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July 2014

INTERVIEW REINER A. ALLGEIER

EVENTS INDIA WAREHOUSING SHOW 2014

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How can Railways improve its freight operations?

BUDGET 2014

A Progressive Package? h24

It is time for the IR to display unflinching commitment to capitalize on its mainstay and target new opportunities in the non-bulk segment. Winning the trust of the private sector is a critical factor...

Logistics Times

CONTENTS

All about Transportation, Distribution & Infrastructure

Volume 5: Issue No.3 * July 2014 Raj Misra

Editor in Chief

rajmisra@logisticstimes.net Ritwik Sinha

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How can Railways improve its freight operations?

Edit Note

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News Brief

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Product

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BUDGET 2014

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INTERVIEW Reiner A. Allgeier

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EVENTS IWS 2014

EDIT NOTE

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New Approach A major takeaway of the maiden budgetary prescription (both union budget as well as the railways) of the NDA government is the emphasis on enhancing the private sector participation across various sectors. Undoubtedly a laudable intention but it would certainly be quite an effort to get them on board in sectors like railways where in some specific segments their past experience has been no less than nightmarish.

Our cover feature in this edition, penned by the noted railways expert Sajal Mittra (a quintessential railways man who has worked on both sides of the divide – public as well as the private sector) precisely focuses on what needs to be done to revamp the mainstay business of the organization which is freight. And what emerges from his argument is that in terms of solutions, approach or attitude is a more critical factor. To give a facelift to its freight operations, IR already has in place a host of schemes for the private sector involvement but latter does not trust the former because their implementation approach has been full of faultlines.

Private Container Train Operations is a glaring example wherein over 15 private players had jumped on the board around 2006-07 enthused by the belief that they could emulate CONCOR’s success story. But what followed thereafter is a tale they would best like to forget given the kind of restrictions imposed on them.

But going by Mittra’s arguments in the cover feature, IR’s freight operations certainly can’t be dubbed as something which completely lacks growth dynamo.

The need of the day is to ignite them with a fresh resolve. An organization which has built a commendable base of over 1000 million tonnes annual carrying capacity can’t be taken lightly. And some vibrant triggers of improvement are well visible in the form of mega projects like Dedicated Freight Corridor. A major challenge for IR would now be to accommodate non-bulk commodities – a segment which it had given up in mid 1970’s following which its market share had started slipping vis-à-vis road transportation. Vibrant growth sectors like automobile are waiting for the IR to pitch in aggressively to respond to their supply chain blues. Also important would be easier norms and a bit of charitable streak from the IR to allow private sector to open freight terminal stations. The bottmline of the cover feature presentation is: IR’s efforts in improving its freight operations have to be consistent going ahead and that has to be communicated effectively as well.

The new government at the centre seems to have resisted a big bang approach in its first budgetary prescription. And the focus is more on taking balanced but formidable steps. This is what emerges out from the response of the industry representatives (including logistics and supply chain) and some analytical inputs from the leading consultancy and research firms also point in the same direction.

Leaf through our budget analysis section to find out if Modi government’s ‘acche din’ theory stays intact after its maiden budget offering.

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

NEWS BRIEFS

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IIP touches 19 month high level The industrial production index shot up to 4.7 percent in the month of May and this has largely been viewed as the first concrete signs of revival of the Indian economy.

Representatives of India Inc believe that the recovery would be sustained on the back of policy measures unveiled in the maiden budget of the Narendra Modi-led government.

“Rise in industrial production for the second month in a row provides a glimmer of hope that the economy could be bottoming out and recovery could be on the anvil. Going forward, we anticipate a rebound in industrial production as the reform-oriented and forward looking Budget would boost business confidence leading to turnaround of the investment cycle,” CII Director General Chandrajit Banerjee said.

Showing signs of recovery, industrial production grew at 4.7% in May, the highest since October 2012, on account of improved performance of manufacturing, mining and power sectors and higher output of capital goods.

The output, as measured by the Index of Industrial Production (IIP), had contracted by 2.5% in the same month of last year.

“As growth is subdued in intermediate sector and capital goods growth also comes on a negative base, the manufacturing sector may take some more time to recover. We are hopeful that the measures announced in the budget would help the sector to revive fast,” Ficci President Sidharth Birla said.

During the April-May period of the current fiscal, the IIP recorded a growth of 4%, as against contraction of 0.5% in the first two months of 2013-14.

Terming the rise in industrial output as a “good sign”, LOGISTICS TIMES July 2014

Assocham President Rana Kapoor said: “I hope the trend continues. It will help GDP grow above 5.5% in the current fiscal. However, monsoon can be a dampener”.

Manufacturing, which constitutes over 75% of the index, grew 4.8% in May, compared to decline in output by 3.2% a year ago. For April-May, the sector recorded a growth of 3.7%, compared to a contraction of 0.7% in the year-ago period.

“We believe IIP has the potential to attain high growth trajectory on implementation of recent reforms announced in the Budget. We look forward to strong industrial growth recovery in the coming times as the new government has provided its thought process on manufacturing sector,” PHD Chamber Sharad Jaipuria said.

Overall, 16 of the 22 industry groups in manufacturing showed positive growth in May.

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Fourth Container Terminal at Mundra Adani Ports & SEZ Ltd, India’s largest port developer and part of Adani Group, recently announced signing an agreement with France’s CMA CGM Group to develop a new common user Container Terminal at Mundra Port. This will be the 4th Container Terminal in Mundra and will be a 650 meters terminal along with 27 hectares of back area capable of handling 1.3 million TEUs annually.

Following this announcement, the construction phase will be initiated immediately and completion will be in a record 24 months.

The project comprises of design and construction of 650 meters jetty with a water depth of 16.5 meters.

This world class terminal will initially have four units of 65 tonne capacity of Rail Mounted Quay Cranes capable

of handling 18,000 TEU vessels and Super Post and Ultra Large Container Vessels. These cranes would be by far the largest and first of its kind in India. The yard equipment will include twelve 41 tonne lift rubber tyred container gantry cranes which will accommodate seven rows of containers and one operational lane.

LOGISTICS TIMES July 2014

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FCI- Allcargo partnership

Allcargo Logistics’ multi-purpose vessel ‘Allcargo Laxmi’ successfully completed the delivery of its first consignment of bagged rice for FCI early this month.

The FCI commissioned the project to dispatch raw rice stock from Vishkhapatnam to Agartala in the northeast region of India through multi-modal transport i.e., sea-river-road. It involved transportation of stock from Vizag port to Diamond Harbour in Kolkata.

This is a first of its kind assignment for MV Allcargo Laxmi, where it carried 5,000 tonnes of rice from Vizag port and reached Diamond Harbour successfully within two days of sailing. At Diamond Harbor, the stock will be trans-shipped into barges and taken through river movement up to Bangladesh. Thereafter, it will transit

Bangladesh through trucks and again would be boarded from Bangladesh to feed FCI depots in Agartala by trucks. The movement is regulated by Protocol on Inland Water Trade and Treaty (PIWTT) signed between India and Bangladesh government.

With this shipment, Allcargo Shipping has contributed in the novel venture of opening up an alternative route when compared with the conventional dispatch of stock by the rail-road hitherto done from Punjab/Haryana to Tripura.

Allcargo Logistics has a fleet of three fully owned ships which operate in coastal movement of bulk, break bulk and Project Cargo across all major ports in India and its subcontinents. The shipping service provides a crucial link between all Indian ports which enables the clients to save on the logistics cost. M.V. Laxmi and M.V. Arathi bear a cargo capacity of 4,800 gross tonnage with a crane range of 2X25 MT, M.V. Susheela is the largest vessel amongst them with a capacity of 6,200 gross tonnage offering a crane range of 2X80 MT.

DHL adds India to the Thermonet network DHL Global Forwarding, the air and ocean freight specialist within Deutsche Post DHL has expanded its service offerings for the Life Sciences & Healthcare industry in India by adding Mumbai, Bengaluru and Hyderabad to the company’s worldwide Thermonet network of Certified Life Sciences Stations. The custodian facility within the airports in these cities collectively offer 502 square meters of +2° to +8° Celsius and 2,886 square meters of +15° to +25° Celsius cold storage space to serve DHL’s global customer base in the Life Sciences & Healthcare sector with temperaturecontrolled airfreight shipment needs.

“Our customers in the Life Sciences and Healthcare sector are looking for better ways to manage the risk of product damage and loss from temperature deviations in their supply chain. DHL Thermonet tackles these requirements and offers Indian consignors and consignees access to a reliable end-to-end cold chain LOGISTICS TIMES July 2014

facilities”, says Samar Nath, CEO, DHL Global Forwarding, India.

DHL is constantly expanding its global Thermonet network of Certified Life Sciences Stations and plans to reach 65 by end of 2014 and 80 by end of 2015. The facilities in Mumbai, Bengaluru and Hyderabad are audited according to globally defined Good Distribution Practices (GDP) to ensure conformity across the network. They support the storage of pharmaceuticals and vaccines and offer customers temperature monitoring, dry ice replenishing along with active and nonactive container handling to ensure product quality at all times. In Hyderabad and Mumbai, there are 5 loading bays each, while Bengaluru is equipped with 2 bays.

In addition, these sites offer temporary transit storage within bonded customs facilities. In the upcoming months, DHL plans to expand similar capabilities at Ahmedabad and Delhi.

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LOGISTICS TIMES July 2014

NEWS BRIEFS

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Minimal impact The planned P3 network will not be implemented following an announcement by the Chinese Ministry of Commerce (MOFCOM) that they have not approved the P3 Network (P3). The MOFCOM’s decision follows a review under China’s merger control rules.

The P3 partners take note of and respect MOFCOM’s decision. Subsequently, the partners have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence.

Franck Dedenis, Managing Director for Maersk Line (India and Sri Lanka), said, “P3 would have provided Maersk Line with a more efficient network and our customers with a better product, globally. However, India was never part of the P3 alliance and therefore there is no impact to our operations here. We are committed to being cost competitive and will continue to offer reliable services to this market.”

