hong Kong (China) and Malta are the members of the OECD (a group of

advanced economies).

As the split bars in Figure 3.1 indicate, the leading countries earned their places in the top 10 based on differerent strengths along the depth and breadth dimensions.

The top ranked country, the Netherlands, excelled on both dimensions (ranking sixth on depth and fourth on breadth).

Ireland, Switzerland, Sweden, Belgium, and Malta also earned their places based on balanced scores across both dimensions. The great Asian trading hubs of Singapore and Hong Kong, along with Luxembourg, earned their top ranks based on the depth of their international integration; relative to the size of their domestic economies. In contrast, the United Kingdom earned its position in the top 10 based on the global breadth of its connectedness (ranking first on breadth but only 40th on depth).

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Having identiďŹ ed the world's most globally connected countries today, it is important to note that even these countries are far less connected than they potentially could be or, put differently, that they still have signiďŹ cant headroom to increase their levels of connectedness.

Consider the top ranked country, the Netherlands, as an example. The Netherlands was one of the pioneers of global trade centuries ago and remains a key trading hub. But, even though the Netherlands' merchandise exports represented 73% of its GDP in 2010, suggesting a high level of trade

The top 10 ranks in the 2011 DHL Global Connectedness Index were occupied, in descending order, by the Netherlands, Singapore, Ireland, Switzerland, Luxembourg, United Kingdom, Sweden, Belgium, Hong Kong (China), and Malta. integration, over half of its manufacturing exports owed through the country rather than originating within it. So, from the standpoint of a Dutch manufacturer (rather than a trader), it is better to

think of the depth of Netherlands' merchandise exports as somewhere in the range of 30-40%, rather than more than 70% (an adjustment that could not be made in the index itself due to lack LOGISTICS TIMES February 2012

REPORT

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of comprehensive data across countries).

Since the Netherlands comprises only about 1% of the world economy (implying that if borders and distance didn't matter at all, it would export 99% of its output), that 30-40% figure indicates substantial headroom even for the Netherlands to increase the intensity of its merchandise exports.

The breadth of the Netherlands' merchandise exports also indicates significant potential for it to become more globally connected. In 2010, 59% of the Netherlands' merchandise exports went to destinations within Europe, even though Europe makes up only about 32% of the world economy. Note that this implies that its exports to the rest of Europe were three times as intense as its exports to the rest of the world.

A useful device to summarize the limited depth and breadth of the Netherlands’ trade is a map that scales it based on its GDP minus its merchandise and services exports (to approximate the portion of its output that remians within the country), after adjusting for re-exports, and scales all other countries in proportion to the value of Netherlands’ exports to them.

Netherlands itself dwarfs all its neigbours, and Europe fills nearly the entire map area.

Data for other types of flows also indicate that the Netherlands could substantially increase its level of global connectedness. In 2010, only 4% of Gross Fixed Capital Formation in the Netherlands was accounted for by Foreign Direct Investment (FDI), and 77% of the Netherlands inward FDI flows came from within Europe. With respect to information flows, on a population weighted (intensity) basis, the intensity of domestic phone calls was 6500 times that of international callls from the Netherlands, 76% of which were to other countries within Europe.

And, considering people flows, 95% of people born in the Netherlands still reside there, and among the 5% who have migrated outside the country, 46% remained in Europe.

Furthermore, while the Netherlands captured the top rank in terms of overall LOGISTICS TIMES February 2012

global connectedness, it still has specific components where it lags behind the most connected countries. In terms of depth, the Netherlands lags in relative terms on the people pillar, ranking 31st overall, 63rd in terms of outward migrants, and 78th in terms of outbound international students.

The countries that fell to the bottom of the rankings are also spread around the world, but share various common characteristics beyond their low levels of global connectedness. The countries with the lowest ranks, starting with the lowest, were Nepal, Paraguay, Guatemala, El Salvador, Botswana, Burkina Faso, Zambia, Mozambique, Central African Republic, and Benin. These countries are

connectedness, the leaders in terms of depth are Hong Kong (China), Singapore, Luxembourg, Ireland, Belgium, Netherlands, Switzerland, Estonia, Malta, and United Arab Emirates. Countries with leading positions in terms of depth tend to be wealthy and small. Thus, depth scores in 2010 had a positive correlation of 0.58 with GDP per capita and a negative correlation of 0.25 with population.

The leading countries in terms of breadth are United Kingdom, France, United States, Netherlands, Germany, Switzerland, Japan, Denmark, Spain, and Sweden. These are among the world's largest and richest economies. Breadth is positively correlated with both GDP

Among the bottom 10 countries, six are landlocked and six are located in subSaharan Africa, far away from the world's largest centers of economic activity.

In contrast, only two of the top 10 are landlocked, and those—Switzerland and Luxembourg—are situated in Europe where their neighbors include some of the world's largest economies. all far less economically advanced than the top 10 countries, but they span a broad range of development levels, from Botswana (classified as an Upper Middle Income country by the World Bank) to among the world's poorest.

Among the bottom 10 countries, six are landlocked and six are located in subSaharan Africa, far away from the world's largest centers of economic activity.

In contrast, only two of the top 10 are landlocked, and those—Switzerland and Luxembourg—are situated in Europe where their neighbors include some of the world's largest economies, and where well developed physical and institutional infrastructure enhance their connectivity.

Turning to rankings by dimension of

per capita (0.54) and population (0.25), and thus more broadly with GDP itself (0.42). A regression analysis confirms that these relationships remain significant even after controlling for other structural and policy factors.

The tendency for larger economies to have higher breadth scores and lower depth scores applies even to the extreme cases of the largest emerging markets, which helps explain why those countries are so globally significant despite most of their economic activity remaining domestic. Each of the BRIC countries (Brazil, Russia, India, and China), has higher breadth than depth scores, with an average difference of 22 points (and an even higher difference of 27 points

21

LOGISTICS TIMES February 2012

REPORT

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LOGISTICS TIMES February 2012

23

when considering only Brazil, India, and China). To appreciate the magnitude of those differences, recall that both depth and breadth are scaled from 0 to 50, so the maximum possible difference is 50 points, and the largest observed difference is 31 points.

Consider the example of China, which ranks 104th (out of 125 countries) on depth and 26th on breadth. As the world's second largest economy and as a country ranked in the upper quartile on breadth (and with stronger outward than inward connectedness), China's global impact is very large.

