Cargo Connect February 2019

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VOL X ISSUE III february 2019 `20

08 Indian Air Cargo Industry Embracing Digital Transformation

Indian Pharma exports on a good growth path Harnessing the potential of Inland Waterways

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Contents

Volume X • Issue III • february 2019

Publisher Smiti Suri Special Correspondent Upamanyu Borah Principal Correspondent Ritika Arora Bhola Senior Reporter Smita Kumar

08

18 COVER STORY

The State Of Logistics Outsourcing

SPECIAL FEATURE

Indian Air Cargo Industry Embracing Digital Transformation

FEATURE

INTERVIEW Infrastructure

Accounts & Administration Nitish Kumar

Sandeep Chadha

Sr Designer & Visualiser Shaique Ahmad

CEO, Allcargo Logistics and Industrial Parks ...........................................62

Sanjay Khanna

Designer & Visualiser Mayank Bhatnagar

CEO, Ras Al Khaimah International Airport .....64

REPORT ............................................56-59 guest column ................................66-68 Shipper Speaks .............................70-71 NEWS ...............................................72-81 APPOINTMENTS .....................................82 EVENTS ............................................83-84 PROFILE .................................................87 UPCOMING EVENTS ................................85

Centre formulating a network of 35 MultiModal Logistics Parks ............................54

Asst Manager Marketing Mehuli Choudhury

Viacheslav Valentik

FRONTLINE ..............................................6 STARTUPS ..............................................55

Harnessing the potential of Inland Waterways ..............................................48

Marketing Manager Rahul Arora

Marketing Executive Akash Gupta CEO & Director, JSC RZD Logistics ..................60

Indian Pharma exports on a good growth path ............................................38

Director Ajeet Kumar

PEOPLECONNECT Mahesh Thakkar

Chairman & MD, Hermes Travel & Cargo Pvt Ltd .............86

All materials printed in this publication is the sole property of CargoConnect All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same.

CargoConnect is printed, published and owned 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 “The bridge will open gates for economic growth in the region and bring an economic revolution.

Eastern and North Eastern India have great aptitude to take the nation to new heights. The government is now keen to develop inland waterways on the Brahmaputra river by spending thousands of crore.”

Prime Minister Narendra Modi said while inaugurating Bogibeel Bridge, India’s longest rail-road bridge in Assam

Seaplanes will fly on 18 air routes among the 235 routes under the government’s ambitious regional connectivity scheme that will also connect 16 unserved airports and six water aerodromes. As many as 69.30 lakh seats will be added on an annual basis across the 235 routes.

More than 1 lakh seats would be through seaplanes.”

Civil Aviation Minister Suresh Prabhu

shared while announcing the awards of the third round of UDAN

“With National Rail & Transport Institute, Vadodara, India gets its 1st ever Rail & Transport-dedicated University, that is set to transform our approach to logistics, encourage innovation in the field and create wide-scale employment in the transportation sector.

Railway Minister PIYUSH GOYAL

tweeted on the inauguration of India’s First Rail and Transportation University at Vadodara

The focus in 2019 will be to build a network of “world-class expressways”, after delivering of country’s first express highway by the government - Eastern Peripheral Expressway (EPE), built in a record time of 500 days.”

Road Transport and Highways Minister Nitin Gadkari asserted

6

CargoConnect - FEBRUARY 2019

Demand for logistics infrastructure is booming in India due to the introduction of the Goods and Services Tax (GST) that has revolutionised how goods across the country are delivered. This has also been helped by the Government of India according infrastructure status to warehousing projects.

- showed the Emerging Trends in Real Estate Asia Pacific 2019, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC.

While our outlook is for 3.7 per cent demand growth in 2019, downside risks are mounting. Trade tensions are cause for great concern. We need governments to focus on enabling growth through trade, not barricading their borders through punitive tariffs.

- IATA’s latest figures show that cargo traffic was flat in November’18 compared with a year earlier, following 31 consecutive months of year-on-year increases.

special feature

Cargo Industry Embracing Digital

Transformation “Digitisation is The Next Big Thing in the air cargo industry,� avow experts. According to them, digitisation is having an incredible impact on the supply chain operations across the globe and is here to stay forever. Keeping in mind its futuristic approach, the industry leaders/freight forwarders are taking significant steps towards digitisation in order to simplify and streamline the supply chain operations right from the origin to the final destination. Ritika Arora Bhola, with the help of experts, explores the latest trends, its potential benefits, the government’s take on it and if the air freight industry is accepting digitisation fast enough.

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CargoConnect - FEBRUARY 2019

special feature

O

f late, digitisation – its potential benefits and futuristic approach have literally taken the global business landscape by storm and the air cargo industry is no exception. Big business houses and industries across the globe have embraced digitisation and invested whopping amounts in infrastructure and technologies.

Indian air cargo industry is nowhere behind. The industry has not only set a benchmark globally by practising worldclass standards of working and delivering excellence, but also by investing huge amounts in new technologies. Be it Artificial Intelligence (AI), Internet of Things (IoT), Blockchain Technology, Robotics and Automation, Cloud Computing, etc. the Indian Air Cargo Industry has whole-heartedly embraced it all. Biggies like Celebi Aviation, Agility, DHL Express, FedEx, and several E-commerce giants like Amazon and Flipkart have already started employing world-class technologies and systems.

If we go to the past, may be a decade ago, the Indian Air Cargo Industry was happily transporting cargo by sustaining smooth and efficient supply chain and delivering quality services to the customers. The industry had believed that it had mastered the art of transportation, until a wave of technology roiled and disrupted the well-set standards, thereby bringing in several positive changes in the industry.

With the logistics industry achieving industry status, the implementation of GST, growth of E-commerce industry, foreign players taking keen interest in the Indian market, increasing exposure and wide reach, increasing exports – the Indian air cargo industry has come a long way and now with digitisation, the Indian freight forwarders are predicting the graph going in the upward direction in the coming years.

Digitisation: Potential Benefits Observing the above, Bharat Thakkar, Joint Managing Director, Zeus Air Services Pvt Ltd jots down few benefits which digitisation is expected to bring in the coming years.

1. Speed: Air Freight is usually the fastest way to get goods delivered to their destination.

2. Reliability: Despite occasional weather delays, air freight has the lowest possibility of impediment.

3. Cost: Air freight is often more expensive than any other mode of transportation.

4. Supply Chain: Air freight can be expensive but the benefits of digitisation with the supply chain balance the cost, lower

FEBRUARY 2019 - CargoConnect

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special feature inventory carrying costs and increase the opportunity to capture the market share.

5. Digitisation is the solution to improve efficiency.

6. Can eliminate ‘ where is my freight?’ calls.

7. Shippers want greater reliability and predictability, not just speed.

K S Kunwar, Director General, Air Cargo Forum India (ACFI), on a positive note, also affirms that digitisation in India has an excellent scope and is picking up momentum, particularly during the period of the present government due to its proactive policy on Digital India.

“Digitisation will basically bring positive changes in the air cargo logistic industry mainly on the following areas,” says Kunwar. a) To bring total paperless processing of EXIM trade transactions that will save falling of lakhs of trees and storage problems of paper documents. b) Faster payment process with the online payment of all the logistics charges, customs duty etc. c) Faster processing of EXIM trade through online EDI processing will improve the prevailing high dwell time of import and export cargo at the gateway airports of the country. d) Improve the level of ease of doing business in the country significantly and finally improve the country’s image among the countries of the world.”

On the other hand, Praveen Vashistha, Director, Gxpress, (an online portal which enables the Indian exporters to directly sell their products on Amazon and eBay) articulates, “The air cargo logistics industry has totally been converted through digitisation. There was a time when for any query related to air

10 CargoConnect - FEBRUARY 2019

Ram Menen Independent Director, Expofreight “Most governments are very supportive of digitisation and are contributing to make their parts efficient by making their boarder control process and regulatory reporting and clearance processes all digital. This ensures the facilitation of trade and services and remains a growth industry.”

cargo, the logistics providers used to call the airlines company regarding the services, space availability and charges, but now there are software available to handle the queries and ensure the smooth functioning of the service delivery. Destination pre-alert, destination covering agents etc. are added facilities now.

Earlier, the documents related to the shipment of the container, were sent via courier but now the documents can be scanned, digitally signed and surrendered at the destination digitally. Thus, the possible errors of manual processing are ruled out.

The complete digitised process makes the services faster, reliable and efficient. The future of the air cargo logistics is digitisation and automation.”

The expert claims that there are literally no disadvantages of digitisation in the air cargo logistics industry. “The air cargo logistics industry has worked in a manual

format for a long time and the manual workforce does involve errors to some extent. As a high-risk sensitive industry, the air cargo logistics has a little scope of errors. Any error in packaging, destination selection or storage can result in the loss of money.

Thus, to cover up the losses, manual jobs must be restricted to some extent and maximum incorporation of digitisation is needed. The digitisation of all the processes in the air cargo logistics, will result in maximum benefits for the service providers and quality customer experience as well,” he adds.

Is air freight industry adopting digitisation fast enough?

While there are many examples that suggest that the air cargo sector is increasingly focusing on the digital innovation, the prime concern remains whether this is an industrywide occurrence.

Though many logistics companies have already digitised their operations, it is being observed that few stakeholders are still apprehensive of a transition to newage IT solutions from their own legacy IT systems mainly because of the complexity of the systems involved and long migration process, coupled with wrong perception that it will bring relatively low benefits due to the interdependency of the carrier on the various other players in the cargo eco-system.

Citing the benefits of digitisation, a latest report by McKinsey estimates that agile processes and digital systems, which ensure data transparency, can slash response time by 90 per cent for the air cargo. This will not only increase the operational efficiency, but also have ripple effects on cost savings, resource management and enhanced capabilities, thereby boosting the customer satisfaction.

special feature The report further suggests, “Full digitisation of the customer experience is also the first step towards a leaner supplier chain; by eliminating intermediaries, the shipper interacts directly with the carrier on a digital platform.

Traditional freight forwarders stand to lose significant control over the supply chain on this account. This may be a core reason for the frictions faced by this sector as it attempts to modernise.”

Another example is the e-AWB initiative, which was supposed to build significant momentum for technology adoption (and save 7,800 tons of paper in the bargain), has just hit about the halfway mark on a global scale according to IATA – well behind schedule. As per the experts, to be fair, the blame isn’t necessarily on the carriers (which handle barely around 1/3 of the entire supply chain) but in the absence of 100 per cent compliance across the supply chain, the airlines cannot claim or take advantage of the efficiencies either.

Observing the same, Ram Menen, Independent Director, Expofreight reiterates, “The reason for this is the lack of digitisation in logistics which is a very critical element of the supply chain. If a segment is not efficient, then the whole chain becomes inefficient. Lack of digitisation initiatives within forwarding and airlines, is a hurdle and slows progress.”

Menen continues, “The traditional air cargo industry has been very slow to embrace digitisation. It is nowhere close to where it should be. It has not even got to the targets of the basics required for digitisation: the e-Freight initiative has just touched about 56 per cent penetration whereas the initial target was to go with full digitised e-AWB by the end of 2015. Unless

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Bharat Thakkar Joint Managing Director, Zeus Air Services Pvt Ltd “Our government is in a fast mode and encouraging the industry to get going with the pace than being left behind.

Digitisation will elliminate waste and non-value added costs. Technology can improve trust and transparency between shipper, intermediary and the airline.”

the first part is got right, total digitisation remains a distant dream.

E-tailers are driving the growth in the air cargo industry and these are the folks who operate in a truly digitised world. To participate in the e-commerce industry, digitisation is a must. Digitisation ensures seamless interface across the whole supply chain, ensuring the availability of all the data anytime, anywhere and at any place, which helps in optimising all the processes to bring in the efficiency of speed and cost. Digitisation also brings in transparency that’s badly needed in supply chain operations. The future of the air cargo business will be the market place like all the trade and commerce fields. Digitisation will allow the players to participate in the digital market place and open up more channels for sales.”

Meanwhile, Thakkar also highlights few complications in adopting digitisation fully:

Pratul Shekhar Director- Air Product – India Sub continent, DSV “We have seen a lot of air volume demand growth in 2018, due to E-commerce trade and the same is expected in 2019. A lot of logistics companies are making alliances with software companies so that both can predict and control the flow during high and low seasons in order to allocate their resources accordingly.”

1. It increases costs.

2. Eliminates waste and non-value added costs.

3. Only 51 per cent of supply chain is using e-AWB. 4. Will we go the way of the travel agent?

5. Role of the freight forwarder is critical.

6. Shippers don’t have the expertise or staff to shop rates, select the route, arrange permits, organise security, clear customs, arrange delivery and oversee the move end to end.

7. Technology can improve trust and transparency between shipper, intermediary and the airline.

8. Shippers are looking for an integrated single window service.

In the meantime, Vashistha intervenes and says that the logistics industry is unique in its own ways, as it generates employment for the illiterate people as well. “Those

special feature people cannot understand and work in sync the digital processing, but the process is gradually changing. GPS tracking system has come up as a solution to this problem in a number of ways, because the drivers are much familiar with the mobile technology.