“Most of the direct & transshipment services to and from India, the MECL covering the North America and Canada, ME1, ME2 & ME3 covering North Europe and the Mediterranean, will remain unaffected

by this alliance not being implemented. In addition, the recently announced Far-East Alliance linking Far-East region to Indian subcontinent will continue to give greater access to trading hubs across Asia. ,” added Mr. Dedenis.

On 18 June 2013, Maersk Line, MSC Mediterranean Shipping Company S.A. and CMA CGM announced their intention to establish a long-term operational vessel sharing agreement on the East – West trades, called the P3 Network (P3). The overall aim with P3 was to make container liner shipping more efficient and improve service quality for the shippers due to more frequent and reliable services.

P3 was intended to be an operational, not a commercial cooperation. On 24 March 2014, the U.S. Federal Maritime Commission (FMC) decided to allow the P3 Network agreement to become effective in the US, and on 3 June 2014, the European Commission informed the P3 partners that it had decided not to open an antitrust investigation into P3 and had closed its file.

P3 was scheduled to start operations in the autumn of 2014.

BITZER Expands Operations in India BITZER, the world’s largest private compressor manufacturer, inaugurated its first ever Technical Brand Center in Delhi on July 8, 2014. The demo center will be used to educate customers on product and technology availability. It is located in the Daryaganj region of the national capital.

According to Robert de Bruyn, Managing Director of BITZER India, “the brand center will not be used for any commercial activities, as BITZER will continue to sell only through its authorized distributors and OEMs. The demo center will provide an opportunity to increase our interactions with end customers and enable them to experience the entire range of BITZER products under one roof.”

The contracting sector also remains undeveloped in the regions and, consequently, it is common in this part of the world for end users to seek their own refrigeration information.Potential buyers converge in Delhi’s CBD for demos and information on new refrigeration technology and products. The process remains a somewhat traditional and preferred method of refrigeration product information, which is why we chose to locate our demo center in this centuries-old hub. “This has the highest concentration of refrigeration supply houses in the country, including three BITZER LOGISTICS TIMES July 2014

distributors, and we are confident that customers will appreciate our investment,” says Harvinder S Bhatia, Country General Manager for BITZER in India.

BITZER has been present in India since 2007 through a wholly owned subsidiary –BITZER India Pvt. Ltd. It has developed an enviable reputation as a reliable supplier of its compression products to major OEMs in India like Blue Star, Voltas, CIAT India, Climaveneta, Motherson Group, Panasonic India, Ingersoll Rand andReynold India. In addition it serves clients like BPCL, Indian Oil, Reliance Industries, Maruti Suzuki, Taj Hotel, Hotel Leela, Radisson Hotel, Wal-Mart, Birla Retail, Reliance Energy, NTPC, Bharat Electronics, Indian Navy and Coast Guard through its offices in Mumbai and New Delhi.

NEWS BRIEFS

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Knight Frank’s warehousing report Knight Frank India recently unveiled the first edition of its flagship report India Logistics & Warehousing report 2014. The report decodes the present scenario of the Indian Logistics sector along with providing a definitive view on the Mumbai and Pune Warehousing markets.

The key takeaways of the report are: h Manufacturing will continue to remain one of the biggest demand drivers of the warehousing sector with an annual requirement of 61 mn sq. ft. of incremental space between 2014 and 2019 h With the government’s renewed focus on incentivizing the manufacturing sector, the logistics market will reap the benefits in the coming years h Investment in warehouse can provide an opportunity of realising returns in the range of 12%-20% per annum to investors willing to explore this sector h The biggest challenge though for manufacturers is the present Central Sales Tax structure which is forcing companies to locate warehouses in all the states they operate in, resulting in an inefficient supply chain h Introducing GST will streamline the taxation procedure thereby creating an effective supply chain Demand Projection between 2014-1019 (mn. sq. ft.)

Speaking about the report, Rajeev Bairathi, Executive Director, North & Capital Transactions Group, Knight Frank India said“Historically, Indian companies have considered warehousing activity as an unavoidable cost and the objective has always been to reduce this cost as much as possible. Such an attitude has resulted in huge under-investment in the sector. However, increasing

competition and introduction of global best practices by multinational companies are compelling Indian businesses to rethink on the importance of warehousing activity and the resultant benefits of managing an efficient supply chain.”

Also added Dr. Samantak Das, Chief Economist & Head of Research, Knight Frank India” Supply chain management is all about flow, be it the flow of goods from the producer to the consumer or flow of information from the consumer to the producer.

Warehouses play a critical link in this process and were conventionally set up as inventory buffer points along the supply chain so that any irregularities within this

chain could be ironed out. However, the need to reduce the service response time and contain inventory cost has necessitated the progression of warehouses from storage points to distribution centres. Additionally, the advent of technology has made it possible to operate the warehouses more efficiently and achieve greater integration with the rest of the supply chain modules.

LOGISTICS TIMES July 2014

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K.U.Thankachen takes over as MD, CRWC K.U.Thankachen has taken over as the Managing Director of Central Railside Warehousing Company (CRWC). He has succeeded Vinod Asthana who retired late last month.

K U Thankachen is a seasoned professional in the field of logistics and warehousing with over 25 years of experience.

He started his career with Airports Authority of India in the year 1987 and joined Container Corporation of India Ltd. in the year 1995. He has held various important

positions in Marketing, Commercial and Operations functions within CONCOR. He was posted as Chief General Manager, Central Region of CONCOR at Nagpur having jurisdiction of 5 terminals at Nagpur, Bhusawal, Aurangabad, Raipur and Mandideep from September, 2010 to April, 2012. Thereafter, he was posted as head of the largest Inland Container Depot in Asia at Tughlakabad, New Delhi from April, 2012 to September, 2013. He also recently attended a one year international MBA programme organised by International Centre for Promotion of Enterprises, Ljubljana, Slovenia.

K.U.Thankachen completed his schooling from Loyola School, Trivandrum and higher secondary education from Mayo College, Ajmer. There after, he completed his graduation in Physics from St.Joseph’s College, Devagiri, Kozhikode and M.B.A with specialisation in Marketing from Department of Commerce & Management Studies, University of Calicut in the year 1986.

Hactl up 13.6% in first half Hong Kong Air Cargo Terminals (Hactl) – Hong Kong’s major independent cargo handler – achieved 11.5% growth in tonnage through its SuperTerminal 1 base in the first half of 2014, compared to the same period of 2013.

Imports increased 13.6% year on year, to a total of 243,287 tonnes.

Exports also grew by 8.8% over 2013, reaching 489,624 tonnes.

Transshipments showed the largest percentage growth, to 64,849 tonnes – up 34.2% on the same period of 2013.

Hactl remains Hong Kong’s largest cargo handler, catering for over 100 scheduled passenger and all-cargo airlines, and serving over 1000 forwarders.

It operates the airport’s largest cargo facility, with a design capacity of 3.5 million tonnes per annum.

Says Hactl Chief Executive Mark Whitehead: “When we parted company with Cathay Pacific in 2013, we expected a long uphill struggle to replace this significant element of our business. In reality, we have quickly made up a substantial proportion of the traffic through new account wins, and organic growth among our 100 airline clients.

LOGISTICS TIMES July 2014

“The growth in our transshipment traffic – while currently still the smallest part of our business – is very interesting, as it reflects the continuing development of Hong Kong as the preferred regional transshipment hub.

“The transshipment result is also gratifying, as it rewards our recent drive to promote Hacis, our addedvalue logistics arm. This provides scheduled road feeders into and out of mainland China, which more and more carriers are using as a safe platform to extend their reach beyond Hong Kong.”

We plan to enhance our warehousing capacity

In an exclusive conversation with Ritwik Sinha, the Managing Director of Schenker India Reiner A. Allgeier explains the broader vision of the company to strike big time in the Indian market which includes going beyond the popular perception of being a globally renowned freight forwarding agency with footprint in all corners of the world. Edited excerpts:

LOGISTICS TIMES July 2014

INTERVIEW

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INTERVIEW

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To begin with, please briefly take me through to the journey of DB Schenker in India. And secondly, how do you evaluate yourself vis-àvis competition? Most of the internationally renowned freight forwarding companies are today positioned in the Indian market and most of you seem to have similar story.

I do not totally agree with the ‘similar story’ theory. But first let me brief you on our milestones.

In India, DB Schenker had forayed in 1996 as a joint venture entity by forging a partnership with an agent of ours then. I would, in fact, go further back – three decades to be precise.

Our actual activity in the Indian market had started in 1963 when our German office Schenker Hamburg had bagged a contract with a government agency to forward their goods and you will be surprised to know that this contract still continues with our colleagues in Hamburg. And then establishment of JV happened in 1996 followed by our decision in 2002 to go solo when we bought out our local JV partner. In my view, 2006 should be looked upon as another milestone mark when our mother company acquired Bax Global India. This integration came as a major boost to our presence in the Indian market as it almost doubled our business instantly. The merger of Bax Global also paved the way for our entry in contract logistics in the domestic market in a major way. Since then we have expanded our base consistently. Just to cite an example, in 2010 we had one million square feet of warehousing capacity which last year shot up to two million square feet. The cumulative warehousing capacity I underlined is spread across 31 locations. To put the things in right perspective – facilities in 31 LOGISTICS TIMES July 2014

locations are leased on long term by us. In addition, in several other locations we are operating out of the premises of our customers. So on an overall basis, we are present in 53 locations in terms of our warehousing offerings.

Today if I have to sum up our Indian profile- we have offices, 53 warehouse locations, roughly 1,200 employees on Schenker’s payroll and a similar size of workforce on a contract basis.

If someone tells you that DB Schenker in India is just a

provider. We can bring goods from anywhere in the world to India, we facilitate customs clearance, help in storage by way of our warehousing network and offer solutions for domestic distribution. We may not be precisely owing our own trucks but we have a network of subcontractors who provide us with the required fleet.

Are you telling me that the broader vision DB Schenker is pursuing in India is to bring in the essential components of a

We do not look at ourselves as just a freight forwarding company only interested in exports and imports of goods via ocean or air. In our reckoning, DB Schenker in India today has the strong capability to act as a total supply chain solution provider. freight forwarding company inclined more towards exim trade, how would you respond to that?