But, China's depth score provides a useful reminder that even in China, the overwhelming majority of flows are domestic, as they are in all other large economies. Readers may be surprised that China ranks 67th in terms of the depth of its merchandise exports, a rank that is exceptional only when compared to other very large economies—the US, Japan and India rank 119th, 108th, and 105th respectively on this metric—or when contrasted with China's rank in terms of the depth of its merchandise imports.

Goldman Sachs has identified Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam as the "Next Eleven" major emerging markets , designated the "N-ll." Since these countries, while still large, are smaller than the BRICs, their breadth scores exceed their depth scores by a smaller margin (17 points on average).

Thus, when operating in these countries, one should expect international flows to loom larger in relation to their domestic economies, but for their external connections to be more regional (at least over the near-to-mid-term) than for the BRICs. Segmenting the DHL Global Connectedness Index scores based on the directions of the flows that are measured yields further insight into the patterns of global connectedness. Among 124 countries with sufficient data to conduct directional analysis, 69 countries are more connected outwards, while 55 had stronger inward connections.

While the significant disparities between inward and outward connectedness are indicative of some of the large imbalances (in particular in terms of trade and capital flows) that have contributed to recent instability, it is important not to over interpret these scores as indicators of dangerous imbalances. First of all, imbalances on the breadth dimesnion just mean that a country interacts with a more globally representative set of countries in one direction, while focusing more on particular partners in the other.

For example, Hong Kong (China) has a much more global pattern of exports than imports, because it serves as a key export gateway for mainland China, but plays a lesser role as an intermediary in

in favor of outward connectedness are Cambodia, Venezuela, Sri Lanka, China, and Lithuania; while those with the largest imbalances in favor of inward connectedness are Jordan, Lebanon, United Arab Emirates, Ghana, and Bahrain. The countries with the most balanced connectedness between inward and outward directions are Netherlands, South Africa, Belgium, Poland, and Central African Republic.

While it is difficult to discern patterns in directionality at the level of overall connectedness, some patterns are apparent when depth and breadth are examined separately. The proportion of fuel in a country's exports, for example, correlates positively with both stronger

Each of the BRIC countries (Brazil, Russia, India, and China), has higher breadth than depth scores, with an average difference of 22 points (and an even higher difference of 27 points when considering only Brazil, India, and China). the mainland's imports. Such patterns are not necessarily problematic, and can in fact reflect useful specialization.

Secondly, most of the flows included in the index do not create future obligations.

International flows of debt capital —the most dangerous flows in these terms because they must be repaid on specific dates—are excluded from the index.

Trade, FDI, and portfolio equity flows do directly impact future obligations, but the rest of the flows in the index do not.

Inbound telephone calls, for example, apart from common courtesy, do not require future outbound calls. Tourists, foreign students, and migrants all come with no obligation at all to engage in reverse flows of the same type.

With those caveats in mind, note that the countries with the largest imbalances

outward connectedness in terms of depth (a correlation of 0.47) and with stronger inward connectedness in terms of breadth (0.34).

The rankings can be disaggregated further to the level of specific pillars.

The top ranked countries on the trade pillar are Netherlands, Belgium, Singapore, Thailand, and Malaysia.

On the capital pillar, the leaders are Luxembourg, Netherlands, Switzerland, Ireland, and United Kingdom. In terms of information flows, the most globally connected countries are United Kingdom, Netherlands, Australia, Italy, and Switzerland. And the top countries on the people pillar are Switzerland, Iceland, Ireland, Germany, and Norway.

(Courtesy: DHL) LOGISTICS TIMES February 2012

COVER STORY

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LOGISTICS TIMES February 2012

25

Auto Logistics

Trends, challenges and way forword Fuelled by explosive growth trends (cutting across all segments) in last one decade, India today has the proud distinction of having become the second fastest growing automobile market in the world. And the demand is only slated to multiply manifold all through this decade posing challenges galore on logistics management front. Prem K. Verma, CEO, TML Distribution (a subsidiary of TATA Motors) and Guest Editor of this issue shares his insight on modalities which need to be adopted by stakeholders to cope with future challenges, many of which are simply appearing out to be insurmountable at this stage:

LOGISTICS TIMES February 2012

COVER STORY

26

Indian Auto industry Automotive industry in India as well as globally is one of the key sectors of the economy. Post de-licensing process in 1991, Indian automotive industry has grown in the last few years at an impressive average rate of 16 to 17%.

There has also been a steady increase in the numbers of manufacturing facilities in India after the gradual liberalization of auto sector. Auto industry has a strong multiplier effect and is one of the key drivers of economic growth due to its deep forward and backward linkages with several key segments of the economy. In rupee terms, auto industry recorded a turnover of around Rs 3 lakh crores in the year 2010 -11 and provided direct and indirect employment to 170 million people. Contribution of this industry to the GDP is around 6% and

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it also contributes 17% to the indirect tax revenue to the Government.

India is the second fastest growing automobile market in the world after China. It has emerged as the world’s second largest manufacturer of two wheelers and ďŹ fth largest manufacturer of commercial vehicles besides the seventh largest passenger car manufacturer in

the world. With the growing domestic market, high quality standards, cost effective manufacturing base with product development capabilities and availability of skilled manpower, India has the potential to emerge as an auto hub. To effectively position the industry as an automotive powerhouse, Indian automakers need to adopt and implement

27

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some best industry practices.

Indian Automobile industry is set to continue its growth trajectory in the medium term on the back of steady economic growth servicing both

domestic demand and increasingly export opportunities. Easy access to finance, rising prosperity and increasing affordability is likely to stimulate the two wheelers and passenger cars domestic

market. As per the Society of Indian Automobile Manufacturers (SIAM) estimates, vehicle market in India is expected to reach a volume of around 44 Million by 2019 – 20. (Refer to Chart 1)

COVER STORY

28

Logistics in India: We have a very large but inefficient logistics sector; inefficiency can be attributed to inadequate infrastructure, fragmented supply chain, non uniform tax structure, manual documentation process etc. Logistics costs account for 13% of the cost of GDP in India as compared to 8% - 10% in developed countries like US and Europe. Total logistics spend in India in year 2010 - 11 was around $ 100 billion and it is expected to reach $ 150 billion by 2015 – 16. Contribution of organized players to spend is as low as 7% and will increase to 15% by 2015 – 16. It is expected that logistics industry in India will grow at a CAGR of 10% over the next five years.

Logistics industry will evolve from a mere transportation service industry to one providing value added services in the near future. Efficient supply chain will be seen more as a tool for “Competitive Advantage.” With the ever increasing competition and customers expectations, logistics functions and components of supply chain have also undergone various changes over the period of time.

