Cargo Connect December 2019

PAGES 92 inclusive of cover

www.surecommedia.com Postal Registration No.: DL (S)-17/3372/2019-2021 WPP No.: U(S)-81/2019-2021 Posted at Lodi Road HPO, ND on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month

VOL VOL XI ISSUE X ISSUE I December IX august 2019 `20

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Light Industrial Warehousing: Setting the tone for developers

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Cross-Border: The new frontier in E-commerce

46

Asia's air cargo ascent

contents

Volume XI • Issue I • december 2019 Publisher & Editor-in-Chief Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent / Sub-editor Upamanyu Borah

16 COVER STORY Enter the 4PL

34 SPECIAL FEATURE

Cross-Border: The new frontier in E-commerce

focus

TECHNOLOGY

Correspondent Saurabh Sharma Reporter Pallavi Jain Director Ajeet Kumar Marketing Manager Rahul Arora Marketing Executive Akash Gupta Rahul Jain Uday Arora

Light Industrial Warehouses: Setting the tone for developers ..........................10

How does Artificial Intelligence optimise the Supply Chain ....................................62

INTERVIEW

feature

J florian pfaff, Vice President- Asia Pacific, Lufthansa Cargo ...............................................64 Brahmananda sharma, Cluster HeadSouth East Asia, ECU Worldwide .......................66 Michael Eastabrook, President and MD, 4FrontES, USA ...................................................68 Axel Mattern, CEO, Port of Hamburg Marketing Association ......................................70

Asia's air cargo ascent ...........................46

SHIPPER SPEAKS

feature

rAJASEKHARA REDDY, Vice President- Global Demand Planning and Logistics, Glenmark Pharma..................74

Bonded Trucking: Charting the offering to the top ................................................52

Ghanshyam singh, Head- Supply Chain, Purchase & Quality Assurance, CHAI POINT...................................72

FRONTLINE ............................................06 BUZZ .....................................................08 INFRASTRUCTURE ..................................60 NEWS ...............................................76-81 EVENTS ............................................82-84 UPCOMING EVENTS ...............................86 APPOINTMENTS ....................................88 REPORT .................................................90

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Accounts & Administration Lavish Thakur Designer & Visualiser Ashok Saxena

All materials printed in this publication is the sole property of CargoConnect. The printed matter contained in the magazine is based on research and analysis and information provided by the spokespersons featured.

The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily reflect the same.

CargoConnect is owned and published by Smiti Suri, and is printed at Compudata Services, 42, DSIDC Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014

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frontline ATITHI will create a tech-savvy image of India Customs and would encourage tourism and business travel to India while ICEDASH as an Ease of Doing Business monitoring dashboard of the Indian customs will help the public see the daily customs clearance times of import cargo at various ports and airports.

Nirmala Sitharaman, Finance Minister

With the latest reforms,

India now ranks 68th globally on import and exports and

performs significantly better than the regional average.

Taxes can be lowered, competition on fuel supply can be improved and more efforts be taken on regulating airports.

The previous government lowered some taxes...It is going in the right direction.

Apparently, there is a strong push to extend airport capacity. Our concerns are taken into account.

India is planning to open 100 additional airports by 2024, as part of a plan to revive economic growth in Asia’s third-

Alexandre de Juniac, Chief, IATA

India will encourage the delivery of goods by drones by 2023. The country will prepare drone corridors by 2021.

Government is working on creating a mechanism to ensure that the rebates and discounts given by ports to shipping lines are passed on to the exporters and importers. When a ship comes to the port, she is getting a certain percent discount on vessel related charges (VRC). This discount should also go back to the trade (exporters and importers).

largest economy.

The domestic air freight demand is expected to touch 1.1 million tonne by the fiscal 2025 at a compounded annual growth rate (CAGR) of 7-9 per cent.

The GVK-led Mumbai International Airport Limited (MIAL) became the first Indian and third Asian Airport

to achieve IATA’s CEIV (Pharma) certification in April 2019.

Anil Devli, Chief Executive Officer, Indian National Shipowners’ Association (INSA)

The newly-launched first-of-its-kind Transshipment Excellence Centre (TEC) facility, will contribute significantly in promoting Bangladesh’s textile and retail industry leveraging to carry and connect voluminous air cargo across the world.

TEC will contribute significantly in promoting Delhi airport as air cargo hub of the South Asian region and an air cargo gateway to the world.

Sanjiv Edward, CCO, Delhi International Airport Limited (DIAL)

148,000 tonnes of cargo has been handled at Hyderabad International Airport (HYD) in FY 19.

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CargoConnect - DecEmber 2019

SpiceJet is committed to investing in the growth of Indian trade and commerce.

We have received a positive response from the market and we are confident that this move will add value to our customer’s supply chains. The SpiceJet freighter aircraft, capable of carrying 20 metric tons of cargo – will operate six days a week between Hyderabad, Delhi, Mumbai, Bangalore and Chennai.

Manjiv Singh, Chief Project Officer, SpiceJet

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buzz startups being added this year so far indirect jobs, Nasscom said in its report.

According to the report, investment in start-ups was steady, with $4.4 billion flowing in between January-September this year across 450 start-ups - up 5 per cent year-on-year (y-o-y). Funding saw a huge spike in early stages (series A, B as well) with $1.6 billion being recorded and growing at 70 per cent y-o-y.

The trend witnessed over the year

India retains position as world’s third-largest startup hub

W

ith the addition of more than 1,300 startups this year so far, India continues to reinforce its position as the thirdlargest startup ecosystem in the world, according to IT industry body Nasscom.

The total number of tech startups in the country has grown to 8,900-9,300 with 1,300 startups being added this year so far. The startups have created an estimated 60,000 direct jobs and 1.3-1.8 lakh

investment in startups was steady, with $4.4 billion flowing in between JanuarySeptember this year across 450 start-ups - up 5 per cent yearon-year

was that start-ups are driving focus more towards the B2B space and almost half of the country’s start-ups are offering enterprise-focused services, it said.

Over 18 per cent of all start-ups in India are now leveraging deep-tech, which means there are over 1,600 such companies in India. This number constituted only 8 per cent of start-ups incepted in 2014, and has seen a 40 per cent CAGR (compound annual growth rate) over the past five years, the report said.

Government to invest $1.39 trillion in infrastructure to spur economy

F

inance Minister Nirmala Sitharaman has said that the government will unveil a series of infrastructure projects in December as part of a plan to invest `100 lakh crore ($1.39 trillion) in the sector over the next five years. The proposed 'National Infrastructure Pipeline' will include greenfield

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and brownfield projects with an estimated cost of more than `100 crore each. Sitharaman said, “A set of officers are looking into the pipeline of projects that can be readied so that once the fund is ready, it could be front-loaded on these projects. That task is nearly completed. Before 15 December,

we w i l l b e able to a nnounce frontloading of at least ten projects."

In September this year, the ministry set up a task force headed by economic affa i rs s ec ret a r y At a nu Chakraborty to identify technically and economically via-

ble infrastructure projects that can be kickstarted in the current financial year ending March, and can be included in the `100 trillion plan for the sector over the next five years.

focus

Light Industrial Setting the tone for developers

Adage ‘The Bigger, The Better’ seems to be ill fitting when it comes to warehousing space, as the demand of light industrial properties has sprung, owing to flourishing E-commerce sector in recent times. Given the current dynamics of industry, smaller warehouses equipped with advanced facilities can be the fastest growing trend in warehousing sector.

A

Saurabh Sharma

large chunk of small warehouses exists in populated areas which evidently favours the seamless supply chain operations of e-commerce and retail sector.

Companies might own or lease spaces, but all of them need well-oiled warehouses to keep their supply chain spiffy.

Of late staggering demand of light industrial warehouses, ranging from 70,000 to 120,000 sq ft has also caused the rise in rental prices and consequently the combination of high demand and higher rent potential has thrown a prime opportunity for private equity firm and real estate developer companies to invest in the light industrial logistics market.

Lease Transactions in Warehousing Market

According to the Indian Warehousing Market report 2019 launched by Knight Frank, total warehousing space estimated to be 68 mn sq m (739 mn sq ft) in 2019 for the manufacturing sector which is projected to grow at a compounded annual growth rate (CAGR) of 5 per cent in the next five years to 86 mn sq m (922 mn sq ft) by 2024. Although the storage requirement for the manufacturing sector is a massive number, but it is still substantially addressed by the unorganised segment

10 CargoConnect - DecEmber 2019

and captive spaces, it is the leased warehousing space market of all sectors, including manufacturing that is of interest to developers, occupiers and institutions. Besides manufacturing industries, year 2018 saw remarkable increase in warehouse transactions of E-ommerce and 3PL industries as depicted in the Knight Frank report.

Analysing the uptick in the demand for small warehouses Ankur Minda, GM (Land and Leasing), Allcargo Logistics explains, “E-commerce companies now days are serving a large number of pin-codes along with maximum coverage of tier II, III and IV cities. This is expected to lead to mushrooming of small-scale warehouses, especially in regions close to highly-populated residential catchments, increase in the number of mobile internet users further has further pushed the demand indirectly.”

A multitude of factors are driving this wave of change in warehousing market such as requirement from compliance regulators (in case of the pharma industry), quality consistency assurance from clients/regulators, statutory penalties on teach-feasibility, non-complaint warehousing facilities, economies of scale achieved through larger warehouses, safety and security of goods, efficiency in operations, quicker turnarounds, efficient warehousing designs and the advent of

focus

Warehouses E-commerce. All these attributes has made multinational businesses to occupy only complaint facilities.

“The competition among E-commerce companies has led to the requirement of smaller warehouse spaces in strategic locations for faster deliveries. Smaller warehouses can be constructed in a shorter turnaround time, or they are existing facilities which can be improved. Larger warehouses require bigger investments and customised design to suit the company’s requirements, hence it requires a larger turnaround time,” says Prakrut Mehta, Director Leasing, ESR India.

Challenges of Urban Warehouses

Lack of available space and construction sites in the vicinity of populated areas and high cost of property restrict the number of urban warehouses, which basically come under the category of light industrial property. Smaller spaces are tougher to come by on account of myriad other reasons as well.

According to Viren Thakkar, Director, Logistics Park India, “The demand for fast delivery is driving the growth of city warehouses, but urban facilities present unique property and safety challenges. Warehouses in densely-populated areas, however, come with unique risks that suburban or rural warehouses don’t typically need to manage.”

Thakkar jots down few more challenges:  Often, the buildings aren’t designed for extensive storage.

So, they need to be brought up to standards suitable for warehousing products for wholesale distribution.  Warehouse close to population clusters means more people, which mean more potential for crime. The logistical realities of urban warehousing also make it more difficult to keep crime out.  Warehouse close to population clusters with less space find

According to the Indian Warehousing Market report 2019 launched by Knight Frank, total warehousing space estimated to be 68 mn sq m (739 mn sq ft) in 2019 for the manufacturing sector which is projected to grow at a compounded annual growth rate (CAGR) of 5 per cent in the next five years to 86 mn sq m by 2024.

it hard to capacitate much automation, which means workers are doing more material handling.  Cities crowded streets and tight corners aren’t built for hulking delivery trucks. A benefit being in an urban warehouse is access to highways and roads, but larger vehicles can’t navigate as easily in a city environment.

M i nda add s, “Apa r t from land cost there are other major challenges like lack of proper parking space and restricted entry time for the trucks. Also, since these warehouses are generally multi-storey, access to higher floors through ramp, cargo-lift etc makes operation difficult during peak time. They also need sound architectural design as well as technological planning so that all supply chain processes can be carried out on all floors without any hindrance.”

Getting speedy approvals owing to complicated procedures involve with land acquisition can be exhausting many a times; high rental cost is yet another factor to be recompensed with.

Rationalising the Capacity

There is no denying the fact that large warehouses make more sense in macro economics environment when they at least have about 25 acres of land available, given that around half the space is needed for supporting infrastructure such as parkDecEmber 2019 - CargoConnect

11

focus ing spaces and sewage treatment plants. But talking about capacity optimisation in smaller warehouses and fulfilment centers is paramount for the E-commerce domain. A rationalisation of warehousing capacity in favour of well-located hubs is also pushing demand.

As the requirement for space grow in a small or medium warehouse, it becomes essential to utilise the space expeditiously. Four common consequences of reaching capacity are:  Use cube of space rather than square- Securing a facility on square footage means settling for a bigger footprint facility and lower ceiling heights. The higher cube buildings allow for pallet racks usage with forklifts to move product from bulk to forward picking.  Use a variety of storage media to store product- Such as bulk (pallet) and shelving with variable bin sizes, to get the most capacity. Multiple storage media also accommodates a wide variety of product types and sizes. To effectively accommodate this variety, it is desirable to provide a variety of storage types and sizes.  Adopt a forward pick location concept- Store a week’s quantity of product to eliminate replenishing picking slots frequently.  Liquidate slow moving and obsolete inventory- To free up space and cash.

Investment in smart warehousing

Investors had already started realising the opportunities in the warehousing sector much before the government began to implement the reforms, such as Goods and Services Tax (GST), and granting infrastructure status to the logistics industry, including warehousing.

Large chunk of the USD 6.8 bn investment has come over the last three years. Some of the renowned and largest global pension funds, sovereign funds and private equity funds are investing actively into this space. Many Indian developers, who were earlier focused on residential, office, or retail developments, now realise the potential of the sector to provide additional stream of annuity revenues, and they have announced plans to venture into the warehousing asset class.

12 CargoConnect - DecEmber 2019

Ankur Minda GM (Land and Leasing), Allcargo Logistics

E-commerce companies now days are serving a large number of pin-codes along with maximum coverage of tier II, III and IV cities. This is expected to lead to mushrooming of small-scale warehouses, especially in regions close to highly-populated residential catchments.

Prakrut Mehta Director Leasing, ESR India

Smaller warehouses can be constructed in a shorter turnaround time, or they are existing facilities which can be improved. Larger warehouses require bigger investments and customised design to suit the company’s requirements, hence it requires a larger turnaround time.

Some $10 billion in fresh investments from marquee global players such as Warburg Pincus, Blackstone and KKR have been committed, with smaller funds such as Everstone tying up with local operators to gain an advantage.

On establishing smart warehouses regardless of their size Mehta says, “We are developing smart industrial parks that aims to increase time efficiency and enables sustainable elements leading to bottom line savings. ESR app enables efficient movement of trucks, through advanced visitor management, way finding increasingtime efficiency. Sustainable integrations like smart water management, day light integration waste management and energy efficient features enable better working environment and cost-effective manufacturing.”

According to Jasmine Singh, Nation Head– Industrial, Land & Logistics Services & Senior Executive Director Advisory & Transactions Services, CBRE India, “The overall supply for the sector is expected to be around 60 mn sq ft till 2020 and at least 22 mn sq ft of this supply is estimated to be in the investmentgrade category and likely to be developed by leading players but in order to satiate the demand for quality spaces, domestic companies would continue to partner with foreign players to seize the growth opportunity that the sector is offering.

The growth of E-commerce, challenges of new consumption patterns and demand scenario as well as new retail models like omnichannel have impacted warehouses and supply

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focus chains in an unprecedented way. Vivekanand, Country Manager, India & APAC, GreyOrange underscores the need to invest in IT and automation in warehousing rather than acquisition of large spaces alone.

“E-commerce has been compelled to upgrade to some degree of automation to stay competitive and provide faster turnaround.

For instance, in a warehouse, technologies such as AI and roboticsare being deployed to handle millions of parcels to be shipped every day. Also, with implementation of GST, players are looking at larger state-of-the-art warehouses which would be about five to ten times their current facilities, making automation a critical part of the supply chain process,” adds Vivekanand.

Amazon is known for pioneering the Smart Warehouse model and therefore this concept is at times referred to as the Amazon Effect. A smart warehouse is one where all gadgets and devices are connected to each Amazon Kiva, a mobile robotic fulfilment system that tremendously increases efficiency in warehousing operations. Around 15,000 such robots have been deployed in Amazon’s latest fulfilment centres across the US.

Prospect for Light industrial Properties

Future is inviting light industrial properties in the proximity of populated areas. Demand for logistics and warehousing space is largely expected from tier II cities including Coimbatore, Ludhiana, Lucknow, Jaipur and Guwahati. NCR towns of Noida, Ghaziabad and Gurugram are also expected to be key drivers of demand in the logistics leasing market. Most of these aforementioned regions are subject to land constraint due to the mass settlement of residential and corporate buildings. Advent of small but Multi-storey warehouses can be a solution in land–constrained areas to increase the usable floor space per square foot of land. It is gradually gaining momentum in other countries as well. Such warehouses need sound architectural design as well as technological planning so that all supply chain processes can be carried out on all floors without any hindrance.

Counting on the incessant growth of E-commerce, Singh says, “We expect that the trend of E-commerce platforms owning and operating their own facilities will result in more built-to-suit facilities, thereby taking off some 'pure' leasing from the market.

Viren Thakkar Director, Logistics Park India

Urban facilities present unique property and safety challenges. Warehouses in densely-populated areas, however, come with unique risks that suburban or rural warehouses don’t typically need to manage.

14 CargoConnect - DecEmber 2019

Jasmine Singh Nation Head– Industrial, Land & Logistics Services & Senior Executive Director Advisory & Transactions Services, CBRE India

The overall supply for the sector is expected to be around 60 mn sq ft till 2020 and at least 22 mn sq ft of this supply is estimated to be in the investment-grade category and likely to be developed by leading players but in order to satiate the demand for quality spaces, domestic companies would continue to partner with foreign players to seize the growth opportunity that the sector is offering.

Vivekanand Country Manager, India & APAC, GreyOrange

In a smart warehouse, technologies such as AI and robotics are being deployed to handle millions of parcels to be shipped every day. Players are looking at larger state-of-the-art warehouses which would be about five to ten times their current facilities, making automation a critical part of the supply chain process.

For H2 2019, it is expected that the supply-constrained locations will continue to deliver rental growth, with new logistics hubs also emerging across cities in response to labor availability and land shortage. Prime locations likely to witness rental growth in coming months include NH-8 in NCR; Bhiwandi in Mumbai; Western and Northern Corridors in Chennai; Northern Corridor in Hyderabad; and NH-2 and NH-6 in Kolkata.”

“Light industrial properties will be on the rise and there is a dearth of supply in this segment. E-commerce companies will be inclined to use these facilities to develop their competitive edge and increase their bottom-line savings. Developers will be inclined to further invest in this segment as they lead to better management of parks, gives them an opportunity to develop state-of-the-art infrastructure and provide cost effective and sustainable solutions,” projects Mehta.

However, India still has a wide gap to cover in terms of efficiency and optimisation of warehouses. Adapting and adopting international best practices is one way to bridge this gap. Policies like GST are welcome measures that are expected to supplement the process of growth. Yet there is a long way to go before it reaches the standards of its global compatriots, which can only be achieved with active and coordinated participation from government and private players.

cover story

I

Also known as supply-chain-as-a-service (SCaaS), fourthparty logistics (4PLs) act as a true extension of the business by assuming responsibility for all supply chain-related activities.

By combining technology, processes, transportation, and more under one roof, 4PLs can help drive new levels of visibility and productivity as businesses face increasing supply chain pressures. This article explores this little known reality that portends a strategic disruption.

n the past three decades, many firms have chosen to outsource logistics operations management to specialised suppliers called logistics service providers (LSPs). This managerial reality has been described and analysed extensively in academic studies in marketing, strategic management and logistics management. More recently, a new generation of providers, called lead logistics providers (LLPs) and fourth-party logistics (4PL) providers have radically altered the logistics industry. They notably offer complete logistics service without necessarily possessing the physical assets (means of transport, warehouses, etc.). These providers are gradually becoming orchestrators within supply chains.

However, it wasn’t until recently, with the emergence of Industry 4.0, that the 4PL model is becoming more mainstream. Since its original inception, the definition of 4PL has been debated among supply chain and logistics experts, but most definitions center on the combination of technology usage, strategic integration, various logistics operations, the absence of physical assets (e.g. warehousing space and trucking fleets), and extensive relationships with outside logistics service providers.

Advent of 4PLs

On-demand delivery, trade uncertainties, siloed information‌for today’s supply chain managers; the list of concerns is long. Current industry and geopolitical trends are complicating matters further. Companies are juggling more products and suppliers, leaving supply chains increasingly vulnerable to disruption.

To keep up in this evolving yet volatile environment, many businesses seek outside expertise. Traditionally, companies outsource one or more of their procurement and logistics processes to external third-party logistics (3PL)

16 CargoConnect - DecEmber 2019

Upamanyu Borah

cover story

DecEmber 2019 - CargoConnect

17

cover story partners, who utilise their own fleets, facilities, and equipment to handle standard logistics procedures such as warehousing, shipping, packing, E-commerce fulfilment, and distribution. More advanced providers will also provide value-added services such as security and tracing.

However, some find that this model doesn’t go far enough.

Unifying internal and outsourced teams remains a challenge, making it difficult to gain a complete picture of the supply chain. Businesses are also collecting vast amounts of supply chain data throughout the organisation, but don’t have the infrastructure or expertise to mine it for insights. That’s where 4PL come into play.