Honestly speaking I would not like to hear that. But, of course, it is upto us now to change that perception in the market.

To tell you point blank- we do not look at ourselves as just a freight forwarding company only interested in exports and imports of goods via ocean or air. In our reckoning, DB Schenker in India today has the strong capability to act as a total supply chain solution

typical 3PL firm?

We are not really catering to the pure domestic requirements. For example, if you would come and tell me you have one tonne of consignment which need to be transported from Delhi to Mumbai, we wouldn’t get involved in such kinds of transactions. But wherever we have a shipment coming by the air or ocean route, we ensure the last mile delivery like the way we do it when the shipment is meant for overseas destination. We also offer the complete domestic distribution of

INTERVIEW

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goods stored at our warehouses.

In a marketplace like India, action is probably visible more on the domestic front than exim. My question to you would be: the churnings which you witness in sectors like retail, does it excite you?

Would you like to be part of this story?

To some extent, we have begun aligning with sectors like retail.

We already have some noted customers in that segment. But you are right, this part of our

have already been initiated for a number of customers. But as I pointed out, we try to do it in connection with the international trade.

Indian economy has not precisely enjoyed a healthy phase via-a-vis growth in the last three-four years. Probably after a consistent high trajectory growth environment of 10-15 years, there has been a perceptible slowdown since 2010. Players like DB Schenker have waited for long

Three years down the line, we are targeting to have 3 million square feet warehousing capacity. So we will have additional 50 percent capacity vis-à-vis the existing base. And alongwith that, we will expand our business with our customers with total supply chain solutions. activities has by and large remained unnoticed. And we certainly want to bring these facets to the notice of the market very aggressively going ahead.

So you are broadly indicating developing a balanced portfolio wherein while you would like to retain your front ranking position in the exim trade as a freight forwarder, you would also gradually tend to develop a much wider offering for the domestic trade?

Yes. Domestic offerings as I said LOGISTICS TIMES July 2014

and they would certainly like to strike big time in this country.

Tell me, what is your sense of DB Schenker’s management broader vision on DB Schenker in India. For instance, where would they like to see this Indian unit three years down the line?

Three years down the line, we are targeting to have 3 million square feet warehousing capacity. So we will have additional 50 percent capacity vis-à-vis the existing base. And alongwith that, we will expand our business with our

customers with total supply chain solutions. So we will have more global customers for whom we are working in several countries where our responsibility does not stop when the cargo reaches at the port or the airport but when that cargo is delivered to the final point. And that’s the broader strategy or vision we have for the Indian market.

Of your total business in India, what is the kind of ratio balance between the ocean freight and air freight business?

In terms of revenue, air freight has a ratio of 50 percent. We generate 30 percent of our revenue from ocean freight and the remaining 20 percent comes from contract logistics which includes warehousing and distribution.

Given your broader mediumterm plans, do you think this profile ratio will change?

It will change primarily because of the market conditions. The air freight part as such will not grow tremendously going forward.

Many of our global customers are looking for more ocean freight solutions now. So we expect a continuous shift from air freight to ocean freight. So ocean freight will continue to grow and we with our strategy which is aligned with regional and global requirements, are keen to tap the bigger customer segment in ocean freight. The way we foresee the near to medium run trends for us in India, ocean freight volume will grow at a healthier pace and same holds true for the contract logistics business. So if you ask me in three years how will the picture look, I will say we would have 35 percent share each for air freight and ocean freight and 30 percent of contract logistics.

I would like to point out at another interesting trend in the ocean

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freight segment. What we have seen in the last few years is that a lot of shipments which some years ago were going out in bulk are now being sent containerized . And this is also to our advantage and also means an additional opportunity because our expertise lies in the container segment.

This factor – the shift from bulk to container will automatically bring growth. If I have to speak in general terms, I believe that the ocean freight market in India over the next few years will grow at the rate of 4-5 percent annually.

DB Schenker has quite a reputation for its railways logistics expertise which it has so successfully displayed in Europe. Has the company ever thought of moving in big markets like India with its railways specific solutions?

The government here is keen for private participation in the

railways logistics and India has a huge railways network.

You have put this question to the wrong person. We have two sister companies – DB Schenker Logistics and we are part of it and we have another unit called DB Schenker Rail. Our parent organization DB would be to make a decision on any activity of DB Schenker rail in India.

Conventional wisdom suggests that international freight forwarders usually do not invest in facilities like warehouses.

But you have displayed a contrarian approach here.

What is the message you are trying to send?

We see this as an additional way of adding value to our customers’ supply chain. This also serves us an opportunity to shun that typical freight forwarder image. We, of course, do not want that. This brings me to a thought because

it fits very well in this context.

When our founder in 1872 had established the company, he had propounded the theory from house to house in one hand.

That motto has ultimately grown into total supply chain and that is what we quintessentially want to do. Going by the same DB Schenker today is an integrated global logistics provider in India and worldwide.

I know you wouldn’t speak about your topline and bottomline. But can you give a sense of the percentage revenue growth you are targeting from the Indian market?

We will be looking at annual growth figures upwards of 10 percent. We expect the market in general will grow at 4-5 percent in the coming years and we would like to clock the double of the average growth base.

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Budget 2014

A Progressive Package?

In its first budgetary prescription, the new goverment did not exactly pursue a big bang approach. But as the preliminary response of senior industry representative and analytical inputs from the leading research and consultancy agencies suggest, both railways and union budgets are not shorn of growth catalysts either.

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Union Budget initiatives which may impact logistics/supply chain sectors...

The government will work to introduce the much awaited Goods and Service Tax (GST) this year.

Rs 1000 crore provided for rail connectivity in northeastern region.

Rs 37, 800 crore allotted for National Highways.

In order to complete gas grid, 15000 km of additional pipeline to be developed through PPP mode.

New and renewable energy deserves high priority; ultra modern power projects to be taken up in Rajasthan, Tamil Nadu, Ladakh with Rs 500 crore.

Rs 4200 crore set aside for Jal Marg Vikas project on river Ganga connecting Allahabad to Haldia , over 1620 km.

Scheme for development of new airports at tier II and III cities through PPP mode.

Rs 200 crore set aside for 6 more textile clusters in Rae Bareily, Lucknow, Surat, Bhagalpur. Rs 50 crore set aside for Pashmina Production program in J&K. Earmarks Rs 7000 Crore to create 100 "smart cities.

Railways budget highlights ( freight specific) Facilitate transport of milk through rail. Special milk transportation trains in association with Amul and National Dairy Association Board.

Speedy work on critical coal connectivity lines to bring nearly 100 MT of incremental traffic to Railways and facilitating faster transportation of coal to power houses.

Setting up of Logistic Parks to modernize logistics operations; Top priority to mechanization of loading and unloading.

Suitable pricing mechanism to garner additional revenue from empty flow.

Pilot project for automatic rebate to customers offering traffic through computerized FOIS system.

Launching scheme to facilitate procurement of parcel vans or parcel rakes by private parties.

New design of parcel vans with better tare to pay load fin Setting up of Private Freight Terminal on PPP model to develop network of freight terminals.

Boost to rail movement of fruit and vegetables in partnership with Central Railside Warehousing Corporation at 10 locations.

Close monitoring of Dedicated Freight Corridor Project Implementation of Eastern and Western DFCs; Target of nearly 1000 kms of civil construction contracts.

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Rajaraman Venkataraman (Director - Infrastructure )India Ratings Ind-Ra believes that the budget carries a positive note for the infrastructure sector as a whole. The proposals to relax CRR/SLR requirements for infrastructure bonds and set up infrastructure investment trusts by banks are intended to deepen debt market and create a risk appetite for infrastructure investments. The government's emphasis on public–private partnership projects for attracting investments in airports and seaports reinforces its XII plan commitments to the overall sector. The 8,500km target for award of roads projects for National Highways Authority of India is ambitious, given the achievements during the last two years. However, it accentuates the government's assurance to enhance the pace of attracting investments.

Assuring coal availability for the existing capacities is a positive for thermal power plants. This is likely to infuse confidence among foreign investors and lenders, including banks. The budget clearly focuses on the need for renewables and we believe that this is a step in the right direction. The budget proposals display a commitment to revitalise the sector as a whole and inject investor confidence into the sector.

Srinath Manda, Program Manager, Transportation & Logistics Practice, Frost & Sullivan.

Announcement 1: Allocation of INR 5,000 crore provided for the Warehouse Infrastructure Fund Impact: This warehouse specific infrastructure fund allocation, together with transformation plan to invigorate the warehousing sector and significantly improve postharvest lending to farmers is expected to improve scenario of agri-produce warehousing in the country. In addition, the INR 5,000 crore addition to corpus of Rural Infrastructure Development Fund (RIDF) to the previously announced amount, (in Interim Budget) which takes the total to INR 25,000 crore, and restructuring FCI and reduction in transportation and distribution losses and efficacy of PDS, are likely to add impetus to agri-produce and food sector warehousing in the rural areas. All these developments are expected to contribute significantly in containing the massive losses in agri-produce (expected to the tune of INR 50,000 crore every year) due to lack of sufficient/appropriate storage infrastructure.

Overall Impact: Positive Top 2014 Expected Growth Drivers related to this announcement: 1. Growth in development of warehousing infrastructure, especially in rural areas is expected within the remaining part of the year.

2. Growth in agri-produce storage facilities (including cold storage facilities), especially in rural areas is expected within remaining part of the year.

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Announcement 2: Project on Ganges called “Jal Marg Vikas’ to be developed between Allahabad and Haldia Impact: Though India has more than 14,000 kms of inland waterways, they are largely under-utilized with just about 1-2 percent of total cargo being transported by this mode. Within the available waterways, AllahabadHaldia route of Ganges is prominent and has potential to be developed as a perennial route for medium to large vessels, similar to that of inland waterways (Yellow river) serving Shanghai city. The announced project ‘Jal Marg Vikas’ is expected to be (and is recommended to be) developed similarly to the Yellow river waterway in Shanghai, to reap the benefits of the most economic domestic transportation mode between these cities.