Role of auto logistics – scope and potential: India is the second fastest growing automobile market in the world after China which caters to a large and geographically

LOGISTICS TIMES February 2012

diverse market base – which makes fulfilling the customer’s demand a very challenging task as it requires a very efficient logistics infrastructure with great emphasis on customer orientation. The last decade has also witnessed a change in distribution pattern of vehicles. In today’s environment, outbound transportation is no more a mere efficiency and cost initiative but more of a strategic objective Auto industry is a complex system, with various subsystems, which are interlinked and inter dependent. Logistics is one of the critical subsystems which play an important role, as it involves efficient integration of suppliers, manufacturers, warehouses / stores and encompasses the company’s activities at many levels.

Inbound logistics is a key area of growth with quite a few suppliers maintaining warehouses close to plants for logistical and tax reasons.

Urban consumers have fueled the auto growth in India so far. Two third of the population which lives in rural India currently accounts for a very small percentage to that growth but the development and economic growth of rural areas and a surge in demand in Tier 2 and Tier 3 towns especially will throw a challenge of a different kind to the Auto supply chain in the country. This evolving business landscape and increasing competition across industries, is creating the need for more efficient and reliable supply chain necessitating development of strong back end and front end supply networks.

Auto sector is expected to contribute around 10 % of India’s GDP by 2016.

Average industry spend on logistics is around 4 % of its revenue and almost 50 percent of the same is spent on transportation alone. Auto industry is very heavily dependent on road transportation

India is the second fastest growing automobile market in the world after China. It has emerged as the world’s second largest manufacturer of two wheelers and fifth largest manufacturer of commercial vehicles besides the seventh largest passenger car manufacturer in the world.

Logistics Times Ensure your copy every month by subscribing To know more, please visit us at: www.logisticstimes.net

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31

with very low share of Railways as compared to other developed countries with virtually no transportation by sea or inland waterways.

As they say, gap between success and failure in logistics depends on servicing emerging customers and auto segment is no different.

Outsourcing in Auto Logistics: Till some time back, supply chain was looked at more from a cost perspective, the reason why not much development has happened on this front. 3PL activity in India is an emerging business and has a huge business potential. In India, this industry is less than 10 percent of the total logistics business as compared to 80 percent in Japan. Transportation is mostly outsourced by Indian automotive companies where as value added services are least outsourced. The Indian auto market is becoming increasingly more globally integrated and competitive. As OEMs want to concentrate on their core capabilities, outsourcing is no longer considered a taboo. Manufactures and traders would be more inclined towards outsourcing logistics functions and those LSPs who can provide value added / range of services besides transportation and warehousing would always have an edge over others.

Some of the critical factors to be considered before any OEM decides to outsource or appoints LSP: 1. Is appointment of LSP a strategic decision of the organization or an operational one?

2. Are various stakeholders / decision makers committed for this tactical and strategic change to the new WOW? 3. Are we outsourcing just for cost?

4. Are you willing to allow operational autonomy to the LSP? 5. Have we decided on his key deliverables including internal and external benchmarking?

It is not an exhaustive list of factors but some of the critical ones - outsourcing has to be a strategic decision of any organization to provide longevity to its

relationship with LSPs. This will enable LSPs to focus / invest on innovation which will lay the foundation for long term, profitable success through positive relationship management. This cannot happen without a complete buy in of the senior management and all stakeholders of the organization. While LSPs are expected to be more cost effective due to the efficiencies they bring in their operations for variety of reasons but we should avoid outsourcing with cost as the only objective.

We also need to treat our LSP as a business partner / associate and not a mere vendor and need to maintain complete transparency with him. In case outsourcing is expected to fructify we need to give some operational autonomy within well defined boundaries as we are not appointing just a box mover whose forte is only the size and quality of fleet or various type of warehouses. His key deliverables need to be his capability to provide complete logistics solutions.

While trust and transparency is critical it is also mandatory for both (OEM & LSP) to remain vigilant and always question and continue sending loud and clear signals to keep predators at bay.

While selecting LSP, we have to ensure that SCM is his core competence and has to be a good culture fit with his principles befitting your organization. LSPs should have the capability to re-engineer supply chain process and needs to be a game changer who can provide multi modal solutions and bring radical changes in every supply chain facet of the OEM business. Knowledge and familiarity with the region for liaising with authorities will be an added advantage for LSPs. People who are going to run the show is also a very critical / decisive factor.

Challenges faced by logistics sector: The Indian logistics industry is likely to witness a consistent growth of 9 to 10 percent every year during the next ten

Auto industry is a complex system, with various subsystems, which are interlinked and inter dependent. Logistics is one of the critical subsystems which play an important role, as it involves efficient integration of suppliers, manufacturers, warehouses / stores and encompasses the company’s activities at many levels.

Trust is critical and essential part of any business and economic success. For more than two decades it is being touted as the all powerful lubricant that keeps economic wheels turning. As transparency is inevitable today, being candor can help in improving the performance.

As regarding certain suggestive practices for outsourcing - there should always be an exit option / clause for both the parties, as it will help both of them trust each other more and with higher commitment.

Ownership and admittance of an error could dilute / remove crises and create a healthy working atmosphere. Obstacles faced should be shared openly, which could otherwise result in a crisis and such sharing should be a regular process.

years and should attain revenues of around $ 200 billion by 2020. While the industry is evolving, it is facing certain trends and major challenges which urgently need to be addressed. Critical amongst them are manpower / skill gaps, technology led solutions, improved infrastructure connectivity, implementation of GST, collaborative approach, warehousing and availability of multimodal transportation solutions which could facilitate the growth of this sector.

Manpower / Skill Gap: Logistics in India is still not considered a primary function in traditional organizations. There is a very low awareness among industries on all LOGISTICS TIMES February 2012

COVER STORY

32

As OEMs want to concentrate on their core capabilities, outsourcing is no longer considered a taboo. Manufacturers and traders would be more inclined towards outsourcing logistics functions and those LSPs who can provide value added / range of services would always have an edge. aspects of logistics due to which logistics functions are not dynamically linked to business strategies of the corporate.

While the economy has witnessed a high growth trajectory in the last decade across all industries by and large in the last few years, the availability of skilled manpower is still lagging behind the requirements of the industry.

Serious challenge going forward would be managing and upgrading manpower skills with increased complexity. This is being discussed and debated at almost all the supply chain forums as skill deficit is a major concern for OEM and LSP both but despite that there is still not enough focus in developing manpower skills in this sector. Though this is a LOGISTICS TIMES February 2012

high volume employment generator sector, which employs around 50 million people, it is still not being perceived as a career industry among the youth of this country. Industry lacks image and is not as respected as white collar jobs and the emergence of alternative attractive career options like retail etc has further compounded the problem. Industry lacks attractiveness amongst new recruits due to comparative poor working conditions and relatively lesser attractive pay.