The increasing digitisation of freight transportation is also opening the door to this new kind of management within the supply chain. 3PL providers have been successfully managing company’s operations for years. But with new data streams and technologies such as blockchain that will allow disparate systems to operate in a single, unified and trusted chain, the rise of the 4PL is bound to be upon the industry.

According to the Council of Supply Chain Management Professionals, 4PLs, also known as LLPs differ from other models in the following features:  4PLs are independent entities set up as joint ventures or through a long-term contract between the main client and one or more partners.  4PLs act as an interface between clients and several suppliers of logistics services.  4PLs manage all or most aspects of its client’s supply chains.  External logistics suppliers can become 4PLs with the structure they already have in place.

18 CargoConnect - DecEmber 2019

Jim Briles

Co-Founder and COO, Terra Worldwide Logistics

4PL Providers, have significantly greater responsibility and accountability in helping customers accomplish their strategic goals. Specifically, 4PLs serve as end-to-end supply chain integrators. And in many cases, 4PLs are, in effect, partners with the businesses they support. 4PLs have a broader scope than 3PLs. The 3PL-4PL difference

A 3PL consists of 1st party (the shipper), 2nd party (the receiver) and 3rd party (the carrier). These range from small independent carriers, often used for managing local deliveries up to the mega carriers and large logistics organisations.

Fundamentally, they all work on the same basis of utilising their vehicles as effectively as possible. Irrespective of size, 3PL optimise resources and manage volume fluctuations and seasonality through subcontracting excess activity to other 3PL. The key is minimising ‘empty’ running and ensuring vehicles are constantly utilised. For in-

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cover story stance, UPS is a well-known example of a third-party logistics provider and operates on a global scale.

4PLs typically go beyond the traditional outsourced 3PL arrangement to oversee all supply chain operations, no matter who’s actually moving your cargo. For example, if a shipper uses multiple partners for his/her shipments, a 4PL manages the logistics services it provides as well as services from other providers.

From customs compliance and purchase order management to carrier allocation and warehousing, 4PLs provide a single point of contact, management, and accountability to simplify your operations. They’re also typically non-assetbased, giving them the flexibility to connect you with the carriers and solutions best for your business. As an example, Deloitte provides 4PL services that go above and beyond traditional 3PL by offering strategic business insights and consultative services in addition to logistics execution.

Jim Briles, Co-Founder and COO at Terra Worldwide Logistics says, “4PL Providers, have significantly greater responsibility and accountability in helping customers accomplish their strategic goals. Specifically, 4PLs serve as end-to-end supply chain integrators. And in many cases, 4PLs are, in effect, partners with the businesses they support. 4PLs have a broader scope than 3PLs.” Technology plays a key role in the 4PL relationship.

Rosalyn Wilson Senior Business Analyst, Parsons Corporation

4PLs by definition must be non-asset based.

Many ‘wannabe’ companies are hiding transportation assets somewhere under false advertising, and it’s not good enough to have a separate division offering the service. There must be complete mode/vendor neutrality.

Many 3PLs offer their own proprietary systems, but may not offer visibility across multiple providers, modes, and steps in the supply chain.

The main strategic differences between 3PLs and 4PLs  4PLs offer more integration and optimisation features; 3PLs focus more on day-to-day operations.  4PLs form high-level strategic relationships; 3PLs focus more on operations.  4PLs offer a sole contact point for the supply chain and takes on the transportation, warehousing, and other processes; 3PLs do not manage these processes in their totality.

When a 4PL is actually a 4PL

A true 4PL relationship should be a proactive partnership with the 4PL highlighting waste in the business as well as an explanation of where and why it occurs. Cost to serve/ supply is an important part of the information, identifying customers or suppliers who are under or over serviced.

Many freight forwarder organisations refer to themselves as 4PL, whilst some carriers or 3PLs have a 4PL division.

However, without the systems or processes and expertise, automatic 4PL classification is not guaranteed. 3PLs with a 4PL division are unlikely to be aligned from a business vision perspective to really offer a 4PL service as the core values of the different business are diametrically opposed.

Most industry experts contend that 4PLs are focussed on the logistics processes of the client, from the way they handle operations internally, through the partners/logistics suppliers they use, to customer service. Still, they say, there remains a number of ‘pretenders to the throne’, and severe scrutiny is advised before making a commitment.

After all, the 4PL is obligated to provide the best supply chain solution, not the one that it’s in the best position to implement.

“It is very difficult to make the distinction between a 3PL and a 4PL,” says Rosalyn Wilson, Senior Business Analyst at Parsons Corporation, a technology company

20 CargoConnect - DecEmber 2019

cover story based in Virginia, US. Sharing a little anecdote, Wilson says, “During the Great Recession everyone was trying to grab onto anything that would get them more business. Even small trucking companies were trying to get in on the action by saying they offered 3PL and 4PL services, but most were well out of their element.”

According to Wilson, 4PLs by definition must be nonasset based. Wilson argues that many ‘wannabe’ companies are hiding transportation assets somewhere under false advertising, and that it’s not good enough to have a separate division offering the service.

“There must be complete mode/vendor neutrality,” says Wilson. “The element that complicates this issue even more is the fact that some non-asset based 3PLs say they offer 4PL services…but they are not really in a neutral position.” For example, the consulting arm of such an organisation would be hard pressed when making recommendations not to include their 3PL services as an option. “They can’t have warehouses, transportation equipment, or even a software product that would be recommended,” notes Wilson.

Alan Van Boven, Principal at the consultancy Supply Chain Visions is on the same page with Wilson. “Ideally, a 4PL would never have assets. It would typically work as the single partner for a shipper, selecting 3PLs, freight forwarders and customs brokers.” Van Boven allows that a 4PL could also be a 3PL with its own network, but must be mode neutral.

“Accountability and control help differentiate a 3PL

Alan Van Boven Principal, Supply Chain Visions

Ideally, a 4PL would never have assets. It would typically work as the single partner for a shipper, selecting 3PLs, freight forwarders and customs brokers. A 4PL could also be a 3PL with its own network, but must be mode neutral.

from a 4PL,” explains Andy Moses, Senior Vice President of Global Products for Penske Logistics, in a blog post. “As a 4PL, we become a trusted advisor, and the customer becomes reliant on our data to drive them forward.”

The introduction of 4PLs is not new – they have been around for some time – but their mainstream use is growing, due in large part to advances in technology. Previously, different software systems and goals made it diffi-

cover story cult for one party to control an entire supply chain. That is changing.

“When we speak to clients about what exactly is the difference between a 3PL and a 4PL, there’s no textbook definition of the relationships,” says Josh Nelson, Associate Principal, Strategy & Transformation at the Hackett Group.

“A 4PL is an enhanced 3PL. A company will look at its supply chain and choose a 3PL for transportation, warehousing and distribution. These same partners are separated from each other. It’s a portfolio of relationships— a 3PL.” A 4PL, however, manages all of those supply chain operations, including carriers, warehouses, reverse logistics and more, breaking down silos and providing end-to-end visibility and transparency. Quite often, Nelson added, 3PLs will acquire other 3PLs that have different capabilities — distribution, warehouse, reverse logistics — and naturally expand into 4PLs. Nelson mentioned about a consumer durable company that had transportation and distribution relationship with a 3PL, but had to deal with returned goods needing minor repairs, or a change in colour. The 3PL had acquired a number of reverse logistics capabilities with facilities in several regions, in essence becoming a 4PL.

How and Why 4PLs make a lot of sense

The outsourcing of transport via the 3PL route has long been an effective way of reducing costs, utilising expertise and improving processes. Whilst this continues to offer benefits for many businesses, 4PLs are increasing in popularity as multi-service providers, enabling a company to outsource its entire transport operation, from planning through to reporting.

So what can a 4PL offer above and beyond a 3PL – and is outsourcing an entire supply chain always the best way to go?

22 CargoConnect - DecEmber 2019

Andy Moses

Senior Vice PresidentGlobal Products, Penske Logistics

The introduction of 4PLs is not new – they have been around for some time – but their mainstream use is growing, due in large part to advances in technology. Previously, different software systems and goals made it difficult for one party to control an entire supply chain. That is changing.

Briles says, “Looking back to the Industrial Revolution, you can see the logistics landscape has undergone tremendous change. Industry 4.0 has significantly transformed logistics and supply chain management. It has indelibly changed business processes, roles, responsibilities, and relationships. With the rapid advancement and adoption of technology and the spread of globalisation, logistics and supply chain management have become complex.”

Briles believes that these changes and the complexities that come with them serve as a tailwind leading to the rise of 4PLs. They also seem to aptly fill the gaps left by 3PLs. The logistics industry has become more specialised out of necessity in Industry 4.0. Therefore, as complexity grows, 4PLs will continue to grow and become integral to successful supply chain management.

“Not only is 4PL the next step from 3PL mechanism, it serves a larger goal and is a critical process based approach, integral to companies that operate on a scale. It not only involves the functions of a 3PL system, it at the same time, brings together various suppliers, manufactures and customers to the main fold of an organisational structure,” explains Sandeep Chadha, Founder & CEO of Warehouster Capital Advisors India. While outsourcing is a key alternate to minimise costs and increase efficiency, in 4PL adaptation it becomes a strategic function in the company’s overall mission.

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Josh Nelson

Associate Principal, Strategy & Transformation, Hackett Group

A 4PL is an enhanced 3PL. However, it manages all of those supply chain operations, including carriers, warehouses, reverse logistics and more, breaking down silos and providing end-to-end visibility and transparency. Quite often, 3PLs will acquire other 3PLs that have different capabilities — distribution, warehouse, reverse logistics — and naturally expand into 4PLs.

Minimised costs, enhanced efficiency and synchronisation of various verticals of an organisation are some of the main benefits of using a 4PL mediator.

The 4PL model, Igor Jakomin, COO, CargoX says, enables an enterprise to completely outsource its logistics activities and the execution thereof. This enables them to

24 CargoConnect - DecEmber 2019

completely focus on their production and specialisation, while their 4PL partner can focus on the complete logistics around the production. The 4PL can also act as a large buyer, demanding the producer to deliver large enough quantities for the supply chain in which the 4PL partner is a part.

I am sure that in certain cases companies who produce something cannot keep pace with the novelties in logistics and supply chain management like specialised 4PL providers can. The logistics, here, becomes a product of another company.

The ones that we discussed above as inclusive to a 4PL, which also Amar More, CEO of Kale Logistics Solutions lists as some of the main benefits of 4PL are – neutrality, single point of contact, open-book management, full transparency, material flow optimisation, substantial logistics costs savings, gain in productivity, global sourcing strategy and synergies, industry best practices benchmarking, data ownership and visibility and continuity of personnel.

When we talk about newer way, adoption and implementation of technology 4PL companies are far ahead of traditional 3PL and other logistics companies, informs Rishi Singla, Director at Jhanu Logistics. There are lot many advantages of using 4PLs. To begin with, most of the 4PL companies are part of bigger business groups and MNCs. These companies have better and deeper access to resources like technology, manpower, finance, and vision

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cover story and acceptance being the most important ones. By using these resources, 4PL companies are able to scale up their business and make the right investments.

Do you know which of your warehouses are the most cost-efficient? Can you see each shipment from procurement to fulfilment? Jon Slangerup, Chairman and CEO at American Global Logistics says working with a 4PL partner with a full understanding of your supply chain can help you:  Gain end-to-end visibility: Getting a true picture of the supply chain is a top priority for organisations, but many current platforms can’t deliver. A 4PL can help you design and implement a cloud-based solution that pulls data from all internal and external sources, giving insight into each step of the process—regardless of who handles the shipment.  Optimise operations: Leveraging a broad set of capabilities and industry relationships, 4PLs customise full-service solutions based on what success looks like for each business.  Get data-driven insights and analytics: By acting as the keeper for all supply chain information, a 4PL can help you turn data into business intelligence. Customisable KPIs and reporting offer insights on staffing costs, service levels and more, helping you drive value throughout the supply chain.  Deliver value: Between economies of scale and multifunctional expertise, 4PLs help businesses find new ways to lower landed costs and minimise supply chain risks. The right supply chain partner takes full accountability for meeting your business rules and requirements, freeing you to focus on more highvalue tasks.

When selecting a 4PL, consider how well they know your industry, their core capabilities and how they’ll ser-

4pl solutions - today

Sandeep Chadha Founder & CEO, Warehouster Capital Advisors India

While outsourcing is a key alternate to minimise costs and increase efficiency, in 4PL adaptation it becomes a strategic function in the company’s overall mission. Minimised costs, enhanced efficiency and synchronisation of various verticals of an organisation are some of the main benefits of using a 4PL mediator. vice your business day-to-day. A successful relationship combines powerful technology, full-service logistics, and a keen eye for identifying and implementing processes that give you a competitive advantage.

Demystifying the cons of 4PL

4PLs are a relatively new concept, but typically they’re sought after by medium to large sized businesses that are seeking a complete logistics solution from both an operational and a strategic perspective. However, little control over logistics and fulfilment processes and involving a bigger budget are the rough drawbacks of a 4PL. Many Ecommerce businesses therefore choose 3PLs because they provide a good combination of support, flexibility, and cost-effectiveness.

According to Jakomin, companies are often careful

4pl solutions - Future differences

IT platform

IT platform

Analytics

Analytics Managed services (consultancy function) Other up-/downstream activities

Managed services (consultancy function) Other up-/downstream activities

End-to-end view/integration

End-to-end view/integration

Monitoring and reporting

Monitoring and reporting

Logistics planning & control Transport management/ 3PL management

Logistics planning & control Transport management/ 3PL management

0 0

Customer

2

Logistics

26 CargoConnect - DecEmber 2019

4 IT

6

8

Consulting

10

1

2

3

4

5

12 Customer

Logistics

IT

Consulting

6

7

cover story about outsourcing to 4PL providers, and sometimes they just outsource certain lines of products, to mitigate any damage arising from a partner lock-in. Sometimes, the 4PL seems more like a big wish of a logistics company than the true need of a production company.

Further, the feasibility lies in perfecting the company’s speciality– whether it be manufacturing certain goods, or producing some other material, or anything of immaterial nature, and on the other hand the 4PL provider can become a much better logistics expert than a department within the producing company ever would. So there are investments to be made on both side to improve their core business and boost their market share, but each case really needs to be evaluated really carefully.

Chadha does not take issue with Jakomin’s assessment—but only to a point. Chadha says, “Well, the expectation of new age customers are sky high. They want it quick, they demand quality, and they want to be pampered. Once you outsource your supply chain and integrate it with the customers, suppliers and manufacturers for a synchronised structure, it gives you time to enhance your product development, brand building and expand with the right kind of opportunities to be exploited. There is no apprehension as long as the customer is served well, served in time and is given the enough attention for his concerns.”

Talking about feasibility, Chadha says, while the companies who outsource the entire supply chain to focus on

Igor Jakomin COO, CargoX

The 4PL model enables an enterprise to completely outsource its logistics activities and the execution thereof.

This enables them to completely focus on their production and specialisation, while their 4PL partner can focus on the complete logistics around the production and also act as a large buyer, demanding the producer to deliver large enough quantities for the supply chain in which the 4PL partner is a part. their core area may have to shell out a little more, it’s sensible over the long haul. Companies get time, they can focus where it matters and it allows them room to experiment further. Gauging it from the monetary aspect only wouldn’t be the right assessment. Given the returns over the long, it not only makes sense, it’s all the more desirable for a synchronised organisational system.

Direct to every direction.

cover story

Jon Slangerup Chairman and CEO, American Global Logistics

When selecting a 4PL, consider how well they know your industry, their core capabilities and how they’ll service your business day-to-day. A successful relationship combines powerful technology, full-service logistics, and a keen eye for identifying and implementing processes that give you a competitive advantage.

Raajeev Bhatnagar

Vice President, HTL Logistics India

3PLs, freight forwarders and 4PLs all have the same generic issues of time and utilisation, the 4PL solution is geared up to make savings and give control back to the customer, providing them with the information to make decisions and the flexibility to meet fluctuating transportation needs.

“Choosing 3PLs vs 4PLs can be a complicated decision, and methodology will bring in better control, efficiency and which depends on the complexity of the supply chain and savings,” states Singla. a company’s strategic goals,” observes Raajeev Bhatnagar, Echoing a similar sentiment, More says, “There are Vice President, HTL Logistics India. bound to be pros and cons with any new or next generation As wit h most areas of transport management, technology, is what More feels. What would be a key deterutilisation and timing are key, the longer the notice period minant in its adoption is the relative ease of use and the pain of demand, the more optimised the 4PL solution will be areas that it addresses. In the case of 4PL, there is a distinct for the client. “The 4PL provider has the same issues advantage over other PL variants in its ability to tame even as any shipper when little notice is given, but their datathe most complex supply chain network into a docile data base of options is far larger than a 3PL,” contends Bhatsystem. So that should address some of the apprehensions nagar. Besides, Bhatnagar says, of the users.”

4PLs overall objective is to More adds, “As with any drive down cost for a given sernew technology, the investvice level, and they will have a m e nt s i n 4 P L n e e d t o b e In 2019, Logistics Plus Inc opened good understanding of the weighed against the benefits in new "Logistics Plus Chemical SCM" carriers offering the best synthe short-term and long-term as ergy for any given lead time, entity in India which will bring a full well. So the cost-effectiveness geographical or delivery size and feasibility of the 4PL syssuite of 3½PL and 4PL solutions tem would be entirely depencombination. to petrochemical and chemical dent on the supply chain net3PLs, freight forwarders and work it harnesses and would 4PLs all have the same generic companies in India. thus need to be evaluated on a issues of time and utilisation, case-by-case basis.” the 4PL solution is geared up to make savings and give control 4PL and Industry 4.0 back to the customer, providing them with the information Industry 4.0, which has brought about a digital overhaul of to make decisions and the flexibility to meet fluctuating the manufacturing industry, has paved the way for 4PL. By transportation needs. leveraging the power of sophisticated digital technologies As a matter of fact, partnering with a 4PL will offer the and streamlining supply chain processes, 4PL can offer opportunity to the users to focus on their core business companies a serious competitive edge. elements and outsource the complex bit. “Users can determine the goals and the 4PL will manage it better and in a For example, 4PL partners can utilise Big Data to cull cost-effective manner. If done properly, there is an opporkeen business insights. By following the trail of digital tunity to save cost, and manage the functions more effecfootprints provided by Big Data, organising the informatively,” says Singla. tion into sensible, actionable systems, and using precision Looking at the cost side, Singla believes 4PL will bring analytical processes, 4PL providers can rapidly identify in more cost saving and will be one of the most feasible and mitigate potential supply chain risks and are able to model. “When we talk about the bigger picture, there can maintain visibility throughout every link in the supply be lot of savings directly or indirectly. The new technology chain and open the lines of communication between com-

28 CargoConnect - DecEmber 2019

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cover story

Amar More

CEO, Kale Logistics Solutions

As with any new technology, the investments in 4PL need to be weighed against the benefits in the short-term and long-term as well. So the cost-effectiveness and feasibility of the 4PL system would be entirely dependent on the supply chain network it harnesses and would thus need to be evaluated on a case-by-case basis.

Frauke Heistermann

Member- Board of the Association, Bundesvereinigung Logistik

The new 4PL providers can conquer the market using the power of modern IT while exposing themselves to only minor risk. The software required to manage all the various stakeholders was once a barrier, but all that has changed: register, customise, and you’re good to go – including end-to-end visibility.

panies, facilities, carriers, employees, and other partners— question for shippers, then, is whether they wish to build thereby improving visibility, transparency, operations, up or expand their own logistics expertise or instead outsource it to partners such as 4PL providers.” and productivity.

While not addressing blockchain specifically, HeisterAs more advanced technologies such as the Internet of mann describes one of the possible scenarios blockchain Things (IoT), automation, robotics, and sensors become could be used for. more prevalent in the manufacturing industry, the need for “Truck manufacturers are equipping their vehicles with a centralised 4PL system will likely become more acute. smart telematics, sensors, and software,” notes Heister“Only a few years ago, 4PL providers still occupied a mann. “This will eventually allow them to offer their own mere niche market in the shadow of the big logistics companies. Today, potential new trans­p ort capacities and compete in the traditional carrier players in this segment are marketplace. Shipping systems finding a new and promising In 2019, Deutsche Post DHL Group and trucks will then communiapproach for their idea in the cate directly about shipping detools offered by cloud-based concluded the landmark deal to and transport capacity platforms and transport mantransfer its supply chain operations mand agement solution,” says Frauke without the need for carriers as in Mainland China, Hong Kong and Heistermann, Member of the the middlemen. The smart systems work together to automatiboard of the association for Macau, herein after referred to as suggest free capacities that Germany-based Bundesver"China" to SF Holding (SF), a leading cally einigung Logistik. The new meet the needs of the shipper. premium logistics service provider 4PL providers can conquer the Rating portals and user communities bring transparency to market using the power of in the counry. the quality of service so that this modern IT while exposing factor can be taken into account themselves to only minor risk. in the selection process.”