Apart from this, vocational training and literacy programmes are conducted to train such employees.

Although the workforce employed in the metros is rapidly taking up the digital process, yet the rural areas are still facing a lot of challenges with no access to the internet in many parts of India. The existing technological gaps need to be filled first in order to fully capitalise the potential benefits of digitisation.”

Kunwar also feels that at present, there are few supply chain professionals who are not capitalising the potentials of digitisation. He complains, “I will blame the government authorities, mainly the regulators who are yet to make up their mind for the implementation of digitisation on a 100 per cent basis. The Government of India has brought IT Act 2000, eighteen years back to give legal sanctity to the digitisation process and documentation, but the implementation of EDI with totally paperless is yet to happen.

The government has to place trade friendly systems and processes and with adequate hardware and software, for the uninterrupted implementation of digitisation/EDI in its true sense.”

Government’s take on Digitisation The Indian government has always been supportive of the air cargo industry and has taken various initiatives for its development. The Indian air cargo industry is going through a revolution with so much development happening, leading to increase in exports. As per the information

14 CargoConnect - FEBRUARY 2019

Praveen Vashistha Director, Gxpress “The air cargo logistics industry has totally been converted through digitisation. To cover up the losses, manual jobs must be restricted to some extent and maximum incorporation of digitisation is needed.

The digitisation of all the processes in the air cargo logistics, will result in maximum benefits for the service providers and quality customer experience as well.”

shared by ACFI, the Indian economy is one of the fastest growing economies of the world and by 2030, the Indian economy is forecast to be the fourth largest in the world. The international trade policy of the present government has targeted three times growth in the country’s international trade by 2030 at worth $900 Billion. This will create exceptional potential for the growth in the aviation sector too, as 35 per cent of this target ($315 billion worth value) international trade will move by air.

Accordingly, the proportionate development/improvements should take place in the policies, processes and infrastructure by all the segments of the air cargo industry, including the government agencies.

Menen reiterates, “Most governments are very supportive of digitisation and

are contributing to make their parts efficient by making their boarder control process and regulatory reporting and clearance processes all digital. This ensures the facilitation of trade and services and remains a growth industry. These governments have also realised the only way handle the huge growth volumes can be handled, is to digitise otherwise the cost of manpower that is required, as well as the time taken to process the shipments, will become prohibitive as well as slow the supply chain operations drastically.”

Meanwhile, Vashistha feels that the custom clearance processes are automated and the Electronic Data Interchange (EDI) facilitates the smooth functioning and ease of access for the government and air cargo logistics players.

He adds, “Manual shipping bills, manual settlement of the incentives, manual settlement of bank realisation certificates and most other manual processes are already been converted in one single EDI system. The government has established the online mechanism in access to shipping bills.”

Agreeing with both, Thakkar also says that our government is in a fast mode and encouraging the industry to get going with the pace than being left behind.

Digitisation is here to stay Air cargo experts believe, digitisation is having an incredible impact on the supply chains and operations across the globe and it is here to stay forever. “The impact of digitisation can be seen in the way the e-commerce industry operates,” stresses Menen adding, “Look at Amazon.com, Alibaba and other e-tailers. Their success is based on moving the information and physical goods in sync with total visibility to the customer. In

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special feature one click, when one buys an item, it triggers the whole process backend which is only possible with digitisation. Traditional operators, both forwarders and air carriers, have to take a leaf out the integrators and e-tailers book and work on their systems and processes in order to be able to play a role in the e-commerce market, as this segment is likely to continue to grow in high twenties, in percentage terms year on year, while the traditional cargo growth will be in low single digit in the years to come.”

On a positive note, Vashistha articulates that the air cargo industry is a growing industry with a lot of scope for the development and advancements, as opposed to the major logistics involving road and ocean cargo logistics, the air cargo requires minimum transit time, quick processing and turnaround time.

He asserts, “The incorporation of advanced technology is going to increase the productivity, reduce cost, save time and improve the service quality of the industry.

I see a really good future of the air cargo industry because this exponentially growing industry is adopting newer technologies like Artificial Intelligence, block chains, warehouse management systems etc. The industry is focusing on the automation and digitisation of the service process for its bright future.”

As per the reports, the future of the air cargo logistics industry is very bright as the country’s foreign trade is forecast to grow three times as per the indications given by the government in its foreign trade policy 2015-20.

The share of the movement of the international trade by air in terms of value comes to 35 per cent of the total international trade, transported by all the modes of transportation.

16 CargoConnect - FEBRUARY 2019

However, in order to sustain this growth taking the benefits/impacts of digitisation, the following areas need special attention by one and all, including the Government, as suggested by Kunwar.

Sanjiv Edward Chief Commercial Officer, DIAL “In this environment of unconstrained capacity, the traditional approach to yield management will not work. This will require airlines to provide their alliance partners with transparent, real-time access to available capacity and predictive analytics to determine best routes based on speed, reliability and cost.”

K S Kunwar Director General, Air Cargo Forum India (ACFI) “Digitisation in India has an excellent scope and is picking up momentum, particularly during the period of the present government due to its proactive policy on Digital India. It will basically bring positive changes in the air cargo logistic industry.”

The success of the implementation of Customs Single Window System, will depend when all the other regulatory authorities like Drug Controller, FSSAI, WCCB, Plant and Animal Quarantine departments etc. are fully geared up in terms of the operational skills and availability of their respective systems-hardware and software, placed at the cargo terminals for issuing the NOC online on 24x7 basis, so as to achieve the total paperless concept.

The frequent breakdowns/ slowdowns of the Customs EDI system, is another cause of concerns of the trade and industry as the difficulties are being faced by all the stakeholders of the air cargo trade in respect of the delay in cargo clearance, on the account of disruption in clearance process due to frequent breakdowns/ failures of the Customs EDI System. This is causing high dwell time of cargo, loss of business to trade and airlines etc. Therefore, the Government must also ensure that the online Customs EDI system, centralised server etc. must be robust with full redundancy backup system.

All the regulatory authorities and trade must work on 24x7 basis to take the full benefit of the implementation of digitisation/ online EDI processes.

With the implementation of 100 per cent digitisation to its true sense, the present high dwell time of import and export cargo shall come down to 24 hours, as targeted by the Govt and shall improve the level of ease of doing business in India significantly. CC

cover story

The State Of

Logistics

Outsourcing 18 CargoConnect - FEBRUARY 2019

cover story

A reliable and robust logistics sector is one of the primary requirements for the development of any economy. Also, industries need to adopt logistics holistically and allow efficient integration within their systems and processes. In India, the size of the logistics sector is approximately $160 billion currently and is expected to touch $215 billion by the year 2020, according to the Economic Survey 2018. While these numbers indicate a sizeable logistics sector in India, the country still has a long way to go. India has only scratched the surface concerning taking best advantage of logistics.

Upamanyu Borah

FEBRUARY 2019 - CargoConnect

19

cover story

T

hird Party Logistics (3PL) market is expected to witness profitable growth prospects, pertaining to the fact that the number of outsourcing activities undertaken by companies to reduce costs from supply chain is prominently increasing. 3PL companies work with shippers to transport their commodities to numerous locations in ways that are sufficiently cost-effective and suitable for the product. As per reliable statistics of 3PL industry, more than 95 per cent of the Fortune 100 companies and more than 80 per cent of the Fortune 500 companies use dedicated contract carriage, warehousing & distribution, domestic & international transportation management, and software services, which form the crux of the 3PL market service landscape. With more and more companies focusing on core business competencies and preferring to outsource their logistics operations, 3PL market is experiencing a y-o-y growth rate of 4.4 per cent over 20152022.

under the GST regime across India. E-way bill systems reduce the idle time spent at check posts for tracking and inspection, eventually, making tax compliance easier.

In India, E-commerce is the only sector which has been able to take its full advantage by leveraging 3PL. Companies in the E-commerce sector have been able to focus on their core business while their logistics operations were handled by companies that specialises in handling and managing logistics.

Other industries can also replicate the model which the E-commerce sector has adopted to increase efficiency by opting for 3PL logistics. Third Party Logistics allows outsourcing of not only contracting activity, but also monitoring and control of individual movements. 3PL solutions can allow a better reach across regions.

Technavio analysts forecast the 3PL market in India to grow at a CAGR of over 8 per cent during the forecast period.

3PL usage reflects global market trends 3PL industry has firmly established its footprints across the globe. The emergence of big data and the increasing demand for logistics outsourcing from the automotive and life science sectors is predicted to impel Europe 3PL market, which is slated to cross USD 210 billion by 2022, with a CAGR estimation of 2.5 per cent over 2016-2022. Renowned 3PL providers specialise in transportation, cross-docking, warehousing, inventory management, freight forwarding, operation integration, and packaging.

Overview of 3PL market in India Technavio’s 3PL market in India research report has identified the introduction of tax reforms and initiatives for third-party logistics in India as one of the key factors pushing the market to register revenue of more than USD 31 billion by 2022. With the introduction of various transformative reforms and initiatives such as GST, companies in the logistics sector have been able to increase their operational efficiency and optimise the supply chain operations in the recent years. The implementation of GST has helped in the reduction of price differences between states and make tax liabilities uniform across India.

Based on the services provided, 3PL industry companies can be Furthermore, the Government of India granted infrastructure categorised within the following: status to the logistics sector by including it in the Harmonised Master List of Infrastructure Sub-Sectors. Consequently, Standard services owing to the continuously improving government reforms and Companies that provide solely packaging and warehousing initiatives by the Indian government in the logistics sector, the and distribution services fall under this category. Only new third-party logistics market in India is expected to witness entrants are known to provide these services, to establish their accelerating demand position in global 3PL during the predicted market. Many other INCREMENTAL The year-over-year growth rate The market will be ACCELERATING GROWTH period. providers are known for 2018 is estimated at growing at a CAGR of over $10.25 bn to provide other Logistics companies value-added services. 2017 2022 have access to the The market is HIGHLY FRAGMENTED with quite most economical Warehousing and One of the KEY DRIVERS for this a few players who occupy the market share market will be the introduction of of the growth loans under distribution is tax reforms and initiatives for will come from favourable terms; one of the prime TRANSPORTATION 3PL in India SERVICES avail infrastructure services under the lending at easier terms service spectrum with enhanced limits, of 3PL industry.

10,000+ reports covering niche topics THIRD-PARTY LOGISTICS MARKET IN INDIA and other benefits. In Warehousing & TRANSPORTATION AND LOGISTICS 2018-2022 April 2018, the E-way distribution services bill was introduced held more than 22 per

8%

7.90%

49%

20 CargoConnect - FEBRUARY 2019

cover story “Today, companies are increasingly making use of data analytics and that’s a popular trend. Companies are now able to learn how to use and organise insights from data. Above that, robotics and automation is a growing trend, a lot of manual work goes into it.”

“We can have the best system, best processes and best people but if there is no trust, the entire supply chain breaks down. Blockchain Technology will help build the trust as every entity records his/her data which cannot be altered.”

Vishal Sharma

Sandeep Chatterjee

CEO, Schenker India Pvt Ltd, (India and Indian Sub Continent)

cent of the overall 3PL market in 2014 and are anticipated to grow substantially over the next five years. These services are usually provided on long-term contracts and find extensive applications in end-use industries such as pharmaceuticals and food refrigeration.

Developed services Many companies provide services such as cross docking, specialised packaging, and tracking and tracing, apart from the basic services. 3PL market players providing developed value-added services, usually try to upgrade their service portfolio and enhance their business position.

Customised Services Customised services are offered by 3PL industry participants who take over the complete logistics of the firm. Of late, most companies have been offering high profile customised services.

of software services, enhancing their distribution channel networks, and providing high quality services to clients.

Given below are some of the major trends to watch out for in 3PL industry:

Blockchain for Supply Chain The increased desire for visibility within the supply chain is driving increased interest in blockchain technology, which breaks each movement down into a block and documents transactions every time a shipment changes hands. Linking the 3PL industry has firmly blocks together creates a record of the established its footprints parties involved in the process and across the globe. The provides specific details associated emergence of big data with each movement, which all the and the increasing parties can access. The technology demand for logistics improves security because each outsourcing from transaction is validated and recorded the automotive and by an independent third party. life science sectors is

predicted to impel Europe 3PL market, which is slated to cross USD 210 billion by 2022, with a CAGR estimation of 2.5 per cent over 2016-2022.

Developed customisation services Top behemoths of 3PL market are known to provide these services.

Here’s where the 3PL provider is officially integrated with the firm, and it takes over the whole logistics operation.