Truck drivers who form the backbone of the transportation sector are the most neglected / untrained set of workers.

As per the available estimates, only 10 percent of overall manpower costs (out of INR 600 billion) are spent on

soft skills development, training, and employee welfare schemes, etc., by the Indian logistics companies compared to 20 percent and more by global logistics companies. Most of our existing drivers are illiterate and lack any formal training.

Fatality rate on road is almost 10 times more than the developing countries which is causing huge economic loss.

Currently, 10 percent of the available fleet remains unutilized due to shortage of drivers; it is estimated that the demand for truck drivers will increase to five million by 2016, as against three million truck drivers that exist today. With the estimated requirement of an additional two million drivers by 2016, the movement of goods could be severally impacted. Introduction of highly sophisticated trucks will further compound the problem of recruiting / retaining trained drivers. We all have to understand that the need to have skilled and trained drivers is not only the requirement of auto industry alone but each and every industry will be impacted due to their shortage.

There is also shortage of skilled manpower in the areas of logistics supervisors, warehouse managers, mid level managers as their profile and position has undergone a radical change in the last decade. Most profound difference is in the level of complexity managers have to cope with

33

in current environment. Besides the core transportation and warehousing services, logistics industry is progressively expected to be the provider of value added services.

Sophistication and competition along with scale building among the industry players is expected to drive the need for deeper skills at the operational level and a broader range of skills at the middle and senior management levels in future.

There is an urgent need to have an institutionalized skill development environment for creating logistics manpower and to undertake initiatives to uplift the image of the industry. We need to invite new talent to improve the efficiency of the industry. Academicians, various industry bodies and seniors of the logistics industry need to take the responsibility of creating awareness regarding the career prospects and opportunities being provided by the logistics industry.

Technology led solutions: IT adoption in the logistics sector in India is still at a nascent stage; as industry is largely dominated by the unorganized sector and use of technology is still limited. In Europe, a logistics company spends around 5 percent of its revenues on IT development, whereas in India it is around 0.5 percent. The major

It is estimated that the demand for truck drivers will increase to five million by 2016, as against three million truck drivers that exist today. With the estimated requirement of an additional two million drivers by 2016, the movement of goods could be severally impacted. industry segments that use IT in their logistics spends are Inland Container Depots (ICDs) / airports / ports and warehouses.

In today’s scenario of intense competition, technology has emerged as the most important tool in gaining a competitive advantage. With the advent of technology led solutions in the logistics sector and the emergence of organized players, corporate in this sector are striving hard to deliver quality services using latest technology available. With right technologies in place (bar-coding, scanners, RFID, electronic notepads, on-line tracking, etc) one can not only reduce operational expenses by around 25 percent but also reduce the lead times

to facilitate express distribution.

IT industry is expected to be the forerunner of growth in the coming decade of the Indian logistics sector but the biggest obstacle is the awareness and adoption of the same, which requires a change in mindsets. Adoption of technology in the auto logistics is definitely much higher as compared to other industries but it still has a long way to go and realize the true potential / advantages of it.

Infrastructure: Although India has over 3.3 million kilometers of roads and worlds’ second largest road network, the country’s road density is only 3 KM per 1000 people, as compared to the world average of 6.7 km.

LOGISTICS TIMES February 2012

COVER STORY

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Though there are plans for expansion of road network, the critical thing is that this expansion is not keeping pace with the needs. Considering already widespread transport-related challenges ranging from traffic congestion to the quality and adequacy of transport infrastructure, there are significant concern about whether this will become a bottleneck in the country’s economic progress.

Average speed of our trucks is less than 40 kms / hr which is even lower than some of the under developed countries.

Also, waiting time at toll stations and state borders is very high resulting into lower running per day. We not only have to improve our roads and highways but also the infrastructure at ports to improve turnaround times. In addition, creating an encouraging environment and supporting policies for the industry are also needed.

However, much of this is changing with the government now demonstrating a strong commitment towards providing an enabling infrastructure and creating conducive regulations.

As per the information available, significant investment (to the tune of INR 15 trillion) planned in the infrastructure over the next few years with an increased emphasis on PPP (public-private partnership).

Dedicated Freight Corridors (DFCs) and Industrial Corridors (ICs) would emerge to be the game changers in the logistics industry. At the same time, regulations around rationalization of tax structures and prevention of overloading though still in few states is creating an environment of positive change. Organized players now have the opportunity to leverage economies of scale, complemented with better infrastructure, to provide integrated logistics solutions which are cost effective.

states. This has led to the prevalence of small scale, fragmented warehouses, with corresponding inefficiencies rather than large, centralized set-ups. A traditional corporate house will have 25 to 30 warehouses across India depending upon the geographical spread of their business.

As a result, facilities are often small and

Warehousing: Warehousing sector, though with a huge growth potential is also an extremely fragmented and geographically scattered sector. One of the key reasons for the same is India’s indirect tax structure which has forced most corporate houses in setting up warehouses across different

nothing more than poor quality and highly inefficient stockyards which are typically managed by local C&F agents, having poor knowledge of latest warehousing technologies. Ineffective warehousing system and inefficiency have a direct impact on the overall inventory level India has one of the highest inventory

LOGISTICS TIMES February 2012

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levels as compared to some other BRIC countries due to ineffective and inefficient warehousing structure.

As majority of players in this industry are small / medium entrepreneurs running the warehouse as a CFA for one or more companies, scale of these warehouses operations is not large

enough to derive benefits of economies of scales or justify investments in higher standards. Going forward, implementation of the GST is expected to drive consolidation of stockyards and emergence of large scale warehouses.

The rapid growth of organized retail is expected to drive sophistication and efficiency in warehousing practices.

These developments would drive the need for specialized warehousing skills and the ability to understand and use warehouse management systems (WMS).

Auto companies are operating on two sets of storage / delivery mechanism.

COVER STORY

36

Direct billing and dispatch from the plant to the dealers or stock transferring to the stockyards located in various states and billed and dispatched to the dealers. More often than not passenger cars, SUVs, and two wheelers are dispatched directly from plant whereas other commercial vehicles follow the later and are primarily driven on their own power. Off late even passenger car companies are exploring the route of hub and spoke model to reduce the trade inventory and improve on customer service levels.