The software required to manage all the various stakeholders was once a barrier, but all Heistermann goes on to suggest that truck makers that has changed: register, customise, and you’re good to may become the carriers themselves with the 4PL handling everything else. She notes that 4PLs could reduce go – including end-to-end visibility. risk, waste, complexity and improve the overall environHeistermann surmises that more 4PLs will enter the market as software advances have lowered the bar for entrance, mental profile of moving freight through more effective but the industry will also see more logistics departments leend-to-end management. verage their expertise and become 4PLs in their own right.

In the near future, Heistermann suggests a 4PL will be For many, logistics serves as a tool for customer retenable to monitor data for all parties involved – shipments, tion and customer satisfaction, and its importance is entracking, documents, freight costs, customs, dangerous hanced by service factors such as quality and reliability,” goods, transport packaging, transit times, schedules, Heistermann says. “Logistics is also a major cost factor; telematics and sensor data, pallet and container data, even however, special trips, costly express deliveries, wasted data specific to real-time monitoring of the supply chain such resources, and excessive complexity drive up expenses. The traffic, weather, labour strikes, and environmental disasters.

30 CargoConnect - DecEmber 2019

cover story center-stage in times to come. An increased throughput, an enhanced efficiency, minimised costs are always so integral to an organisation’s objectives, so we might see a greater role for 4PL in the times ahead.

Rishi Singla Adding to, on a personal Ievel, Singla says that in the Director, Jhanu Logistics next few years, 4PL will play a major role and will have the advantage to manage complex supply chain networks. In India most of the 4PL are part of big business houses, which have been managing complex and challenging supply chain networks. Their understanding and approach to solutions is In the next few years, 4PL will play a major role and completely different to other companies and service providwill have the advantage to manage complex supply ers. It’s time for another round of consolidation in the induschain networks. In India most of the 4PL are part of big try. Smaller elements of the supply chain will be serviced by business houses, which have been managing smaller companies and 4PL will macro-manage to bring in complex and challenging supply chain transparency, visibility and functional benefits. All of these networks. Their understanding and approach will be achieved with the help of Artificial Intelligence (AI), to solutions is completely different to other Robotics, Blockchain and the evolving theory of COBOTS. companies and service providers.

Talking about the underlying factors, Jakomin says, it is difficult to foresee the future, as the market is saturated with different approaches. Some companies will embrace 4PL: The Takeaway this model, if they will see in it better profits for their core The explosion of digital advancement precipitated by business, and some companies will still need to control Industry 4.0, combined with an increasingly complex supply their own logistics. But as logistics becomes more and more chain, has created the need for a more holistic approach to complicated, the 4PL partners have the opportunity to present a viable business case for enterprises to embrace. This logistics. Today more than ever, businesses need solutions needs to be evaluated case by case. that offer end-to-end visibility and accountability. Because Complementing Jakomin’s opinion, Bhatnagar exall of the complex details are handled by one entity, 4PL presses that the level of information visibility that a 4PL is providers are able to achieve this — greatly simplifying the able to obtain from its systems allows it to drive savings process and acting as a centralised point for operation management and communications. and service improvements. A 4PL system will also highlight areas of inefficiency within the shippers/customers Thanks to their distinct specialisation, sophisticated operation. resources, and valuable connections, 4PL providers are There is a future for 4PL, flexible enough to offer a cusand to take advantage of this tomised suite of full-service offering market has to mature, In 2018, GEFCO launched global solutions that are uniquely which is accepting this offering mission control centre for Time beneficial to an individual comand benefiting from the serCritical Freight Forwarding solutions. vices provided. pany. These partners can create multi-tiered plans that can be The idea of 4PL is to optiThe innovation centre is expected to mise complex supply chain netadapted to various scenarios, provide global operational support works by providing an all-enoffering companies a wider control and coordination of time compassing overview that prorange of business and logistical vides visibility across the netoptions. critical solutions shipments. work, says More. So going forSing ularly focussed on ward, as global supply chains handling both day-to-day and increase in complexity and overall master-plan for logistics, 4PL can help minimise costs by constantly assessing geographic spread, 4PL and eventually 5PL will be the situations and finding the best solutions for the lowest norm rather than the exception to how supply chains will price. Not only does this add value through cost savings, it be managed across the globe. also frees up businesses to focus on higher-value projects.

Despite the cache of 4PL, we may wait for some time Chadha says that although 4PL is still in its evolutionbefore it gains currency. However, one thing seems certain; ary stages, it is becoming critical for companies with a very the ‘5PL’ is not a coinage that will command much attention, although it seems as the pinnacle and forefront of complex supply chain and a diversified manufacturing logistics technology and services. For most businesses, 2PL system with a vast distribution base. In times to come, with and 3PL providers are sufficient. Nonetheless, determining the advancement of technology, with companies focussed the right logistics providers depends on your business to minimise costs, with, with companies dealing with a structure and strategy. complex supply chain structure, 4PL is bound to take the

32 CargoConnect - DecEmber 2019

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Cross-Border The new frontier in E-commerce

34 CargoConnect - DecEmber 2019

special feature

Both domestic and cross-border E-commerce is booming in developing markets such as India, China, Indonesia and Malaysia. This encompasses not just direct-to-consumer retail, but also shipments of electronics, pharmaceuticals, and consumer packaged goods. Getting cross-border E-commerce right starts with extending optimised domestic operations; domestic logistics and strategies to address legacy processes and technology can unlock opportunities both here and abroad.

Ritika A Bhola

he last few years has witnessed the Ecommerce industry transform the way business is done in India. With increasing internet and smartphones penetration– online business has not only charmed consumers in the metro cities but has also reached out to the remote areas– tier III and tier IV cities. Reports say that the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. The ongoing digital revolution in the country has definitely increased India’s total internet user base– to 829 million by 2021 from 604.21 million as of December 2018. And now, with popular foreign retail brands like Vero Moda, H&M, Zara, Mango, GAP, GUESS, Shoppers Stop, etc. going online or merging with E-commerce firms like Amazon, Flipkart, Myntra, Jabong, Shein and Ajio has increased the craze and customer’s expectations to buy more and more. Apart from apparel, what’s trending is electronics, automotive, baby supplies, toys, limited-edition accessories and home décor items/luxury products.

At present, considering the high demand from across the world, the E-commerce industry has gone one step forward.

The next step in the trade is Cross-Border Shipment.

With increased exposure and income, India is actually experiencing a huge surge in the growth in cross-border E-commerce spends. It is quite clear that Indians are not really satisfied with what’s on offer in the domestic market and are ready to explore and expand their shopping horizon. After all, when they are getting international brands like Burberry, Chanel, Prada, Hermes, Louis Vuitton, limited-edition watches, electronic items, cell phones, etc. at comparatively lowest prices, then who would want to miss out. Global E-commerce companies are helping Indian customers get foreign products at the luxury of sitting at home. Though the trend is new in India, it

US$ 200 bn Indian E-commerce market is expected to grow by 2026

is growing. According to recent reports, global E-commerce giants like Amazon and eBay have made enormous investments in the Indian market, and Alibaba (popular global E-commerce firm) is also planning to venture and invest in India soon.

Next Level: Global Reach

India is a massive market and Indian E-commerce industry has witnessed tremendous growth and positive feedback in the last few years. It’s the right time for the MSMEs to now look globally to grow their operations. The next step, according to experts is to focus on and to promote Cross-border E-commerce to expand the customer base. Rachid Fergati, Managing DirectorDecEmber 2019 - CargoConnect

35

special feature India is the fastest growing market for the E-commerce sector. Revenue from the sector is expected to increase from US$ 39 billion in 2017 to US$ 120 billion in 2020, growing at an annual rate of 51 per cent, the highest in the world.

Growing Demand

advantage india

Attractive A lot of India's blue-chip PE firms are looking for opportunities in the sector.

Opportunities policy support

increasing investments

100 per cent FDI allowed in B2B E-commerce, 100 per cent FDI under automatic route is permitted in marketplace model of E-commerce.

E-commerce and consumer internet companies in India received more than US$ 7 billion in private equity and venture capital in 2018.

Indian subcontinent at UPS says “We are seeing that the fastest growing customers are often those doing business across borders. Our industry plays a key role in connecting small and medium sized business to global markets – being global is not just for big companies. From my standpoint, supply chains are enablers of cross-border trade and world markets. That is why UPS moves three per cent of the world’s GDP.” According to a report by PWC, over the past two decades, India’s gross domestic product (GDP) has risen by more than US$ 1 trillion, in the process of bringing millions of citizens into the fold of an emerging middle class. Therefore by 2021, India’s emerging and middle-class segments combined will comprise nearly 900 million people— which will open up new opportunities for growth and business. The Indian E-commerce market is expected to grow to US$ 200 billion by 2026.

Fergati believes that growth of the industry has been triggered by the increasing internet and smartphone penetration.

It is therefore not a surprise that a really large international consumer and E-commerce companies are anchoring their presence in India. These developments will have a significant impact on cross-border trade to and from India. Logistics will play a critical role in connecting these products, people and enterprises across borders.

Dipanjan Banerjee, Vice President – Sales (Express Division), Ecom Express informs that India is experiencing a surge in cross-border E-commerce and has reached approximately $500

million in 2016 with an estimation to reach $2 billion by 2020.

“With such rapidly rising prospects, there are certainly huge opportunities for cross-border trade to thrive,” says Banerjee. E-commerce has made it easier for the global brands to reach Indian customers and has emerged as one of the fastgrowing trade channels available for the cross-border trade of goods. There is a growing appetite for international brands and better-quality products amongst digitally connected Indian shoppers (including huge expat population living in India) prompted with rising income levels and aspiration plus increased awareness. The global marketplace has provided consumers more choices than ever before.

Apart from the growth triggered by increasing internet and smartphone penetration, digital connectivity has also provided opportunities for our MSMEs to participate in the international trade and reach customers from other countries (including Indian diaspora living abroad). Currently, about five per cent Indian MSMEs contribute to exports, however, due to the large range of diverse categories that Indian artisans churn out, the momentum will allow millions of registered MSMEs to gain most in the due course of time.

On a similar note, Saurabh Prabhakar, Operations Manager- Supply Chain Management, Amazon India shares, “For India, there is a huge opportunity and space to grow and invest in cross-border shipment. Our competitors are mainly China and the US. China is aggressively moving in the direc-

Indian MSME units, particularly those with second and third generation entrepreneurs in the business are quicker to adopt technology, thus witnessing improved business efficiency. This has further resulted in huge opportunity for MSMEs that earlier had limited marketing options and can now directly connect with the buyers across global markets.

Ketan Kulkarni

CMO & Head - Business Development, Blue Dart

36 CargoConnect - DecEmber 2019

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special feature We are seeing that the fastest growing customers are often those doing business across borders. Our industry plays a key role in connecting small and medium sized business to global markets – being global is not just for big companies. From my standpoint, supply chains are enablers of cross-border trade and world markets.

Rachid Fergati

Managing Director- Indian subcontinent, UPS

tion of cross-border shipment and if, India as a country has to excel in cross-border E-commerce, the whole community has to work towards it.” For instance, if we compare shipment via India Post with China Post, the cost of it is twice and time consumed is also doubled. Therefore, if we want to succeed in this space, all of us have to be competitive.”

Besides, Prabhakar feels that when it comes to cross-border E-commerce, 50 per cent of the cost is logistics, so if we can’t make it cheaper, even 30 per cent, we are not competitive enough and we will be out of the business. “That is what is happening right now,” says Prabhakar. “If a small or medium business tries to enter in this space, their products will prove to be pretty expensive for foreign customers. For example, why would somebody in Spain buy a western tee that cost 20 euro when the person is

er to adopt technology, thus witnessing improved business efficiency. This has further resulted in huge opportunity for MSMEs that earlier had limited marketing options and can now directly connect with the buyers across global markets.”

Kulkarni continues, “Cross-border shipping has given an opportunity to the Indian MSMEs to cater to a larger market and engage with the international consumers directly. This will help them reduce the transaction cost, will eliminate cross-border payment issues via e-payments, contribute to creating brand value and at the same time will be able to increase revenue base and improve margins. Cross-border Ecommerce is an appropriate platform, where the MSMEs can expand and scale up their market outreach as cross-border trade facilitates a level playing field for an otherwise skewed traditional export market. ” Citing a report, Kulkarni says that B2C cross-border E-commerce in India global market is estimated to reach $2 billion by 2020.

Apparel

has the largest penetration followed by entertainment, healthcare, home ware and technology.

getting the same at 15 euro at a local shop? So, that is the catch, because there is a lot of space to grow and in order to cash on it, we have to work towards making it more competitive as a whole industry.”

Agreeing with Prabhakar, Ketan Kulkarni, CMO & Head - Business Development at Blue Dart enunciates, “E-commerce has become an important driver to create new markets in otherwise inaccessible geographies. MSMEs account for more than 98 per cent of the total industrial units in India and a new trend of boom in digitization amongst these MSMEs is on the rise. Indian MSME units, particularly those with second and third generation entrepreneurs in the business are quick-

38 CargoConnect - DecEmber 2019

Indian products going global

According to the UPS Pulse of the Online Shopper Study 2019, which captured evolving trends, preferences and expectations of online shoppers in 15 countries and regions, including India, a wide range of categories are being purchased by online shoppers. Apparel has the largest global market penetration followed by entertainment, healthcare, home ware and technology.

“Overall, apparel is the most popular online purchase in Asia Pacific and America. India has been a supplier to world markets for apparel and has a competitive edge due to availability of raw materials and abundance of skilled manpower,” says Fergati.

According to Banerjee, the US, UK, UAE and South Asian countries are major export destinations for Indian merchants selling online products such as automotive, baby supplies, toys, clothing, footwear, wearable and accessories, jewelry, watches, cosmetics, health products, digital entertainment, leather goods, handloom and handicrafts and educational services that can be traded through international B2C Ecommerce marketplaces.

Prabhakar jots down the list of products which he observed most-sold in foreign countries.  Indian clothing– ethnic and traditional wear.  Spices are in demand, especially Pepper and saffron.  Fashion jewellry would get a lot of traction.  Handcraft goods.  Electronics, although China has dominated the market.

Kulkarni says, “Cross-border E-commerce has the potential to stimulate MSME growth by bridging gap between buyers and sellers digitally. The key categories from India that will uplift cross-border E-commerce are gems and jewellery, apparel and footwear, handloom and handicraft, hosiery, auto parts, agro and food processing, leather and sports goods.”

Need for Policy and Infrastructure to facilitate trade

Having the top-notch infrastructure and refined policies to facilitate such trade which would require digital payments, efficient logistics, analytics and digital advertisements holds utmost importance and is the need of the hour. Experts say, with the progress of economic reforms, increasing rates of internet penetration and the rapid adoption of new technologies– Indian E-commerce industry is ready for it. Indian consumers are enjoying unprecedented levels of access to goods and services from around the world. Underscoring this progress is a steady increase in the connectivity that makes it easier than ever before for the forces of supply and demand to cross borders.

Fergati opines, “The growth story of India’s E-commerce industry has only just begun. Being an enabler of global trade, UPS recognises that such a shift requires an effective supply chain to be well-positioned at the intersection of connectivity, technology and efficiency to provide a smart business network to enable Indian businesses to reach global consumers and world markets. An Indian SME who is a supplier in a B2B Ecommerce chain requires certain level of technical capabilities

and sophistication, and associated investments. Infrastructure, strong technological capabilities, flexibility in response, strong customer service orientation and the capacity to work in sync with the producers’ technology systems are key requirements for Indian SMEs to compete globally.” Meanwhile, stressing on the need to push investments in cross-border E-commerce and other requisites, Banerjee says, “Currently, a large share of India’s cross-border E-commerce trade is export, as India is considered to be a delicate location for import. Some of the challenges restricting growth of cross-border E-commerce are high shipping costs, import duties and complexities in returns and exchanges. Challenges also remain, in terms of logistics infrastructure and payment methods. Though the cross-border E-commerce model has touched the peripherals, but it is likely to go deep.”

However, on a positive note, Prabhakar says that if compared with last five years, there’s a drastic change and there’s still a lot of scope for change. “Recently, there has been news of India Post initiating E-commerce portal and offering Ecommerce shipping. So, definitely we are moving into that direction. Unless there’s a solution given to MSMEs, they will not be able to survive on their own because if they are sending

by DHL, the only option is postal service becoming a reasonable solution. E-commerce services are competitive. As soon as there’s a business it will come up. Right now, e-bay and Amazon are giving such platforms. There are few start-ups playing in this space. So as soon as there is business there will be solutions for it but first thing which is required is business environment,” explains Prabhakar.

In the interim, Kulkarni shares that for cross-border trade to be smooth and successful, there is a need for conducive policy and infrastructural evolution. “Uniform guidelines across supply chain, policies related to electronic data interchange, claims, customs, intellectual property, product certifications, etc. need to be firmed up. With the current government, we are hoping to see further improved trade policies and other developments related to these aspects. This would also lead to the development of related industries such as digital payments, logistics, analytics and digital advertisement,” says Kulkarni.

There is a growing appetite for international brands and better-quality products amongst digitally connected Indian shoppers (including huge expat population living in India) prompted with rising income levels and aspiration plus increased awareness. The global marketplace has provided consumers more choices than ever before.

Dipanjan Banerjee

Vice President– Sales (Express Division), Ecom Express

40 CargoConnect - DecEmber 2019

special feature For India, there’s huge opportunity and space to grow and invest in cross-border shipment. Our competitors are mainly China and the US. China is aggressively moving in the direction of cross-border shipment and if, India as a country has to excel in cross-border E-commerce, the whole community has to work towards it.

Saurabh Prabhakar

Operations Manager- Supply Chain Management, Amazon India

Embracing Challenges

Challenges are a part and parcel of every organisation. But to overcome the challenges, E-commerce companies should adopt firm strategies which can enhance speed, accuracy and efficiency of the business operations. Few challenges in crossborder shipment are lack of adequate infrastructure to facilitate the trade and efficient logistics to move the products to and from the country in minimum time possible. Also, digital transactions, analytics, advertisements require lots of investments. Risks of non-payment, loss of goods in transit and default customers are other few areas which need to be looked at.

Fergati observes that E-commerce is about a larger ecosystem. The E-commerce industry is about speed, accuracy and scale. He highlights three strategies that businesses can employ to help their business cross trade borders.

Find the right international partner: Businesses looking at international expansion should choose the right partner and consider capabilities such as network reach, their expertise in global trade, and the technology they offer to help make worldwide shipping more automated. Especially, if the goods in the supply chain cross borders in different phases of completion and in different shipping modes, they need to

42 CargoConnect - DecEmber 2019

think about how integrated the provider’s network is. Compliance procedures and regulations differ as geographical borders are crossed. The right logistics partner can help anticipate and ensure compliance at every stage, even before the shipment reaches the transit point. The state of infrastructure and level of accessibility also differs from place to place, making adaptability in transitioning to different modes of transportation, if required, whilst maintaining the quality of the shipment.

Have the right technology tools: Technology plays an even crucial role in the E-commerce industry. It needs a robust technology platform that can manage the flow of information seamlessly. E-commerce is about convenience for a shopper so it also requires creation of convenient delivery solutions such as UPS My ChoiceÂŽ, as the customers demand it. Visibility of the product is also critical since the shipper has already invested in the product and the consignee has paid for it.

Consider risk of non-payment: Risk of non-payment can be a business limiting concern, especially for SMEs. Risks of non-payment can be due to defaulting customers, loss of goods in transit, etc. Solutions such as trade credit protection, cargo insurance, etc. can help mitigate these risks and facilitate cross-border trade.

special feature On a similar note, Kulkarni asserts that there are certain key challenges that need to be resolved for the Indian Ecommerce industry to continue witnessing the growth in the future. “Customer acquisition cost and customer loyalty as discounting alone is not a sustainable way, enhancing the delivery experience through improved supply chain infrastructure, scalability in terms of talent, processes and systems, uncertainty on regulations, data protection, seamless integration of front end and back end infrastructure, payment costs (high return rates on Cash on Delivery), etc. will need resolution,” points out Kulkarni.

No doubt, the E-commerce industry in India is rising at a prospering rate, more so with the ongoing digital transformation in the country that is expected to increase India’s total internet user base to 829 million by 2021 from 560.01 million

as of September 2018. However, the E-commerce industry in India lags far behind compared to the western countries. Banerjee explains, “One of the challenges that surround Indian E-commerce is the low penetration of acceptance of electronic payments methods as well as credit card by customers. This has led to the adoption of Cash on Delivery services by E-commerce companies in order to increase the number of transactions and acquire first-time customers. This was a plausible solution however, many of the customers refuse to pay money at the time of product delivery which result in high returns and eventually lose out on sales and revenue.” Although, Banerjee says, Internet is the mainstay of E-commerce and its prevalence is growing, yet the rate of internet penetration in India is dismally low.

However, increased availability of bandwidth, affordable data plans and increased awareness driven by the government programscan rapidly bridging the digital gap between urban and rural India.”

44 CargoConnect - DecEmber 2019

Reaching out to global consumers

Experts believe, by engaging in the cross-border E-commerce; MSMEs will be able to access a larger pool of global consumers.