3PL market landscape has undergone a number of transformations over the last few years, which will provide lucrative avenues for 3PL providers to enhance their service portfolio. Leading providers have changed their growth strategies and are increasingly turning toward the deployment

22 CargoConnect - FEBRUARY 2019

Sr Manager, Deloitte

By using blockchain, 3PLs and shippers could drive additional value from the supply chain. Data generated through blockchain technology could provide more opportunity to analyse information, which is becoming more important in today’s data-driven supply chain. Because blockchain closely tracks and transmits timely data and creates transparency upstream and downstream, retailers can closely monitor inventory levels, which in turn could lead to dynamic supply chains. Blockchain could create challenges, including the development and governance of blockchain data sharing. Because blockchain creates a centralised, accessible ledger, there needs to be interoperability across private and public blockchains, which will require

cover story “We’ve long understood the challenges facing the supply chain and logistics industry and quickly recognised the opportunity for blockchain to potentially provide massive savings when used broadly across the ocean shipping industry ecosystem.”

“Whether it is the development of new tools which can benefit the entire supply chain or internal measures to boost performance, different companies are looking at continued ways to evaluate how digital offerings can promote positive change.”

Bridget van Kralingen

Ashwin Bhat

Senior Vice President, Industry Platforms, IBM

standards and agreements. There are also expenses associated with blockchain, and shippers will need to derive clear value from the technology. Currently, there doesn’t appear to be an easily defined value proposition for all products, requiring shippers to spend time determining the benefit for their products and business environment. Both 3PLs and shippers are in the beginning states of examining or implementing blockchain technology, and because of its nascent stage, the blockchain ecosystem needs further development. However, interest is increasing, particularly among logistics providers and its use could create a competitive advantage.

According to Vishal Sharma, CEO, Schenker India Pvt Ltd, (India and Indian Sub Continent), “When companies will collaborate with each other and other parties in the ecosystem, they will get familiar with the Blockchain technology, which will be a game changer for the logistics industry because this technology is for the parties between whom there’s a lack of trust but are trying to deal with each other.”

He continues, “3PLs are investing in new technologies, which allow them to provide more strategic and innovative services.

This has led to greater logistics effectiveness and improved consumer experience.”

Benefits of Blockchain Because blockchain would track and verify movements throughout the production, shipping and delivery phases of a supply chain, it would aim to eliminate many of the risks and concerns involved in the process of moving products. Within each movement or block, blockchain would identify the parties involved, price, date, location, quality,

24 CargoConnect - FEBRUARY 2019

Head of Cargo, Swiss WorldCargo

state of the product, and any other information relevant to managing shipments and the products on the shipments. The public availability of the ledger makes it possible to trace back every product to the very origin of the raw material used. Important data can be updated in real time, which could eliminate the need for reconciliation with each other’s internal records and give each party within the supply chain network more detailed visibility of movements and the product’s status. What’s more, the decentralised structure of the ledger makes it impossible for any one party to hold ownership or manipulate the data. Because no single company has its total control, it increases accountability and the security of data that is transmitted. The information shared would increase visibility and minimise the potential for human error. It could also dramatically reduce time delays, eliminate added costs, minimise human error and decrease corruption. The increased accuracy and accountability of the data managed within blockchain could provide more opportunity to drive analytics, which is becoming more important in today’s data-driven supply chain.

“In an eco-system where there is more collaboration, there are more entities. And outsourcing comes at a cost in terms of coordination and 3PL-SHIPPER PLANNING FRAMEWORK control. And if we have Planning Forecasting Execution to control the supply chain, we need to have 30 Weeks 22 15 5 1 0 -1 -4 real-time data. And, the need of the hour -Contracts is data which is not -Shipment Planning -Reconfirm Pickup -Budgets or Delivery -Transportation Planning centrally controlled, as -Advance planning -Follow-On Details -Administrative – Info this will help build the trust issues. We can -Shipment Visibility -Invoicing -Pickup/Delivery Scheduling -Audit/Payment have the best system, -Other Logistical Details -Performance Reports best processes and best people but if there is no Forecast Volume Shipment Planning trust, the entire supply Transportation/Inventory chain breaks down,” says Actual Pickup or Delivery Confirmation Sandeep Chatterjee, Sr Initiate Invoicing Manager, Deloitte.

People. Partnership. Performance...

Infrastructure & Advantages Custom bonded warehouse Import & Export hub Buffer yard & factory stuff Cold storage & cold chain

Entrance

Storage area 28,000 sqmt Direct access to the Naational Highway 4B leading to the JNPT port Ample space for parking of 10000 cargo trucks 24X7 CCTV monitoring CFS owned equipment: 4 top lifters, 80 trailers, 30 forklifts, 2 empty handles, 1 crane Distance from JNCH: 11 Kms

Covered Warehousing Facility

Distance from Belapur station: 7 Kms Zero toll, congestion & carting charges in the CFS Zero congestion on the approach road Carting & stuffing dine in covered area Ideal location for Exporters/CHA's/Freight Forwarders

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Covered Carting & Stuffing Area

15-23, National Highway 4B, Panvel-JNPT HighwAay Village Padeghar, Panvel-410206, Maharashtra Ph: +91 22 66280700-98, +91 22 66280781 | Email :jwrcfs@jwllogic.com, raaj@jwllogic.com, hema@jwllogic.com, mgrops@jwllogic.com

cover story “The technology to move, turn and stop an autonomous vehicle is quite straightforward and yet it promises to bring positives of increased safety, decreasing costs for transport operators and reduced emissions.”

“Granular data related to the handling of an order and the handoff to the warehouse or the fleet, as well as the visibility out on the road and time records of deliveries, make you much more efficient and helps provide insight into the costs to serve individual customers.”

Boris Blanche

Tom Scollard

Managing Direc tor, International Road Transport Union (IRU)

He adds, “Blockchain Technology will help build the trust as every entity records his/her data which cannot be altered. This brings in real-time data monitoring, transparency and trust in the supply chain.”

Vice President, Dedicated Contract Carriage, Penske Logistics

Bringing together our collective expertise, we created a new model the industry will be able to use to help improve the transparency and efficiency of delivering goods across the globe.”

When a blockchain is managed all the way to the end user, Challenges with Blockchain it also has the potential to create demand chains as it closely Blockchain technology makes supply chain integration tracks and transmits data in real time related to consumption. much more real. It has the potential to change the game, By partially eliminating the multiple-party path of information but its application isn’t simple or straightforward. There are that has historically been transmitted, shippers can get a challenges with the technology, including the development greater understanding of real-time and governance of blockchain data demand. One of the biggest benefits to sharing. Along with scalability issues shippers is that blockchain technology and lack of protocols, privacy is one of guarantees security, transparency and the concerns blockchain technology authenticity to wary customers. It must address.

Both 3PLs and shippers promotes standardisation, minimises are in the beginning fraud, and enables accuracy and Shippers and 3PLs will have to states of examining or consistency of each shipment. It could determine how much information implementing blockchain also help overcome delays and errors, should be made available. In some technology, and resulting in more streamlined and situations, companies may not want because of its nascent efficient supply chain management. to provide full transparency of all the stage, the blockchain “We believe that this new supply information to everyone in the supply ecosystem needs further chain solution will be a transformative chain. Liability could also become a technology with the potential to concern. The more information those development. However, completely disrupt and change within the supply chain have, the more interest is increasing, the way global trade is done,” says they can be held accountable for, and particularly among Bridget van Kralingen, Senior Vice companies may determine they don’t logistics providers and President, Industry Platforms, IBM. want such a detailed level of tracking. its use could create a Moreover, blockchain technology in competitive advantage.

Kralingen brought to light the first itself does not address the reliability of Industry-Wide Cross-Border Supply its records. Often a person acting as a Chain Solution on Blockchain that Maersk and IBM unveiled trusted third party, records the information on the blockchain. in 2017, and briefed, “Working closely with Maersk for years, In the case of tracking slavery or other unethical business we’ve long understood the challenges facing the supply chain practices, an individual can simply enter into the blockchain and logistics industry and quickly recognised the opportunity system that the business is legitimate and upstream actors can for blockchain to potentially provide massive savings when thus be fooled. What’s more, blockchain requires third party used broadly across the ocean shipping industry ecosystem. verification of data, which introduces additional costs.

26 CargoConnect - FEBRUARY 2019

cover story “TMS should be constantly in sync with WMS, continually updating a company’s traffic teams with the most up-to-date information relating to customer deliveries while tracking and telematics have become integral to not only offering greater visibility and customer service.”

“Having a robust Warehouse Management System (WMS) helps clients to work efficiently. Majority of clients also look at that the service provider uses client’s WMS, which we as a logistics company undertake, since this helps to maintain data integrity.”

Alex Knowles

Reyaz Farook

Managing Director, Knowles Transport

Chairman, HTL Group

Automation/Digitisation in the Supply Chain airlines, airports authorities, forwarders, shippers and 3PLs. Sharma informs, “Today, companies are increasingly making Such dialogue promotes good communities, progress – and use of data analytics and that’s a popular trend. Companies ultimately, an effective collaboration between all parties,” are now able to learn how to use and organise insights from Bhat added. data. Above that, robotics and automation which is a growing trend, a lot of manual work goes into it.

Automation and digitisation within the Companies are using robotics to process supply chain is driving change in two The economic globalisation has automation largely. They are hugely areas– the ways in which data is collected led to a massive expansion of investing in it and exploring it along and utilised and technological advances 3PL market. Estimates claim with digitising their interface with the on equipment used to transport goods. the 3PL industry to surpass customers; now exchange of documents a massive revenue of USD with customers is happening via e-mails, Shippers and 3PLs are collecting, 1000 billion by 2022. With attachments and online documentation. transmitting and analysing increased technological advancements A lot of interaction that happens between amounts of information, and data-driven playing the key role in the a company and a customer is a mix of decision making is the key to increase market dynamics, 4PL – a notch analog and technology, and that interface asset utilisation, improve efficiency and higher than the 3PL services is now needs to pick up more and more.” decrease volatility. Shippers and 3PLs are likely to be the next revolution in leveraging advanced technologies to enable the logistics space.

While commenting on the potentiality faster and more efficient services, provide that the trend of digitalisation has within visibility and improve safety. Reports say the air cargo sector, Ashwin Bhat, that big data shows maximum potential REGIONAL STATISTICS Head of Cargo, Swiss WorldCargo within the supply chain; with large • Asia Pacific is forecasted to said, “Digitisation is the most important numbers of both shippers and 3PLs saying lead the global 3PL industry growth trend which is sure to drive they plan to make future investments in landscape with a revenue target businesses in the future. Whether it is the capability. Technologies, currently in of USD 385 billion by 2022 the development of new tools which can development, include self-driving trucks, • North America is likely to hold benefit the entire supply chain or internal truck platooning, traffic jam assist and the second-largest market share, measures to boost performance, different automated docking. having held an industry value of companies are looking at continued USD 185 billion in 2014 “Driverless cars are already on the road, even ways to evaluate how digital offerings if still in the early generations. The same can promote positive change. We are • Europe 3PL market growth will applies to trucks. This is going to be the continuing to look at ways within Swiss be comparatively slower, with next leap forward in transport,” expresses WorldCargo through which we can a CAGR estimation of 2.5% over Boris Blanche, Managing Director, offer the right tools and innovations that 2016-2022 International Road Transport Union would drive us forward – both within our (IRU). organisation and as a means of supporting GLOBAL MARKET INSIGHT, INC. our customers.”

He adds, “The technology to move, turn and stop an autonomous vehicle is quite straightforward.

“There needs to be regular conversations and communications It’s more complicated to prepare the vehicle to operate in the between ground handling staff and all the stakeholders–

28 CargoConnect - FEBRUARY 2019

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cover story multimodal environment of the public road. And yet, automation promises to bring positives of increased safety, decreasing costs for transport operators and reduced emissions. What is clear from the precedents, is that machines almost always out-perform humans.”

However, rapidly changing technology has both benefits and challenges. While the large number of companies competing in the space may drive costs down, it could also threaten the continuity of service as players drop out. It could lead to a potential struggle to build a comprehensive adoption strategy as technology changes over time. The rapid progress also means today’s technologies may be obsolete next year, as new players rise and fall in the digital space, which could make some shippers and 3PLs hesitant to invest in certain technologies.

Core Supply Chain Technologies TMS and WMS: Transportation Management Systems and Warehouse Management Systems are two primary ways shippers and their 3PL providers can collect and analyse data, and their use is becoming more common in the supply chain. The Global 2018 Annual Third-Party Logistics (3PL) Study finds out that the majority of respondents—70 per cent of shippers and 77 per cent of 3PLs — reported that they are currently using core supply chain technology, while 68 per cent of shippers and 64 per cent of 3PL reported that they plan to make future investment in the technology.

WHY INVEST IN DIGITISATION AND AUTOMATION? MEETING CUSTOMER SERVICE NEEDS

18%

3PLs

23%

SHIPPERS

INCREASED EFFICIENCIES (DELIVERY TIME)

13%

18%

3PLs

SHIPPERS

DECREASED OPERATING COSTS

7%

21%

3PLs

SHIPPERS

33%

17%

make you much more efficient and helps provide insight into the costs to serve individual customers or individual stops.