Implementation of GST: There is an urgent need to hasten the process of implementation of GST as it would remove the anomalies in taxation policies across different states and would bridge many a gap in this fractured system. Its implementation would also give the required impetus to the logistics industry, as it would simplify many existing rules, which will streamline inter-state and intra-state movements by avoiding regulatory checkpoints.

GST will also be a major step towards a more efficient, hub-and-spoke delivery network with the use of regional / centralized distribution centers. This new regime will promote giant warehouses in India, where warehouse concept will be driven totally by logic of operational efficiency. This may give rise to multi brand warehouses, operated by 3PL, to achieve efficiency in secondary transportation to dealers / customers and to be more competitive in the market. Bulk movement from plants to these warehouses will give rise to movement through rail, sea, multimodal transportation.

Efficiency Improvement Drivers: While infrastructural constraints and multiple tax system are an impediment in improving the efficiency in the supply chain of auto logistics, Government and industry also needs to work on the following drivers to improve the operational efficiency and to achieve sustainable cost erosion in the entire supply chain: LOGISTICS TIMES February 2012

A) Collaborative synergy – Unified market place Collaboration is the key to survival in today’s business climate. Any challenge which is too immense for your supply chain to handle, you could even join hands with your rivals and may get a better and quick solution as “rivals are no more untouchables in logistics game.”

Considering the various challenges today being faced not only by auto logistics but by the entire logistics sector, the solution of the same would need some form of collaboration directly or indirectly between the various entities. It could be collaboration between various OEMs, LSPs or even rivals who might be fighting with each other in the market place for

may not have the scale, right geographical spread of demand to support efficient distribution network. The solution is to look beyond one’s own enterprise and to have tie-up with other’s supply chain.

GST could provide an advantageous position to those OEMs who are willing to use common resources for stocking and distribution through common warehouses (Distribution Centers) across the country and sharing trailer capacity amongst them especially for the last mile transportation. This would not only significantly improve the efficiency of auto logistics but would be even more cost effective due to economies of scale.

Efficient and effective use of railway network (which is still the fastest mode

Average speed of our trucks is less than 40 kms / hr which is even lower than some of the under developed countries. Also, waiting time at toll stations and state borders is very high resulting into lower running per day. We not only have to improve our roads and highways but also the infrastructure at ports to improve turnaround times. additional volumes but all cost erosion, improved customer service and efficiency improvement drivers need some form of collaboration to bear fruition.

Collaboration need not be confused with just freight consolidation / better utilization of transportation as it would be a very narrow and restricted view of collaboration. In the true sense, collaboration means improve the exchange of information, management of sales orders and execution / delivery of the same by working with various stakeholders.

Post implementation of GST, collaboration amongst various OEMs would not only gain more importance but could even be a necessary evil for those who still consider this either as a fad or even a taboo. A single company

of transportation) can also only be achieved by collaboration among various OEMs / shippers. Though the use of Railway for auto movement has increased over the last few years, but the initiatives are largely limited to individual company levels. Collaborative efforts among all OEMs could lead to much improved rail capacity utilization and efficiency improvement.

Pre-requisites of Collaboration: We need to have a multi stake holder approach with active participation from various stakeholders.

It should be more of a business objective than a mere cost cutting one.

It should not centre on better utilization of transportation or

37

optimization of warehousing but should go beyond creating value propositions.

Collaboration should be for long term and not need based.

Its success would depend on the efforts of all the stakeholders which need not be from the same industry.

Collaboration could be lateral - with your rivals or even could be vertical with your suppliers / end customers or stakeholders.

One of the major obstacles for collaboration in logistics is the lack of trust as most corporates fear the risk of important / sensitive information getting leaked to the competition.

While we need to build certain safeguards

B) Multimodal transportation – Best fit alternative Massive growth of containerization globally which introduced the modern concept of multimodal transport has shifted the cargo delivery system from ‘port to port’ to ‘door to door’. Globally, several industrial and agricultural companies have changed their production methods and shifted their manufacturing bases to be able to use containers and capture the advantage of MMT. In order to facilitate movement of goods from manufacturing locations to ports and vice-versa we will need to focus on developing a multi modal transportation system in India. Entire chain of transportation processes

Any challenge which is too immense for your supply chain to handle, you could even join hands with your rivals and may get a better and quick solution as “rivals are no more untouchables in logistics game.” to minimize the damage due to same but more important is to build an environment that is credible from the beginning to end as greater the bilateral dependencies the lesser will be the risk of letting each other down.

Vulnerabilities in the supply chain need to be identified before hand and need to educate all the collaborators before you share information related to forecasting, order and production scheduling etc.

LSPs would need to play a very critical role in driving the same and onus has to be more on them to educate the OEM and end-customers on the potential cost savings and efficiency improvements.

LSPs are not only the experts in their own field but also have the advantage / experience of dealing in related and complementing products with various customers.

needs to be effectively connected and coordinated with complete flexibility to link warehouses to ports through rail and road network.

Traditionally transport policies / systems have focused on individual modes of transport like rail, ships, roads etc. but there is an urgent requirement to have a nodal agency which can interconnect such systems in a seamless intermodal transportation system which is supplementing each other. Besides safe, efficient and flexible, multimodal transportation is: Environmentally friendly.

Cost effective Meets the needs of large spectrum of industries.

Business potential of colossal proportions is waiting to be tapped in multimodal transportation in India. This segment of transportation which can do wonders in

reducing costs and enhancing efficiencies is awaiting the attention from the policy makers to provide the right environment and attention. With more and more OEMs starting to realize the importance of multimodal transportation, the potential for this mode of transportation is enormous. A coordinated approach is required from an empowered government body to develop infrastructure which can support the multimodal transportation throughout the country which is now more of a pre-requisite for a sustainable growth of Indian economy.

Growing popularity of small cars in emerging markets like China, Thailand and India have made movement by containers a viable economic option.

They also provide much needed security from climatic conditions, infrastructure deficiencies and pilferage. The ultimate goal is to “deliver greater value to customers or create compatible value at a lower cost or do both”.

C) Sub optimal modal mix - Over dependency on road transport: Contrary to more mature economies, the majority of vehicle movements in India are still dominated by road transport. As per the study done, 61% of the total goods movement is done by road transport, followed by railway contributing only 30%. While in auto logistics, the scenario is even worst, road transport contributing 94% and railway contributing only 6% of the total movement. Due to inadequate development on infrastructural part, road transportation remains inefficient and cost ineffective over the period of time. In addition to high number of toll stations, high waiting time at state borders and frequent congestion on highways hampers the movement of vehicles.