Citing a report, Fergati says, cross-border E-commerce is estimated to reach $1 trillion by 2020. According to PWC, by 2040, the purchasing power of the emerging countries of the E7 is expected to double that of the G7. India and China will be the key drivers of that growth. Those staggering statistics also represent an emerging market for Indian SMEs. “I see cross-border E-commerce as a heat map that lights up as stakeholders across the world get connected. More Indian SMEs need to be connected to this heat map. Logistics companies such as UPS are connectors between global markets, local businesses and demanding customers,” he affirms.

Agreeing with Fergati, Banerjee clarifies that the spread of E-commerce is rapidly changing the face of international trade. “As India quickly begins to adopt E-commerce, MSMEs can now look to grow their customer base in the different countries by participating in the speedily growing global E-commerce market.

Cross-border trade would not only help MSMEs in brightening their chances to grow their businesses internationally but it would be cost-effective for small businesses to use eplatforms and their logistical facilities to sell their products in wider geographical areas. Cross-border E - c om merc e a l s o a l lows MSMEs to explore customers Cross-border in newer geographies which E-commerce is might not have significant estimated to reach trade relations with India. By unlocking the opportunities created by digitisation and digital trade, the importance of connectivity has resulted in a h u g e o p p o r t u n it y f o r MSMEs,” tells Banerjee.

Kulkarni concludes saying, “There will be 2.07 billion digital buyers in the world by end of 2019. As India quickly begins to adopt E-commerce, MSMEs can now focus on growing its operations globally. For expanding their reach to a global level, they would have to promote cross-border Ecommerce. By simply focussing on the products that can be traded through B2C E-commerce such as jewellery, leather goods, handloom and handicrafts there is an available $ 52 billion market opportunity. By engaging in exports, companies will be able to gain invaluable access to the tremendous global opportunity.”

Cross-border shipment, though, slowly picking up in India, is the trend which is going to stay forever. It will not only boost the Indian economy but will also help Indian E-commerce players go global and attract foreign investors to the Indian market.

$1 trillion by 2020

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feature

Asia’s Air Cargo Ascent

DecEmber 2019 46 CargoConnect - december

feature

As per the Boeing 20-Year Forecast, while global air cargo would reach 509 billion revenue tonnekilometers (RTKs) by 2035, i.e. twice that seen in 2015, at an annual average rate of 4.2 per cent, Asia will lead the growth with China, intra-Asia, and Indian market expanding at the highest rates of 6.2 per cent, 5.5 per cent and 6.7 per cent per annum respectively. Asian countries will also strive to establish more air routes to promote tourism, trade, and enhance greater connectivity.

Upamanyu Borah

O

Over the last two to three decades Asia has become the epicenter of economic gravity and a major manufacturing region, with more and more carriers opening up new destinations to serve growing appetites of European and American consumers. Industries that require transport of time sensitive and highvalue commodities such as perishables, consumer electronics, high-fashion apparel, and pharmaceuticals, depending on the unique capabilities that air cargo provides is offering a new phase of air cargo growth in the Asian region.

Asian airlines have an outsized role in air freight, accounting for nearly 40 per cent of the global market as the region is a major manufacturing hub. Besides strong E-commerce demand is also fueling Asia’s air cargo market. The sector is growing at a tremendous pace, driven by Chinese behemoth Alibaba Group and rival JD.com, as well as others such as Japan’s Rakuten Inc, Amazon, and India’s Flipkart.

“E-commerce is changing the way people are buying stuff, especially in countries such as Indonesia and the Philippines,” says Jean Francois Laval, Executive Vice President - Sales Asia, Airbus Group. It is coming from China,

Korea, and other parts of the region.

Therefore, the need is a huge amount of cargo space.

According to Andrew Herdman, Director General, Association of Asia Pacific Airlines (AAPA), “Asia-Pacific air cargo volume rose 4.8 per cent in January-August 2018, shows data from the Association of Asia Pacific Airlines (AAPA). That was lower than 9.8 per cent in 2017 but came off a higher comparison base at a time of record shipments.”

During 2017, Herdman says, they have witnessed stable demand for exports from Asia (upto 12 per cent), but what is even more important is that the growth rates for imports to majority of stations in Asia has seen double digit growth, a 20 per cent higher than Europe, including high growth of automotive goods and medical equipment, as well as healthcare products.

Expressing similar sentiments, William Flynn, President & CEO, Atlas Air Worldwide Holdings Inc informs, “Growth in Asia and an expansion of the global middle class are transforming the global economy. Increased disposable income will support a strong future for global trade and the consumption of goods. Our strategic focus DecEmber 2019 - CargoConnect

47

feature Asian airlines have an outsized role in air freight, accounting for nearly 40 per cent of the global market as the region is a major manufacturing hub. Besides strong E-Commerce demand is also fueling Asia’s air cargo market.

The growth rates for imports to Asia has seen double digit growth, a 20 per cent higher than Europe, including high growth of automotive goods and medical equipment, as well as healthcare products.

on express and E-commerce service and the fastergrowing Asian markets position us for further business growth as we carry through the balance of 2018, into 2019 and beyond.”

India’s strategic preparedness India seemingly has all the ingredients to be one of the world’s great air cargo centers. Rapid growth of international trade, a huge manufacturing engine and a population of more than 1.2 billion all bode well for the industry. And with the recent launch of the National Air Cargo Policy Outline 2019, India is set to realise this great potential.

India’s Air Cargo Policy will aim to leverage the country’s geographical location as a transit hub between Europe and South East Asia and a gateway to the South Asian region, making India a transit cargo hub of choice to-and-from other parts of the world. The policy covers all three categories of air cargo transport: domestic cargo to ensure efficient flow of goods across India; international cargo facilitating all indigenous export and import of products; and transit international cargo by making India the transit cargo hub of choice to and from other parts of the globe. The policy covers the development and growth of all

DecEmber 2019 48 CargoConnect - December

E-commerce is changing the way people are buying stuff, especially in countries such as Indonesia and the Philippines. It is coming from China, Korea, and other parts of the region. Therefore, the need is a huge amount of cargo space.

Jean Francois Laval

Executive Vice President Sales Asia, Airbus Group

The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market.

With the region accounting for more than 35 per cent of total FTKs, this performance is the major contributor to the weak industry-wide outcome.

Andrew Herdman

Director General, Association of Asia Pacific Airlines (AAPA)

Asia has been raising the bar of quality performance for airfreight transportation by implementing latest industry technologies and adapting best practices and more highly skilled personnel.

types of cargo. In India, international cargo comprises of 60 per cent of total air cargo tonnes handled, and grew at 15.6 per cent in 2017-18. One of the strategic objectives of the policy is to invest in emerg i ng cargo markets like Africa, South East Asia, etc. The potent ial i n t he new markets needs to be explored with long term infrastructure creation to sustain cargo growth in the next 10-15 years at least.

Since the last few years, there has been exponential growth in India’s air cargo traffic. The country is working with partners around the world to create aviation logistics hubs. Besides, the government also plans to develop Nagpur as the central location for global Maintenance, Research, and Operations (MRO) in aviation.

“T he a i r c a rgo market in India has the potential to become a global hub,” also feels Shailendra Seth, Director and Country Manager- India for charter cargo specialist Chapman Freeborn. The

feature Projected growth in demand for air cargo transport services through 2035 (in billion ton-kilometer)

1.8 fold

75.6

41.9

89.1

2.2 fold

41.4

Asia-Europe 2.0 fold

Asia-North America

67.6

34.1 Within Asia-Pacific

Demand for transport

Source: Japan Airport Development

Indian charter market is rapidly growing.

Trade has grown over the past five years as a greater share of trade moved towards finished goods.

Products driving the growth include pharmaceuticals, gems and jewelry, transport equipment and ready-made garments. We feel the long term growth potential is quite positive.

Growth in Asia and an expansion of the global middle class are transforming the global economy. Our strategic focus on express and E-commerce service and the faster-growing Asian markets position us for further business growth.

William Flynn

From Bottlenecks to Opportunity Pluralism High-tech production facilities are growing at a very high speed in the Asian region, including aerospace, automotive, medical, etc. and this pushes airfreight volumes to and from Asia, while raising the bar of quality performance for airfreight transportation by implementing latest industry technologies and adapting best practices and more highly skilled personnel. Even though the 2018 market grew at a slower pace compared to the robust 2017, a solid and stable growth was seen in the first months of 2018, after backlogs were cleared, while the EuropeAsia trade lane continued its momentum and generated needed volumes.

According to P Balasubramanian, Found-

Result in 2015

Projection for 2035

President & CEO, Atlas Air Worldwide Holdings Inc

The Indian charter market is rapidly growing. Trade has grown over the past five years as a greater share of trade moved towards finished goods.

Products driving the growth include pharmaceuticals, gems and jewelry, transport equipment and readymade garments.

Shailendra Seth

Director and Country ManagerIndia, Chapman Freeborn

er & CEO, Air Cargo Consultancy International Services (ACCIS), “Asia-Pacific airlines saw demand for air freight contract by 4.9 per cent in July 2019, compared to the same period in 2018. It is true that 2018 witnessed an overall good performance in air cargo growth in the Asian region, despite the late 2018 marginal decline. This is commendable given that International Civil Aviation Organisation (ICAO) had dubbed 2018 as the year of ‘solid passenger and moderate air cargo growth.’ The ever-challenging US-China trade talk’s scenario, particularly its direct effect on the tariffs, especially retaliatory tariffs, did not help the cause either and still, markets did a brisk business. However, those tariffs related issues have a larger sig nificance for ocean freight than air. A view exists that this uncertainty associated with the potential fallout triggered more air cargo movement, either to beat DecEmber 2019 - CargoConnect

49

feature

the calendar or to overtake the uncertainty curve, thus showLooking ahead, Herdman says, “Asian carriers overall saw ing a healthy upbeat growth trajectory.” a significant improvement in earnings in 2018, on the back of It is a child’s knowledge that E-commerce has played a the strong growth in air passenger and air cargo demand. stellar role in this growth story further keeping the graph gaze However, the US-China trade war and weaker manufacturing towards the sky rather than the ground. “China is the conditions for exporters in the engine of the world is an oft-repeated but irrefutable region have significantly impacted the market. With the recliché. However, the direction of US-China talks, any Asia-Pacific airlines saw gion accounting for more than resultant currency volatility – not just normal movedemand for air freight contract ment, the progress of its belt and road 35 per cent of total freight in by 4.9 per cent in July 2019, Initiative would determine the rate tonne kilometers (FTKs), this compared to the same period of growth of air cargo in Asia. Eperformance is the major conin 2018. Despite the late tributor to the weak industrycommerce is expected to contin2018 marginal decline, ue to dominate Asian air cargo wide outcome. Air freight capacit is true that 2018 ity increased by 2.5 per cent over growth story, partly due to unwitnessed an overall intended political challenges on the past year. Besides, the airline good performance in the other side of the globe, be it operating environment remains air cargo growth in the Brexit or protectionist tendenchallenging, with competitive Asian region. cies,” explains Balasubramanian. pressures including higher fuel prices and labour expenses.”

P Balasubramanian

Increasing production fueling Air Cargo demand

Founder & CEO, Air Cargo Consultancy International Services (ACCIS)

Growth prospects in the emerging-market economies are collectively projected to be steady over 2019-20, but this masks diverging developments in the major economies. A gradual slowdown appears set to persist in China, despite renewed policy support, and substantial adjustment challenges are continuing in those economies hard hit by the financial market stress seen last year. In other countries, including India and Indonesia, downside risks from financial market tensions have eased, and strong investment, improving income growth and past reforms are helping to support domestic demand.

“Correspondingly, world trade activity continued to expand, underpinned by increased investments and higher manufacturing output in the region, in response to increased new business orders. These positive factors continued to support growth in both air passenger and cargo demand for Asian airlines,” says Herdman.

50 CargoConnect - DecEmber 2019

2019 and beyond

With the volatility of the air cargo landscape over the last four to five years and with a dependence on one-off events, it has become quite hard to forecast where the market is headed. However, air cargo is witnessing a reasonably moderate 2019 given the high uncertainties associated with political developments globally, both in the developed and not so developed worlds.

So far, air cargo growth in 2019 looks confident with the growth in E-commerce, pharma and perishable trade increasing across continents, especially in Asia. Besides, the transport of pharma and other premium cargo services is driving output for the year. Also, during the current year, the overall market seems to get more segmented into freight forwarding, warehousing, express delivery, third-party logistics and E-commerce markets. Therefore, the leading players of each of these segments will be the crucial associate of air cargo industry. CC

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feature

Bonded Trucking Charting the offering to the top

52 CargoConnect - DecEmber 2019

feature Bonded Trucking: smooth road ahead?

While custom bonded trucking has been in India for 15 years, the concept has not found the footing in the industry. Some argue that the process in which imported cargos do not go through the customs at the port entry but are transported to another bonded area, is cost effective, whereas others claim that the delays involved in procuring required sanctions make it unfavourable.

Ritika Arora Bhola analyses which way the debate swings.

Though the industry has a sufficient number of bonded trucks with huge capacities to carry the cargo as swiftly as possible, there are a few hindrances which need to be addressed for smoother and faster cargo transportation. Experts aver that due to higher dwell times, cargo lies at the AFS for many days; it leads to delays and somehow affects the relationship and rapport between end-users and customers. ith the globalisation of markets and Also, the experts seek simplified procedures for security compliance at the swiftly growing Indian E-commerce AFS so that the cargo is moved effiindustry, transport or trucking industry professionals need to be ready to ciently and competently. acclimatise to the ever-changing landCommenting on the same, Dileepa scape and deliver excellent services to says, “Bonded trucking operations are the potential customers. Custom bondhigh risk operations. In case of export ed trucking, though considered as cargo, we need to connect the relatively new concept in India, cargo at the destinat io n . He nc e, we has been benefitting the Indian logistics industry, need to make all Custom bonded since last two decades, in necessar y artrucking, though considered rangements at ma ny ways. Bonded as relatively new concept in destinations to trucks carry cargo in reIndia, has been benefitting the mote areas– tier III and offload the carIndian logistics industry, since go immediatetier IV cities wherein ly on arr ival; airlines cannot operate. last two decades, in many failing connecVariety of cargo, viz. pharways. maceutical products, perishtion of cargo will ables, machinery, apparel, end up with penalty dangerous goods, etc. from airlines. In case of import cargo, we have to do the loading are transported via only on customs working day. We can’t bonded trucks from Air take permissions from customs on holifreight Stations (AFS) to the final destination (warehouses/customers). days. If there are continuous holidays, Indian trucking industry majorswe have to wait for the next working Shreeji Transport, TT Aviation, TVS day only which leads to delays in deliveries. We have well-trained drivers to Logistics and Om Logistics, etc. has carry out the operations. Drivers are successfully ventured into custom thoroughly educated about the imporbonded trucking and operating in the tance of cargo and its time-bound delivsphere, ensuring safe, fast and timely ery to the destination.” delivery of cargo to the nook and corners of the country. Today, the concept Along the same lines, J Govindarajan, Director, TT Aviation Handling of bonded trucking is being well adopted by the players as it has improved Services informs, “The government/ cargo operations at the airports. customs authorities are expected to take Acknowledging the same, Dileepa adequate measures to ease the procedures and quicken the process time and BM, CEO– BondedTrucking, Shreeji also permit the bonded truckers in India Translogistics says, “Bonded trucking has been in India from the last 21 for cross-border movements, similar to years. Most of the airlines are utiliswhat is currently permitted and pering bonded trucking facilities in one formed in Europe and the US. Bonded or the other aspect for export or imtrucking activity is an extension of airport cargo.” line which facilitates the carrier to use DecEmber 2019 - CargoConnect

53

feature the space from the terminal point to regional levels including remote areas.

This kind of trucking mainly facilitates the freight forwarders to transport the cargo from one offline origin city to the online city. This allows the international carriers to move the cargo to various destinations in India through bonded trucking from a particular termination point. The carriers/ freight forwarders/ exporters use bonded trucking to optimise their logistics cost.”

Further Govindarajan informs, “The gvernment will facilitate development of a data platform for monitoring the bonded trucking performance/ growth/revenue/yield centrally (like WorldACD: Air Cargo Market Data to monitor air cargo export market) which will be a tool to assess the market potential, performance and growth. The government will come forward to reduce the threshold for Bank guarantee waiver quantum (i.e. to/from an airport - from 2500 MT to 500 MT per annum) to make the bonded trucking services in India cost-effective, creating a competitive environment.”

Despite the emerging prospects, there are challenges such as congestion of vehicle/cargo at loading/unloading areas, customs delays due to non-availability of officers at times and customs server (IceGate) issues and non uniformity in the processes/procedures followed by different custom officers with respect to permission/ bond/bank guarantee waivers, etc. and the ones faced by the bonded truckers such as lack of manpower and short-

54 CargoConnect - DecEmber 2019

Akash Bansal

|

Country Head, Om Logistics

damage to shipments.  Dedicated arrival to truck dock at Çelebi warehouse.  GPS-enabled app on mobile devices for live tracking of cargo.

Transparent shipment status at all levels of value chain.  Assured same day connection on the booked flights.  Celebi’s booking App for truck bookings.  Consolidated product offering at competitive rates.

Om Logistics has been a long-term partner with Çelebi for any trucking requirement they wish to offer to their customers anywhere in the country, and are willing to provide customised solution to make it a value proposition for all stakeholders in business. According to Akash Bansal, Country Head at Om Logistics, “In addition to Celebi’s scheduled trucks operating between city pairs as per scheduled timetable, ad hoc trucks are available upon request.” This service also offers customers enhanced catchment area connectivity. Now cargo from Amritsar, Jalandhar, Phagwara and Ludhiana can be Customs cleared at OWPL ICD facility in Ludhiana, points out Bansal.

Shreeji has been operating custom bonded trucking from the year 2002. At present, the company offers bonded trucking services from 16 airports in India, One truck including Kolkata, Inshould be allowed to carry dore, Vizag and Goa. mixed cargo for different In the month of Sept e m b e r t h i s y e a r, locations. If taken seriously, it Shreeji had an agreewill help the industry in the ment wit h Celebi to coming years. move the latter’s cargo

age of handling equipment in the loading/unloading points (airport operators/custodians).

Recently, Celebi Delhi Cargo Terminal Management India has collaborated with Shreeji Translogistics to start bonded trucking service from Kolkata, Indore Airport, Vizag and Goa to Celebi Terminal Delhi IGI Airport in order to provide their customers with the possibility to move air cargo in an efficient, safe, process-driven and cost-effective manner. Arvind Aggarwal, Senior Manager, Business Development, Çelebi Delhi Cargo Terminal Management India, highlights some of the salient features of its bonded service from Ludhiana:  Time-bound deliveries.  No volume constraints- A small shipment can also be planned with the same proportionate cost and time.  Assured daily departures for express products.  Minimal handling to avoid

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feature from Kolkata, Indore, Vizag and Goa airport as well. As Celebi is one of the biggest terminal operators with a good customer base, bringing in cargo through these stations, Shreeji can utilise its bonded trucking facilities to increase the volume of cargo from Delhi.

Bonded trucking has been in India from the last 21 years. Most of the airlines are utilising bonded trucking facilities in one or the other aspect for export or import cargo. Bonded trucking operations are high risk operations. In case of export cargo, we need to connect the cargo at the destination.

Is bonded trucking costeffective?

Experts often complain about high dwell time taken by bonded trucks for transporting cargo at the required destinations considering poor road conditions and connectivity, especially in the remote areas, ultimately resulting in higher costs incurred. However, Dileepa feels that it is cost-effective. “At present, we are having very good roads connecting all airports. We have standard timings for each sector and we achieve on-time delivery of cargo,” asserts Dileepa.

Bringing to light the underlying factors, Govindarajan elucidates, “Bonded Trucking is done only from a customs bonded area location to another bonded area location. Route validation/ transit time estimation is done prior to accepting the cargo for movement considering the road conditions along the route to maintain the transit time to connect the cargo to the flight without failing. Local city entry restriction by RTO is the major factor to be considered while calculating the transit time for flight connection. Our company has developed a mobile app called ‘TRUCK WATCH’ as an additional feature to airline/freight forwarders/customers to track and trace the movement of the shipments in real-time online.

56 CargoConnect - DecEmber 2019

Dileepa BM

|

CEO– BondedTrucking, Shreeji Translogistics

Generally, the dwell time is around three to four hours if the required documents are kept ready before the arrival of the cargo to the airport. No doubt, bonded trucking is cost-effective as compared to air freight rates.”

Bonded Trucks: Capacity & Availability

Shreeji Translogistics owns around 300 trucks and augurs well to for their bonded trucking operations. “We have different size of trucks like 20ft trucks, 24ft trucks, 30ft trucks, 32ft trucks, multiaxle vehicles, which have different weight carrying capacity,” says Dileepa.

Talking about the capacity of bonded trucks, Govindarajan says, “Closedbody trucks (with customs sealing facility available) of various capacities can only be used for bonded trucking.

Packed bulk cargo (in drums/bags, etc.) are transported mainly through bonded trucks. The capacity depends on the dimensions of the cargo; the maximum capacity will be 20 MT of dense cargo in a bonded truck (i.e. in a 40ft closed trailer).”