Then you can make better decisions on how you price your product in market,” Tom Scollard, Vice President, Dedicated Contract Carriage, Penske Logistics said.

Increased communication can also streamline warehouse operations between Warehouse Management Systems and Transportation Management Systems. The TMS can select the carrier and service level prior to processing a load, so warehouse operations can be optimised.

Alex Knowles, Managing Director, Knowles Transport informs, “TMS should be constantly in sync with WMS, continually updating a company’s traffic teams with the most up-todate information relating to customer deliveries. Also, tracking and telematics have become integral to not only offering greater visibility and customer service over the past decade, but in allowing teams to plan and allocate with much more effect, allowing the company to target inefficiencies in driving behaviour, helping reduce vehicle miles and their emissions.”

The two systems also can uncover a better way to accurately build loads. The actual mixed-item pallet configurations INDUSTRY from WMS can be used by TMS to more COMPETITION accurately fill the trailer, increasing utilisation. In addition, information from both systems can be used to understand When technologies communicate, and balance warehouse labour they turn data into actionable, valuerequirements. Reyaz Farook, Charmain, added information, increase visibility HTL Group shares, “Having a robust and maximise productivity. Proactive Warehouse Management System (WMS) 3PLs SHIPPERS information can help shape advance helps clients to work efficiently. Majority planning and strategic decision-making of clients also look out if the service to minimise disruptions. Increasing communication and provider uses client’s WMS, which we, as a logistics company collaboration between all parties within the supply chain undertake, since this helps to maintain data integrity. Our improves the ability to plan and execute shipments, and both company’s WMS is ably supported by handheld scanner by parties can make better decisions when they have the right which data is seamlessly transferred from one activity to other.” information. “Granular data related to the handling of an Internet of Things (IoT): The Internet of Things, also called order and the handoff to the warehouse or the fleet, as well IoT, refers to the interconnection via the internet of as the visibility out on the road and time records of deliveries,

30 CargoConnect - FEBRUARY 2019

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Covered Warehousing Facility

Over 6000 TUEs per month, i.e. 72,000 TUEs per annum CFS owned equipment: 5 top lifters, 80 trailers, 30 forklift, 2 empty handles, 1 crane Direct access to the National Highway 17, from Panvel to Goa Distance from Panvel station: 6 Kms 3PL Admin Building

JWC LOGISTICS PARK PVT LTD, National highway 17, Panvel Goa Highway, Village Palaspe, Panvel, Maharashtra - 410206 Tel: 2143-661900 (100 lines) , 2143- 661952 | Email: jwccfs@jwclogic.com, krutijobanputra@jwclogic.com, jignesh@jwclogic.com | Website: www.jwclogic.com

cover story “Adequate Integration of IoT and transactional data in logistics will be a game-changer, in terms of enhancing the accuracy of a organisation’s predictive demands, patterns, and by making the data available with various stakeholders (internal and external).”

“We fundamentally believe that by focusing on drivers’ pain points we can solve the industry’s biggest challenges.

Happy drivers mean happy shippers, and ultimately everyone benefits, including the end consumers of the goods.”

Rajesh Kapase

Lior Ron

Director IT, Special Projects, Spoton Logistics Pvt Ltd

Head of Uber Freight, Uber

computing devices embedded in objects, enabling them Digitisation of Load Boards: Load boards are matching systems to send and receive data automatically. Existing building that allow shippers and freight brokers to post loads — have blocks of IoT include devices constantly connected to moved from physical boards located at transportation hubs a larger network, such as smartphones or smart home and truck stops to a digital, typically mobile platform, moving technology. Supply Chain IoT offers the possibility of the load-matching, rate negotiation and other offline elements self-monitoring transportation fleets and buildings for to a virtual system. The digitisation of load boards allows for proactive maintenance and increased uptime as well as more information to be transmitted faster, and load-matching the possibility of servicing rural or inaccessible areas. algorithms are the key to help carriers and owner-operators IoT is increasingly popular in the find the most profitable loads. The commercial sphere, especially for technology continues to change as use in warehouses and logistics, and providers find improved ways to it is changing the way people shop. connect users to a trusted network With IoT commerce, smart things of providers. Uber has entered into tracking and telematics can make purchases on behalf of the load-matching business with have become customers based on rules, context Uber Freight. With the app, vetted integral to not only and preferences. IoT is connecting users search for a load, tap to book offering greater everything from coffee makers to it and receive a rate confirmation visibility and customer printers, which could automatically within seconds. “Uber has a mobile service over the past order necessary refill items, such application that allows truck drivers to decade, but in allowing as coffee pods or ink, which could schedule their next delivery as if they teams to plan and drive different shipping or supply were accepting a ride on the Uber app,” allocate with much chain needs. says Lior Ron, Head of Uber Freight, more effect, allowing Uber. “Uber Freight will offer faster the company to target According to Rajesh Kapase, Director payment than other freight matching inefficiencies in driving behaviour, helping IT, Special Projects, Spoton Logistics systems,” he further states. reduce vehicle miles and Pvt Ltd, “By implementing IoT driven their emissions. solutions, real-time fleet management “We fundamentally believe that by plays a vital role in managing longfocusing on driver’s pain points we can haul vehicles, their routes, positions, solve the industry’s biggest challenges. and can also help optimise the routes.

Happy drivers mean happy shippers, Adequate integration of IoT and transactional data in logistics and ultimately everyone benefits, including the end consumers will be a game-changer in terms of enhancing the accuracy of the goods,” Ron adds. The word Uberisation can apply to of a organisation’s predictive demands, patterns, and by the concept, and among the respondents, 20 per cent of 3PLs making the data available with various stakeholders (internal and 6 per cent of shippers said they are using “Uberisation and external). Investment in IoT can help organisations of freight” currently; 41 per cent of 3PLs and 30 per cent of increase the overall efficiency dramatically. It also enhances shippers said they plan to use it in the future. in-transit visibility of the vehicles, therefore bringing more orders. IoT can also predict imminent issues and difficulties Warehouse Robotics: Robotics are already in use worldwide, that may inhibit the development of all the aspects of the especially in assembly functions for manufacturers, and logistics industry.” robots could support improved logistics processes as well

32 CargoConnect - FEBRUARY 2019

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cover story “The air cargo industry is mostly driven by costs. We always complain that no one is investing into automation and new technologies but in an environment where it is all about rates and margins, everyone is just looking for ways to reduce costs.”

“Smaller players will have to evolve according to the needs of the industry.

Adoption of newer technologies will only help smaller service providers to integrate large supply chains and provide value by becoming the last mile connectors for larger service providers.”

Felix Kreutel

Thomas Tieber

Senior Vice President- Cargo, Fraport AG

Chief Executive Officer, ASEAN & South Asia, DHL Global Forwarding

as improved levels of productivity going forward. Future said they are investing to meet customer service needs, 15 advances in robotics may be in automation of more complex per cent said it is allowing them to provide value-added tasks or in aiding portions of warehouse work that are services, and 12 per cent said it is to increase efficiency and burdensome for human workers but easy for robots, such as to improve time to deliver. Among shippers, 22 per cent are lifting of heavy loads or providing mobile transportation across investing to meet customer service needs, 21 per cent are the warehouse. Next generation robots looking to decrease operating costs, are expected to be more affordable and 18 per cent are working to increase easier to program. The technology will efficiency and improve the time to continue to evolve, and key supply deliver, and 16 per cent are investing chain players are working to advance because of competitiveness in the Supply Chain IoT it. For companies not making direct industry. Only 4 per cent of 3PLs offers the possibility investments in robotics, rental and and 2 per cent of shippers said of self-monitoring leasing is an option for those who want they’re investing in digitisation and transportation fleets to explore the new robotic technology automation to collect and analyse and buildings for as it develops. data even though this is an area proactive maintenance that respondents agreed holds the and increased uptime as Benefits and Concerns of Automation most potential. That is driving costs well as the possibility and Digitisation down for users of the technology of servicing rural or Digitisation and Automation can as there are multiple players in the inaccessible areas. IoT increase efficiency, improve safety digitisation space all competing is increasingly popular and decrease operating costs. for the largest market share. There in the commercial Shippers and 3PLs, both cited similar are also inexpensive opportunities sphere, especially for reasons for investing. The Global to try Software as a service (SaaS) use in warehouses and 2018 Annual Third-Party Logistics and small-scale solutions before logistics.

(3PL) Study finds out that for 3PLs, full implementation. However, competitiveness in the industry is technology still comes at a cost, the top reason, with 33 per cent of respondents saying and the majority of respondents—71 per cent of 3PLs and that it is making them invest. Among 3PLs, 18 per cent 65 per cent of shippers—are investing 0 to 5 per cent of

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cover story capital expenditures in digitisation and automation.

Among 3PLs, 10 per cent are investing between 6 and 10 per cent in digitisation, compared to 13 per cent of shippers.

Only 3 per cent of both parties said they are investing 25 per cent of capital expenditures in digitisation and automation. When asked, what is standing in the way of future automation and digitisation capabilities, 25 per cent of 3PLs and 17 per cent of shippers cited their uncertainty in the Return on Investment (ROI), 21 per cent of 3PLs and 16 per cent of shippers cited competing core IT projects; and 13 per cent of 3PLs and 17 per cent of shippers blamed a lack of funding.

Rapidly changing technology has its benefits, but can also create challenges. The large number of companies competing in the same space, may drive costs down, but it could also mean that continuity of service may be at risk if players drop out. It could also create a potential struggle to build a comprehensive adoption strategy as technology changes over time. What’s more, the rapid progress also means today’s technologies may be obsolete next year as new players rise and fall in the digital space. That could make some shippers and 3PLs hesitant to invest in certain technologies.

Risk/Resilience in Shipper-3PL Relationships Increased visibility within the supply chain is creating On the complexities prevalent across the air cargo industry more opportunities for 3PLs to provide greater value, and for the uptake of digitisation, Felix Kreutel, Senior Vice providers are becoming better prepared to deal with potential President- Cargo, Fraport AG shares, “The air cargo industry uncertainties and problems before they occur. Both parties is mostly driven by costs. We always increasingly need the resources complain that no one is investing in required to enhance their abilities automation and new technologies to take action in real-time, lessening but in an environment where it is all or mitigating the consequences of about rates and margins, everyone is supply chain disruptions, and realRisk, resilience and just looking for ways to reduce costs. time problems depend on real-time There is just no money to invest. As solutions. In the Global 2018 Annual recovery are the three long as no one cares about quality, it Third-Party Logistics (3PL) Study, key elements of the will be a tough change. However, we 98 per cent of shippers and 99 per continuous cycle that have to confess that there is currently cent of 3PLs agreed that there is an help those within the no real measurement for quality increased need for 3PLs to respond in place.” to customers more quickly and with supply chain understand, complete, accurate and consistent quantify, mitigate or Automation and the use of technology information. However, both parties eliminate, and then are many a time not affordable for agree there is a need for improvement, recover from certain smaller logistics service providers. with just over half of shippers—51 per types of risk.

Given this situation, on what would cent—and half of 3PLs reporting that be the way out, Thomas Tieber, 3PLs communicate well in responding Chief Executive Officer for ASEAN to risks and executing operating & South Asia, DHL Global Forwarding asserts, “Smaller objectives. Risk, resilience and recovery are the three key players will have to evolve according to the needs of the elements of the continuous cycle that help those within the industry. Adoption of newer technologies will only help supply chain understand, quantify, mitigate or eliminate, smaller service providers to integrate large supply chains and and then recover from certain types of risks. Successful provide value by becoming the last mile connectors for larger relationships often include processes for solution design and service providers. The larger players in the industry have an delivery, timely protocols to resolve problems, reduced cycle edge but smaller providers are very much needed and help in times and process variability, and effective communication creating value at the lower end of the supply chain.” using state-of-the-art capabilities.

36 CargoConnect - FEBRUARY 2019

cover story

OPIC

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“We have seen over and over again that when we partner digitisation and data collection capabilities are growing with successful companies, our combined knowledge allows rapidly. Supply chain leaders and logistics executives are us to achieve better results,” says Andy Moses, Senior Vice taking on even greater importance as companies work to build President – Product Management, Penske Logistics. more efficient and technologically advanced supply chains.

“Typically, we’re able to engage with Although it may seem like increased Understanding the professionals on the shipper’s end that automation will decrease the need for current and future understand all the nuances of their companies to invest in employees, the state of the supply chain customers’ environment, and when we opposite is true. Technology will help combine that with our talented supply industry will help shippers employees recognise greater potential and 3PLs align a company’s chain pros, it seems we’re able to get and address certain tasks so that talent business and talent more done than the shipper would have can push further, but it is human talent strategy and then map the been able to do on their own—and not that is the key factor in defining and workforce’s needs. just in terms of speed; we’ll get more out applying innovation. of it than perhaps they would have.”