There is no standardization on the type and size of car carriers and trailers due to which transporters are more at the mercy of the interpretation of the state authorities which further compounds the inefficiency issue and increases the cost.

Over the last few years, movement of goods has increased manifold in India, and it has outpaced the infrastructure development. Unlike the earlier situation, where delivery locations were limited to LOGISTICS TIMES February 2012

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metros and large cities; increased demand from tier-2 and tier-3 cities has seen movement of goods to these smaller cities and towns. While we need to reduce our overall dependency on road but we also need to build some road infrastructure to these smaller cities and towns to take care of emerging demand.

In spite of above mentioned problems faced by road transport, it has still remained highly dependent mode due to non existence of alternative modes of transportation besides the flexibility it provides over the other modes. Capacity constraint in Railway and underdeveloped ‘waterways’ have virtually forced the Auto OEMs to transport their vehicles by road.

Considering the poor condition of roads which are already highly congested we LOGISTICS TIMES February 2012

Growing popularity of small cars in emerging markets like China, Thailand and India have made movement by containers a viable economic option. They also provide much needed security from climatic conditions, infrastructure deficiencies and pilferage. need to start working on an alternative mode of transportation to take care of the projected 45 million auto volumes of 2020. That alternative could be improvement of share of Railways or development of inland waterways.

Railways: In developed countries like the US or

Europe, nearly 60-70% of the passenger cars are transported by rail mode but due to capacity constraint, movement of automobiles through railway in India has remained very low and dismal at 6%.

Indian Railways does nearly as many passengers per KM as China but when it comes to tonnage per KM, it does only one fifth of China. As auto industry is

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growing at a rapid pace, Railways need to increase their transportation capacity substantially to cater to the growing demand of transportation of cars and other automobile vehicles. With the introduction of GST in near future, state and regional warehouses would come in to play. In such a scenario, bulk movement from plants to major consumption centers in the states and regions ideally should be done through Railways which would reduce the burden on roads. Railways can play a very major role in the first leg of distribution while last mile movements could be done by roads. Other than the capacity issue, the other concerns to be looked into by Railways are non availability of parking space, poor lead time, goods safety issue and proper loading and unloading facilities etc.

However, new wagon policy, auto hub policy, auto freight policy and projects like DFCC are clear indications of things to come. With various initiatives and better co-ordination with in various OEMs / LSPs, railway auto share has improved from 2% to 6% in last two years but anything less than 20% movement

by Railways by 2020 could impact the transportation of finished vehicles to consumption centers and in turn impact the planned growth trajectory of auto business.

River & Sea Transportation: Having long coastal line of around 6000 KMs and large number of ports available throughout the coastal line, India has huge potential of developing Sea or Inland Water Transportation as alternate / multimodal mode of transportation. It is not only the most cost effective way of transportation but even the most eco friendly mode of transportation.

Movement of goods in India through this mode of transportation is not very popular, as besides not many manufacturers have their manufacturing base on the coastal area, the road or rail connectivity to the ports is also a big factor. In case of auto movement, transportation through this mode is insignificant as compared to 20% to 30% in most developed countries.

In developed countries like the US or Europe, nearly 60-70% of the passenger cars are transported by rail mode but due to capacity constraint, movement of automobiles through railway in India has remained very low and dismal at 6%.

Lack of focus on development of Inland Water Transportation is the main hindrance in utilizing this mode of transportation for goods movement.

Bridges across rivers are constructed without considering the needs of IWT. Lack of landing sides and approach road is also one of the constraints.

China on the other hand, is investing heavily in developing facilities for inland waterways.

The future of India lies in using engineering skills and knowledge in analyzing the problems of national waterways to ensure that they conform to international standards.

D) Improving packaging efficiency – More cars per carrier.

As auto cargo being of voluminous nature no of cars or small commercial vehicles per carrier is determined more by space than weight. Every additional vehicle can reduce the cost of transportation in geometric proportions. OEMs and LSPs need to work together on improving the packaging capacity of rail and road mode of transportation within the statutory regulations.

E) Waste prevention – Minimize empty hauls.

In auto transportation freight is heavily dependent on return load factor, car carriers being special purpose vehicles they are generally incompatible with general cargo. As per the recent study done, 50% reduction in the empty hauls can reduce the freight expense by almost one third. OEMs and LSPs can play an important role here also by coordinating with each other to reduce the empty hauls and even become cost effective. Although

movement of auto through containers is still not common in India but containers besides having multi modal capability can reduce dependence on auto for return loads.

Green Logistics – Way Forward: Limiting damage to the environment is the major challenge any industry faces over the coming years. For long time logistics industry is being slammed / criticized for being one of the key contributors to environmental pollution. Corporates have stepped up their environmental programs and actively looking for ways to make their supply chain green by emphasizing the short and long term advantages of going green. Since scope of green logistics is not restricted only to the transportation of the vehicles, but also expands to whole supply chain, firms have larger role to play in controlling carbon footprint.

Sustainability and profitability don’t have to be mutually exclusive and can very much go hand in hand. While setting financial objective for a supply chain network we need to consider environmental issues as it is possible to successfully balance the trade-offs between both of them. The main objective of supply chain is to coordinate these activities in such a manner that it meets the customer requirements at minimum cost to the organization and damage to the environment In absence of government regulation and any clear guidance on how to measure and reduce carbon emissions, most of the work done is by self motivated individuals or corporate houses. However, there are signs of increased awareness and corporate society has started talking LOGISTICS TIMES February 2012

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about the environmental issues in detail.

As one report suggests that corporate houses are now even willing to remove those suppliers who are not meeting carbon management criteria set by them.

In future, it is expected that information on carbon emission and its reduction initiatives will become a standard part of the logistics contract.

There is an increased trend of cutting on carbon footprint by way of efficient logistics. As per a published report, JCB shifted from road to rail transportation for dispatching its finished machines from UK to Italy.

It resulted into reduced cost of 20% and reduced carbon by 75%. It is also now looking for combining the inbound material coming from Italy, for better utilization of train capacity. Since, river and sea routes are the most eco friendly route for long distance, lot of car companies in Europe have started shifting transportation of its finished goods and inbound movement from road to rail / sea to cut on carbon emission.

Another initiative becoming popular is efficient use of resources by maximizing available capacity and reducing on empty KMs. Companies in Europe are now demanding full truck load from its distributors / dealers to cut down on emission. Also, reduced speed has direct link with reduced carbon emission.

LOGISTICS TIMES February 2012

K-Line is running its container services on the basis of “slow steaming” which reduces a vessel’s speed by 50%. With this, it can save up to 90% of the fuel as compared to full speed. However it may result in to requirement of more ships and may result in to delayed deliveries, but companies are ready to compromise on that considering the large benefits to environment.