At t he same t ime Ba nsal also opines, “Yes, trucks are available but the concept of bonded trucking is still at a nascent stage in India so it will still take time for Indian customers to understand the nitty gritty of bonded trucking, wherein they have to use a cross benefit analysis of which airport to operate from. For example, at times some cargo in Indore carried to Mumbai may be cheaper in terms of road transport but the rates out of Mumbai to a particular destination are higher so that cross benefit analysis is not happening and everybody is trying to reach at the closet airport to export their cargo from. If we talk about Europe there is lot of bonded trucking happening there but in India it will take time to get the things right, the capacities and resources are all there, the questions is to approach them and use them in appropriate manner. But gradually it has started happening in India at right pace.”

Safety & Security

Bonded trucks can be operated to desti-

feature The government/customs authorities are expected to take adequate measures to ease the procedures and quicken the process time and also permit the bonded truckers in India for cross-border movements, similar to what is currently permitted and performed in Europe and the US. J Govindarajan

|

Director, TT Aviation Handling Services

nations where airlines cannot operate their flights. Therefore, it is the job of the truck driver to take necessary precautions while transporting cargo from the AFS to the warehouse, safely and securely. From apparel, perishables, heavylift products, machinery, to dangerous goods and odd dimension cargo (ODC), custom bonded trucks carry all types of cargo from airports. GDP guidelines/RTO rules and other necessary approval processes relating to road transportation of all types of special cargo are to be cleared and adhered to for safe and secured cargo transportation. Besides, the drivers need to be well-trained and fully briefed about the measures to take care of in-transit while carrying special cargo and the emergency response on occurrence of any incident. Here, Dileepa informs, “Shreeji moves transshipment cargo from customs notified air cargo complex to another within India. We have to take precautions while carrying cargo other than general cargo. Perishable cargo is carried only in refrigerated trucks. DG cargo will be moved only in dedicated

trucks, it will be co-loaded with any other cargo. In regard to ODC cargo, further instructions outlined by customers are strictly followed. It will be covered under Special Contingency Insurance Policy.”

Future of Bonded Trucking

Industry players believe for a better future of the bonded trucking industry in India, the need is customer-friendly customs and custodians rules and tariffs. According to Dileepa, “If custodians stop multiple handling charges for the same cargo, surely there will be

The drivers need to be well-trained and fully briefed about the measures to take care of in-transit while carrying special cargo and the emergency response on occurrence of any incident.

huge tonnage that can be carried through bonded trucks.”

Meanwhile, Govindarajan says, “Airlines/freight forwarders considers on bonded trucking to remote areas/from hub-terminal point to another destination on account of better road infrastructure and cost-effectiveness. The government’s focus on export growth, infrastructure policy of connecting the country, and the quality and cost-effective services offered by ICDs/CFSs to the customers as compared to the airport terminals will create the road map for efficient bonded trucking services in India.” On a positive note Bansal comments, “I am very optimistic with regard to the future of bonded trucking in India, it has a very sustainable future in times to come because now gradually everybody has started to realise the need and importance of bonded trucking and also the price benefits associated with the same. It is bound to give the flexibility to the customers.”

Driving ahead

Even though custom bonded trucking has come a long way, it still remains underutilised because of the complex policies framed by the government of India and fewer airlines operating, as compared to other countries. For transporting cargo via bonded trucks, special permissions have to be taken by the gateway customs office, which is timeconsuming and expensive. Besides, consolidation of cargo should happen.

One truck should be allowed to carry mixed cargo for different locations. If taken seriously, it will help the industry in the coming years.

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infrastructure

Analysing the potential of railway’s game changing freight corridor network

T

he logistics sector in India has conventionally relied on roads to facilitate freight transportation requirements. An already grid-locked road network accounting for 65 per cent of the freight movement in the country has severely undermined the competitiveness of Indian logistics. It has also resulted in substantial cost overruns for the industry with environmental implications.

Realising the importance to provide a viable cargo transportation alternative to India’s logistics sector players, the government unveiled the dedicated rail freight corridor (DRFC) initiative. Aiming to create an integrated rail corridor framework in the country and Work is already on mitigate the burden of existential in full force on the rail routes whose efficiencies have 1,500 km western been marred by high line capacity freight corridor, utilisation, the government rolled- which will run from out const uction works for six Dadri near Delhi to freight corridors across the country. JNPT, Mumbai and Work is already on in full force on the eastern freight the 1,500 km western freight corri- corridor traversing dor, which will run from Dadri 1,800 km from near Delhi to JNPT, Mumbai and Ludhiana, Punjab to the eastern freight corridor travers- Dankuni, West ing 1,800 km from Ludhiana, Pun- Bengal. jab to Dankuni, West Bengal. The railways plan to complete more than 60-70 per cent of the work in the two corridors this financial year and make them fully operational by 2021.

While the first section of the eastern DFC—200 km stretch from Bhadan to Khurja—and western DFC—another 200 km from Rewari

DecEmber 2019 60 CargoConnect - december

to Madar—has been completed, around 1,000km of DFC, including western DFC connecting states such as Haryana, Maharashtra and eastern DFC connecting Punjab and West Bengal is expected to be operational in the current year.

Experts believe projects like DFCs are important and must be given priority. There has already been a delay in completion of the project. The challenge here is that there’s a large amount of capital investment and there is also a need for adequate preparations such as land acquisitions, arranging the money, and then see if the project happens on time.

The high-speed dedicated ‘freight-only’ lines will not only establish crucial rail connectivity but also create trade and commerce linkages with emerging markets located across the country’s hinterlands. The freight corridors can play a pivotal role in unleashing the economic growth and development potential of untapped and under-developed regions by facilitating the setting up of multimodal The dedicated logistics parks (MMLPs) and indus- freight corridor trial clusters. The government will initiative will also need to expedite the pace of identi- boost the efficacies fying strategic locations and de- of the ambitious velop the right infrastructure for Sagarmala the integrated development of mul- programme by timodal logistics parks offering expediting end-toworld-class logistics and ware- end rail and port housing facilities. A significant rise connectivity. in the modal share of railways in the overall freight transport mix will enable the seamless movement of goods from multimodal logistics parks to faraway market locations, accelerating delivery schedules and optimising high transport transaction costs.

As consumers from small towns and hinterlands of India redefine consumption patterns and reshape market purchase dynamics, companies are reorienting their marketing strategies and revamping their distribution channels to tap into under-leveraged consumer markets in tier II and III regions of the country. The dedicated freight corridor project will be a key corollary in boosting consumer-led economic growth as trade and commercial activity is uplifted and large-scale employment is generated in key investment clusters and industry belts set up in proximity to the rail corridors. Streamlining logistical processes and improving crucial connectivity between production centres and consumption markets, dedicated freight corridor holds the promise of revitalising regional market competencies and integrating a widely-scattered consumer base within the national supply chain mainframe.

The dedicated freight corridor initiative will also boost the efficacies of the ambitious Sagarmala programme by expediting end-to-end rail and port connectivity. The freight-only rail transport corridors will fast pace freight movement between industrial heartlands in north India and ports on the eastern and Western seaboard of India.

DecEmber december 2019 - CargoConnect

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technology

How does Artificial Intelligence optimise the Supply Chain?

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technology

C

-suite exec ut ives across every industry have realised the value of Artificial Intelligence (AI) and are exploring how to incorporate it into their operations – and supply chains often top their agendas. Core pain points that AI is helping procurement and supply chain executives remedy includes a lack of end-to-end visibility, delayed reactions to unforeseen events and inaccurate forecasting.

So, how are organisations achieving these improvements?

Supporting end-to-end visibility

A Capgemini survey reveals 83% of supply chain executives believe a lack of end-to-end visibility in their organisation was a barrier to growth. Delivering insights at scale is essential to identifying bottlenecks and establishing what data organisations need to capture and analyse in order to make informed decisions and drive better outcomes.

Organisations, especially in manufacturing, are investing heavily in Internet of Things (IoT) solutions and connected devices. Intel highlights that the world of IoT is growing rapidly, from 2 billion objects in 2006 to a projected 200 billion by 2020. The resulting opportunities for increased collaboration between AI solutions and connected devices could play a vital role in determining tomorrow’s supply chain leaders.

The key will be to develop intuitive AI solutions that can pull real-time data from connected devices and empower decision-makers with broader and deeper operation insights on an unprecedented scale. This increased visibility allows executives to rapidly make contingency plans in the event of unforeseen circumstances, whether internal (e.g. machine breakdowns) or external (e.g. delayed supplier shipments), minimising negative effects on

the supply chain and, ultimately, on the brand.

Building better reaction times

Slow reaction times to such incidents often have a domino effect on operations and the bottom-line. Supply chain executives need to consistently monitor industry activity to ensure they react and adapt quickly.

In the UK, the Food Standards Agency’s recent recall of products due to mislabelling not only affected the big supermarkets, but also producers, delivery drivers and customers throughout the retail supply chain. The ability to quickly implement a counter strategy in such situations is invaluable.

Companies require innovative AI systems that will integrate with suppliers’ connected devices, and analyse and format data for executives, enabling them to make faster and betterinformed decisions. By linking manufacturing and sales data, for example, thus, taking a combined view of supply and demand, waste and production costs can be reduced.

To optimise the value that AI can provide, a company’s infrastructure must also integrate with its customer relationship management (CRM) and enterprise resource planning (ERP) solutions. Once organisations deploy an AI supply chain solution capable of machine to machine (M2M) communications, the data generated by their CRM and ERP platforms can inform best practice strategies, updating internal policies and facilitate access to solutions within the supply chain.

Forecasting into the future

The third widespread issue faced by the supply chain industry, but certainly not the least important, is inaccurate forecasting. Most forecasting is based solely on historical data, failing to factor in real-time market trends. Strategies are therefore based on obsolete data. And not even the finest chefs can excel with out-of-date ingredients.

That’s just a recipe for disaster… that’s why supply chain executives need realtime data to create effective strategies.

So, it is no surprise that companies say they require end-to-end transparency and real-time updates to forecast accurately. How can they achieve this?

They need to invest in AI software that will allow them to gather information from key market sources and incorporate real-time trends data into their actions. Once these data points are in sync with a company’s supply chain, executives will instantly see drastic forecasting accuracy improvements, and how they can better plan for the uncertainties of tomorrow.

Why AI?

AI is on the radar of most companies, with 78 per cent of organisations implementing it to enhance operational efficiency by at least 10 per cent. The increased usage will reduce workload, saving organisations that most precious of commodities, time, which they can reinvest into other areas to deliver stakeholder value.

Real-time data analytics boosts visibility and reaction time in changes in demand, enabling companies to reduce costs and increase sales.

To finance investment in AI, businesses must first build a transparent end-to-end supply chain. AI isn’t a stand-alone magic cure: only when truly integrated within the overall supply chain can it improve efficiencies by informing strategies. That’s why organisations that choose to implement AI must accurately evaluate the technology already deployed both internally and across their supply chain. This way, executives can ensure they identify the optimal AI solution to gather the necessary real-time data, convert it into knowledge and ultimately drive the best future course of action. And that cannot be achieved by looking solely in the rear-view mirror.

By Giacomo Squintani, Marketing Manager- EMEA at E2open

DecEmber 2019 - CargoConnect

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Interview

We enable Global Business What practices distinguish Lufthansa Cargo from other leading cargo airlines across the world?

First of all, we have a vast network with more than 300 destinations in over 100 countries. Second, we are driving forward digitisation which helps us to respond even faster to the wishes and needs of our customers. And third, we carry all kinds of cargo, from airmail to live animals. We are able to offer individual air cargo solutions, e.g. for goods that need to be cooled or handled with extra care. It is the top priority of our dedicated team to always have the best possible and most convenient solution for our customers. This is our goal. This is what ‘Enabling Global Business’ means to us.

How has the implementation of API technology been the game changer for Lufthansa Cargo?

We see API technology as a new industry standard for real-time data exchange. With APIs, our customers benefit from faster airfreight and seamless connectivity. For example, with the ‘smartBooking’ API, customers receive a qualified and immediately bookable offer- capacity check and fixed price information with routing options. With ‘getRates’ and ‘getCapacity’, it is quite easier for our customers to see their individual rates and available capacity at a glance. Last but not least, with ‘shipment tracking’ and ‘getRoutes’, our customers can see our freighter’s daily flight schedule and individual status of their shipments. Apart from this, Lufthansa Cargo is pushing digitisation by cooperating with partners like Freigh-

64 CargoConnect - DecEmber 2019

tos; besides developing in-house solutions like the DGD.online cloud application known as eDGD- the electronic declaration of dangerous goods.

Brief us about the new technology ‘CSafe RAP’ approved by Lufthansa Cargo since July to handle temperature sensitive materials and pharma supply?

Lufthansa Cargo offers a wide range of active and passive cool solutions for transport on its extensive network.

With the CSafe RAP, we have further widened our portfolio. The CSafe RAP ensures temperature integrity and safe delivery of temperature-sensitive, lifeenhancing products across the globe.

CSafe’s proprietary insulation together with an innovative cooling and heating system, the CSafe RAP precisely main-

Within our network, we see the main trade lanes between Asia and Europe and North America and Europe. tains a defined payload temperature set-point throughout product transport, even in the most extreme ambient conditions (-30°C to +54°C).

What are the major markets that you cater to? What is the share of the APAC region in terms of amount of cargo carried to and fro by your carriers?

Lufthansa Cargo is networking the world and offers more than 300 destina-

As implementation of application programming interface (API) technology has set new industry standards for real-time data exchange, customers are now provided with all the necessary information like fixed price, capacity check and shipment tracking without much hassle.

J Florian Pfaff, Vice President- Asia Pacific at Lufthansa Cargo informs Saurabh Sharma about the addons of making investments in IT and the transitional shift towards digitalisation.

tions in over 100 countries. This clearly shows our sustainable commitment to many key markets in Asia and all over the world. Within our network, we see the main trade lanes between Asia and Europe and North America and Europe. In particular, in Asia we sold more than 4 billion freight tonne-kilometres, which accounted for more than 40 per cent of total traffic in 2018. Our market share in Asia is stable between 9 and 11 per cent, mainly driven by a strong Chinese market.

Overall, the region is expected to grow further over the coming years and we aim to further strengthen our good market position in Asia.

How do you perceive the impact of booming E-commerce sector on your air cargo capacity?

The E-commerce sector, also capacity-wise, continues to gain importance. It is changing the requirements of our customers, to which we are responding in the air mail segment with more new dedicated offers. For example, Lufthansa Cargo founded ‘Heyworld’ as a wholly-owned subsidiary. Heyworld focusses on the needs of the E-commerce industry with configurable, transparent and reliable transport solutions, especially designed for online retailers, digital marketplaces, online shop operators and forwarders.

Kindly inform us on your future plan to establish cargo handling facilities at various airports.

In Asia, Lufthansa cargo is successfully cooperating with and invested in Shanghai Pudong International Airport Cargo Terminal (PACTL) and International Cargo Centre Shenzhen (ICCS) in Shenzhen. In Frankfurt,

Our market share in Asia is stable between 9 and 11 per cent, mainly driven by a strong Chinese market. we continue to modernise our hub and are happy to offer more capacity in our Cool Centre, which was extended from 4,500 to 8,000 sq mts last year. Of course, there is yet more to come.

How do you predict the future of the air freight market? What trends you believe will drive the growth of industry in the times to come?

The air cargo market will continue to grow in line with world trade. Since we expect that prosperity will increase further over the next few decades, demand for air freight will also continue to rise. However, the current year is marked by decreasing demand and headlines about Brexit and the trade dispute. The challenge therefore is to adapt flexibly to a volatile market. As a combi carrier, we are happy to offer our customers the combined strengths of the comprehensive Lufthansa Group network and the high competence of an experienced and efficient cargo airline with a wide range of individual services.

DecEmber 2019 - CargoConnect

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Interview

Competing in a volatile and complex marketplace need abounding experience A unit of Mumbai-based Allcargo, ECU Worldwide is a traditional non-vessel operating common carrier, where the company does not own a ship but owns slots for cargo, a business model similar to Uber and other ride hailing companies. Until 2019, the company has developed its business beyond Europe into markets such as the US and China and opened offices around the world, making it a truly global enterprise. Brahmananda Sharma, Cluster Head- South East Asia at ECU Worldwide, in a conversation with Upamanyu Borah throws light on the industry trends that will shape the future of the company.

How has ECU Worldwide evolved with time to make it big in the Less than Container Load (LCL) cargo business globally?

Our vision is to provide world-class logistics solutions globally. Over the years, ECU Worldwide has established its presence across all the strategic markets by collaborating with a number of partners and agents with proven expertise and track record. Our network strength presently spans 160+ countries with 300+ offices.

66 CargoConnect - DecEmber 2019

While expanding our global presence, we invested in developing niche trade-lanes for our direct LCL services in addition to opening new offices in the last four years in almost all the countries with special focus on the Southeast Asian region. Moreover, we launched multiple sailings to a few specific ports. These measures have ensured safe and appropriate handling of our client’s cargo and the shortest reworking time for shipping from an originating point to the destination. All these factors have helped us stay ahead of others and ascertain our leadership position globally.

What makes ECU’s services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages the company will need to overcome?

We derive competitive edge from our abounding experience and invaluable legacy of close to three decades, indepth knowledge of the markets, unparalleled expertise and our ever-expanding network. Ocean freight, as a matter of fact, has been facing several challenges in the past few years. Experts are pinning their hope on technical innovations to address those challenges. In addition, there is an urgent need to switch to greener energy.

The secret behind our global network and advanced capabilities is our extremely dedicated team which is always committed to delivering nothing but the best services offerings to our clients.

With that said, our continued focus on investing in people, upgrading their skill sets and building competencies in middle and senior management, has enabled us in embracing the dynamics of the ever-changing market scenario and take

on the disruptions coming our way.

Our competitive advantages are not limiting to the niche services or multiple sailings, we also service Deliveredat-Place (DAP) and Ex Works (EXW) shipments, Dangerous Goods (DG) cargoes for LCL. More than the competitive disadvantage, I think there is a need to look at these larger interests and modify the strategies and adapt accordingly. Keeping pace with the evolution in the markets is the need of the hour.

How far has ECU been successful in implementing technology to effectually streamline its logistics and supply chain management services? Any impending digital transformation strategy the company is preparing to roll-out?

The issue of technology adoption in our sector is a very subjective one. Developed markets like Singapore, Europe and the USA are ready for it whereas some markets in other parts of the world are slowly getting ready to accept the technology-led changes. As far as

ECU Worldwide has established its presence across all the strategic markets by collaborating with a number of partners and agents with proven expertise and track record. Our network strength presently spans 160+ countries with 300+ offices. the digital transformation strategy goes, we have been working on it. We provide tools to facilitate cargo track and trace, booking, etc.

Meanwhile, we have automated our file closing process. Our system has built-in capabilities so that every office

We at ECU always keep the entrepreneurial spirit high. Our focus for 2020 and beyond will be on riding on the opportunities in each of the ASEAN countries. functions on the same operating and financial systems. We have also developed capabilities for offering door-todoor LCL pricing in select markets like Europe and in certain counties in APAC like Singapore, Malaysia, Philippines, to name a few. Our ECU360 webtool is the newest offering to the market in this regard.

What strategies is ECU formulating to leverage the untapped opportunities in emerging markets like APAC and Africa for ECU Worldwide?

Emerging countries in these regions are witnessing faster trade movements as their economies are growing. Besides that, companies are also moving their manufacturing and distribution operations to developing countries due to tariff wars. As an LCL provider, our goal is to leverage this trade movement by offering end-to-end solutions. In Africa, we are present in almost all the countries while in APAC, we have offices in all the developing countries as well as in developed markets like China and Singapore. We have been investing in new offices and direct routes as well.

We at ECU always keep the entrepreneurial spirit high. Our focus for 2020 and beyond will be on riding on the opportunities in each of the ASEAN countries. We will concentrate on building our capabilities in Vietnam, further strengthen our commercial activities in Myanmar and evaluate opportunities for more cross-border synergies. We would also like to keep our options open for developing CFS solution as per the requirements of our clients. CC

DecEmber 2019 - CargoConnect

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Interview How does Kelley leverage modern technology and innovation to develop customdesigned material handling equipment?

Kelley has a unique value proposition that is truly focussed on Voice of the Customer (VOC) and total lifetime cost of ownership. Customers are always first in our design considerations and in our effort to innovate. Our products are specifically designed around the needs and requirements of our most demanding global customers.

At Kelley, we have an extensive team of engineers with many years of experience in the material handling industry. This is critical to our product offering because thorough understanding of the customer’s application is one of the most important aspects we consider while designing our products.

We work diligently to follow technology advancements surrounding product design and changing applications. We maintain a technology roadmap that is updated routinely as new technologies emerge. We also test our products in a variety of ways, investing substantially in methods and formal VOC exercises to be certain that we are on point with the value proposition that we offer.

In what ways does the new HMI Digital Master Control Panel outpace what the marketplace has traditionally offered?