Overall Impact: Positive Top 2014 Expected Growth Drivers related to this announcement: 1. Growth in river cargo transportation services (and possibly passengers too) across 2-3 major states in the North India (Uttar Pradesh, Bihar and West Bengal).

Announcement 3: Development of Outer Harbour Project in Tuticorin through INR 11,635 crore allocation for phase I; SEZs will be developed in Kandla and JNPT Impact: These initiatives are likely to add significant strength to the Indian shipping and port sector. Tuticorin has always been regarded a suitable/potential port to be developed as a hub port on east coast of India, and this measure is likely to enhance the port’s role significantly within the country’s international trade related cargo movement, especially on the east coast. In addition, the intention to build SEZs at Kandla and JNPT, which are the two major ports on the west coast of the country, is likely to enhance their role within the country’s economy due to the growth of manufacturing and export oriented industry clusters within these locations (SEZs). Apart from these, the proposal to develop a policy on promoting Indian Shipbuilding industry is expected to help in realizing the relevant targets of India’s Maritime Agenda 2020.

Overall Impact: Positive Top 2014 Expected Growth Drivers related to this announcement: 1. Completion of the proposed Tuticorin Outer harbor is expected to add significant strength, and possibly attract larger international ships/vessels to use it as a new hub port or primary port for India and for overall South Asian region.

2. Massive development of manufacturing and export oriented industrial clusters within SEZs at Kandla and JNPT is expected, which is likely to bring in significant economic benefits to the country.

3. Policy promoting shipbuilding industry is likely to help India gain share in global shipbuilding industry (from about 1.5 percent currently to about 5 percent as targeted by Maritime Agenda 2020). It is expected

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to enhance India’s role from being a manufacturer of small and off-shore vessels to that of large vessels manufacturer such as China and South Korea.

Mahendra Agarwal, Founder & CEO, Gati Ltd. The Finance Minister has set the tone for an aggressive and sustained growth path by announcing a progressive Union Budget. Being the lifeline of the economy, logistic companies expected a set of reforms and thrust across related sectors of the economy and the Finance Minister didn’t disappoint.

The proposed investment of Rs 5,000 crore in warehousing, a clear focus on implementing GST by the end of this fiscal will provide the much needed impetus to the logistic industry. The proposed investment of Rs 37,800 crore into NHAI and state roads and a specific focus on development of select expressways in parallel to the development of industrial corridors will improve overall infrastructure, connectivity and lend efficiencies to supply chain. A commitment of Rs 500 crore for Ultra Mega Solar Power Projects and development of Green Energy Corridor Project will encourage further investments in the renewable energy sector.

Setting aside a corpus of Rs 10,000 crore of private capital to aid startup companies, promises the creation of employment opportunities that in-turn will act as a catalyst for the growth of the overall economy and improve per capita income. Allowing manufacturing units to sell their products online is a positive move for the e-Commerce businesses, that can now reap the benefits that lie beyond a B2B and marketplace model."

Ajay Sehgal, Director Finance & Accounts- Schenker India The Union Budget 2014 has given a fresh impetus to the infrastructure sector, which is a good thing. Investments in roads all over India will help Freight forwarding & Logistics Industry in faster movement of Cargo & efficient national distribution services. The investment in new ports will ease congestion on existing ports and opening of new Airports in tier II & III cities will gives us an opportunity to extend our net work to those cities.

An early implementation of GST ,as referred by Finance Minster in his budget speech is a welcome move and will help the industry in movement of goods / cargo efficiently with less of restrictions.

Vineet Agarwal, Managing Director, Transport Corporation of India The new government's presentation of the budget for the year was preceded with high expectations not just for the country but also for supply chain and logistics industry.

The budget did not disappoint and for the first time we saw several industry level announcements for the logistics

sector. Just the fact that the Finance Minister used the word 'warehouse' more than 10 times indicates the focus on logistics!

As per the 'Doing Business' report 2014 of the World Bank, India's rank is 134 against other BRIC economies like the Russia Federation (92); China (96); Brazil (116); Indonesia (120). Aspects related to logistics in the ease of doing business cover areas of cross border traffic. In India, both inter and intra trade have been addressed in this budget with specific announcements of increasing 24X7 customs clearance at ports and airports and a solid intent to implement Goods and Services Tax (GST) in the coming year.

The impact of infrastructure on the transportation industry is massive and the Government’s plan to accelerate game changing projects like the Diamond quadrilateral, Sagar mala, dedicated expressway on high traffic density roads will help the sector tremendously.

According to Transport Intelligence among 49 emerging markets, India has slipped by 2 ranks, behind China, Brazil, Saudi Arabia at 6.75 as the 2014 logistics index.

More thrust on multimodal transportation and better coordination between concerned ministries should get our nation competitive in the global economy.

This year’s railway budget also has been encouraging for the logistics players. The decision to introduce high speed trains for timely delivery of goods and services fulfils our long pending demand. We hope that the continuous push to electrification, gauge conversion and new lines will make the railways and the logistics sector more efficient.

FDI to ensure funds and expertise for the development world-class rail infrastructure and decision to go ahead with PPP projects will lead to rapid modernization of railways. Plans to increase the capacity of cargo containers, restructuring of the railway board and setup independent Rail Tariff Authority to advise on fixing of fares and freight and to engage all stake-holders will make railways more competitive.

TCI had recommended Multimodal Policy for domestic market for seamless connectivity across different modes of transportation. However, there is no mention of the same in the rail budget.

We are of the view that introduction of corrosion resistant, lighter wagons with higher pay-load and speed potential upto 100kmph; tariff and incentive schemes to encourage traffic to rail and minimizing empty running will make transportation by railways a viable option for logistics players.

The focus on improving country's freight network by setting - up a dedicated freight corridor on the Eastern and Western Routes and third party warehousing in Special Parcel Terminals will lead to critical capacity augmentation thus facilitating faster movement of goods LOGISTICS TIMES July 2014

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and de-congestion of existing routes. We hope that this policy will later be extended to the entire time-sensitive cargo segment.�

The proposed investment of Rs 37,800 crore into

K Ravichandran Sr. VP, CO-head, Corporate ratings ICRA Ltd Although details on the role of 3P India are yet to be finalised, a positive impact on the port sector is expected from the proposed body, which could address some of the obstacles faced by port developers operating through the PPP route, especially if it could support the developers in obtaining regulatory approvals and speedy resolution of pending issues. Along with the constitution of this institution, the proposed large investments in the sector on new capacity additions would provide major impetus to the growth in the sector. Further, 1) the proposed development of SEZs at two of the largest ports – Kandla & JNPT, 2) development of a hardware manufacturing facilities in the adjoining areas of Kakinada port and 3) Hassle-free custom clearances through a single window, would all boost trade movement at Indian ports in the long term. Creation of InvITs is positive for the developers in raising cost competitive long term resources.

to the development of industrial corridors will

RS Subramanian, Senior Vice President & Managing Director, India, DHL Express We strongly welcome the strong thrust on logistical infrastructure, a commitment to implement GST by end of this year, and trade facilitation. This specific deadline on GST implementation will positively impact investor confidence in the logistics sector. The commitment to create single-window e-biz portal for all clearances and payments related to regulatory compliance is a very positive move towards transparency and procedural simplification and will go a long way in reducing transaction costs in the country. The announcement on 24/7 customs clearances in all major airports and ports, and a single-window electronic clearance that integrates customs and other agencies would is another big step towards making India world-class in terms of business environment. Another boost for the logistics sector comes from the announcement on allowing all manufacturers to sell directly through the e-commerce mode which will generate new opportunities for B2C logistics solutions.

Manish Saigal, Managing Director for Alvarez and Marsal.

The Railway Minister had increased the freight rates by 6.5% prior to the budget, which would contribute to revenue base increase while not having any significant impact on overall volume moving by rail.

Measures such as resource mobilization through PPP, FDI and PSU surplus are expected to drive investments LOGISTICS TIMES July 2014

NHAI and state roads and a specific focus on development of select expressways in parallel improve overall infrastructure, connectivity and lend efficiencies to supply chain.

in Indian Railways.

Various initiatives have been introduced to increase volumes such as providing connectivity to new and upcoming ports through PPP, accelerating work on critical coal connectivity lines, extending logistics support to various e-commerce Companies by providing designated pick-up centers at identified stations, provision of special milk tanker trains in association with National Diary Board and Amul and rail movement of fruit and vegetables in partnership with Central Rail side Warehousing Corporation Setting up of Logistic Parks and network of Private Freight Terminal on PPP model would improve efficiencies and cargo handling Govt’s scheme to facilitate procurement of parcel vans or parcel rakes by private parties would help improve movement of express cargo and parcels by rail instead of air and road currently.

The government has provided impetus to Eastern and Western DFC projects by setting an ambitious target of 1,000kms of civil construction S.V.Sukumar, Partner - Management Consulting, Head Strategy & Operations Practice, KPMG in India FDI in Railway sector, PPP for future projects Announcement of FDI in Railway sector and PPP for future projects will have a positive impact in terms of creation of new lines and capacity. This will help in achieving better Road Vs rail ratio for freight movement thereby reducing logistics cost for the industry especially for commodity players Connecting Ports and speeding up the existing delayed projects This is surely a welcome announcement as this will debottleneck logistics and will help Railways keep in pace with logistics requirements of the industries.

Fruits and vegetable transport via AC storage, if implemented is surely going to transform the food supply chain in India and could have positive impact on availability, quality and costs.

Though FDI Railway sector is positive, it will be better if this is on infrastructure area rather than non-core areas It is heartening to note that there is an aspiration to become the largest Railways , but this should be backed up a clear roadmap with time bound milestones.

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How can Railways improve its freight operations?

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In strict commercial sense, freight operations is clearly the lifeline of Indian Railways earning over two-third of its revenue annually. And the scope of its overall turnaround hinges on how it redefines its freight business and includes in its profile the missing pieces like non-bulk commodity. The good news is: IR already has a massive traffic base of over 1000 million tonnes annual carrying capacity. But the disquieting fact is: its intention to involve private parties to unleash new dimensions of freight business (something which has been emphasised again in this year’s budget in no uncertain terms) has not met with much success in the past because of structural issues. Noted railways expert Sajal Mittra argues the case for a possible facelift of railways’ freight business...