Supply chain and logistics executives are Results from the study shows that increasingly shifting from physical the parties may have different efficiency to data efficiency. Shippers thoughts about the role each is and logistics providers are to play. What’s more, a larger increasingly using data to drive percentage of shippers see both real-time and long-term the need for pursuing areas decisions, and supply chain for improvement related to professionals have to interpret risk and resilience. Some of insights from the faintest the challenges include high of signals. In addition, workloads, lack of time and/ supply chain leaders must or detail to respond properly, understand all aspects of a lack of experienced and an end-to-end supply chain, capable talent, the need for and adapt, as technology clear understanding of risks, creates new opportunities. and a sense of urgency and cost Like technology, supply chains maintenance. Going forward, it may and business environments are be necessary to remove the silos that constantly in flux, and leaders will exist between functions and process areas have new skills to master and systems to within the organisation, which would provide learn throughout their careers, which means greater flexibility and responsiveness to deal with future industry leaders, will have to be agile. They will problems as they emerge. also have to serve as a visionary and strategist to be successful in embracing change. Understanding the current and future The Logistics Talent Revolution state of the supply chain industry will help shippers and 3PLs Technology is reframing the demands on the workforce, align a company’s business and talent strategy and then map particularly within the supply chain where automation, the workforce’s needs to that strategy. CC

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focus

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38 CargoConnect - FEBRUARY 2019

focus

Pharma The Indian pharmaceutical industry, after facing a tough time last year, is headed for a turnaround in FY19. The sector’s year-on-year revenue growth was coming back on track, as per an EY presentation at a recent CPhI CEO Roundtable 2018. The industry, estimated at $33 billion in 2017, was facing steep headwinds on account of lower generic opportunities, rising competition, supplier consolidation and increase in regulatory alerts for Indian pharmaceutical firms, it said.

Ritika Arora Bhola

FEBRUARY 2019 - CargoConnect

39

focus

W

ith several corrective measures and improvement in exports, growth of India’s pharmaceuticals sector seems to be coming back.

The growth, which was 8.3 per cent negative in the first quarter of FY18, turned positive with 7.4 per cent in the fourth quarter of FY18. And the sector’s Earnings before interest, tax, depreciation and amortisation (EBITDA), which was 14 per cent negative in FY18, is expected to rise to 21 per cent in FY19.

“The sector’s operating income and operating profit are expected to see a course reversal,” the presentation said. As per the CPhI Annual Industry Report 2018, India, followed by the U.S. and China, has the fastest growth potential. Key drivers are the high growth domestic market and expansion of pharma exports, the report said.

Drive Insight As per experts, pharmaceutical sector is out-performing many other sectors like consumer-durable, air cargo, transport etc. in achieving consistently high growth in the last many years. With so much development, India is said to have made it to the top five emerging pharmaceutical markets of the world. Commenting on the same, Udit Mangal, Business Manager Healthcare, Pluss Advanced Technologies Pvt Ltd asserts, “Past decade has been that of tremendous growth of pharmaceutical industry in India.”

He continues, “Indian pharmaceutical industry today has the largest number of sites approved by US FDA after the United States itself. The sector is going through an interesting phase in the country. Companies have embarked on a growth trajectory and aspire to become the low cost manufacturing and R&D hub for the vaccines of the world.”

Agreeing with Mangal, DD Reddy, General Manager – Warehouse, Aurobindo Pharma reiterates, “Indian pharmaceutical companies are now investing on research and development considerably.” He further stresses, “What is also important is the move from creating medicine to creating holistic healthcare solutions that address the entire continuum of care. This is where technology and digital interventions play an important role.”

Meanwhile, logistics veteran, Bharat J Thakkar, Joint Managing Director, Zeus Air Services Pvt Ltd shares that according to commerce ministry data, India’s pharmaceutical exports grew merely 3 per cent to USD 17.3 billion in 201718 due to increasing regulatory concerns and pricing pressures in the global markets, including the US. The sector’s exports in 2016-17 had declined to USD 16.7 billion as against USD 16.9 billion in the previous fiscal year. But after several rectifications in overall policies and procedures, Indian pharmaceutical sector seems to embark once again on the path of export-led growth.

40 CargoConnect - FEBRUARY 2019

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focus “New age technologies like Phase Change Materials for passive temperature control, IoT, and Blockchain, etc. offer solutions in one way or the other. The challenge that then remains is to understand the problem well and to know what combination of technology solutions will work in a specific situation. While technology can help a great deal and many of the companies are already using it, the companies still need a continuous flow of skilled manpower.”

Udit Mangal

Business Manager - Healthcare, Pluss Advanced Technologies Pvt Ltd

PharmaSector: Challenges Over the years, not only government but also private pharma companies have taken several initiatives to provide excellent quality and services to the consumers worldwide. However, if we talk about the challenges, the only deterrent at present is a well-organised, efficient supply chain and transportation system. On-time delivery is what manufacturers and retailers aim for and certainly, the products should reach the customers well in time and in good condition as one cannot compromise with the health of a patient. Unfortunately, due to poor road conditions, unskilled labour, lack of well-maintained cold storage facilities in India, high logistics cost, etc. – the pharmaceutical products are not reaching well in time, be it via air, road or rail.

Observing the same, Mangal complains, “Indian pharmaceutical industry faces both local and a global set of unique challenges that are creating significant pressure to tighten the operations. Quality and price issues have spiraled across the value chain. The regulatory pressures today are more than ever in the past and infrastructure, while better than in the past, is still an area of concern.

However, at this junction where the industry stands today in India, it is certainly at an advantage than the global competitors and must guard its position. Despite the challenges, pharma companies are expected to sustain and drive this growth by enhancing their performance with the use of technology and creating a sustainable competitive advantage.”

42 CargoConnect - FEBRUARY 2019

Focusing further on supply chain and transportation, Mangal whines, “India faces many gaps in its supply chain infrastructure, including transportation, storage, power supply, and above all, skilled manpower. In transportation, just about five per cent roads are national highways, and they handle one-third of traffic. The rail network is similarly inadequate and the air-network in underutilised because of high cost. In terms of storage, the lack of robust cold chain network to support the supply chain represents a significant gap. Drugs have varying temperature requirements to ensure potency. All of these can be addressed through technological solutions and the good news is that these are available.”

He adds, “New age technologies like Phase Change Materials for passive temperature control, Internet of Things (IoT), and Blockchain, etc. offer solutions in one way or the other.

The challenge that then remains is to understand the problem well and to know what combination of technology solutions will work in a specific situation. While technology can help a great deal and many of the companies are already using it, the companies still need a continuous flow of skilled manpower.”

On the other hand, Reddy asserts that in our country, where the doctor to patient ratio poses a challenge, in order to serve our patients better, pharma industries needs to collaborate with partners such as hospitals, devices and diagnostics companies so that we can

integrate, optimise data and generate insights and interventions for better health outcomes for the patients.

REDDY JOTS DOWN FEW CHALLENGES WHICH REQUIRE IMMEDIATE ATTENTION OF GOVERNMENT AND PRIVATE AUTHORITIES: 1. Quality is an important factor and it needs to protect throughout the supply chain.

2. Transporters and their crew should be trained on good distribution practices (GDP).

3. All stakeholders should give utmost importance to protect the quality of the pharmaceutical products.

4. Indian road and ports facilities are consolidating and there has been an appreciable development in the last decade.

5. Road transport vehicle crew needs more facilities like proper toilets, food, parking and rest room facilities on the highways.

After Implementation of GST, check-posts that are no longer in operation, Government can convert the same as facilities for truck driver comforts.

6. Like GST ‘one nation one tax’ road permits also shall be made like ‘one nation one permit’ so that state boarder Road Transport Authority (RTA) checks can be avoided and time be saved.

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focus “The government’s ‘Start-Up India’ initiative is creating an enabling ecosystem through a number of policies that include seed and venture funding to support biotech entrepreneurs, incubators and accelerators. India has also recently unveiled the National Biopharma Mission, which is an industry-academia collaborative mission for accelerating discovery and early development of biopharmaceuticals.”

DD Reddy

General Manager – Warehouse, Aurobindo Pharma

With a different perspective and analysing the pharma industry globally, Thakkar avers, “Import alerts by the US Food and Drug Administration, regulatory hurdles and currency fluctuation also contributed to slow growth in the overseas shipping. The US is the top destination for Indian pharma exports, followed by the UK. USA accounts for about 25 per cent of the country’s shipments. The other important destinations include South Africa, Russia, Nigeria, Brazil and Germany.

Although, the government is working on measures to promote exports in Japan and China, tough registration and regulatory procedures there act as hindrance for domestic exporters. The sector accounted for about 6 per cent in the country’s total exports of USD 303 billion in 2017-18. It is one of the top five sectors in the exports segment.

Generic drugs form the largest segment of the Indian pharmaceutical sector, with 75 per cent market share (in terms of revenues). India supplies 20 per cent of global generic medicines in terms of volume, making the country the largest provider of generic medicines globally. Over 55 per cent of India’s exports go to highly regulated markets. Higher growth in outbound shipments helps create employment opportunities, earn foreign exchange and boost economic activities. India’s pharmaceutical exports can cross $20 billion by 2020 even though the value of shipments to countries including the US has been hit strongly.This is due to increasing interest from neighbouring countries, including China, on which

44 CargoConnect - FEBRUARY 2019

India has been heavily dependent for crucial ingredients for its formulations.

However, the local industry needs to focus on strengthening its Active Pharmaceutical Ingredient (API) business in addition to manufacturing generic formulations to achieve this goal.”

The trend matches a similar switch in China over the last few years. As per Bengaluru-based market research firm Indegene’s study, “The pharma industry’s marketing spends through digital platforms is estimated to shoot up nearly 50 per cent in the next two years to touch `220 crore.”

India’s pharmaceutical exports grew merely 3 per cent to USD 17.3 billion in 2017-18 due to increasing regulatory concerns and pricing pressures in the global markets. The sector’s exports in 201617 had declined to USD 16.7 billion as against USD 16.9 billion in the previous fiscal year. But after several rectifications in overall policies and procedures, Indian pharmaceutical sector seems to embark once again on the path of exportled growth.

Indian players have adopted the best of technologies and world -class standards of working to achieve this kind of growth. Blockchain Technology, Artificial Intelligence (AI), Internet of Things (IoT), Robotics and Automation in pharma warehouses are some of the latest technologies adopted by the stakeholders. Reddy explains, “We have adopted some of the best practices such as validation of contamination control methods and routine monitoring. It is not simply a contamination control program, but a check list with a proactive approach being practised. The standards and better guidance were drafted with pharmaceutical facilities in mind, so that there is an increased awareness of microbial contamination which would eventually reduce hospital acquired infections.”

PharmaTech Zone Technology has truly brought in a revolution in the Indian Logistics Industry and related sectors. Indian pharma industry is now going digital at a fast pace. According to a recent survey, a digital wave is sweeping across the $17 billion Indian pharmaceutical industry and companies are dumping old ways of marketing for newer technology.

This new technology ranges from scientific detailing to doctors to using newer algorithms for better insights into issues like patient compliance.

Mangal feels that Indian players are definitely more agile now than in the past when it comes to adoption of technologies and world-class standards.

“However, the best of technologies being adopted here are mostly an outcome of enforcement than creating a sustainable competitive advantage. We can say that we are

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focus India’s pharmaceutical exports can cross $20 billion by 2020. This is due to increasing interest from neighbouring countries, including China, on which India has been heavily dependent for crucial ingredients for its formulations. However, the local industry needs to focus on strengthening its Active Pharmaceutical Ingredient (API) business in addition to manufacturing generic formulations to achieve this goal.

Bharat J Thakkar

Joint Managing Director, Zeus Air Services Pvt Ltd

good technology followers today,” adds Mangal.”

Number of USA FDA-approved manufacturing plants by country

Govt initiatives & developments Mangal expresses, “Govt has taken strong initiatives for improving healthcare within the country.

These have direct impact on the pharma industry. The National Health Protection Scheme is largest government funded healthcare programme in the world, which is expected to benefit 100 million poor

families in the country by providing a cover of up to `5 lakh (US$ 7,723.2) per family per year for secondary and tertiary care hospitalisation. The programme was announced in Union Budget 2018-19. Additionally, in March 2018, the Drug Controller General of

46 CargoConnect - FEBRUARY 2019

India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India The government’s ‘Start-Up India’ initiative is creating an enabling ecosystem through a number of policies that include seed and venture funding to support biotech entrepreneurs, incubators and accelerators. India has also recently unveiled the National Biopharma Mission, which is an industry-academia collaborative mission for accelerating discovery and early development of biopharmaceuticals.

initiative. Government also unveiled ‘Pharma Vision 2020’ which aims at making India a global leader in endto-end drug manufacturing. Approval time for new facilities has been reduced to boost investments. However, some of the moves such as that of bringing

the vaccines that are already available in National Immunisation Program (NIP) to the National List of Essential Medicines (NLEM) are being taken with a pinch of salt. Sales in retail marketing are very important for the vaccine manufacturer’s survival and continuity. However, having vaccines in the NIP under the National Pharmaceutical Pricing Authority (NPPA) regime via NLEM brings additional risks to business in the form of price restrictions on products sold through retail channels.”