Government & industry support: Although there are some good signs / trends on the policy front, with the Government moving from a regulator’s role to a facilitator role, the pace is the key concern.

Many associations and logistics industry experts have been lobbying for an ‘Industry Status’ for this sector. One of the reason the developed countries having a low logistics cost of around 7-8 percent is because of the benefits in terms of tariff levels and other supporting policies provided to logistics sector. Average logistics cost varies from 4% to 16% in India with the cement industry having the highest logistics cost of 16%. One of the biggest challenge being faced by the logistics industry is to bring down the logistics cost from current level of 13% to around 9% in a phased manner. This reduction is not only required to make

logistics industry competitive, but any reduction in any of the components of supply chain will also help in reducing the cost for the end customer.

With an increase in the manufactured cargo, the need for multi-modal transportation is bound to further increase as cost of switching over from one mode to another is high due to the disconnect between the modes. This can be achieved only with help from the Government, as there has to be a nodal agency, which would integrate the various modes of transportation and take a more cohesive approach towards multi-modal transportation.

Besides above infrastructural supports provisions of Motor Vehicles Act needs to be reviewed to accommodate changes required in current situation, streamlining inter and intra state movements by avoiding regulatory check points. We also need support from industry and Government in building the soft infrastructure. Various Industry bodies and associations need to develop strong institutional framework for creating logistics skilled manpower and to undertake initiatives to uplift the image of the industry and to attract new talent.

Last but not the least is the early implementation of GST which can open a new chapter in the logistics sector in India.

India Aviation 2012 large number of countries that would be visiting / exhibiting in the India Aviation 2012 Exhibition. The event will witness UK as the Partner Country, France as the Focus Country and USA as the Guest Country.

Civil Aviation industry experts from across the globe will meet again at the 3rd edition of the India Aviation Conference on 15 March 2012 during the India Aviation, India’s largest show on civil aviation, being jointly organized by Ministry of Civil Aviation, Government of India and Federation of Indian Chambers of Commerce and Industry (FICCI), to discuss and deliberate upon the future of civil aviation in India. The

forum for global players to tap the emerging opportunities in the Indian civil aviation market and for Indian players to interface with their global counterparts. It will be an ideal platform for showcasing the growth of civil aviation in India and act as a medium for deliberation and discussion on various policy matters.

Presence of policy makers, senior government officials, domain experts and global leaders from civil aviation sector

Highlights of India Aviation 2012 Largest trade show on civil aviation in India

theme of this year’s event is ‘India: The Emerging Aviation Hub.’ The conference will focus on the opportunities for investment in Indian civil aviation sector and highlight India’s potential for becoming a hub for ‘air cargo logistics’, ‘manpower training’ and ‘Maintenance, Repair & Overhaul’ (MRO) work triggered primarily by India’s fast-growing passenger traffic, aircraft demand, availability of talented engineering workforce and strategic position in the South East Asia.

The conference will provide an exciting

offers tremendous on the spot business opportunities to the participating delegates.

The conference offers a diverse range of opportunities all designed to provide the participants maximum exposure to all facets of India’s civil aviation sector. The conference will examine the global outlook towards civil aviation, with particular focus on addressing the challenges faced by the industry and preparing for future opportunities.

The conference will also have the benefit of participation of delegates from a

Jointly organized by Indian Government (Ministry of Civil Aviation) and Industry (FICCI) Practical insights from Indian Government officials/ policy makers, business leaders and market experts Networking opportunities with global aviation players Update on latest development in the design, construction and operation of an airport/Air Center Showcasing your business strengths/ offerings to your potential clients/ customers.

LOGISTICS TIMES February 2012

CURTAIN RAISER

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E-COMMERCE

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Click & Mortar World over, blue chip logistics companies like DHL, DB Schenker , United Parcel Service and many others have embraced Prof. Akhil Chandra, E-Commerce Institute of Logistics & Aviation Management in a big way transfor ming themselves from a ‘Brick and Mortar company’ to ‘Click and Mortar company’ providing new efficiencies to the management of their complex supply chains.

Could India be left far behind? Answer is big No ! India has now an internet user base of over 10 million users and over 865 million mobile phone users and though the penetration of E-Commerce in India is low compared to markets like US, UK, Japan and China but it is growing at a much faster rate with large number of new entrants and a burgeoning and upwardly mobile middle class with large disposable income. Timing is now just right to cash in this new E-business opportunity for third party Indian logistics providers and jump into the bandwagon and with increasing broadband internet ( growth at 20 per cent) and 3-G penetration aided with WI-MAX connectivity offered to business enterprises , floodgates are wide open now for becoming last mile carrier to both type of business viz B to B and B to C. They have to integrate their business with E-Retailers with seamless information flow between retailers, themselves and manufacturers after developing their ICT capability. Let us now look to other key drivers to this new E-business opportunity which are: Availability of much wider product range to what is available at brick and mortar retailers, Busy lifestyles, urban traffic congestion and lack of time for LOGISTICS TIMES February 2012

offline shopping, Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs, Unlimited reach of the customers both nationally and internationally through internet portals, India has world’s fouth largest internet users, and India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%.

Electronics and Apparel are the

biggest categories in terms of sales.

Direct imports constitute a large component of online sales. Demand for international consumer products is growing much faster than in-country supply from authorized distributors.

What shall be the new challenges to LSPs for this new E-Business opportunity?

Electronic Commerce demands an agile, high velocity and granular approach to logistics A manufacturer or online merchant must be able to customize an

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individual order; ship it directly to the buyer anywhere in the world; track the whereabouts of the item at any given time along the supply chain, handle customer inquiries, handle product returns (reverse logistics) all at very high speed and at a fraction of the cost of traditional shipping and fulfilment, Larger number of small parcels or packages due to a larger number of buyers making direct orders and a larger number of sellers than in traditional trade, Origins and destinations of shipments are more widely dispersed, given that more buyers place direct orders with producers and distributors and more sellers access buyers globally, Accountability for shipments extends

through the entire supply chain, compared with traditional logistics in which accountability is limited to single links of the supply chain, Customers have high expectations about quality of services and demand fast delivery of shipments, Higher incidence of cargoes returned to the supplier than in traditional trade, Greater demand for and availability of information covering transactions over entire supply chain, thus allowing on-line shipment tracking and other supply chain management functions, Substantial increase in the volume of small shipments, leading to growth of demand for warehousing transport and other logistics infrastructure that can handle larger volumes of small

when the goods can be transported directly from the producing company to the end customer. Direct home deliveries will request shorter lead times, and more complex distribution systems will be necessary to make this possible.