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Sajal Mittra*

B

y the time you read this piece, railways budget 2014 would have been presented – the first budgetary prescription by this government which has come to the helm on the basis of hope it has generated. Hope of a better future, hope of re-igniting the dreams of India growth story. Quite naturally, the reactions which will pour

in would be aligned to that larger belief that the railways’ turnaround exercise would now be pursued in uttermost seriousness.

But railways’ problems are so mounthill, it can’t be surmounted by merely presenting a progressive budget. Its more about having a well defined medium to long term strategy identifying the space which can be snowballed into growth dynamo ( read new businesses) for the future.

Of course, it also means expression of unalterable political will, at times even taking unpopular decisions to make things work for India’s lifeline.

Railways’ freight vertical is certainly one such space which can be tapped quite aggressively and is crying for a fresh approach bordering on paradigm shift in the operational modalities.

The biggest problem for railways since day one has been that it has never projected itself as an organization which caters to a massive freight movement in the country. But talk to any railway man, and he will tell you that it’s the freight operations which are sustaining Indian Railways. Statistics

tell the story. Of around Rs 1,40,000 crore which IR earned last year, over Rs 90,000 crore was contributed by its frieght vertical. We do understand that there is a huge social commitment which railways has to comply with vis-à-vis the passenger segment and it can’t be side tracked. And through it, governments have been making strong political statements. The aam aadmi of this country discovers railways at the stations or when he travels by passenger trains. So when most of the discussion take place about the railways, the passenger segment gets more attention.

And we do not know many things that happen behind the scene pertaining to the freight movement. Its no small feat that Indian Railways is today carrying over 1000 million tones of traffic annually. That too of all key traffic – coal, iron ore, steel, petroleum, food grain, etc. But as I said, railways for some reasons has never publicized its freight operations. It has always been a closed door affair. But I personally feel it has lost out here. And its time it opens up. Freight business afterall is the mainstay of railways. You have so

Railways had to revamp its operational strategy and completely gave up non-bulk traffic following the major strike led by George Fernandes in 1974.

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Setting up new freight terminals hasn’t been easy for the private sector.

much of brouhaha in the market place after the railways recently announced 14 percent hike in passenger fare. But what will it get railways – Rs 7-8 k crore.

This amount can’t make any significant contribution to that larger exercise of giving a facelift to the organization.

HISTORICAL PERSPECTIVE Despite freight movement being the fulcrum of Indian Railways’ operations in terms of generating resources to keep it alive and ticking, the segment offers a host of disturbing pictures.

All of us very conveniently lament the fact that at the time of independence, railways had a freight market share of 70 percent but now it has shrunk to 30-35 percent with the road transport running away with the major share.

But the moot question is: why did it happen?

Most of us are aware that the basic infrastructure of Indian Railways was laid by the British. And thereafter, railways from freight point of view was moving everything – every kind of product be it bulk or piecemeal.

This continued till 1974. Primarily it means that railways was doing a lot of piecemeal traffic movement including the bulk but the system by and large was inefficient. If you would recall, massive shunting of loads used to take place. You had 32 line yard at

About The Author* Sajal Mittra started his career with the Oil &Natural Gas Commission before joining the Indian Railways. He is from the Indian Railway Traffic Service batch of 1985 and has served in various capacities in the Railways and Government of India. He was Senior Divisional Operations Manager of the Mumbai Division of Central Railway and responsible for all freight, passenger and suburban train operations. Worked on deputation with Container Corporation of India (CONCOR) from 1992-1997 in the formative phase of the Corporation and was instrumental in developing a number of Inland Container Depots in the western region of Concor. Served in the Railway Board as Director (Petroleum Oil & Lubricants) and was responsible for movement of all petroleum products transported by the Indian Railways.

Served as Director in the Ministry of Development of North Eastern Region and was responsible for co-ordinating the development of infrastructure in all the eight states of the region. He was also responsible for developing all projects associated with the Asian Development Bank and World Bank specific to the region.

He took voluntary retirement from the government and was CEO of a private container infrastructure company (Arshiya Rail Infrastructure Ltd) for about 5 years, building the company vertical from inception. Currently Director with Blupith Consultancy firm advising companies on logistics on one hand as well developing cold chain infrastructure for Blupith. He is a member of the Committee on Infrastructure of FICCI developing the private sector perspective on PPP and private participation in rail related infrastructure projects.

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Mugalsarai or 42 line yard at Bhopal, etc. The whole point was: massive loads used to come to these places, and then they were redistributed and eventually sent in different directions. Wagons were accumulated; they were detached and left in yards.

Around the same time in 1974, the railways union was also maturing. They had begun to assert themselves as reflected in the railways strike which was led by George Fernandes. The unions had a couple of key demands.

Primary among them was adhering to the eight hour shift norm. They were also asking for better salaries and better working conditions. These demands were pending for a long time which ultimately led to that major strike. After the strike, the then prime minister Smt. Indira Gandhi took the decision that a total revamp of Indian Railways is required. That was a watershed period for railways because the railways board decided to totally change its operational aspects. And one of the major decisions taken on the freight side was to completely give away the piecemeal traffic. So prior to 1974, 70 to 75 percent of anykind of traffic was

â?›

Prior to 1974, 70 to 75 percent of anykind of traffic was moved by the railways and remaining was done by the road transportation. But because of the management of this piecemeal traffic, the major bulk traffic like coal, cement, iron ore, steel, fertilizer or foodgrain was suffering.

Track upgradation and expansion continue to remain critical.

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moved by the railways and remaining was done by the road transportation.

But because of the management of this piecemeal traffic, the major bulk traffic like coal, cement, iron ore, steel, fertilizer or foodgrain was suffering.

It was changed in favour of the bulk movement and point to point traffic only.

That’s the point from where the percentage of freight traffic movement started changing leading to the present situation wherein the roadways has the lion’s share in the freight movement in the country. So today when you say that roadways has 70 percent share, it has resulted from a deliberate initiative. Not many people realize that by giving up its piecemeal traffic baggage, railways has certainly attained efficiency in its bulk centric operations. Loading systems have improved, and there is a significant improvement in the turnaround of wagons and rakes which are the assets of the Indian Railways. Parallel to that over the decades they also started acquiring wagons with higher capacity, upgrading the track infrastructure to bear the pressure of heavier loads, etc.

Earlier when you had a locomotive, its operation was very specific to a zonal area. But railways realized that there is no need to do that. And they opted for locomotives which could easily go to other zones and come back. This was a major initiative in improving efficiency.

In the due course of time railways also introduced several other measures to modernize their freight operations vis-àvis capacity enhancement, upgradation of tracks, etc.

When Nitish Kumar was the railway minister in the previous NDA regime, a spate of accidents had taken place.

There was also a strong feeling within the railways that overloading is a major reason for these mishaps on track. The tracks were coming under the pressure resulting in deterioration. So Nitish Kumar decided to provision for a safety cess which will help in collecting funds for the upgradation of tracks.

If I recollect correctly, at that point in time the sum estimated to undertake LOGISTICS TIMES July 2014

the mounthill task of track upgradation was to the tune of Rs 25,000 crore. At the same time, railways also took other steps to augment the carrying capacity of freight. For instance, they brought in BOXN wagons for ferrying coal. These wagons were higher in height and had much better capacity. So if the earlier rakes were carrying 2500 tonnes of coal, with the new wagons the capacity had significantly increased to over 3800 tonnes. Here it must be pointed that in countries like Australia and Canada have an advanced systems for the bulk commodity with a capacity base upto 18,000 tonnes.

So railways did make a sincere attempt to augment its freight operations by deploying locomotives with higher horse power and wagons with more capacity. On track infrastructure front, they started gauge conversion and doubling exercise. For example, the whole of Rajasthan and Gujarat at one point was meter gauge. So there used to be massive detention at trans-shipment points. It used to make the entire process very cumbersome. So they started focusing on gauge conversion in a major way. Third emphasis was on new lines. But as you are aware, the requirement of funds was massive.

On one hand, railways had over aged assets which needed to be renewed.

And then it wanted to modernize its set up to become more efficient. All this requires heavy infusion of fresh funds.

And this has been railways’ biggest problem. There have been a number of committees which went into this at various points of time, came out with all kinds of suggestions - the latest being the Kakodkar Committee on safety and Sam Pitroda Committee on modernization. If you look at the Kakodkar committee report, it points out the presence of 1000 odd railways bridges which were built during the British era and are in a poor state. The report clearly underlines that safety has been compromised and the infrastructure has not been spruced up even for the basic traffic. This committee presents a very detailed analysis. If you club

together the basic recommendations of these two committees and look at Mamta Banerjee’s 2020 projection for the railways, what becomes clear is the requirement of massive infusion of fresh funds. It needs a direction and it would need inputs from the private sector in terms of the focus areas for the latter where they can pitch in and contribute. So currently we stand in a situation wherein railways’ finances are very low. They have not put anything in the depreciation reserve fund which is the basic fund for improving the assets of the railways. Now and then they keep on putting in money in the dividend fund. But that’s more of a political statement than anything else.

GROWING BEYOND BULK The economic situation of the country has dramatically changed in the past 20 years and there is no gainsaying that the railways now has to grow beyond its core competence of ferrying bulk commodities. Some of the equations which had drawn railways to only bulk strategy is also changing. For instance, 40 percent of all commodities which railways carry is coal. But there is a larger suggestion now that new power plants should be set up near the pit heads, next to the mine so that there is a continuous supply. And these plants will distribute power through new transmission lines.

So what happens to the railways then?

If the primary product is going to be

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fairly good job. And when the private sector was allowed to come in, it was on the basis of the realization that containerization should be allowed to grow. What was the scene before CONCOR arrived? Containerisation was very low and at most of the ports, goods were transported in the break bulk form. Once the ICDs came up all over the country, trains started carrying these cargo. And suddenly 5-6 percent of containerization eventually grew to 30 percent. So you are increasingly getting more cargo to go in containers.