Reddy concludes, “The Indian government has taken many steps to reduce costs and bring down healthcare expenses.

Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies.

In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.

The government’s ‘Start-Up India’ initiative is creating an enabling ecosystem through a number of policies that include seed and venture funding to support biotech entrepreneurs, incubators and accelerators.

India has also recently unveiled the National Biopharma Mission, which is an industry-academia collaborative mission for accelerating discovery and early development of biopharmaceuticals.” CC

feature

harnessing the potential of Inland Waterways India is way behind China when it comes to utilising its navigable waterways for freight transportation.

Presently, only 0.4 per cent of India’s total freight is being transported through inland waterways whereas China transports 24 per cent, Australia 17 and Germany transports 11 per cent via inland waterways.

Gaurav Dubey

48 CargoConnect - FEBRUARY 2019

feature

I

n India, around 60 per cent of goods travel by congested roads whereas only 25 per cent cargo moves by rail networks. This slows down the movement of cargo, adds to uncertainties, increases the costs of trade, and leaves deep environmental footprints. As per World Bank analysis, the cost of transport of one tonne of freight over a km by road is `2.28, by rail `1.41 and `1.19 for waterways. So, logistics costs in the country can be brought down considerably by transporting more and more goods by waterways.

There is no denying the fact that waterways are the most fuel efficient, environment-friendly and cost-effective mode of transport, besides having the capacity to ease pressure on rail and road sectors. Of late, the Indian Government has also realised the potential of inland waterways and taken up Jal Marg Vikas project to harness inland waterways capabilities. Recent inauguration of maiden inland waterways terminal at Varanasi is the testimony to the government’s commitment of developing inland waterways. Three more terminals will be opened shortly on Ganga River at Sahibganj, Haldia and Ghazipur.

Union government is developing river Ganga as National Waterway-1 (NW1) with the financial aid of the World FEBRUARY 2019 - CargoConnect

49

feature Bank. The objective of the project is to develop the stretch of the river between Allahabad and Haldia to make it navigable for vessels with 1,500-2,000 tonne dead weight capacity. This is close to the carrying capacity of a goods train.

Under the project, navigational channel of 2.2 meters to 3 meters deep and 3545 meters wide is being developed on the river Ganga. Apart from NW-1, a total of 111 inland waterways across 24 states have been declared as National Waterways (NWs). Inland Waterways Authority of India (IWAI) has taken up the projects to develop these waterways as environment friendly and sustainable modes of transport.

Market Forecast The NW-1 could become a logistical artery for the entire northern India as it passes through on of the most densely populated areas and resource-rich regions which generate approximately 40 per cent of the country’s traded goods. The region’s teeming markets also attract goods from other parts of the country. The network of a waterroad-rail link would help the region’s industries and manufacturing units to have a seamless flow of goods to markets in India and abroad. Further, it would also give wider market access to the farmers of this agriculturally-rich Gangetic plain.

Excited on the recent developments, Amit Tandon, Managing Director, Asia Shipping India says, “Three more terminals would be opened in the first phase of Jal Marg Vikas project located at Ghazipur (Uttar Pradesh), Sahibganj (Jharkhand) and Haldia (West Bengal).

Thus, the entire route of NW-1 will get covered. Subject to availability of

50 CargoConnect - FEBRUARY 2019

carried on custom-built barges, the handling as well as transportation costs are expected to be substantially lower than the present road and rail transport where, in both the cases, handling is manual.”

The standard ship designs will help in overcoming the navigation challenges that the Ganga throws due to its complex river morphology, hydraulics, acute bends, shifting channels, meanders and current.”

Amit Tandon

Managing Director, Asia Shipping India

sufficient depth of water along the entire route, cargo can be moved smoothly, both upstream and downstream along the waterway. With Roll-on/Rolloff cargo being predominantly

During the first six months of FY19, Haldia Port handled approximately 4,000 containers traded between India and Bangladesh. This is higher than 3,700 boxes handled in the full year of 2017-18.

IWAI has also released standard ship designs in order to overcome navigational challenges in the Ganga. These standard ship designs can play a vital role in minimising the operational cost of vessels on inland waterways. According to Tandon, the ships built as per these designs, will open huge possibilities for cargo and passenger movement on NW-1. He adds, “The Inland Waterways Authority of India (IWAI) has published 13 standardised ship designs suitable for large barge haulage on the Ganga River. These designs will help get rid of ambiguity on the type of vessels that can sail on the river with efficient maneuverability. The designs comprise a number of dry and liquid bulk carriers, container carriers, ro-ro vessels, LNG carriers, as well as tugs and barges. A fivedeck car carrier design will be capable of carrying approximately 350 cars in water depths of nearly two meters. Similarly, a bulk carrier with a capacity of 2,500 tonne will be able to operate in three meters of water depth.

These standardised designs will help in overcoming the navigation challenges that the Ganga throws due to its complex river morphology, hydraulics, acute bends, shifting channels, meanders and current.

The suggested designs will make for more efficient sailing of the vessels, carrying optimum loads and consuming optimum quantities of fuel, thus making the overall operations cost-effective, while sparing the road and rail capacities for alternate movement of freight traffic.”

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feature On the future of RoRo service, Tandon expresses, “RoRo is an abbreviation of Roll-on/Roll-off, which is the description of how cargo is loaded and unloaded from a RoRo vessel. For selfpropelled cargo such as cars, they roll on and off the vessel on their own wheels.

The vessel decks have different strengths and heights, enabling a RoRo vessel to carry a mix of cargo- from cars, trucks, buses and construction and agricultural machinery to heavy mining equipment, generators and locomotives. These vessels are perfectly suited to carry heavy cargo on the waterways. Subject to the draft available in the NW-1, RoRo vessels can provide a very cost-effective transportation alternative, especially for heavy or medium heavy cargo, which is presently being carried on road on oddsized trailers and platforms congesting the highways.”

Potentialising Haldia as the next Transshipment Port The recently inaugurated multimodal terminal on NW-1 for transporting containerised cargo between Varanasi and Haldia is expected to provide a significant push to EXIM trade from Eastern India, especially from Kolkata and its catchment areas.

Kolkata based leading customs broker and freight forwarder, and Vice Chairman of the Federation of Freight Forwarders Associations in India (FFFAI), Sudip Dey informs, “It is expected that in the months to come Haldia Port will be able to strengthen its position as a viable transshipment port in the South East Asian region.

Thanks to the burgeoning and potential trade transactions between India and Bangladesh through multimodal connectivity where this port will play a pivotal role.”

Recent study unveils that movement

52 CargoConnect - FEBRUARY 2019

expensive land route, and will create an opportunity for Bangladeshi garment exporters to reach European and American markets for avoiding congestion at the Chittagong port.

Import of cargo which are meant for consumption in the heartland of India, especially from the far-east, can now move in an economical manner.

This shall save cost and Kolkata port will be an added advantage for these imports.”

Sudip Dey

Vice Chairman, FFFAI

of bilateral cargo between India and Bangladesh through coastal shipping is on the rise. During the first six months of FY’19, Haldia Port handled approximately 4,000 containers traded between India and Bangladesh. This is higher than 3,700 boxes handled in the full year of 2017-18. only thing that is required is the regulation from the Government side. Besides that, Haldia is geared up to become a transshipment port.

Meanwhile, the Government of India has urged Bangladesh to use Kolkata and Haldia ports for transshipment. Experts say the initiative can make coastal shipping more costeffective for bilateral trade, thereby shifting cargo from

Dey points out that currently, garments from Dhaka are transported by road to Chittagong port in order to get shipped via Colombo or Singapore. In addition, garments and other goods can be transported to Northern and other parts of India by utilising NW-1 and other modes of transportation.

Commenting on the impact of the launch of NW-1 on the EXIM trade and Haldia Port, Dey asserts, “Import of cargo which is meant for consumption in the heartland of India, especially from the far-east, can now move in an economical manner. This shall save cost and Kolkata port will be an added advantage for these imports. We hope to see increased imports via this inland waterway gateway and also, more activity for the forwarder as they shall be booking the barges by themselves. This will reduce dependence on the surface transporter.”

However, Dey clarified that to position Haldia as a transshipment port, customs has to take the leading role, because only customs cleared cargo is entitled to use this facility. It is pertinent to mention that Indian customs authorities have already given green signal to Bangladesh to use Haldia as a transshipment port but approval from Bangladesh customs is still awaited.

“The only thing that is required is the regulation from the government side.

Besides that, Haldia is geared up to become a transshipment port. There are private players who operate berths and they are professionally managed,” Dey emphasised.

Highlighting the fact that currently, volumes of Haldia is on the rise consistently, Dey urged for capacity building as per the rising demand. CC

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Centre formulating a network of 35 Multi-Modal Logistics Parks The transport ministry is planning a network of 35 multi-modal logistics parks Smita Kumar

K

eeping in mind India’s highway network and to improve the logistical efficiency on the network, the ministry is planning for 35 multi-modal logistics parks. According to a ministry proposal, the parks will account for 50 per cent of the road freight in India.

Setting up of Multi-Modal Logistics Parks (MMLPs), part of transport ministry’s Logistics Efficiency Enhancement Program (LEEP), is a key policy initiative of the Government of India to improve the country’s logistics sector by lowering overall freight costs, reducing vehicular pollution and congestion, and cutting down warehousing costs. The transport ministry, in a review meeting with the 15th Finance Commission said, a draft policy on the development of the multimodal logistics parks envisioned as key

Shubham Jain Vice President, ICRA Limited “This is a good initiative but just an idea as of now and it remains unclear on how it will help reduce logistics cost.

Isolated projects such as the construction of the Dedicated Freight Corridor (DFC) will go a long way in bringing down congestion and directly impacting cost.”

40 per cent of the road traffic.

The ministry stated that of the 35 identified locations, 24 were situated on the national corridors planned to be taken up for development in the Bharatmala Pariyojana Phase-I. It was added that the work on the detailed project reports (DPRs) for seven locations - Nagpur, Mumbai, Bengaluru, Chennai, Surat, Sangrur and Jogighopa (Guwahati) - had begun.

Nitin Gadkari Road Transport and Highways Minister “Multi-modal Logistics parks will act as freight aggregation and distribution hubs and will enable long haul freight movement between hubs on larger sized trucks, rail and waterways. It will reduce freight transportation costs.”

production and consumption centres has been prepared and shared with the Department of Commerce.

As per information, India has a total road network of 5.6 million km.

National highways account for 2.3 per cent of this with a total length of 131,326 km, state highways account for 144,961 km and other roads 5.3 million km.

National highways cater to more than

54 CargoConnect - FEBRUARY 2019

“The role of ministry of road transport and highways is to assist the states for the preparation of DPRs for logistics parks, the provision of road connectivity to the Multi-Modal Logistics Parks (MMLPs), the identification of potential locations, and to co-ordinate with the ministries of railways and shipping for connectivity to other modes like rail and inland waterways,” the ministry told finance commission.

The multi-modal logistics parks plan has come in the backdrop of the National Democratic Alliance (NDA) government’s plans of setting up multimodal terminal hubs along the national waterways as part of the part of the Jal Marg Vikas Project (JMVP,) a `5,369 crore World Bank-aided project on the Ganga aimed at augmenting the navigational capacity of the Varanasi to Haldia stretch of the river. The government is developing NW-1 (River Ganga) under the Jal Marg Vikas Project (JMVP) from Haldia to Varanasi covering a distance of 1390 kms. Prime Minister Narendra Modi inaugurated the Multi-modal Terminal on the Ganga River in his Parliamentary Constituency on November 12 last year.

In 2017, 33 memorandums of understanding (MoUs) were signed with the state governments of Assam, Karnataka, Tamil Nadu, Andhra Pradesh, Telengana, Gujarat, Container Corporation of India Ltd (Concor), Inland Waterways Authority of India (IWAI), Port Trusts, National Highways and Infrastructure Development Corporation Limited (NHIDCL), Dedicated Freight Corridor Corporation of India Limited (DFFCCIL) and private entities such as Ascendas on initiatives to improve state of logistics worth `2 lakh crore, the ministry noted. CC

Startups Startups can be the synonym of Market disruption as startups in any field with their immense energy and innovative techniques, challenge traditional companies and disrupt a market by offering the same services at competitive rates. Recently, several startup companies have cropped up in the Indian logistics space with flabbergasting growth projections of the logistics industry. Here we highlight how the startup companies with their innovative solutions, are changing the way of doing the business of logistics in the modern world.

Building innovative E-commerce logistics highways in India Qikpod

Last-mile delivery services refers to the stage where a product from any E-commerce firm leaves their warehouse and reaches your doorstep. Founded by Ravi Gururaj, Bengaluru-based Qikpod uses a combination of IoT solutions and real-time intelligence to help E-commerce firms in streamlining this process ensuring minimal delays or glitches. Qikpod has raised equity investment of $9,000,000 from multiple investors in a Series A round including Ratan Tata, Flipkart, Delhivery, Sumit Jain, Foxconn Technologies, and Accel Partners.