In the immediate term, the digital master control panel enhances the ability of operators to understand the functions of the equipment. This platform simplifies operator training by using pictograms instead of text to channel operator’s actions so that language variations do not become an impediment to using the equipment. Additionally, the digital control panel with HMI can reduce downtime and maintenance costs. For example, the panel displays Programmable Logic Controller (PLC) input/ output status without opening the enclosure, making troubleshooting fast and accurate. The panel also displays event logs that can show maintenance and supervisory staff how the equipment is being used. All of these ele-

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At the heart of Smart Manufacturing As the Indian economy continues to grow in retail and E-commerce businesses, Kelley's branded products are becoming increasingly important. Kelley is excited to participate in the Indian market and to see this important area of their business grow significantly in the future. In an exclusive interview, Michael Eastabrook, President and Managing Director, 4FrontES, USA (Loading Dock Products and High Performance Doors) of which Kelley India is a wholly owned subsidiary, discusses with Upamanyu Borah about balancing speed with efficiency and safety in today’s fast-paced fulfilment environment, and informs how Kelley India is doing it with a suite of intelligent, connected hardware supported by a powerful cloud-based platform at its core.

ments lead to a lower total cost of ownership and an improved Return on Investment (ROI) for our customers.

Automation, analytics and Artificial Intelligence (AI) are all topics with growing relevancy within supply chains. These technologies are emerg-

ing and gaining traction. All of these technologies require data and visibility. The new controls platform addresses this requirement for the loading dock. Most importantly, the digital master control panel with HMI is the first step in what we believe will be a

transformation around the loading dock in the next 5-10 years.

How does the HMI Digital Master Control Panel help centralise warehouse and DC management?

The digital master control panel prepares our products for connectivity and provides a gateway into the 4Sight Connect product ecosphere. 4Sight Connect is our cloud-based warehouse monitoring and management platform.

The first connected element of this new ecosphere is 4SIGHT Connect – Dock. This particular solution gives managers and supervisors of loading docks previously unavailable insight, allowing them not only to respond to events as they happen, but also to create reports for longer-range planning and analytics. It also provides clarity surrounding maintenance requirements and needs, increasing equipment up-time. For warehouses and distribution centres serving highvolume, time-sensitive industries like retail and E-commerce; this can be a game-changing advantage.

How does the 4SIGHT Connect—Dock platform, together with the Kelley Digital Master Control Panel, help shippers use data to achieve improvements?

4SIGHT Connect - Dock integrates loading docks into the Internet of Things (IoT) by utilising data from Kelley’s Digital Master Control Panel, which collects and stores information for each dock door, leveler, and vehicle restraints by dock position. The control panels wirelessly communicate data via a cellular gateway to the cloud-based software platform, where the user interface resides and data are stored. This architecture has important advantages.

The system is designed to be independent and therefore does not require an interface with a facility’s existing IT infrastructure or Wi-Fi. And, because the platform is cloud-based, customers can use any internet-connected device with a web browser to access the 4SIGHT Connect Dashboard.

4SIGHT Connect - Dock offers numerous specific benefits and opportunities such as:

Real-time monitoring: Users can see equipment details, status, truck time at dock, equipment overrides, and alarm condition for all docks in real time.

Managers and supervisors can quickly take corrective action when needed.

Real-time alerts: ‘Smart’ rules trigger an email alert when user-specified events occur. For example, supervisors can choose to be notified about restraint errors and overrides. The system can also be configured to allow them to remotely authorise overrides.

Visibility into dock equipment operation: Reports such as the number of cycles for each piece of equipment, dock utilisation rates, and load times (from restraint engage to restraint release) help managers uncover inefficiencies and better manage maintenance and upkeep. For example, visibility into

Kelley has a unique value proposition that is truly focussed on Voice of the Customer (VOC) and total lifetime cost of ownership. Customers are always first in our design considerations and in our effort to innovate.

dock overuse and/or underuse allows workloads to be spread more evenly, reducing wear and tear on equipment.

Actionable data for planning and analysis: 4SIGHT Connect - Dock’s dashboard lets managers view historical data and generate reports to identify patterns and problems. For example, users can create a report that shows how many times, when, and where restraint overrides occurred.

It’s critical for high-volume warehouses, distribution centers, and orderfulfilment operations to identify and eliminate sources of inefficiency. Cloudbased 4SIGHT Connect – Dock helps do that by providing visibility into day-today operations, including issues on docks that they may go unnoticed.

What makes Kelley’s industrial HVLS fans one of the best inventions ever conceived for warehouses?

The HVLS fan is a tremendous innovation for warehouses. The Kelley HVLS fan design leverages extensive research and analysis in computational fluid dynamics to optimise the amount of air moved with a minimal amount of energy consumed. There are numerous features on the Kelley HVLS fan that are patented and available only to our customers.

As with all of our products, we used VOC exercises to validate the product design and use cases. We have a large number of repeat customers that value the product and the impact it has on worker comfort and productivity. Our line of HVLS fans are tested and independently verified by AMCA (Air Movement and Control Association) versus US Department of Energy standards.

What are Kelley’s benchmark that ensure and enhances safety and compliance along with boosting material flow, productivity and efficiency?

Kelley products are dependable, promote safety and provide the best possible ROI for end users. We have built a historical reputation with hundreds of key account customers that demand the highest quality and the lowest cost of ow nership for their industrial equipment. As part of the Material Handling Institute’s Loading Dock Equipment Manufacturers (LODEM) group, our loading dock equipment is manufactured and designed to meet numerous ANSI standards (MH30.12015, MH30.2-2015 and MH30.3-2015).

These standards cover the performance and testing requirements for dock levelers, portable leveling devices and vehicle restraints. Additionally, as applicable, our equipment complies with CS202-1956 (Industrial Lifts and Hinged Loading Ramps), EN1398-2009 (Dock Levelers Safety Requirements), 2014/30/EU (Electromagnetic Compatibility Directive) and 2006/42/EC (Machine Directive). Our primary manufacturing facilities are ISO 14001 certified. CC DecEmber 2019 - CargoConnect

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Interview

Europe’s leading port for Indian foreign trade Being Germany’s largest universal port, Port of Hamburg receives an enormous fleet of ships skirting every year, which makes an advanced monitoring system inevitable in order to manage the smooth sailing and precise navigation of such a massive traffic. Axel Mattern, CEO, Port of Hamburg Marketing Association, elaborates Saurabh Sharma on their secret to leadership presence, meticulous handling of 135.1 mn tones seaborne cargo last year and much more on their exceptional track record.

How it is perfectly justified to hail Port of Hamburg as Germany’s gateway to the world in terms of its strategic location and throughput?

Port of Hamburg claims the arrival of around 8,000 ships every year, almost 300 berths and a total of 43 kilometers of quay for seagoing vessels, more than 2,300 freight trains per week, four stateof-the-art container terminals, three cruise terminals and around 50 facilities specialised in handling Ro-Ro operations and all kinds of bulk cargoes, along with about 7,300 logistics companies within the city limits – these are just a few of the factors making it one of the world's most flexible, high-performance universal ports.

More than 100 liner services connect Hamburg with the great majority of more than 1,000 seaports – plus others via transshipment – worldwide.

With throughput of 9.9 mn tonnes in 2018, Hamburg is also Germany’s second largest inland port.

Handling 135.1 mn tonnes of seaborne cargo, Germany’s largest universal port with over 75 terminals, handling over 18,000 ocean-going and inland waterway ships per year reported

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a respectable result for 2018. Hamburg successfully asserted itself in a difficult environment, achieving a distinct advance on rail borne seaport-hinterland transport. In 2018, this category accounted for total of 46.8 mn tonnes – up 2.7 per cent – and 2.44 mn TEU – up 4.7 per cent. More than 60,000 cargo trains with around 1.6 mn freight cars were handled during 2018 on the Port Railway network alone. This topped the record total set in 2016 and extended Hamburg’s position as Europe’s leading rail port.

Brief us about the fairway adjustment of Elbe, How it is going to facilitate the movement of ships through the channel?

For the Elbe and port pilots, the 65 per cent increase in the number of calls by what are known as extraordinarily large vessels – German: AGFs – represents a challenge. Whereas in 2008,

around 600 ships in this class berthed in Hamburg, meanwhile more than 1000 do so. AGFs are vessels with a length of over 330 metres and a breadth of over 45 metres. These are subject to numerous restrictions along the 120km stretch of the River Elbe between the estuary and the boundary of the Port of Hamburg, which must be exactly observed. The navigation channel needs to be extended so that vessels are able to enter and leave the port of Hamburg with one metre more draught. To enable inbound and outbound ships to pass

More than 60,000 cargo trains with around 1.6 mn freight cars were handled during 2018 on the Port Railway network alone.

This topped the record total set in 2016. each other more easily, the navigation channel will be widened in some places and a special passing box will be created, especially for wide vessels, thus reducing or even eliminating waiting times. The fairway between Wedel and the Stör/Elbe confluence will be widened from 300 to 320 metres. This will allow ships of an added width of 92 meters to safely pass by or overtake each other. In addition, the passing box will be built along 8 kms near Wedel. It will be 385 meters wide and will allow up to 4 large containerships per tide to approach each other.

The construction of the new culvert on the Elbe island of Neßsand began in mid-July. The culvert will be drilled under the Elbe and will probably be finished early this December.

The suction dredger Scheldt River off Wedel started on July 7 this year with the wet dredging of the fairway adjustment. The work is expected to be completed by 2021, while the construction work for the new front light in Blankenese has started on October 9. As a first step, a bridge abutment is erected on the banks of the Elbe.

What are the unique practices employed by Port of Hamburg in order to handle the movement of vast network of ships and various other port operations?

All companies involved in the transport chain are network digitally and can thus accelerate processes. The Hamburg Vessel Coordination Center (HVCC) is an example of how well networking between different companies and institutions in Hamburg works. The interface benefits ship owners, nautical headquarters, competing terminals and inland shipping. HVCC brings together the relevant data of the various players, interprets it and creates a forward-looking situation picture of ships approaching the port which is then available to the parties involved, making ship handling at the port even smoother.

Having a roadmap to sustainable logistics has become inevitable in present times, what are the initiatives taken by Hamburg port to curb the carbon emissions?

Hamburg’s state government has approved a large-scale expansion of shore-based power supply in the Port of Hamburg. This will create the conditions for a shift from shipboard diesel power supply to ecological electric power during lay times. It will be extended to all existing cruise terminals.

With this expansion, Hamburg is play-

In the first half of 2019, 106,000 TEU- 20-ft standard containers were handled in Hamburg on direct services with Indian ports, a gain of 17 per cent. ing a pioneering role in the field of alternative power supply during ship’s lay times at the port. As the first port in Europe, the Port of Hamburg will offer shore-based power supply both for cruise liners and mega-containerships from 2022.

Recently, HamburgIndia business day was celebrated at the Chamber of Commerce. What are the key takeaways from the session with regard to maritime trade and cultural exchange between the two countries?

Hamburg and India have been connected by trade for centuries.

More than 50 Indian companies have a branch in Hamburg; about 140 Hamburg companies have a branch in India.

With India Week Hamburg, we celebrated our longstanding relationship with the world's largest democracy, ranging from culture and sports to politics and business. The participants cultivate and promote the traditionally good connections between Hamburg and the Indian subcontinent. The focus was on ‘Sustainability’.

Av i a t i o n , i n f r a s t r u c t u r e , insurance, IT, healthcare, maritime transport, ports, shipping and renewable energies are areas that offer potential for the development of relations between India and Germany in general and India and Hamburg in particular.

What is the share of India in the total amount of cargo handled

by Hamburg port as of now and how do you see it in near future?

In the first half of 2019, 106,000 TEU- 20ft standard containers were handled in Hamburg on direct services with Indian ports, a gain of 17 per cent.

With Hapag-Lloyd and its partner ship-owners ONE, YML and COSCO offering an additional weekly sailing from Hamburg on the IEX- South-East India–Europe Express service from November onwards, the prospects for further growth seems good.

Ten liner services link the Port of Hamburg with India. Of these, four are container liner services, three are Ro-Ro services transporting vehicles, and three are general cargo services which also carry heavy cargo, and plant and project shipments. CC

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Innovations led by tech and planning helps us efficiently service our omni-channel model

Shipper Speaks

To succeed in today’s hyper-competitive market, F&B companies must build a strong foundation of flexible supply chain processes, run by knowledgeable and experienced people and enabled by integrated and agile systems. Supply chain initiatives can strip out tens or hundreds of millions in costs and enable a company to achieve competitive advantage.

Ghanshyam Singh, Head – Supply Chain, Purchase & Quality Assurance, CHAI POINT informs Upamanyu Borah on how they are seeking significant value from execution-based supply chain management.

G

enesis of Operations

CHAI POINT, a subsidiary of Mountain Trail Foods, is the first Chai startup of India. First established in Bengaluru in 2010, CHAI POINT brews 450,000+ cups of tea/coffee on average per day to add to a cluster of 150 and upward stores and 3000+ dispensers spanning about 20 cities, with a roadmap to expand further to tap fully into the billion-dollar hot beverage market in India. By 2011, the company reached up to its 10th store. In the same year, CHAI POINT launched its coupon program and celebrated the joy of selling 1 millionth cup. In 2012, the company opened its first 24*7 store in Bangalore International Airport and a store in New Delhi. Until 2019, CHAI POINT has expanded its business to the country’s major cities like Noida, Gurugram, Mumbai, Chennai, Hyderabad, Goa and Pune.

Supply Chain practices

At CHAI POINT, we have built a highend Enterprise Resource Planning (ERP) system– FOUNTAIN- a cloud-based platform, for proper outflow of goods from one end to the other, anywhere in the country. FOUNTAIN helps us integrate all our business functions- retail, delivery, boxC, and consumer packaged goods (CPGs) into one seamless master database, which helps us arrive at logical and efficient decisions and also encourages us to fail fast in order to learn quicker and implement better.

We have multiple systems and trackers to indicate real-time movement of

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CHAI POINT brews 450,000+ cups of tea/coffee on average per day to add to a cluster of 150 and upward stores and 3000+ dispensers spanning about 20 cities, with a roadmap to expand further to tap fully into the billiondollar hot beverage market in India. our shipments, forecasting the demand and ensuring that our products are available at the respective location.

We are seeing a faster adoption of Artificial Intelligence (AI) and Machine Learning (ML) in the supply chain industry. Companies, who manage inhouse supply chains as well as pure play players, are using these cutting-edge technologies for predicting demand and matching supplies, and accordingly are planning manufacturing cycles.

In the manufacturing sector, robotics is used to make products which have resulted in high accuracy and reduction in manufacturing time. All of the good's movement from warehouses is connected through tech platforms thus making the entire supply chain visible, more efficient and error-free.

Overcoming hurdles

Being an omni channel brand, our challenges are multi-layered. To address any concern in the supply chain system, CHAI POINT has an in-house planning

team and an agile ERP system. With innovations at the back-end, utilising technology and driven by planning process, we are able to reach our consumers through every avenue possible- stores, home/office delivery, our corporate beverage dispenser solutions– boxC, CPGs, and E-commerce.

Warehousing strategies

As our business model allows us to deal with perishable products like milk, cakes and other F&B products, we engage in cross docking thus making sure that all fresh products are not stored at warehouse level so that every time freshness of ingredients and consistency in our products is guaranteed to the customers.

Establishing relationships

A connected system in an organisation gives visibility to all the stakeholders. At CHAI POINT, we have a proper demand and supply chain planning system. Planning team ensures to give right visibility

With innovations at the back-end, utilising technology and driven by planning process, we are able to service efficiently at our different touch points– stores, boxCIndia’s first cloudbased beverages service platform, and online channels.

Shipper Speaks tant functions for companies because it requires high investment upfront. Not to question, tech helps in optimising the procurement process. With the help of tech, we now have better visibility about the availability of the materials and even final products, not only in India but globally. This helps us know the best price and product available and we plan its sourcing accordingly.

Tech-enabled procurement: Aspects and Prospects

to all stakeholders- to tell the suppliers how much to produce, when to and where to ship, while the transporter knows when and where to pick up the shipment. The demand and supply planning keeps them infomed on how the inventory is flowing and sales growing.

Scope for LSPs

Logistics Service Provider (LSP) is an idea which is seeing good traction in the industry. Since companies don’t want to lock high CapEx in building their supply chain infrastructure, they opt for LSPs who are experts in the field and helps save costs.

Expectations from LSPs

Our expectations from LSPs are timely service, better performance and showing support for the business as a partner and not just as a service provider.

The next-gen manufacturing supply chain

We believe the next wave in supply chain will be heavily dependent on cutting-edge technology achievements like robotics and AI. Technology intervention will go up in every sphere of the supply chain– right from manufacturing to support. This means that manufacturing will have to become more agile and real-time. The goods will be manufactured as per real-time customer demand and not in batches, which is currently the norm.

Why tech-enabled procurement?

Procurement is one of the most impor-

Companies should opt for digital transformation for the right reasons otherwise they won’t be able to select the right tech that works for them. To begin with, understand the objective – who will this benefit? Quantifying the benefits extended to the business and partners.

Companies should understand that tech is a support system which helps take better decisions to execute a digitally-run supply chain. Bring tech into supply chain can help improve co-ordination with suppliers and ensure quick resolutions of issues too. However, full dependency on tech can lead to complex challenges and redundancies which will ultimately fail the purpose of digital transformation. The requisites are:  Change Management: A change of this magnitude can be overwhelming for employees and the organisation culture. Thus, before going the tech way, make sure all the important stakeholders know what is coming their way. A proper education and demo on the practices is recommended.  Right Partner: Companies should take time in evaluating the right

We believe the next wave in supply chain will be heavily dependent on cutting-edge technology achievements like robotics and AI. Technology intervention will go up in every sphere of the supply chain– right from manufacturing to support.

tech partner to design systems which adapt well to current systems and processes.

Managing back-end supply

CHAI POINT’s back end is fully techenabled and provides access-based visibility to the demand and supply planning team and warehousing team. The data from this tech platform help us analyse stock status and trends in consumption at different customer centric touch points thus indicating the quantity of product procurement. The ERP data suggests which stocks to purchase, right quantity, etc.

At CHAI POINT, we use an auto alert tech system.

We follow zero days holding method for fresh products, any order placed by our stores directly goes to the suppliers, ensuring minimal holding time.

Megatrends and Disruptions

In the good old days, when a store needed supplies, they would raise a demand order that goes to the planning team, who will then raise an order with the supplier through procurement.

Product would be first received in the company’s warehouse and will remain there for some days before being shipped out to the store. This entire process was full of redundancies and time consuming.

At CHAI POINT, we use an auto alert tech system. We follow zero days holding method for fresh products, any order placed by our stores directly goes to the suppliers, ensuring minimal holding time.

Another point is that, Supply Chain Management (SCM) is a capital intensive arm of the business, so focus has to be more. We are seeing that companies don’t want to run their SCM on high Capital Expenditure (CapEx) model. In our case, FOUNTAIN has made the supply chain highly efficient. We can pin point accuracy of our product’s movements that helps us to plan the supply chain, which in turn, improves visibility. CC

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Rethinking new models in a new era

Shipper Speaks

For pharma companies to meet the growing complexity of the industry and the varying demands of their business segments, they need supply chain models that support the strategic priorities— agility, service, or cost effectiveness—of those different segments.

Rajasekhara Reddy, Vice President - Global Demand Planning and Logistics at Glenmark Pharma informs Upamanyu Borah how their approach to supply chain design is becoming the most effective way to address the challenges and tradeoffs they face today.

Background and history

Glenmark Pharmaceuticals Ltd (GPL) is a research-driven, global, integrated pharmaceutical organisation. It is ranked among the top 75 Pharma and Biotech companies of the world in terms of revenue (SCRIP 100 Rankings published in the year 2018). Glenmark is a leading player in the discovery of new molecules, both new chemical entity (NCEs) and new biological entity (NBEs). Glenmark has several molecules in various stages of clinical development and is focussed in the areas of oncology, dermatology and respiratory.

The company has a significant presence in the branded generics markets across emerging economies including India.

Glenmark has 16 manufacturing facilities across five countries and has six R&D centers. The generics business of Glenmark services the requirements of the US and Western European markets.

The API business sells its products in over 80 countries, including the US, various countries in the EU, South America and India.

A flexible supply chain

We definitely have supply chains which are very agile in manner and which we can redesign and remodel for enhancing the supply of our products so that it reaches the customer in the right way and at the right time. We have developed a deep understanding of the needs of our business segment and accordingly we align our supply chains to achieve competitive advantage. Some segments require a highly responsive

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supply chain, one that can react quickly to changes in the business landscape.

This agility help us speed up product launches, extend the life cycle of existing products, enter new markets more quickly, and be more responsive to changes in demand and new business opportunities.

that a patient who needs the drug is not getting the treatment he or she deserves. At Glenmark Pharma, we only turn to logistics professionals who know the best practices in cold-chain shipping to get medical supplies to facilities across the globe.

Importance of logistics

In general, the industry is running manually, and so are our processes. Just because a process has been executed one way for a long time doesn’t necessarily make it the best option. However, we do have systems at place to do an MRP or share a PO for confirmation.