But containerization share has somehow got stuck at 30 percent. And that is the logjam which needs to be broken.

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Some of the equations which had drawn railways to only bulk strategy is also changing. For instance, 40 percent of all commodities which railways carry is coal. But there is a larger suggestion now that new power plants should be set up near the pit heads, next to the mine so that there is a continuous supply. And these plants will distribute power through new transmission lines. So what happens to the railways then?

reduced, we have a serious problem. A lot of imported coals has also started coming in through ports. But railways has by and large lost the chance to pick up this cargo because not every port has vibrant railways linkage. So the days of solely focusing on bulk are reaching to a conclusive end. Alternatively, railways can enhance its carrying capacity for the same products in the dedicated freight corridors where axel load is supposed to go upto 25 tonnes. So the whole rake would be in a position to carry 50006000 tonnes of coal or any other bulk commodity.

Time has clearly come for the railways

to go to the next level when it comes to the freight operations. And it has to happen in the non-bulk commodity segment where railways was providing services prior to 1974. The emphasis on containerization is a positive tiding in that direction. I was associated with Container Corporation of India (CONCOR) during its initial years and the exim consignment was there for the taking. There were a lot of objections from some quarters initially on emphasis on containerization but we moved on and CONCOR today is a success story. CONCOR also focused on domestic traffic and they did a

Why private container train operations turned into a nightmare?

In 2006, railways had taken a significant step in terms of partnering with the private companies to spruce up its freight operations – allowing private container train operations. And this initiative was taken on the basis of CONCOR’s success story. When the advertisements from the railways came, they reflected a situation that you would be allowed to operate on the same line as CONCOR. And that you will get all required support from the railways.

There was no mention of the fact that you will not be allowed to move a specific kind of cargo, and there would be different rates for certain kinds of cargo, etc. At that time, railways smartly gave a month’s notice for companies to decide to come into this container business. The companies which jumped on the board, they already had logistics operations experience and expertise and getting into container train operations was a logical extension for them. Furthermore, the kind of projections which railways had made, it appeared out to be a win, win deal for everybody.

But then the industry soon got the impression that railways was never keen to involve the private sector. It was more of a public posturing showing LOGISTICS TIMES July 2014

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railways’ intention to share opportunity with the private sector as well.

They did not take much time in creating hurdles.

Just to cite an example, a license holder from the north wanted to carry iron ore. But the railways turned it down coming out with a new order debarring private operators from carrying commodities like coal, iron ore and some other items. That was the first shock. Then railways said that for certain products you will have to pay higher cost. The rail line fee was also increased for some specific products. The most critical bottleneck, of course, was in setting up terminals. Now building up a new terminal is a time consuming process. When I was heading Arshiya Rail, we had built a terminal at Khurja and it had taken us two-three years to have the final permission in place.

Container terminal operators had asked the railways to allow them use the terminals which are lying around. The railways initially approved this idea on the condition that the private operators would be charged. But ultimately access was provided to a very few terminals.

Railways did not allow private operators to use terminals which were on the railways land. Of the 64 terminals which CONCOR has, around 56 are on railways’ land for which CONCOR is paying a very nominal charge. In fact, it is paying on the basis of volume of containers handled. None of these terminals were opened for the private operators. It was short-sightedness of the worst kind. Anyway these terminals are not doing great business. Just to cite an example, at the sidings at Tata plant in Jamshedpur, CONCOR is just handling two rakes a month. When Arshiya wanted to move CR coil which is a specialized product, we were not allowed. The point is if CONCOR LOGISTICS TIMES July 2014

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We have a situation today that out of 15 odd license holders in the private container train segment, only a couple of them have somehow managed to reach to the break even mark while rest of them have incurred major losses. And they are hoping of some miracle. is not optimally using a terminal, the private operators should be allowed on a fee basis. The terminal access charge for one rake is around Rs 1,60,000. But they prefer to keep themselves deprived of this earning opportunity.

Fresh terminal creation is indeed a capital intensive exercise but the players who had bagged licenses were capable of making the required investment. But they got so much disheartened with railways’ non-chalant attitude that they went into a slow mode. So we have a situation today that out of 15 odd license holders in the private container train segment, only a couple of them have somehow managed to reach to the break even mark while rest of them have incurred major losses. And they are hoping of some miracle.

If I go back to railways’ various

schemes like wagon leasing, there is one thing which is consistent. None of them have succeeded. Private freight terminals, schemes for the automotive industry, etc. railways have kept on modifying them but the end result has always been off the mark.

One needs to ask the railways – why do you announce these schemes at the first place? Are they just political statements? Why do you dither in your commitment to make the private sector a vibrant partner? Ask the railways one scheme which has succeeded involving the private sector. Private container train scheme was the most projected service scheme and major companies which came in have invested close to Rs 6000 crore. Its failure is a major burden for railways today. In fact, today when it goes out in the market

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and seeks private participation and funds, it is asked to explain why private container train scheme failed. It is well reflected in the fact that in the 11th five year plan, PPP projects brought in just 4 percent of the business vis-a-vis the target. The rationale is simple: nobody trusts the railways and winning it back will not be easy. Railways will have to ensure that projects involving private sector are not diluted at any cost in the future. Many of the license holders of private container trains have over 10 rakes and each rake costs Rs 12 crore.

Today, they are clueless how to make use of these assets?

DFC – A bright spot While railways’ failure to revitalize its freight operations is a wheels within wheels story, the plan to create a mega Dedicated Freight Corridor (DFC) is certainly a bright spot. They are creating this corridor in Mumbai- Delhi and Delhi-Kolkatta sections. These are heavy routes- Mumbai-Delhi because of container movements from the north and Delhi-Kolkatta because a lot of iron ore and steel products traffic from the eastern India. I personally feel DFC is a very positive step, its one way of getting ahead of track capacity problem at least in these sectors. The project took some time to start off because the World Bank obviously will not give you loan across the table.

They suggest a framework which you will have to adhere to. Now railways did not want to adhere to certain steps which the World Bank was insisting and the discussion went on for a long time. Finally, it worked out and they have lent Rs 33,000 crore loans.

Undoubtedly, the railways has taken a progressive step and creating corridors which will have higher capacity. Once they become operational, the paradigm of freight movement can completely change in these sections. DFC will help us in matching the requirement at least if not taking us ahead of the demand curve. It was supposed to take off in 2016 but now they are saying 2017. But this kind of delay in

a mega project of this nature is very much counted for. Land acquisition in eastern section has taken place, in the western section it has become an issue on some stretches. But I am hopeful, it will fall in place.

5 critical initiatives As mentioned above, taking railway’s freight movement capability to the next level would need an undithering commitment on a medium term basis and it would need several initiatives – some fresh and others to untangle the existing knots. There is one set of possible steps which are directly related to operations and then there is another set which is broadly generic in nature.

Let’s look at the operational issues first: Enhancement of track capacity: If the track capacity is not increased, you will not be able to put in additional traffic. You will not be able to even sustain your existing traffic or speed it up. It would include doubling of single lines, extending DFC to other quadrilaterals, last mile connectivity with existing and new ports, etc.

Induction of rolling stocks: Rolling stocks is your wagons and from the future requirement perspective, we are referring to higher capacity wagons.

With DFC coming up, you will have higher axle capability. You will need to look around the world and see the kind of wagons that are available for specific products. Here I would like to emphasize that railways should not be wasting its resources on acquisition of wagons. It should let the private sector to do it. There are umpteen number of companies which can acquire or even manufacture them.

Terminal Infrastructure: Railways freight operations can never improve if terminal infrastructure is not in place. Railways have terminals which are lying unused. It has innumerable goods shed. Many of them can be

upgraded if private sector is allowed.

Containerization: For bulk commodities, specific kind of wagons are available in the Indian marketplace. But for the non-bulk segment, the only tool which can offer a viable option is containerization. And the domestic movers have done it. A lot of companies have developed containers to move specific commodities. And that is the global trend. There are hundreds of types of containers meant for different commodities. Globally the share of containerization is 60-65 percent whereas we have got stuck at 30 percent. It has to be pulled up.

Independent Economic Regulator: Today private sector or anybody who deals with the railways, they always feel subservient. An economic regulator would ensure that railways would not be coming out with restrictive measures for the private sector which has invested. Many a times, these measures have appeared out to be more whimsical in nature rather than making an economic sense. If such an agency is there, the private sector would be more comfortable in dealing with railways.

This is very critical.

On the generic front, there is an urgent need to alter the powers of the railway board. The Kakodkar committee had made no bones in pointing out that the railway board puts on all the hats – rule maker, operator and regulator. It’s a very serious issue. Many of us within the industry believe that the operational part of the railways should be divested off in a separate entity. Railways board should be a policy making body only.

Research, Design and Standards Organisation (RDSO) also needs to be made more accountable. This is what Kakodkar committee had also recommended. RDSO is the main gateway for all technological integration, upgradation, etc. And this agency takes months and years to take a call on vital issues. We certainly need a pro-active organization.

LOGISTICS TIMES July 2014

OPINION

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Rooting for Rail Professor G Raghuram, Dean of Indian Institute of ManagementAhmedabad and a transport specialist does not mince words. On the eve of maiden railway budget of the Narendra Modi government, the bearded knowledge warrior wrote in The Indian Express on what the government ought to focus upon. One of the bullet points was bang on. “…the IR should move away from general-purpose to commodity-customised wagons.

The value from streamlined supply chain is often greater than the benefits lost by replacing multicommodity wagons. Efforts in this direction are already underway …,” pointed out the IIM-A don. Of course, he harps on the concept of Special Purpose Wagons (SPWs) for automobiles.

It’s no longer a concept, so to say.

Maruti Suzuki and APL Vascor have already jumped into the fray by bagging licence to operate such SPWs. India’s numero uno passenger car maker Maruti Suzuki already started moving thousands of vehicles from its Gurgaon and Manesar stables to its Bangaluru parking yard ea, although APL Vascor is awaiting the rake from Titagarh Wagons of Kolkota to kickstart the operations. Maruti Suzuki will be using the rail route for captive consumption, though empty backhaul syndrome it is ready to handle for its own strategic reasons.