Delivering freight effectively GoBOLT New Delhi-based logistics technology startup GoBOLT was founded by Naitik Baghla, Parag Aggarwal and Sumit Sharma in 2015. Since then, the company has been innovating the logistics sector through Hybrid Asset Ownership models, Cutting-edge technology & Extensive network. The above enablers along with specially designed fleet, ensure their trucks run 1000 kms a day as compared to industry average of 250 kms thus providing Express delivery times. The company is currently working with Marquee brands in E-commerce, FMCG, FMCD and Industrial sectors.

Making shipping easy and cheap

Vamaship

Mumbai-based global logistics aggregator Vamaship was founded by Bhavik Chinai in 2015. Vamaship is a SaaS enabled logistics marketplace, facilitating shipping via air, ocean and surface to over 200 countries and 25,000 pin codes within India. Vamaship’s technology digitises offline shipping processes and helps save over 15 per cent of shipping costs by bringing transparency to shipping costs and eliminating layers of middlemen. With over 1500 customers from 100+ cities of India, ranging from the world’s largest mining companies to SMEs, Vamaship is growing at over 25 per cent quarter-on-quarter.

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report

PHARMACONNECT 2019 surpassed all expectations, hailed huge success

Surecom Media’s annual flagship event PHARMACONNECT 2019 – Pharma Suppy Chain Conference was convened at The Westin Mumbai Garden City on January 17, 2019.

This second edition was endowed with participation by more than 310 pharma and logistics industry professionals from around the country and abroad. Five intriguing panel discussions were held in the conference which touched each and every aspect of India’s pharmaceutical supply chain.

Ajeet Kumar, Surecom Media’s Director, provided the opening remarks and noted the organisation’s commitment to delivering first-rate logistics conferences to the entire industry. The conference formally commenced with the lighting of lamp by dignitaries- Bharat Thakkar, Joint Managing Director, Zeus Air Services; Julian Sutch, Pharma Global Sales, Emirates SkyCargo; Ryan Viegas, Former Head of Logistics – Asia, Teva Pharmaceuticals; Makarand Sane, General Manager – Export Logistics, Sun Pharmaceuticals and Smiti Suri, Publisher – Surecom Media.

The 1st panel discussion of the conference on ‘Mastering Import/Export Compliance for Global, Multi-Layered Supply Chain’ elucidated the elements of export compliance, import compliance and trade agreements. When it comes to making sound and cost-effective decisions related to importing, exporting and trade agreements, it would be virtually impossible for a shipper to independently master all of the intricacies involved. Fortunately, there are technology

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solutions and solutions providers whose core business is providing expertise in complying with customs, security and trade regulations, policies and procedures worldwide.

The panel saw eminent speakers- Bharat Thakkar, Joint Managing Director, Zeus Air Services; Makarand Sane, General Manager- Export Logistics, Sun Pharmaceuticals; Julian Sutch, Pharma Global Sales, Emirates SkyCargo; Ryan Viegas, Former Head of Logistics – Asia, Teva Pharmaceuticals; and Shabana Khan, Chief Operation Officer, Hermes Travel and Cargo, who converged to discuss an integrated framework for international logistics and trade to ensure seamless supply of clinical materials.

Optimising value in the supply chain: report PHARMACONNECT 2019 Conference, Mumbai PHARMACONNECT is the most prestigious annual pharma supply chain event- bringing together key stakeholders in the business under one roof.

CONFERENCE HIGHLIGHTS PHARMACONNECT 2019, attended by 310 delegates, endeavoured to move the industry from talk to action with this year’s edition, featuring highly interactive sessions, specialised tracks related to the Indian pharma supply chain.

01 02

Better communication, teamwork, collaborations, real time information sharing and smarter use of technology are required to facilitate efficient pharma supply chain practices.

Key performance indicators will help in locating the best service provider.

Integration of stakeholders has a lot of answers for an industry that is making strides in addressing the needs of modern manufacturing and the changing face of mobility, but there are still gaps to fill in terms of supply chain- visibility, faster asset deployment, and empty backhauls.

03 04 05

Entire Pharma industry has to be able to respond faster to disruption in the supply chain when the inevitable unforeseen crisis hits. Other struggles will include the recruitment of sufficient talent, whether managers, warehouse workers, artificial intelligence specialists, or delivery drivers.

It is paramountly important that medicines reach the patients in the right condition. Hence, exporters, handlers, packaging vendors, and forwarders have to be very careful in every step of the process.

06

Pharma companies need to engage with their logistics service partners from product development to launch giving them a forward window so that they can plan their capacities and service levels.

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In the 2nd panel discussion, Surendra Deodhar, VP- Materials Management, Reliance Life Sciences; Rajesh J Rao, HeadSupply Chain Management, Cadila Pharmaceuticals Limited; Raja Sundaramurthy, DGM – FDF Logistics, Mylan Labs; Balaji S, Sr Director – Industrial & Logistics Services, Advisory & Transactions, CBRE; Rajeshh Rao, Former Head – SCM, Emcure Pharma; Sanjay Kulkarni, Sr General Manager – Corporate Demand Planning, Glenmark Pharmaceuticals; and Rajesh Pednekar, Head – Logistics and Distribution, Cipla, brainstormed on the issues pertaining to ‘End-to-End Optimisation - Seamlessly transitioning operations from Product Development to Launch’. The wide canvas of questions that were debated ranged from basic issues like storage and packaging, personnel management, due diligence, regulatory audits, to complex ones such as greater standardisation and visibility, network design and planning, etc.

The post lunch session kicked off with the 3rd panel discussion on ‘Bridging Clinical and Commercial Operations.’ Addressing a dozen of questions of relevance on development and commercialisation of drugs and devices, accelerating regulatory and marketplace acceptance, and inter-company cooperation between teams- clinical researchers to product marketers so as to achieve accelerated clinical and commercial development, industry leaders- P K Gupta, President, Confederation of Indian Pharma Industry; DD Reddy, General Manager – Warehouse, Aurobindo Pharma; P Balasubramanian, Founder and CEO, Air Cargo Consultancy International Services; Sumedha Nadkar, Sr Director and Site Head, Research & Development, Consumer Healthcare, Perrigo Laboratories India Pvt Ltd; Manoj Subramanian, General Manager – West India, Flyjac Logistics; and Ryan Viegas, Former Head of Logistics- Asia Head, Teva Pharmaceuticals, discussed on the various factors that aims at crafting a balance between science and commercial strategies.

The 4th panel discussion of the conference ‘Why efficiency & efficacy matters and how can we get it delivered’ brought on

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stage Vinod Mulay, General Manager – Business Operations, Bilcare Limited-GCS; Manas Sahoo, Vice President – Supply Chain, Fresenius Kabi India; Vishal Shah, Executive Director, V-Xpress (a division of V-Trans India Ltd); Stanley Fernandes, Deputy General Manager – Export Logistics (International Business Division) Bharat Serums and Vaccines Limited; Kapil Madhok, Country Manager – Air Services, India, Bangladesh & Sri Lanka, Expeditors International (India); and Divyanshu Tambe, Executive Director, Ernst & Young, who briefed on integrated and collaborative approaches to develop sustainable supply and value chains that will enable Indian pharmaceutical companies to steadily reduce costs, increase their flexibility and delivery reliability, and maintain high standards of quality, safety and environmental protection on a global basis.

The 5th and last panel discussion witnessed professionals and specialists from the field- Lalit Patil, Manager – Supply Chain, Roche Pharmaceuticals; M K Roy, Vice President – Supply Chain, VIRBAC India; Vikas Rajput, Head of Logistics, Cipla; Jayanthi Bandi, Head – Global Logistics, Exceed Logistics; Radharamanan Panicker, Managing Director, Dangerous Goods Management India; Brijendra Kumar, Sr Manager – Logistics International Business, Mankind Pharma; and Arloph John Vieira, Sr Vice President, SCM – Kopran, sharing their knowledge and expertise on the topic ‘How do we bring about change in pharma delivery in the country’ and mapping out logistics strategies that need to be closely aligned with a company’s manufacturing and commercial strategies.

The conference concluded with a delectable dinner and bohemian cocktail treats.

The next PHARMACONNECT 2020 conference, will be held on January 16-17, 2020 in Mumbai, India.

POWERED BY Registration Partner EXCEED LOGISTICS

PHARMACONNECT 2019 at start of the year, was of great importance bringing pan India pharma users under one roof through the day covering 5 sessions which were meticulously planned by CARGO CONNECT team, giving stakeholders rarest of opportunity to understand the services offered to pharma users, hear their experience, and what they further desire to plan their supply chain seamlessly.”

Bharat Thakkar, Zeus Air Services

It was indeed a pleasure being part of PHARMACONNECT 2019. The conference was very interesting, especially talking about the content covered and the dignitaries invited as part of the panel discussions. I am sure all the expert comments would certainly help the Indian pharma logistics trade flourish.”

Vikas Rajput, CIPLA

It was one of a kind conference and hospitality was superb. Lot of learning and knowledge sharing happened during the panel discussions. Would be more than happy if there would be more professionals from the logistics department of pharma companies attending the event.”

Stanley Fernandes, Bharat Serums and Vaccines

It was a pleasure meeting the top personnel from the field. For future, I would suggest we talk about compliances and regulatory policies/bodies within India catering to both domestic and international market, and also challenges to set compliance at each stage in line with the present scenario.”

Jayanthi Bandi, Exceed Logistics

Indeed a splendid platform for pharma and supply chain professionals, who has unquestionably been benefited after attending this conference. The panel sessions gives an international exposure with respect to most recent trends in the industry and how these can be implemented in day-to-day activities.”

Vinod Mulay, Bilcare Limited

It was a wonderful event and our heartfelt congratulations to the entire team for putting together such a good show. All the best to the team for their future endeavours.”

Arvind Aggarwal, Celebi Delhi Cargo Terminal Management

Compliments for organising a wonderful gathering of various partners active in the Indian Pharma Supply Chain. The distinctive feature of this event was the practical discussions, augmented by the networking opportunities.”

Surendra Deodhar, Reliance Life Sciences

I truly see that the event turned out very fruitful for all participants. Looking forward to a more grand PHARMACONNECT 2020 next year.”

Brijendra Kumar, Mankind Pharma

It was a great event. Very well organised and a lot of knowledge exchanging took place on the logistics of pharmaceuticals related topics.”

Sanjay Kulkarni, Glenmark Pharma

An amazing and one of its kind event. Excellent arrangements. Good sequence of panel discussions.

Superb hospitality. Overall a truly satisfactory PHARMACONNECT 2019.”

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Interview

North-South Transport corridor: Priority for Russia and India Leader in the Russian logistics outsourcing market for industrial enterprises and the largest multimodal logistics operator in the CIS and Baltic countries, JSC RZD Logistics was created in order to develop the logistics business segment of Russian Railways Holding. Viacheslav Valentik, CEO and member of the Board of Directors of JSC RZD Logistics, in an interview with Upamanyu Borah elucidates more about the company’s exclusives, the expanding geography of its railway services, ideals the company follows to provide best-in-class logistics services, and much more.

What opportunities do you foresee in multimodal ways of transporting cargo?

The advantage of multimodal transportation lies in multimodality itself. A client gets an opportunity to get timely delivery at any place and by any mode of transport. Multimodal transportation helps us in customising our services as per the client’s requirements. North-South International Transport Corridor is a good example of multimodal transportation which connects sea, railway and auto resulting in a new perspective route supported by several countries. In the future, this route should become a good alternative to the familiar sea freight.

Recently, JSC RZD Logistics has undertaken a project to deliver Volvo cars from China to Russia.

Please elucidate the complexities of the processes in this project. Any relevant advantages to specify?

Today the delivery of cars in containers via railways is in a developing stage. Car

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manufacturers and dealers are especially interested in this type of delivery, as the velocity of money is extremely important to them. Partial relocation of European car manufactures to the center of China is another advantage for railway.

From the logistics point of view, these regions prefer railways instead of sea transportation as rail transport is a more convenient mode of transport in the region. Railway tariffs are also less volatile as compared to sea freight and those increase only in accordance with the average rate of inflation in transit countries.

Railways also guarantee predictability of transportation cost, which is of utmost importance for any client. In the course of the year, there can be slight changes in the price of rolling stock provided for a shipment, but these changes are inessential, taking into consideration the price of transported cargo.

This way of transportation guarantees more safety of cars and makes the total time of delivery more predictable. It also simplifies transshipment from one mode of transport to another. During the transshipment, a car stays fixed and is not removed from a container. Then, a sealed container is easily loaded to auto from a railway platform, and afterwards it is delivered to the nearest excise authority for further customs clearance.