We have extensive communication tools starting from email to WhatsApp group wherein we share all necessary information. The transporters also share daily field report and updates but that top happens over Excel spreadsheet without having to manually import the data. A standardised solution, such as a SaaS platform that streamlines processes is much awaited. Without a solution that keeps everyone and everything connected, an organisation is vulnerable to the common issues that plague distributed teams.

While logistics is a most crucial matter to companies in any industry, getting pharmaceutical logistics solutions right can be a matter of life and death, depending on the situation. Hospitals, primary care physicians, urgent care facilities, pharmacies, and a number of

The generics business of Glenmark services the requirements of the US and Western European markets. The API business sells its products in over 80 countries, including the US, various countries in the EU, South America and India. other establishments need to have medicines readily available in order to care for their patients; sometimes for life threatening situations. The failure to package or keep cold-chain pharmaceuticals at the right temperature can ruin them by the time they get in the patient’s hands. Not only will these leads to a loss of revenue for the pharmaceutical manufacturer, but it also means

Establishing coordination

Adopting unique or innovative strategies

More effective supply-chain designs can be both economical and a strong source of competitive advantage. We have developed supply chain strategies for different kind of products distributed within India- oncology products which are sensitive, and products

Shipper Speaks which are of high-volume and massdistributed. For instance, in case of oncology products, where quality needs to be maintained and our delivery service expedited, we do not keep it with all our CFAs or distributors; it gets delivered directly to the customer/hospital only from two of our key state-ofthe-art locations, be it through regular service or express courier. Whereas for the other products, which need to be available in the local market immediately, we ship it faster by storing it closer to the market.

Overcoming complexities

No perennial problem or issue as such exist in the supply chain, or go unattended. However, labour issues and such problems do arise during warehouse operations but gets resolved overtime.

Alternate transport options

Innovation is at the heart of Glenmark.

We always keep looking at ways and means to find a different way to do the same thing and try and fix the issues we have or try and be better in what we are doing. International logistics is the biggest differentiator for any pharmaceutical company. For instance, many a times our product gets shipped from India to various international markets, and since our plant is in Goa, we have to transport the product to the nearest airport. Traditionally, we have Mumbai Airport as the only gateway for air shipments because it’s the most common route available, but after an intensive study, we found out that Hyderabad and Bengaluru are equally far off, and since logistically we incur the same cost and time, we started shipping it out from the two airports.

Now, we don’t have to wait for our trucks to reach Mumbai or be concerned about finding slots in freighters. Besides, at times, when we have to ship our products faster due to customer demands, we transport our products from Goa to New Delhi so as to dispatch to the US.

Implementation: Tech-trends

We are evaluating technology developments within the company’s operations and gradually implementing them

across our warehouses. We are looking for a solution which can give us all the functionalities of WMS but not overburden operations like a huge WMS which would ultimately turn out expensive.

Outsourcing of logistics

We do not outsource logistics completely. Except for transport services for which we hire trucking companies or source in courier services, we control and monitor logistics internally very closely. We use GPS sytems like RoamBee for real-time shipment tracking and asset monitoring.

Innovation is at the heart of Glenmark. We always keep looking at ways and means to find a different way to do the same thing and try and fix the issues we have or try and be better in what we are doing.

Warehousing strategies

For storing and maintaining, we use and employ standard warehousing practices. Under one roof, we have racking systems and forklifts, the cold rooms for keeping temperatures intact for products. We keep conducting preparatory quality assurance checks that help us guarantee warehouses and other storage facilities have the appropriate amenities and operating procedures to protect sensitive drugs or clinical supplies. Nonetheless, with the new guidelines being implemented by the government, we are looking at how to step up to the expectations with maintaining an unbroken supply chain.

LSPs and their critical values

CoolEx, DHL Smartrucking, Mahesh Cargo Movers are a few of the companies that provide logistics services to us. For business outside India, we have other service offerers.

Outsourcing functions to a thirdparty logistics partner is essential to continued success, because pharmaceutical company management and per-

sonnel like us don’t always have time to evaluate, educate and troubleshoot, we need reliable results. Therefore, before leaping into a new business relationship, it is important for us to consider a variety of factors. When vetting potential logistics companies, we look for these characteristics in their level of service:  Consistent and Reliable Transportation  Trusted Experience and Proactive Best Practices  Security  Continuous Improvement

Managing back-end

Our back-end is standard. We work on a purchase order (PO) basis with the suppliers. We give the POs and expect the same to be delivered on the required time while the communication process flows over telephone and emails. We choose suppliers who can meet our specific needs. Since faster turnaround is a priority for us, there is no point in selecting on grounds of cost if the turnaround requirements cannot be met. One way which we formalise this is, we draw up a service level agreement (SLA) between your business and your supplier.

In the plants, we have an ERP system that manages all aspects of our workflow and cost visibility. Besides, we have SAPSs and the functionalities of which we utilise in having the right level of master time side, bill of materials, and updated information about the routings in the plants which helps us in many aspects of business operations.

Next-gen supply chain

Today, pharma companies are required to make critical strategic decisions for successful implementation and smooth operations at plants. Major decisionmaking factors are selecting new stand-alone hardware module or integration with existing packaging line, single vendor strategy for both hardware and software or multiple vendor strategy, global or regional supplier engagement strategy and choosing the best-fit hardware and software for existing ERP and MES systems.CC

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n ews

Kalaburagi Airport inaugurated under UDAN / RCS

K

Commerce ministry seeks views of different departments on national logistics policy

T

he commerce department has sought views of all the ministries, including steel and shipping, on the draft national logistics policy which aims to promote seamless movement of goods across the country and reduce high transaction costs.

T he gover n ment has drafted the national logistics policy as it feels the sector’s growth is critical to boost ex-

ports and economic growth.

The logistics division of the commerce ministry floated the draft. The cost of logistics in India is 13-14 per cent of the gross domestic product (which is over $2.5 trillion) and is much higher than in other countries. The target is to reduce it to about 10 per cent in the coming years with concrete measures.

It has suggested several

steps, including creating a national logistics e-marketplace.

The draft also aims at simplification of documentation for exports/ imports and drive transparency through digitisation of processes involving customs, in regulatory, certification and compliance services; and creating a data and analytics centre to drive transparency and continuous monitoring of key logistics metrics.

Import-driven industries to get special financial package: Gadkari

U

nion MSME Minister Nitin Gadkari has said that the government will create a special financial scheme for 10 industry segments which are import-driven.

Gadkari said the government has created a scheme to support industries where imports are high by providing special financial assistance.

"We have identified 10 sectors which are largely importdriven. We have worked on a

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scheme to support these sectors to upgrade their R&D and skill development and training, among others," Gadkari said at an Outlook Business

event late this evening.

He said the intention was to reduce the dependence on imports and ensure indigenous development.

"We plan to create a special fund for providing financial assistance to these indust r ie s a nd e n s u r e overa l l growth of our economy," Gadkari said. However, he did not elaborate on these 10 sectors.

arnataka Chief Minister BS Yediyurappa recently inaugurated the newly built airport in Kalaburagi. The airport is likely to improve connectivity in KarnatakaHyderabad Region. The runway at the airport is 3.25 km long, which is the second longest in Karnataka after the Bengaluru International Airport. Kalaburagi Airport will act as a gateway to many places frequently visited by people. The airport has been built under the UDAN-RCS Scheme of Government of India and is spread across 742 acres and developed at an estimated cost of Rs 176 crores.

Maiden Container cargo vessel to sail on Brahmaputra

T

aking a leap forward in the Northeast’s inland waterway, a landmark container cargo consignment will sail on inland waterways from Haldia Dock Complex (HDC) to the Inland Waterways Authority of India (IWAI) terminal at Pandu in Guwahati for the first time soon. The 12-15 days voyage will be an integrated IWT movement via National Waterway-1 (river Ganga), NW-97 (Sunderbans), Indo-Bangladesh Protocol (IBP) route and NW-2 (river Brahmaputra).

The vessel, MV Maheswari, is expected to be flagged off by Shri Gopal Krishna, Secretary (Ministry of Shipping).

n ews World Bank submits master plan for $300-mn logistics infra development in Kolkata

W

est Bengal Finance Minister Amit Mitra said that the World Bank has submitted a conceptual master plan for development of logistics infrastructure within the city metropolitan area.

The proposed project will entail a cost of around $300

million, likely to be funded by the World Bank. A meeting will soon be held to finalise the plan, Mitra told the media on the sidelines of a Logistics Colloquium organised by CII and the West Bengal Industrial Development Corporation (WBIDC).

The focus will be on multi-

modal logistics development, including rail and road. The World Bank is also believed to have expressed interest in a review of industrial parks, logistics hubs and SEZs in West Bengal with the aim of improving logistics competitiveness, employment generation and ease of doing business.

Assam gets its first export policy

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ssam has got its first export policy to boost exports. The state has a competitive advantage through increased market penetration as well as to explore new markets for products in nine focus areas, which includes tea, its principal export item, wellness hospitality and health tourism. The export and logistic policy, 2019 will be in force for five years.

The other objectives of the policy include enhancing the ease of doing exports through

creation of simple, effective and efficient institutional mechanisms, simplified processes and efficient organisation and coordination with stakeholders.

Besides tea, the other focus areas are agro and allied products, food processing, floriculture, organic farming, bamboo products, ornamental fishes and pisciculture and medicinal and aromatic products, hydrocarbon products, plastics and petrochemicals, tourism including medical tourism, hospitality and wellness.

55 railway projects underway in Bihar, 362% rise in fund allocation

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here has been an increase of 362 per cent in the allocation of funds for railway projects in Bihar and as many as 55 projects are underway in the state.

Minister of State for Railways Angadi Suresh Channabasappa said `4,093 crore has been allocated for Bihar, an increase of 362 per cent, and that 55 projects are underway in the state.

On a specific query when the Hajipur-Mohua rail line

was started, Channabasappa said it was started almost 14 years ago but has been pending for some reasons.

"No survey for HajipurMahua New Line section has been conducted. However, a

Reconnaissance Engg-cumTraffic Survey (RETS) for new line between Bhagwanpur (located at a distance of 20 km from Hajipur)-Samastipur via Mahua (60 km) has been taken up," Union Railways Minister Piyush Goyal said in a written reply.

Besides, Channabasappa said, demands for survey and sanction of new lines is a continuous process.

Final view on sanction of a project is taken on the basis of financial and economic return on the project after examination of the survey report.

SpiceJet signs MoU with Gulf Air to explore codeshare and coordinated engineering services

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piceJet and Bahrain’s national carrier Gulf Air recently signed a Memorandum of Understanding to explore possibilities regarding interline and codeshare agreement, coordinated cargo services, engineering services and pilot training.

The MoU was signed by Ajay Singh, chairman and managing director, SpiceJet, and Kreimir Kucko, chief executive officer, Gulf Air, in New Delhi.

Virgin Atlantic to start second daily flight on LondonDelhi route

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ritish airline Virgin Atlantic on Tuesday said that it will start a second daily flight on the London-Delhi route from March 29, 2020.

The new flights to Delhi will go on sale on November 23.

The airline said the second flight would depart from Heathrow in the morning, complimenting the airline's current evening departure.

The airline will also be re-timing its Mumbai flight to an evening departure from Heathrow, offering a more convenient choice for business customer.

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n ews FFFAI meets Shipping Minister, other ministry officials to discuss current issues

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ith a view to improve the ease of doing business at grass root level enabling reduction in dwell time in EXIM trade and to discuss strategic and operational issues cur-

r e nt ly fac e d by c u stom s broking industry, the office bearers of the Federation of Freight Forwarders Association in India (FFFAI) headed by its Chairman, AV Vijaykumar met Mansukh Mandavi-

ya, Minister of State (Independent Charge) Ministry of Shipping and various other ministry officials in New Delhi on November 15.

The association presented the issues of customs brokers and freight forwarders before the minister for reduction in transaction costs and dwell time by improving infrastructure at various ports and Inla nd Contai ner Depots (ICDs), increasing connectivity with ICDs and gateway ports, and enhancing costal cargo movement.

Lufthansa plans to strengthen partnerships with Indian airlines

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he Lufthansa airline group is planning to "strengthen" its partnership with Indian airlines like Vistara and Air India in 2020, the top Indian official of the largest European carrier has said.

Cu r r e nt ly, t h e Lufthansa airline group has an interline agreement with Vistara, which allows a passenger to check-in his luggage at the first airport itself for the

whole journey consisting of flights of both airlines.

The European carrier has a codeshare agreement with Air India, which allows one

airline's passenger to book a ticket on the other airline, using the first one's ticketing system.

For 2020, the Lufthansa group "will be trying to strengthen our Indian partnerships" so that Indian carriers "can bring passengers from second a nd third-tier cities to our four gateways", George Ettiyil, Senior Director, South Asia, Lufthansa Group said.

Logistics unicorn Delhivery looks to drones, EVs for faster deliveries

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eading logistics startup Delhivery plans to use electric vehicles and drones to scale up their delivery process, although the latter is still under regulatory lens, said a company executive.

The Gurugram-based firm plans to deploy electric vehicles to scale up their operations in the near future. “We believe this is the only scal-

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able model," Vaibhav Suri, Co-Head, Product & Strategy, Delhivery said at the Nasscom Product Conclave in Bengaluru, earlier this month.

Drones will be a reality in the near future with the government also investing heavily in this area. “Drones are the only way to solve the scale problem given that 45 per cent of the delivery cost typically goes to the driver," Suri said.

Bengaluru Airport has handled 41,444 kgs of marigold flowers to Dubai

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empegowda International Airport, Bengaluru (BLR Airport) handled 41,444 kgs of marigold flowers to Dubai on November 22.

The fresh flowers were laid out at ‘Flowers of Tolerance’ at the Dubai Festival City. It has now entered the Guinness Book of World Records as the largest natural flower carpet in the world.

The Marigolds were sourced from various parts of Bengaluru and the surrounding districts, including Devanahalli and Chikaballapur. This huge consignment of fresh flora was handled by DHL Global Forwarding on a chartered Boeing 777 Freighter (777F). The freshly-harvested flower consignment was managed by Air India SATS CoolPort to ensure maximum freshness and longer shelf-life of the marigolds.

Zurich Airport wins bid for Jewar airport

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witzerland’s Zurich Airport International AG emerged as the highest bidder for the proposed international airport at Jewar, Uttar Pradesh, on the outskirts of Delhi, sparking hopes for the long-delayed project and the development of the area around it. Zurich Airport which offered a revenue share of 400.97 per passenger said it will design, develop and operate the new greenfield airport in Jewar under a 40-year concession. It will invest 650 million Swiss francs (4,663.731 crore) for the first phase, which will take four years to be completed.

n ews Allcargo Logistics join hands with ONE Line to transport containers to Nepal

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llcargo Logistics has announced an agreement with ONE Line India to partner in transporting containers to Nepal from the ports of Kolkata in West Bengal and Vizag in Andhra Pradesh.

Allcargo Logistics recently completed the customs formalities for the maiden import shipment of 8 x 20’ containers for ICD Birgunj in Nepal which docked in Kolkata port. The shipment was handed over to the rail operator and received in Birgunj, Nepal on November 24.

“Given our global scale and repute on account of being the widest CFS-ICD operators in India, we emerged as the preferred partners for expediting customs clearance solutions and boosting ONE Line’s Exim business in Nepal.

With an operational presence in Nepal as well as Kolkata, we are also strategically positioned

G Left to right - Partha Chakrabarti, Sr Mgr-Ops and Darpan Das, Mgr-Ops of ONE Line, Sudipta Singha Dy Mgr-Sales and Marketing and Faiyaz Shamim, Dy Mgr -Ops of Allcargo Logistics, Sudhin Arland, Exec (C and O) operations of CONCOR.)

to assist ONE Line in ensuring faster clearance of goods, ensuring speedy last-mile delivery services and gaining critical leverage and connectivity to the emerging markets and industrial hubs of Nepal,” stated Prakash Tulsiani, CEO, CFS-ICD, Allcargo Logistics.

Bolloré Logistics India & CFM sign contract for engine transportation

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olloré Logistics India and CFM Aircraft Engine Support South Asia have come together for aircraft engine transportation including customs clearance documentation.

T he cont rac t wa s signed between Karthigeyan Ramaswamy, Managing Director, CFM Aircraft Engine Supp or t S out h A sia a nd Philippe Lortal, CEO Middle

East and South Asia, Bolloré Logistics during the 2019 Dubai Airshow.

"The contract signed is for importation into India includ-

ing but not limited to custom clearance at Delhi airport. Further, the contract also includes services related to re-export from India which includes outbound export custom process at Khurja to re-export back to origin. Bolloré Logistics is also nominated for the International Freight Forwarding to various origins from Delhi," announced Ramaswamy.

JSW Infra commissions new 18 MTPA iron ore terminal at Paradip Port

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SW Infrastructure, one of India’s leading private port companies and part of US$ 14 billion JSW Group, commissioned its new iron ore terminal at Paradip Port.

The 370 meters’ long terminal with a capacity of 18 MTPA has been developed with a futuristic vision. It is built to handle Capesize vessels for iron ore and pellet exports and can load at a rate of 100,000 metric tons per day.

The high load rate is expected to significantly

Gateway Distriparks to sell Chandra CFS & Terminal Operators in Chennai

reduce the preberthing delays at Paradip as well as allow incremental cargo flow for the Port which is all set to be the largest port in the country.

The company has invested approximately `750 crore to establish the new terminal at Paradip.

ateway Distriparks Ltd (GDL) has entered into a Share Purchase Agreement to sell its second CFS in Chennai, held in its wholly owned subsidiary - Chandra CFS & Terminal Operators Private Limited (Chandra CFS) - to Team Global Logistics Pvt Ltd (TeamGlobal), for a consideration of INR 47 crores and an amount equal to earnings before depreciation and amortisation for a period of April 1st 2019 to closing date. Further, TeamGlobal will be placing Rs 2 crores in an escrow account as a commitment fee, which will be adjusted as part of the purchase consideration on closing.

The transaction is expected to close in 45 days.

DHL SmarTrucking is Rich Graviss new logistics partner

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HL SmarTrucking has partnered with Rich Graviss Products Pvt

Ltd to provide long-haul cold chain trucking services across India for their portfolio of bakery and F&B products, including Rich’s Whip Topping, a leading non-dairy whipped cream topping.

Due to the nature of the products, 90-95 per cent of Rich’s shipments require transportation at temperatures suitable for frozen food to preserve freshness and quality, and prevent spoilage. DHL SmarTrucking ColdChain’s fleet of reefer or refrigerated container trucks provides temperature control capabilities in a range as wide as -25˚C to 25˚C, to ensure all of Rich’s cargoes reach their destination in the right condition.

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International Liege Airport to leverage Alibaba Cloud’s Aviation Brain

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libaba Cloud, the data intelligence backbone of Alibaba Group, and Liege Airport, the biggest cargo airport in Belgium, have announced a joint plan to work together to empower Liege Airport with Aviation Brain, a proprietary Artificial Intelligence (AI) programme from Alibaba Cloud that aims to help them aviation sector tackle real-world operational

Turkish Cargo is entitled to ‘TAPA FSR’ security certificate

challenges. Liege Airport hopes to leverage Alibaba Cloud’s leading technologies to optimise aviation procedures and improve operation efficiency, in order to unleash its potential as the next-generat ion i n novat ion hub for aviation.

With Liege Airport positioned as the strategic freight hub in Europe, Alibaba Cloud and Liege Airport hope to

work together to reduce onthe-ground logjams by refreshing the aircraft parking apron utilisation, or parking spaces for aircraft, in order to increase efficiency and minimize aircraft relocation time.

The usage of specialised technologies also allows flight dispatchers to make more timely and precise decisions to space out arrivals and avoid possible bottlenecks on the runway.

Port of Hamburg handled 104 million tonnes with 3.2% growth from Jan-Sept

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he Port of Hamburg saw strong growth in the first nine months of 2019, with seaborne cargo throughput rising by 3.2 percent to 104 million tons, At that rate, Hamburg exceeds the growth rate of competing ports in northern Europe, which on average have reported just one percent growth, according to the Port of Hamburg.

Container volumes at Germany’s largest port have increased of 6.9 percent to 7 million

TEU so far in 2019 thanks to new transatlantic and Baltic feeder services. The transatlantic services, operated by Hapag-Lloyd and ONE, connect Hamburg with ports in the U.S., Canada and Mexico.

Notably, in the first three-quarters of the year, 439,000 TEU were handled on container services with the USA, Hamburg’s second most important trading partner, for an advance of a solid 325 percent compared to the same period in 2018.

DHL breaks ground on ‘mega’ parcel centre in Bochum

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ontinuing to strengthen its efficient parcel netw o r k i n G e r m a n y, D e ut s c h e Po s t DH L Group opened a state-ofthe-art mega parcel center in Bochum.

With a sorting capacity of up to 50,000 shipments per hour, the Bochum parcel centeris the largest DHL parcel center in Germany and also one of the most efficient parcel centers in all of Europe. When

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it reaches its full capacity in 2020, the new location will create a total of around 600 jobs subject to social insurance contributions and covered by collective agreements.