Achal Paliwal, ex-Head of Exports and Logistics at Honda Cars India, who was negotiating with APL Vascor for moving its own export vehicles from its Greater Noida manufacturing site to Ennore Port, near Chennai Port – more than 2000 km away – emphasises the need saying that it is a strategic need because dependence on road LOGISTICS TIMES July 2014

Ramesh Kumar

100 per cent is risky. Status of Indian highways and environmental concerns are two factors making auto makers to consider rail logistics seriously. Why? “That’s the only alternative available,” adds he.

Coastal route is still been debated.

It is estimated that the usage of rail for moving market ready cars is 40% globally whereas in India, its share is in single digits – six per cent. By 2020 when the passenger car projection will touch 5 million, there is a thought process that at least 25% of that production should move on rail.

Maurti Suzuki’s ‘captive rake’ policy thus leaves the entire automotive market to APL Vascor. There are several big names besides Maruti Suzuki such as Hyundai Motors, Toyota, Renault Nissan, Ford, Mahindra Automotive, BMW, Volkswagen, Tatas, Fiat, General Motors etc who certainly will be interested in movement on rails. It is no secret that everyone is interested in risk mitigation strategies plus the thrill of pushing 300 plus vehicles in a single rake on rail instead of maximum 8-10 normal sedans through car carriers on road. It is a good business for Indian Railways as well. Dipankar Dasgupta, former

professor of economists at Indian Institute of Statistics hits the nail on its head when he says that, “ ... the branch of the Indian Railways that is concerned with freight transport earns substantial profits. In contrast, the passenger service division has been merrily generating losses, thereby making it next to impossible for the authorities to keep things in healthy shape since time began. It is not hard to observe here a conflict between the two goals, monetary returns and social welfare. As far as freight traffic goes, the railways are mostly serving the private business sector that is engaged in profit oriented ventures. Consequently, even though run by the government, profit seeking through freight transport need not be inconsistent with welfare motives.”.

Costing, again, is an issue for auto OEMs as well. Logistics cost is a key area and at the same hedging risk is the need of the hour. Nobody is contemplating a 100% switch over from road to rail neither today nor in the foreseeable future. Such a scenario is next to impossible. But the die has been cast to explore rail logistics for automotive movement.

With Maruti Suzuki out of the competitive game of freight pricing, APL Vascor enjoys a monopoly status currently since it is the only player to have thrown its hat into the ring. It is a tricky game since auto OEMs are ‘dreaming’ about wangling at par freight with road from rail rake operator. Since the volume moved will be huge vis a vis road, it is argued that economies of scale would kick in and therefore rail freight ought to be lower than road freight! Analysts point out that would be a win-win game if everything were to seen through the prism of supply chain management,

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LOGISTICS TIMES July 2014

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In matured economies , railway is the vibrant mode for the transportation of finished vehicles.

not pure vanilla transportation.

Rail move ment of cars is not going to be all roses. Multiple handling and rail and road (first and last mile connectivity issues) will be a thorn, no doubt. Unlike the existing rail wagons – modified after being junked for passenger usage – the new ones to be made by Kolkotabased Texmaco (for APL Vascor) and Titagarh Wagons (for Maruti Suzuki) are modelled on new design approved by Ministry of Railways’ own design unit that - may be less prone to handling damages. Auto OEMs would love the simple dispatch of market ready vehicles from factory yard to dealer points.

Strictly speaking, rail movement is nothing new. It has been a regular and ongoing affair. For instance, Maruti Suzuki’s export vehicles move on rails from Patli, near Gurgaon/Manesar to

It is no secret that everyone is interested in risk mitigation strategies plus the thrill of pushing 300 plus vehicles in a single rake on rail instead of maximum 8-10 normal sedans through car carriers on road.

Mundhra Port on the Gujarat coast.

Similarly, Hyundai Motors vehicles for northeast travel by rail from Chennai to Guwahati. Mahindra Tractors also goes for rail movement from its multi-locational manufacturing sites to pan-India market. Yet the volume is nothing to write home about. But the newly designed high capacity wagons – carrying almost 2.5 to 3 times volume as in the conventional fashion would be a boon for auto

OEMs. Rail for long distance and road for first and last mile connectivity and short distance dispatches will be new mantra or practice that would become the norm in the years to come. In the absence of inadequate volume to occupy the complete rake by any single auto OEM, perhaps this lacuna may push them to practice “collaborative logistics” they have been championing verbally for quite sometime.

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

Infusion of Fresh Ideas Logistics sector, especially the Indian Railways, is likely to be one of the key determinants of the pace of future growth of the Indian economy. Most industries are witnessing very strong growth rates, creating a need for movement of freight. This requires an integrated and coordinated approach in which development of each mode – Railways, Waterways and Roads – has to be matched to the needs of industry. Also the existing assets should be better utilized.

India’s freight traffic is likely to more than double from current levels by 2020. Inadequate rail network would adversely affect growth of user industries and India’s exports could be rendered less competitive due to higher transit time and lower reliability.

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

India’s rail share of the current 36% must increase to 46% to prevent wastages caused due to poor infrastructure ( approximately 5% of the GDP).

This would require – h Extracting more from the existing assets like using stainless

steel wagons with a higher carrying capacity. h Allocating more investment to rail – The plan allocation for Railways needs to be increased substantially, to be utilized on building high density traffic corridors, connectors and last mile links. There is need to build rail and coastal shipping as well as rail and road connectors for long and medium distance movement of freight. h A policy to establish dedicated freight corridors, addition of new tracks, doubling and gauge conversion of the existing ones, increase in rolling stock, last mile rail links, multi-modal logistics parks and technology adoption.

Skill Development and service standards need to be carefully

LOGISTICS TIMES July 2014

OPINION

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chalked out and implemented.

To fulfill this plan, the overall allocation to Railways must go up from the existing 7% to nearly 15%.

Such a policy would improve share of rail, reduce economic waste and improve energy efficiency.

Evolution of Railways h It is the 4th largest rail network and the 2nd largest under single management in the world. h It has a total route of 64,500 kilometers with 8241 stations. h The total assets at the end of the 11th plan were USD 55.5 billion. h Rail share has been declining from 89% in 1951 to 36% in the current year due to chronic under-investment in rail infrastructure and faulty rating policy of subsidizing passenger fares with higher freight rates, though rail continues to be the fastest and most economical modes of transportation for freight in India. h Freight is a profit making business of Indian Railways and is the backbone of railway revenues. h The total number of claims on Indian Railways were to the tune of 2,82,146 and compensation paid was Rs. 129.97 crores in the period 1997-2000. Out of this 90% was due to: complete loss of package, pilferage or damage by wetting. The items included are perishables, food grains, cement, petroleum products, iron and steel.

Poor skill of the human resource causes the following problems – h Improper recruitment h Lack of use of technology h Economic losses due to accidents h Huge claims and compensations to be paid h Inability to successfully carry special cargo h Low level of motivation due to LOGISTICS TIMES July 2014

Indian Railways is well positioned to become a logistics service provider of class only if appropriate HR policies of correct and positive training are implemented to provide quality service and meet the expectations of the customers. The question is: “Are they motivated enough to discharge their duties efficiently? permanency of job h Lack of analytical skills during adverse situations h Lack of awareness of safety and crisis management h Lack of knowledge of Global Standards For adopting an expansion policy, Railways will need to increase the demand for requisite skills. This in turn would require up-grading the training infrastructure and collaborating with institutes of technology, engineering colleges and other training institutes to help meet the growing demand. This would help to improve efficiency and simultaneously reduce costs.

In addition to this, environmental gains can also be attained in terms of reducing emission and energy consumption due to awareness generated through proper training.

At present Indian Railways is well positioned to becoming a logistics service provider of class only if appropriate HR policies of correct and positive training are implemented to provide quality service and meet the expectations of the customers. The question is: “Are they motivated enough to discharge their duties efficiently?”

Recommendations: h Training in soft skills will increase motivation and improve customer satisfaction h Better organization and coordination will help to bridge the skill gap, reduce cost and improve efficiency h Such training should be refreshed from time to time to help change the mindset of the human resource and align them to the need of the customers.

Some possible measures to be taken by Railways to improve its share h Besides, the 8 to 10 critical coal corridors in the states of Jharkhand, Orissa and Chattisgarh need development of track and rail head for better connectivity and movement of coal. A minimum of 750 mile link needs to be created. h Since the commencement of the 12th Five Year plan, Railways has announced and supported the creation of Private Freight Terminals, already 40 such terminals are either fully operational or are in different stages of construction, that will help to move larger amounts of freight by rail.

PRODUCT

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NEW TESTO 184 TRANSPORT DATA LOGGERS: BLACK BOX OF YOUR SENSITIVE FREIGHT Be it food products such as dairy, fruits, vegetables, frozen food or pharmaceutical goods such as vaccines, the cold chain between the manufacturer and the final consumer may under no circumstances be interrupted.

Quality deficits, financial losses or even serious damage to the health of the consumer or patient can be the consequence.

What is the solution for reliable cold chain monitoring during transport?

With the NEW data loggers testo 184, you can monitor every step of the cold chain. The loggers travel on your behalf in freight and loading rooms, monitoring temperatures during the transport of sensitive goods on rail, in the air or on the road. At their destination, your see at a glance whether the configured limit values have been adhered to. In order to obtain detailed information, it is sufficient to connect the logger to a PC – a PDF report is immediately generated with all relevant data.

Logistic operators are no measurement experts. How will they know how to configure the loggers?

New testo data loggers 184 come with a common standard preconfiguration (+2…+8 °C) that fits to many customer requirements. If the customer is fine with these settings, he just has to press the START button – no further configuration!

Even a layman can use these loggers.

No download, no installation and no additional costs. Furthermore, testo LOGISTICS TIMES July 2014

184 is intuitively operated, and can be used without special training or previous knowledge: The “Start” button begins data recording. “Stop” ends it.

Loggers generally come with software. The sender of the freight may have the software installed along with accessories that act as interface. But how shall the receiver arrange for the software installation along with the interface accessories?