Conclusion: E-Commerce opportunities can no longer be ignored by Indian 3 PL players.

Country has now offered robust internet connectivity with high reach in the country and with new technologies like Wi-MAX and 3G future of E-Commerce is bright and early birds in logistics industry can reap the benefits offered.

E-Commerce has been embraced by practically most of big international players and with multi-branding which

Onus is on LSPs to accept the change and thrive with the e-business opportunities.

Logistics industry has to face the challenges and opportunities created by e-commerce, both from within the industry and from external players. shipments, Qualified e-logistics providers must depend on integrated IT systems and complex, Software to manage the dynamic flow of products. The quality of information must be much better than that of traditional outsourcers, so that companies can have visibility into their supply chains. Better information also reduces inventory throughout the supply chain, enabling companies to react quickly to market changes, and When delivering to private persons instead of companies, the demand for fast and accurate deliveries will increase. This is because one or more of the physical nodes will disappear

is soon to be allowed to foreign retailers like Wal-Mart, Tesco and Carrefour etc

by Government of India as reiterated by our prime minister somewhere around March, 2012, application of E-Commerce shall rise offering a clear cut opportunity base to Indian logistics service providers. Onus is on them to accept the change and thrive with the e-business opportunities. Logistics industry has to face the challenges and opportunities created by e-commerce, both from within the industry and from external players.

The industry has always been pressed to cut costs and squeeze margins, and the future will be even more formidable as competition forces most companies to continue the streamlining of their business.

LOGISTICS TIMES February 2012

PRODUCT

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INDIA’S NO.1 ENTRANCE AUTOMATIONS & LOADING BAY EQUIPMENT COMPANY GANDHI AUTOMATIONS OFFERS FIRE ROLLING SHUTTERS/ FIRE DOORS:-

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Door closes automatically under governor control after separation of fuse link.

UL-listed brush type smoke gaskets satisfy smoke retardation requirements.

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LOGISTICS TIMES February 2012

EVENTS

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Excellence Awards In a glittering ceremony on 8th February at New Delhi’s Taj Man Singh hotel, Indian Chamber of Commerce (ICC) distributed awards across nine categories for excellence in logistics and supply chain. The prominent winners during the evening were: Air India, Blue Dart, Safexpress, TCI, Arshiya and Kale Logistics. Gati chief Mahendra Agarwal was given a special award during the ocassion.

The excellence awards were part of Indian Supply Chain and Logistics Summit, 2012 which also saw three exhaustive business sessions in which leading industry representatives and experts participated.

Logistics Times was media partner of this event

LOGISTICS LOGIST STICS TIMES February 2012

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Book Release A book on “Facilitating Trade and Global Competitiveness – Express Delivery Services in India” authored by the Indian Council for Research on International Economic Relations (ICRIER) and Indian Institute of Management (Kolkata) and published by Oxford University Press (OUP) was released in a seminar organised by ICRIER; OUP; CII Institute of Logistics; and EICI on February 8, 2012 at the Lalit InterContinental, New Delhi. The book was released

by Ajay Shankar, Member Secretary National Manufacturing Competitiveness Council.

The launch was followed by a panel discussion on “Express Transportation in Global Supply Chain”.

DHL Delivers Manchester United’s Champ19ns Trophy Tour DHL, the world’s leading express and logistics company, delivered Manchester United’s Champ19ns Trophy Tour to Mumbai for a special event with employees and customers.

The DHL Champ19ns Trophy Tour event in Mumbai included a football clinic with two Manchester United Legends Denis Irwin and Quinton Fortune with children of the Magic Bus Foundation and the DHL football team at the newly opened Manchester United Soccer School.

This is the first time the club has toured India with the trophy, and is part of a global tour which will visit 27 Asian and African destinations, including Turkey, South Korea, Japan, Vietnam, South Africa, and Kenya, covering over 48,000 miles.

LOGISTICS TIMES February 2012

Customer & Brand Loyalty Award Cu rd Blue Dart E Express Limited, has won the Customer & Brand Loyalty Award in the Logistics Sector – Domestic Express at the 5th Loyalty Awards 2, marks the Awards. The award, presented at a gala ceremony at InterContinental The Lalit, Mumbai on 1st February 2012, second time in a ro row that Blue Dart won this accolade amongst a host of national and international players who were also nominated for the honour. The Loyalty Awards, a part of the 5th Loyalty Summit were presented by AIMIA.

TCI bags aw award ward in 3PL category catego gory At the glittering AIMIA Loyalty awards ceremony, Transport Corporation of India (TCI) was declared the winner in the “3PL / Supply Chain” category.

Jasjit Sethi, President & CEO, TCI SCS accepted the award from Louise Cantrill, Director of European Operations Development, AIMIA and Arjun Hira, General Manager (Brand & ARB) RHQ, Bharat Petroleum Corporation Ltd. These Awards are the outcome of a combination of Consumer Research undertaken in 5 major cities of India aided by Nominations received from organisations. An Accredited Research Agency was appointed for the Research of the Awards Nominees & the winners.

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EVENTS

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Hat-trick for Emirates

For the third consecutive year, Emirates SkyCargo has been honored as the ‘Air Cargo Carrier of the Year 2012’ at Air Cargo India summit held in Mumbai. Ram Menen, Divisional Senior Vice–President received the award at a glamorous evening on Thursday, February 02 and witnessed by the powerhouses of the Indian cargo sector. Carrying special cargo such as Formula -1 cars, two day old chicks, the famous Assam tea as well as luxury cars out of India only demonstrates Emirates SkyCargo’s potential and specialised ability to deliver at the highest level without a doubt. Additionally, the airline has been instrumental in carrying pharmaceuticals & vaccines, electronics & electrical, engineering spares, chemicals, jute, silk, various kinds of perishables, valuables such as jewellery – diamonds – currency and finished leather goods on a weekly basis from India to the world.

Annual Get-Together

Aero Sail Services, the leading Air Cargo GSSA / Airline representative and Air Cargo Charter Provider in India organized an industry get together on 28th January 2012, at “THE MIRADOR” Hotel, over Lunch, Cocktails and Entertainment, hosted by Capt. K.S.Bagga. The event was well attended by over 500 Guests, mostly from the Aviation Industry along with friends and family members.

LOGISTICS TIMES February 2012

RNI RNI No. No. DELENG/2011/39329 DELENG/2011/39329

Regd No.: DL(E)-20/5380/2011-13