With currently more than 20,000 sorted items per hour, the Bochum parcel center is already providing major support for the fast and reliable processing of shipments in the Ruhr region in the run-up to the 2019 Christmas period. The new parcel center is also supporting Deutsche Post DHL’s ongoing quality initiative in Germany, which, in the current year, has already resulted in a significant reduction in the number of complaints and an improvement in the company’s customer-care service.

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urkish Cargo is entitled to ‘GROUP A TAPA (Transported Asset Protection Association) FSR (Facility Security Requirements)’ certificate founded to reduce the loss in the international supply chain and based on the security of facilities.

TÜV Rheinland, a noted leader in independent inspection services, providing independent audit services in terms of quality and security has issued this certificate for Turkish Cargo’s cargo facilities at Istanbul and Atatürk Airports.

Sichuan Airlines launches freighter service from Delhi to Chengdu

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ichuan Airlines (3U) is commencing freighter services from Delhi to Chengdu, China effective from November 27, 2019.

This service will be operated with AB330-200F which offers maximum payload capacity of 60 tonnes. After the inaugural flight, the freighter will operate twice weekly service every Monday and Friday to enhance their frequency to four weekly services.

Sichuan Airlines has built a world-class fleet of 152 aircrafts that connects five continents, improving its network capability and opening more international routes to build a bridge between Western China and the world.

International Saudia Cargo transports 67 race cars to Formula-E Championship

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or the second year in a row, Saudia Cargo successfully transported 67 electric race cars for the World Championship Formula-E event, which took place on November 22-23 at the Historical Diriyah in Saudi Arabia.

The airline carried the vehicles, which collectively weigh 375 tonnes, in four shipments from their starting locations (Milano, Italy and Doncaster, UK) to the destination: King Khalid International Airport, Riyadh in Saudi Arabia.

Abdulrahman Al-Mubarak, chief commercial off icer at Saudia Cargo, commented:,“Saudia Cargo is a major supporter of all global events taking place across the Kingdom and always mobilizes its logis-

Etihad Cargo launches state-of- the-art cargo control center tics capabilities to ensure the success of these events. We have transported all types of equipment and spare parts for major events around the country related to sports, entertainment, cultural and social.”

Jettainer signs new code of conduct to ensure ULD care

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ettainer has become one of the first signees to support the ULD Care Code of Conduct, intended to reduce damage and improve safety.

The ‘Ten Rules for ULDs’ list recommendations for correct handling including information on proper loading, adequate transport and the exclusive use of intact containers. As a result, ULDs are to be perceived more clearly as im-

portant components of the air f reig ht t ra n spor t system which are largely responsible for load securing and, thus, for ensuring flight safety.

"The ULD Care Code of Conduct is an important step towards raising awareness of this topic within the industry.

We fully support these efforts and are pursuing further approaches to reduce avoidable damage, for example through

our JettCare programme," explains Frank Mühlenkamp, director global Operations at Jettainer and board member of ULD Care.

As a further step to ensure proper handling of ULDs, Jettainer has entered into cooperation with Airport College International. “We believe that this cooperation provides us a unique possibility to work closely with Jettainer to promote and sell our online Unit Load Device Operations training courses,” says Airport College International CEO Pertti Mero.

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tihad Cargo, the cargo and logistics arm of the Etihad Aviation Group, has taken its data-driven digitalisation journey another step forward with the launch of its state-of-the-art Cargo Control Centre (CCC) at its head office in Abu Dhabi.

Launching a year after Etihad Cargo embarked on a far-reaching digital transformation strategy, the CCC today becomes the “nerve centre” for real-time monitoring, tracking and active management of all shipments, flights, and UAE road feeder services in an effort to enhance Etihad Cargo’s ‘delivery as planned’ (DAP) promise to its customers.

SAS Cargo No 1 in the world in delivering air freight quality

Skyways Group launches new logo for Bangladesh arm

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lobal logistics company Skyways Group has rebranded its Bangladesh arm, Skyways SLS Frugal (BD) Pvt Ltd, with a new logo.

Speaking at the occasion, Yashpal Sharma, MD, Skyways Group said, “Everyone around the world is looking at Bangladesh with a lot of enthusiasm for a lot of learning on how to build a large scale

economy so cost effectively and also deliver the products with time efficiency. The market, which has been dominated by textile exports, is also venturing into other products like pharmaceuticals, automotive, etc. and I am confident that the market will flourish and grow sizeably in the years ahead. Skyways is committed to add value to the supply chains of Bangladesh with its

best in class technology and logistics solutions.”

Bangladesh office of the Skyways Group was started in partnership with EUR Services (BD) Ltd in May 2017. Over the last two years Skyways has managed to add number of customers and bring some new and innovative solutions for these customers.

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AS Cargo has been ranked No 1 in delivering air freight quality according to the IATA Customer Promise Performance Index. The IATA Customer Promise Performance Index is a very important benchmarking index as it reflects a fixed and standardized mutual measurement of quality between carriers and forwarders.

IATA driven organisation Cargo iQ has released its September 2019 results, revealing that SAS Cargo maintains the lead position.

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EVENTS

45th annual ACAAI Convention culminates in Phuket

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he 45t h Air Cargo Agents Association of India (ACAAI) convention kicked-off in Phuket, the largest island of Thailand, on November 21, 2019.

The convention was formally inaugurated by Chief Guest, Fitsum Abadi, MD, Ethiopian Cargo & Logistics Services; Tadesse Tilahun, Regional Director- India subcon-

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tinent, Ethiopian Cargo & Logistics Services; Sunil Arora, President, ACAAI; Anil Vazirani, Chairman, ACAAI; Afzal Malbarwala, VP, ACAAI; Anis Chakravarty, Partner & Leader, Global Transfer Pricing Center, Deloitte India, amongst others.

The 3-day convention saw the assemblage of delegates and members from India’s air

cargo fraternity who brainstormed on a range of measures to counter the issue of ‘End-to-End Logistics – The Way Forward’, which was also the theme of the convention.

Besides, the convention witnessed engaging business talk sessions, insightful presentat ions a nd mot ivat ional speeches with inspiring lessons.

AMTOI’s North Region Chapter hosts its first conference

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he North Region Chapter of Association of Multimodal Transport Operators of India (AMTOI) hosted ‘Multimodalism – Is India ready to exploit its full potential?’ a brainstorming session on November 01, 2019 at t he Hotel Pr ide Pla za, Aerocity in New Delhi.

The Chief Guest, N Sivasailam, Special Secretary- Logistics, GoI, along with S Ramakrishna, President, FFFAI; Keku Bomi Gazdar, CEO, AAI Cargo Logistics and Allied Services (AAICLAS); Cyrus Katagara, Partner, Jeena & Company; Shantanu Bhadkamkar, President, AMTOI; Xerxes Master,

Vice President, AMTOI, and other management committee members and dignitaries from AMTOI national and extended board members, formally inaugurated the event with lighting the lamp.

The event, which was particularly significant in view of the recent Government interest shown in logistics policies and c ha nges suggested to be framed to regulate it, saw participation of over 100 delegates.

AITWA organises National Convention 2019 in the capital

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ll India Transporters Welfare Association (AITWA) organised a two-day-long National Convention from November 11 12, 2019 at NDMC Convention Hall in New Delhi, aimed at

focussing and raising matters/ issues related to the Transport industry. The first day, was reserved for the internal matters and issues, the proceedings started with the welcome address by Ashok Gupta, Sr Vice

President, AITWA, who outlined the important pioneering role played by the body, ever since its inception in 2000, for improving the working conditions of the industry. The second day's programme started

with the welcome address by Nitin Gadkari, Minister for Road Transport & Highways, GoI, that followed with honouring the achievements of the organisation by Pradeep Singal, Chairman, AITWA. DecEmber 2019 - CargoConnect

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EVENTS

DCBA elects new managing committee with S Ramakrishna as President

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elhi Customs Brokers’ Association (DCBA) has elected its new Managing Committee for the ensuing two years at the 36th Annual General Meeting held on November 24, 2019 at Jawaharlal Nehru Stadium, New

Delhi. The elected office-bearers are S Ramakrishna (President), Gurvinder Singh (VicePresident), Santosh Kumar Choudhary (Hon Secretary), Rajbir Singh (Hon Joint Secretary), and Bhim Singh Jain (Hon Tr ea s u r er). A n i l K

Mishra, Devendra Singh Bhadoria, Rajiv Kumar Sharma, Rohit Kapoor, Vaneet Aggarwal, Vijay Raghvan G, Vikrant Gogia, and Yogesh Kumar have been elected as Managing Committee members of DCBA.

Bahrain King inaugurates Alba's Line 6 expansion project King Hamad bin Isa Al-Khalifa (right) of Bahrain inaugurating the Alba Line 6 milestone with Alba’s Chairman Shaikh Daij bin Salman bin Daij Al Khalifa (middle), and Brendan P Bechtel, Chairman and Chief Executive Officer of Bechtel

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ollowing the close of a successful The Arab International Aluminium Conference (ARABAL) event in the region, Bahrain’s King HM King Hamad bin Isa Al-Khalifa inaugurated Aluminium Bahrain’s (Alba) Line 6 Expansion project on November 24, 2019.

The elaborate opening ceremony was attended by His Royal Highness Prince Salman bin Hamad Al Khalifa Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister and other dignitaries.

Welcoming the inauguration of Line 6 project under the patronage of His Majesty King Hamad, Alba chairman Shaikh Daij bin Salman Al Khalifa, said that the completion of Line 6 project is the greatest achievement in the era of His Majesty in Bahrain and this monumental event would not have been possible without the directives and support of his wise leadership.

Turkish Cargo participates in ‘Logitrans – 2019’ fair

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loba l a ir cargo bra nd Turkish Cargo participated this year in Logitrans, Turkey's most extensive international transportation and logistics fair, for the 11th time. Having a 155 m2 wide stand area in the fair organised in CNREXPO Istanbul Fair Center on November 13-15, Turkish Cargo met business

partners and event participants.

Turkish Cargo, within the scope of Atlas Logistics Awards organised for the 10th time this year, was awarded the first prize in the “International Air Carrier” category and the Jury Special Award for ‘Dual Air Cargo Hub Solution’ and ‘Mission Resque’ projects.

Kuehne + Nagel hosts second Aerospace & Defence Summit in Gurugram

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he 2nd Aerospace & Defence Conference organised by Kuehne-Nagel on November 07, 2019 witnessed the presence of aerospace industry stalwarts and ministry combined.

The summit was formally inaugurated by Vandana Aggarwal, Economic Advisor, Ministry of Civil Aviation (MoCA), Erik Goedhart, SVP and Global Head of Aerospace and Industrials, Kuehne + Nagel Management AG and Peer Rasmussen, Managing Director, Kuehne + Nagel India.

The conference focussed mainly on the supply chain challenges facing the sector in the newly developing growth spots.

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UpComingevents Logistics and Supply Chain

Air Cargo EVENT: Aviation Festival Asia ORGANISED BY: TERRAPINN DATE: February 18 - 19, 2020 WHERE: Suntec Convention & Exhibition

EVENT: Logix India 2019 ORGANISED BY: Federation of Indian

Export Organisations (FIEO)

DATE: December 12 – 14, 2019 WHERE: Hotel Lalit, New Delhi

After a successful first edition that concluded with roaring success, huge participation and great fan following from across the country and globe, the 2nd Logix India logistics business event will bring over 350 C level end-users and logistics companies, including 120 International logistics companies from 25 countries.

To know more visit www.logix-india.com

EVENT: 8th Global Logistics Show ORGANISED BY: Infinity Expo DATE: February 20 – 22, 2019 WHERE: Somaiya International

Convention Centre, Bombay GLS is the premier meeting place for the India's Logistics and Supply Chain Sector. In its 4 edition, it brings together 5000 professionals involved in the handling, moving and transportation of goods throughout the supply chain, with proving as an ideal place to meet new contacts and win new business.

To know more visit www.globallogisticsshow.com

Centre, Singapore Aviation Festival Asia aims to be the gateway for the attendees to the world’s fastest-growing aviation market.

It provides the attendees with the opportunity to meet senior executives in the Asian aviation industry and focuses on the ancillary strategies, price management & distribution for the modern airline along with AI, data-driven technology and the future of aviation.

To know more visit www.terrapinn.com

EVENT: IATA World Cargo Symposium 2020 ORGANISED BY: International Air Transport

Association (IATA)

DATE: March 10 - 12, 2020 WHERE: Hilton Istanbul Bomonti Hotel &

Conference Center, Istanbul, Turkey IATA’s 14th World Cargo Symposium will continue to move the industry from talk to action with this edition. WCS 2020 will feature plenary sessions, specialized tracks, workshops and executive summits, tackling aspects related to Technology & Innovation, Security & Customs, Cargo Operations and Sustainability.

To know more visit www.iata.org

EVENT: Breakbulk Asia ORGANISED BY: Hyve Group PLC DATE: March 18 - 19, 2020 WHERE: Shanghai World Expo

Exhibition & Convention Center, Shanghai, China Leading conference and exhibition for project cargo and breakbulk professionals offering an unparalleled opportunity to connect with the industrial project supply chain – shippers and service providers, local and international – who are involved in today’s megaprojects that revolve around China's One Belt, One Road program.

To know more visit www.asia.breakbulk.com

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EVENT: 10th India Warehousing Show ORGANISED BY: Reed Manch

Exhibitions DATE: June 18 – 20, 2020 WHERE: Pragati Maidan, New Delhi Bringing the future at your doorsteps, the India Warehousing Show brings the industry in its full dimension, gathering all facets of logistics, warehouse infrastructure, material handling, storage, automation and supply chain. The show acts as marketplace and driver of innovation and success, creating an ideal platform, positioning your company to the forefront of success.

To know more visit www.indiawarehousingshow.com

EVENT: Air Cargo Forum 2020 ORGANISED BY: The International Air Cargo

Association (TIACA) and Messe München DATE: November 10 - 12, 2020 WHERE: Miami Beach Convention Center, Miami, Florida, USA The International Air Cargo Association (TIACA) is the only organisation representing all segments of the air freight supply chain. TIACA’s Air Cargo Forum (ACF) is a biennial event bringing together thousands of airfreight decision makers and supply chain operators from across the globe.

To know more visit www.tiaca.org

24 september 2020 pUNe Speakers at AutoConneCt 2020

ashwin patil Kia Motors

aMlan Bose Ford Motors

senthil KuMar d ashoK leyland

Venugopal Batchu Maruti

Supporting ASSociAtionS

pallavi: +91 8700809249 pallavi@surecommedia.in | SMiTi: +91 9711383365 smiti@surecommedia.com SponSorShipS ajeeT: +91 9810962016 ajeet@surecommedia.com DeleGaTe reGiSTraTion rahul: +91 7011609817 rahul@surecommedia.com | akaSh: +91 8383061964 sales@surecommedia.com Speaker

APPOINTMENTS Arvind Singh takes charge as Airports Authority of India Chairman

IAS officer Arvind Singh has taken charge as the Chairman of Airports Authority of India.

The 1988-batch IAS officer of Maharashtra cadre will replace Anuj Aggarwal, who has been with the additional charge of AAI Chairman. Prior to this appointment, Singh was the additional Chief Secretary (Energy) of Maharashtra government. He also worked as Chairman and Managing Director of Maharashtra State Power Generation Company Ltd and Maharashtra State Electricity Transmission Company Ltd.

Burak Kart appointed CEO of Celebi Delhi Cargo Terminal

Celebi Aviation Holding has elevated Burak Kurt to the post of CEO at Celebi Delhi Cargo Terminal Management India.

Kurt, who benefitted from the ‘Promote Within’ culture of deploying talent from within the company, took up with position in Delhi on November 4.

With 18 years of experience in cargo and ground handling, Kart began his career at Celebi Aviation in 2001 and was working as the Regional Director, Istanbul at Celebi Hava Servisi since 2016.

FIATA names Stéphane Graber its new Director General

The International Federation of Freight Forwarders Associations (FIATA) has announced the appointment of Dr Stéphane Graber as its new Director General who will take the role on January 01, 2020 in its new headquarters in Geneva.

Stéphane brings to FIATA a strong background in information technology, training and development and finance. As a previous Secretary General in a not for profit non-governmental body involved in commodity trading and shipping based in Geneva, Stéphane has that in-depth understanding of international logistics and the movement of goods across borders.

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ACSA appoints Fundi Sithebe as new acting CEO

The Board of Airports Company South Africa (ACSA) has appointed Fundi Sithebe as acting Chief Executive Officer (CEO), with effect from November 1.

However, ACSA said that the process to recruit and appoint a permanent CEO is underway.

Sithebe joined ACSA in March 2015 and was subsequently appointed to the role of COO in December 2017. Sithebe wealth of experience also includes several years of consulting at companies such as Deloitte and First Rand Africa with extensive skills in strategy formulation, research and analysis, project management and due diligence reviews.

Rudolf Steiner is the new Senior VP- Cargo for EMEA at Swissport

Swissport has appointed Rudolf Steiner as Senior Vice President of Cargo for Europe, Middle East & Africa (EMEA) with effect from November 1. In his new role, Steiner will coordinate and manage the EMEA Cargo business jointly with the regional and local management.

Steiner comes to the new role with over 20 years of experience in the air cargo business. Steiner, prior to this role, was senior vice president and Head of Commercial EMEA at Swissport.

Karthikeyan Hariharan joins Dubai-based RSA Global as COO

UAE-based digital freight forwarding and supply chain management company RSA Global has appointed Karthikeyan Hariharan to the position of COO. In his new role, Karthikeyan will lead and streamline freight and logistics operations.

Karthikeyan has extensive experience in the finance sector as well as in the freight forwarding and logistics industry obtained over 16 years.

Stéphane Cassagne named Executive VP of Distribution & Express business at Geodis

Geodis has named Stéphane Cassagne as the Executive Vice President of the Distribution & Express line of business at Geodis.

He is also a member of the Group’s Management Committee.

Stéphane Cassagne began his career in the Legal Affairs Department at Calberson in 1993. In 2007, he took responsibility for the Group’s real estate, insurance and customs portfolios. Since 2013, he has served as Group Corporate Secretary.

Michael Pearson to lead B&H Worldwide’s American growth

B&H Worldwide has appointed Michael Pearson to the newly created position of General Manager Americas to further strengthen its international senior management team. In his new role, Pearson will offer additional support across the B&H Worldwide US operation and he will work closely with the company’s Miami office whose team will report directly to him.

Pearson comes with market knowledge and skills in time-critical logistics, and leadership which he has developed throughout his career.

Total Container Rail volumes grew 2% YoY (YTD: +2.4% YoY)

during Oct-19 due to 6% YoY jump in Exim volumes while Domestic segment volumes dipped by 14% YoY (sharpest fall since July-16).

The container rail for 2QFY20 (July-Sept) remained flattish YoY/2% QoQ.

Container Rail growth at 2% YoY in October-19

Lead distance in Exim segment stood at 757km,

-6% YoY /-2% MoM; while in Domestic, lead distance at 1,232km, -3% YoY / +5% MoM after -9% fall in September MoM. Overall Rail lead distance stood at 562km vs 580km YoY, down 3% YoY.

Overall Rail cargo volumes, including other commodities slumped -8% YoY in Oct-19 (YTD: -2% YoY) led

by Foodgrains: -14%; Coal: -13%; Cement: -10% YoY, Other cargo: -13% YoY; RM for Steel: -8% YoY; POL -2% YoY while Fertiliser grew |7% YoY followed by Container/steel: +2% YoY

Total Cargo volumes at Major Ports (Inc other commodities) de-grew 5.4% YoY in October-19 (vs. -0.5%

YoY in Aug-19) led by Coal reported a decline of 36% YoY. Fertiliser reported 105% YoY growth followed by 45% YoY jump in other cargo. POL, Iron Ore and container YoY growth remained muted.

On YTD basis, overall cargo remained flat YoY to 0.4% YoY.

Among major ports, highest cargo growth on YoY basis was registered at Vizag (8%) followed by

Cochin (5%) and Deendayal (2%) while New Mangalore (-33%), Mormugao (-23%), Kamarajar (-22%) and Chennai (-10%) reported double digit decline while ports like Kolkata/Paradip/ V.O.Chidambaranar/Mumbai reported single digit decline. JNPT too reported 5% decline.

Major Ports Container volumes declined -12% YoY for October-19

Aggregate cargo volumes (at major ports) grew +1% YoY in October-19

Container volumes for Major Ports (in TEU terms) declined by 12.3% YoY in October-19 (vs ~-4% YoY in Sep-19).

Portwise, volume growth stood at: JNPT: -23% YoY for

Oct-19; Ports like Mormugao/ Mumbai/ New Mangalore/Chennai Port declined by -50%/-33%/-15%-/-12% YoY while Deendayal / Kolkata reported 66%/10% YoY growth. Vizag, V.O.Chidambaranar and Cochin grew 3-4% YoY.

Amongst all ports, New Mangalore/V O Chidambaranar/Vizag/ Cochin have grown by 10-13% YTD basis. Smaller ports like Ennore and Deendayal

have shown a sharp improvement YoY.

Tonnage-wise, container cargo growth at Major ports

was flat YoY.

Credits: DART Research by Dolat Capital

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