The sender of the package is geographically somewhere totally different than the receiver of the package. To their advantage, testo has launched these loggers of 184 series that require no software installation at all. Just plug in any USB cable to the computer and the data can be accessed. These are new generation ‘Plug and play’ data loggers.

How is the data read-out from the logger if there is no additional software?

A PDF/A report with the transport data is created immediately on connection of the testo 184 data logger to the USB interface of a computer. This is suitable for longterm archiving according to PDF/A standard. All testo 184 data loggers can be read out on site also with an NFC-capable Android smartphone.

Data transfer from the data logger to a compatible Testo printer also functions wirelessly via NFC. Often loggers once sent through the shipment are difficult to be

received back. Are there use & throw loggers?

Thanks to globalization, cold chain products are shipped throughout the whole world today. Very often the costs of sending back the logger to the origin are very high and hindered by custom regulations.

In the distribution of cold chain products we also very often see the problem, that they are transported to external partners, who have no interest at all in sending the data logger back to the sender. In such cases, use & throw loggers can be used.

Testo offers 184 T1 (90 days) and 184 T2 (150 days) that can be used any number of times during the given time period. Although they are use & throw, testo loggers offer multiple usage during the defined usage time.

Fitting in a logger in every package or a box and keeping a record of the same is very time consuming. Do testo 184 loggers save you any time?

Yes, testo 184 transport loggers save your time in many different ways. Firstly, they are preconfigured and hence its just a press of start button to start data logging. They require no time for programming or configuring in the first place.

Secondly, these are such sleek & flat devices that they easily fit inside or on top of packages. Unique serial number be displayed as bar code is used to include logger in logistic processes easily so that record of all the shipments corresponding to the logger can be maintained very easily.

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A glance at the display or the LEDs is enough to know whether limit values have been violated during transport.

An on-site analysis of data is also possible through NFC smartphone.

Easy to use, easy to read loggers also therefore save time at the receiver’s end as an automated PDF report is generated by merely plugging the USB to the computer.

What about some sensitive fright such valuable art, delicate machinery or electronics which may get damaged due to shocks during transport?

Testo offers a special shock logger - testo 184 G1 which can measure acceleration or shocks. It constantly keeps scanning for a certain high frequency of shock or acceleration.

Logger starts recording as soon as the trigger value is reached. Shock event is indicated by a dot in the PDF report. Logger then goes back to the scanning mode.

There are certain products that are transported with dry

ice. Are there data loggers that can operate at such low temperatures?

Dry ice (-80 °C) is used for transport especially in the pharmaceutical industry, for example when transporting blood plasma, organs, virus, scientific material, etc.

The testo 184 T4 was especially developed for dry ice applications. testo 184 T4 logger housings are made out of a special ABS polymer that can survive in such low temperatures. The extremely cold conditions are also very harsh for the batteries. Nevertheless testo 184 T4 batteries can hold for 100 days at -80 °C. What are other variants available in testo 184 series?

The new transport data logger family has six different variants: 1. testo 184 T1: It is a temperature use & throw logger, that has 90 days lifetime and is without a display.

2. testo 184 T2: It is a temperature

3.

4.

5.

6.

use & throw logger, that has 150 days lifetime and is with a display. testo 184 T3: It is a temperature logger that has 1.5 years battery life and comes with a display. testo 184 T4: This temperature logger is especially for dry ice applications (-80 °C). testo 184 H1: This one measures temperature as well as humidity and comes with 1 year of battery life. testo 184 G1: This data logger measures temperature, humidity and shock.

There are various industryrelevant norms and regulations that must be fulfilled during cold chain monitoring. Is testo 184 logger compliant? testo 184 data loggers are compliant to the most important standards for the transport of pharmaceuticals and food products, namely, GxP (GMP, GLP & GDP), 21 CFR Part 11, HACCP and EN 12830.

Write back to us to know more about testo 184 data loggers: info@testoindia.com Log on to our site www.testo.in/184 and book your free demo now!

Testo India Pvt. Ltd., a 100% subsidiary of Testo AG, Germany was founded in 2006 in Pune. The company has established thirteen home offices in major metros and a dealers’ network covering this enormous country.

Testo AG is a world leader in the design, development and manufacturing of portable test and measuring instruments. Testo has also become a major supplier for HVAC industries, refrigeration, airflow and environmental monitoring instruments for markets as diverse as chemical, steel, power, cement, food and beverages, pharmaceuticals, biotech etc. Today, Testo consists of 2450 employees, 30 subsidiaries and 80 sales & service partners in other 43 countries.

LOGISTICS TIMES July 2014

EVENTS

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Yale – Maini Road Show at Gurgaon

NACCO Materials Handling Group (NMHG) and Maini Group hosted a road show in Gurgaon on 4th of July’ 2014. The objective of the event was to: h Increase awareness of customers in the Delhi – NCR region of how the wide choice of models, configurations and unique product specifications of the Yale – Maini product range could help them drive productivity in their business. h See for themselves the newly launched Yale-Maini Reach Truck and other Yale – Maini range of equipment including the Yale-Maini co-branded three-wheel counterbalanced forklift truck.

The materials handling equipment user industry segments have learnt how to transition from old school approaches of material handling and embrace newer products designed for high productivity, superior ergonomics, serviceability, low cost of ownership and higher dependability.

NACCO Material Handling Group (NMHG), USA parent company of the Yale brand has a strategic LOGISTICS TIMES July 2014

alliance with Maini Group, India to manufacture specific Yale forklifts and reach trucks in India and make other Yale products manufactured overseas available to the market in India.

Since 2010 Maini Group has been exclusively responsible for the sales, service, parts and customer support for Yale’s extensive range of materials handling equipment in India. The link with NHMG has allowed the Maini Group to expand its portfolio and to manufacture European designed equipment in India at Maini Group’s factory in Bangalore.

The event was attended by senior representatives from a diverse range of industries including Indigo Airlines, DB Schenker, Maruti Suzuki, Baxter India, JBM, ACIL, Continental Automotive, Honda Motorcycles and Scooter, MJ Logistics, Hero Moto Corp, Exide India, Fab Furnish.

Rajesh Wazarkar, Managing Director of NMHG India delivered a corporate overview of NMHG and their presence in India to invited guests. With S A Mohan, CEO of Maini

Materials commented “The launch of locally manufactured Reach Trucks and Forklifts by an Indian company will bring significant benefits to customers. The market in India has experienced and is increasingly seeking new products that incorporate technologies which will provide increased levels of productivity, reliability, and significantly increased operator efficiency which will all contribute to increased return on investment.”

Senior Management of NMHG India (Kiran Shetty, Territory Manager – India) and Maini Group (Chandra Shekar R, Business Head – Yale products, Sandeep Bajaj, Regional Manager – North, Rahul Sagar, Assistant General Manager, Marketing) were all present at the event to hold business discussions with guests present at the event.

With the wide choice of models, configurations and often unique product specifications in the Yale – Maini product range, Maini Group is now able to increasingly respond to the demands of the growing Indian markets in all segments of the materials handling industry.

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ACCD LUNCH

Air Cargo Club Delhi organized the 1st Lunch event of this calendar year at Hotel Radisson on the 4th of July 2014. The event was attended by over 120 members of the club and some eminent guests. On the occasion, the guest speaker Madhav Kulshreshtha shared with ACCD members the scope of IT utility in the air cargo business. This event witnessed a wide variety of healthy interactions among the members and stake holders as it laid the foundation towards a more greener environment of supply chain and logistics. The convener of the event Ashwini Sharma opened the event and the Hon. Secretary, Sajan Kallra carried out the other proceedings of the event. President of the Club, Yashpal Sharma gave a vote of thanks to the speaker and the entire house. The speaker session was followed by an enjoyable networking session over lunch.

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World of logistics under one roof The fourth edition of India Warehousing Show which was held between 8-10 July at Pragati Maidan, New Delhi once again brought together Warehousing, Materials Handling, Logistics and Supply Chain sectors together under one roof. The show comprised more than 200 exhibitors and over 350 representative brands from 20 plus countries. Adding value to the exhibition was Intralogistics Summit India 2014, a two day concurrent conference.

LOGISTICS TIMES July 2014

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LOGISTICS TIMES July 2014

EVENTS

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Best Container Terminal Award DP WORLD terminal in Mundra was awarded the ‘Best Container Terminal’ in the category of terminals doing business under one million TEUs, at 28th Asian Freight & Supply Chain Awards. The award was handed over to DP WORLD at a commemorative ceremony in Shanghai and was accepted by Kris Chang, Managing Director of DP WORLD operations in China, on behalf of Mundra International Container Terminal.

On being felicitated with the award, Tejas Nataraj, CEO, MICT said, “It is a proud moment for the terminal and its employees. This award is the fruit of the hard labour and dedication of the whole team at the terminal. We would like to congratulate each and every department for continuously raising the bar of performance and supporting each other in the endeavour of providing quality on time service to our customers. We pledge to continue this momentum and accept this award as an encouragement to do provide even better service in the future.”

Project LEAP Allcargo Logistics, through its NGO Avvashya Foundation inaugurated the Leprosy Elimination Action Project (LEAP) on 30thJune 2014 at Koproli Primary Health Centre (PHC). The project was launched with a vision to support the people of Koproli who are victims of leprosy along with helping them in their economical development.

Association for Leprosy Education, Rehabilitation & Treatment (ALERT), a 35 year old leprosy control NGO has partnered with Allcargo Logistics in this activity. Several undetected and increasing number of cases due to the negligence of people in the region was one of the prime reason to undertake this project. The project was inaugurated by Adarsh Hegde, Executive Director of Allcargo Logistics Ltd, in the presence of Dr. Sonia Bagade, Assistant Director of Health Services- Leprosy, Raigad District; Dr. Varsha Dhote Medical Officer, Koproli PHC; Mrs. Stella Mancheril, Director, Finance & Administration, along with other representatives.

Project LEAP has started the leprosy control work in 6 blocks covering 7 PHC’s across Raigad. On the day of inauguration, 72 beneficiaries availed various services and 65 leprosy patients were assessed and provided medication.

LOGISTICS TIMES July 2014

RNI No. DELENG/2011/39329

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