We pay special attention to the way the cars are fixed in the containers (three cars are transported in a 40-feet long container), and also to the safe unloading process. We use special fixation equipment, which we return in the same container for further use of shipments.

As far as the delivery of the Volvo’s shipment is concerned, we first unloaded cars in the presence of Volvo representatives as they wanted to get assured about the safety procedure of

unloading process. I would also like to mention our successful transportation of 123 cars in a full container train which was organised recently.

JSC RZD Logistics has launched test multimodal shipments of cargo from Japan to Russia across TransSiberian railway in containers, e q u i p p e d w i t h t e m p e ra t u re , moisture and vibration level sensors.

What are the other initiatives being taken by the company to smoothen the transportation of cargo between Japan and Russia?

First of all, these shipments are in progress, so it’s early to evaluate the results. The aim is to find the ideal solution for each kind of transported

Multimodal transportation helps us in customising our services as per the client’s requirements

cargo. We expect to receive the analysed results of these tests in the first quarter of 2019. We would like to discuss the results at a joint working group on the cooperation between Russia and Japan in the area of transport.

Which innovative ways does JSC RZD Logistics follow to provide best-in-class logistics services to its clients?

In the present time, various projects on transport digitalisation have been coming to the fore. Apart from the unified electronic workflow, it is necessary to implement modern digital sensors. This includes not only GLONASS, but also temperature, humidity, vibration and other sensors, which receive and transmit information about the condition of the transported cargo. This solution has several aims: increasing trust on railway transportation and in general,bringing transparency in railway shipments for

consignors and consignees. Such access to the information should be available, first of all, to the forwarding companies and operators, with being provided to the clients later.

At present, JSC RZD Logistics has its presence in 27 cities of Russia, more than 250 partners and with 5 subsidiaries across the country.

Any expansion plans in the pipeline?

We are planning to strengthen our presence in China and Europe. The cooperation with local platform companies, provinces’ authorities and railway administrations will help us to improve our service levels and also inthe expansion of routes network. We are also looking forward for cooperation from the countries such as Vietnam, India, Thailand and Indonesia. We see good perspectives for the development of new multimodal services, but it is too early to speak about the opening of our offices there.

H o w d o y o u p e rce i v e t ra d e relations between India and Russia specifically in terms of logistics business? How can the logistics companies of both the countries take benefit of improved trade relations?

As far as the field of logistics is concerned, the relations between India and Russia are, for sure, concentrated on the NorthSouth Transport Corridor. The leaders of both the countries perceive huge potential of this route. Unfortunately, the political circumstances for the countries through which this corridor will pass, are posing hindrance to the corridor’s dynamic growth.

Anyways, I believe that all these obstacles are temporary: if all the participants of the project are interested in its development, sooner or later, it will become a reality.

JSC RZD Logistics, being the first company to ship cargo across this corridor, will put every effort to make “North-South” work. CC

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Upbeat on the future of integrated endto-end logistics

Interview

How has your company evolved overtime from being one of the most sophisticated logistics solutions providers to a diverse business conglomerate?

Could you please tell us your company’s exclusives?

We started small 25 years ago. Logistics solutions are our core area. We have been doing that since our inception, we have a knack for it and it is serving us well. However, over time we have evolved as a conglomerate. We have diversified ourselves to meet the relevant demand in the related areas. I am proud to say that, today our group as a whole

With an aim to provide integrated services to its customers to help them bolster their supply chain competencies, Allcargo Logistics and Industrial Parks Pvt Ltd (ALIPPL) is extremely proud for having won the confidence of prestigious customers like Walmart and Decathlon. Sandeep Chadha, CEO, ALIPPL, in a candid conversation with Upamanyu Borah, annotates on the company’s journey to becoming a diversified multi-business conglomerate within the Indian logistics market, and a customerfocused commitment to quality that meets or exceed their expectations.

is doing phenomenally well in all the areas where we have presence. It would not have been possible without the far sightedness, vision and dedication of our founding Chairman Shashi Kiran Shetty, who to this day continues to saddle the ship with precision and passion. As for exclusives; we put customers first, we put our investors foremost, and we prioritise employee well-being and embrace technology. To conclude we are not the ones to rest on the laurels, we are always alert- be it adapting the latest technology or internalising the trade trends. We always follow the latest and best practices available. And, a look at

our CSR activities would confirm our commitment towards society.

Apart from logistics services and facilities, what kind of integrated solutions do you provide to maximise customers’ logistics efficiency and support their further expansion in the market?

To help customers maximise their logistics efficiency, we have our dedicated 3PL arm (Avvashya CCI), who takes care of the entire supply chain for our esteemed customers. In my vertical, Allcargo Logistics and Industrial Parks, we provide Grade A-built to suit, warehousing and industrial parks to help the tenants in setting up their dedicated distribution centers while enhancing the overall throughput.

Elaborate on how effectually your company has been integrating IoT in accelerating its inbound and outbound logistics services? Any digital transformation impending in your company!

We are an agile group and are always ready to embrace technology to improve the efficiency and remove bottlenecks.

Not only IoT, we are also looking at domains like Blockchain, Artificial Intelligence (AI), Automation, Robotics and all of these emerging cutting edge offerings. In fact, we are an asset heavy group, at the same time we understand the importance of technology and are always ready to adapt to suitable and lasting technology paradigms. We do assess our technology frameworks on a regular basis and adapt the compatible and viable options therein.

With offering excellent logistics solutions, does your company also structurally invest in trend research and solution development?

Here, I would like to emphasise that we have a dedicated investment and strategy wing which looks out for potential and promising investments

across the horizon. We have an open and supporting corporate culture which encourages our employees to put forth the ideas they may have. Our research and development team is thoroughly alert to look out for solutions that add to our throughput. Digital platforms and add-ons that are in sync with our vision are always welcome. All in all, we are aware of the emerging trends and are ready to embrace the suitable change in the offing.

We understand the importance of technology and are always ready to adapt to suitable and lasting technology paradigms

Recently, in the largest scale land lease deal in India’s warehousing history; your company’s warehousing division has agreed to lease a three million square foot large warehouse to some of the biggest players in E-com and Retail. Do you consider it to be a crucial milestone contributing to the stabilisation of expectations and potentially modernising your framework in the Indian logistics market?

When we talk about 3 mn sq ft, it’s huge.

And when you look at the tenant profile therein, it makes it even more special.

Of course, it’s a milestone in this short journey so far. It boosts our confidence to have clinched the kind of the tenant mix, beating the competition. The size of the deals underlines the capability that we have to deliver these superior Grades A warehouses. We have prioritised our clients’ requirement and have accordingly included them in the overall design. Yes, these marquee transactions have catapulted us to the forefront and I am confident to say that we are fully capable to deliver on the expectations. CC

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Interview

Air Cargo – Vital Motor of the Global Economy Much convinced with the fact that the air freight industry is witnessing a revolution, Sanjay Khanna, CEO of Ras Al Khaimah International Airport, elucidates their role in augmenting the same.

In an interview with Smita Kumar, he describes how the competition is stronger than ever before and the expectations of the customers. He also talks about the crucial role the middle eastern market is going to play this year, and how they are equipped to face the competition. Excerpts:

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The air freight industry is living in a period of sustainable growth. Do you agree with this?

Yes. The air freight industry is evolving faster. Air cargo is a vital motor of the global economy.

The air cargo industry continues to face challenges of sustainability, profitability and customer satisfaction. It is far from being immune to global shocks such as Brexit. Competition is stronger than ever with other transport modes such as shipping, rail and road offering new products.

Customers are also looking at mixing transport options to balance costs and speed. In parallel, the industry has been slow to adapt to an increasingly electronic world that demands more transparency, speed and efficiency. Airlines and Airports together have to be a part of this transition and adapt to the changing dimensions of the air cargo industry.

Paper airway bills are being fast replaced by electronic way bill to increase the efficiency, speed and precision. Although, global implementation of electronic airway bill to date is just around 50 per cent.

Amazon leasing aircrafts from Atlas Worldwide and DHL, Panalpina and Danzas leasing freighters from Cargolux are a few examples of the changing pattern. Many major cargo GSAs in the Middle East prefer to operate their own freighters, and the association of the airport with the GSA and freight forwarders is key for any airport to grow.

How do you see the air freight market growth prospects in 2019?

Air cargo market in 2019 seems buyoant with the growth in E-commerce, pharma and perishable trade increasing across continents. The transport of pharma and other premium cargo services will drive output for the

Proximity to major markets in Dubai, faster turnaround time and commercial advantages over other big airports, make us an ideal choice for the many small freighters operating in the region

StB Cargo by IATA, is an effective programme in this direction.

Air cargo must evolve to adapt and improve its value proposition.

year 2019. The growth in air cargo is brightening majorly due to the diminishing trade tensions and decreasing fuel prices.

What is your take on the increasing shift of freight from air to ocean?

During the year 2019, the market would get more segmented into freight forwarding, warehousing, express delivery, 3PL and E-commerce.

The leading players of each of these segments, will be the key associates of the air cargo industry. While the global air freight growth has moderated in 2018 after unusually strong growth in 2017, many indicators show that the

With the increasing shift of freight from air to ocean, shippers are increasingly opting deferred air services and multimodal transport system; airlines and airports need to provide the facilities needed for this transition. The air cargo landscape is changing with more freight forwarders taking control of freighter operations and hence the traditional ways are changing.

air cargo market is fundamentally well positioned to sustain the growth momentum at or above the long-term trend.

ACMI providers, also referred to as wet-lease providers, offer cargo operators the flexibility to obtain lift, augment existing markets, and provide service in markets that are highly seasonal— all with no capital equipment investment required. Large freighters in long-haul markets account for the most significant segment of the air cargo ACMI business. The ACMI business is sensitive to changes in the overall air cargo business, but it has been an established industry sub-sector and will continue to play a major role in the year 2019.

With high competition especially from the Middle Eastern airlines, how will you strategise your policies and plans for 2019?

Ras Al Khaimah International Airport is planning to be a base for other freighters operating from UAE. The proximity to major markets in Dubai, faster turn-around time and the commercial advantages over other big airports, make us an ideal choice for the many small freighters operating in the region. Managing the export acceptance, import delivery, and timely transport of shipments through IPTA and RFS is a complex operational challenge, and we strive constantly to improve our service and operational capabilities.

With increased operational facilities including chillers, freezers and live animal facility, our airport is fully prepared to accept and overcome the challenges during the year 2019. CC

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guestcolumn

Growing demand for ‘Grade A’ warehousing space Rajesh Jaggi

T

he Indian warehousing and logistics Industry is expanding rapidly to foster the booming E-commerce, online retail and manufacturing industries. Fuelled by the landmark Goods and Services Tax (GST) and complemented by the granting of infrastructure status, the logistics and warehousing sector has witnessed tremendous activity. According to the Economic Survey 2017-18, India’s logistics industry, worth $160 billion, is likely to touch $215 billion by 2020 and grow at a CAGR of 10.5 per cent.

Manufacturing sector and logistics service providers are increasingly looking at large organised pan-India partners, who can provide Grade A infrastructure at strategic locations closer to consumer markets.

The surge in demand for quality warehouses has led to an increasing need for Grade A warehousing space. The distinction between Grade A and Grade B is made on the basis of quality of construction, location, amenities, etc. According to estimates by JLL, the share of Grade A will increase on a regular basis and is expected to reach around 85 mn sq ft in 2019. This shows that an increasing number of customers are opting for Grade A warehouses over Grade B. Globally, a ‘Grade A – Warehouse’ is planned as per the following specifications: • Additional height and floor load bearing capacity.

• Better infrastructure with access to mechanised MHEs, fire detection & prevention systems, and clean environment.

• Land use with space for parking heavy vehicles/MHE movement, multi-modal connections.

Also, Grade A warehouses provide distinctive advantages over Grade B: • Operational efficiency: Up to 30 per cent additional open space, up to 30 per cent space for internal cargo handling

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and up to 40 per cent storage height to enhance traffic and cargo movement, use of modern MHEs and maximised storage load.

• Wider cargo lines: Additional floorload capacity (up to 50 per cent) and storage height facilitates heavy/odddimension cargo and increases the pallet position for standardised cargo, especially for long-term storage.

• Prevention: Improved firefighting and drainage systems, and construction quality provide additional protection from unexpected threats and minimises risk of in-store damage.

• Time management: Provision for sufficient parking, material handling and marshalling space optimises operational time and cost for vehicles, MHE operation and sorting/identification of products.

IndoSpace, the largest and the only national network of industrial real estate in India, is committed to helping India Inc and MNCs, for boosting India’s economic growth. Given the positive backdrop of improved road connectivity and progress in dedicated freight corridors, large and best-inclass logistics and warehousing facilities will be crucial. More customers will look to consolidate their warehousing space, shifting from smaller to larger Grade A facilities.

IndoSpace is ahead of the curve in providing Grade A, institutional world-class light industrial and warehousing facilities that the fast-growing Indian economy requires. In January 2019, IndoSpace announced its plan to build three cutting-edge industrial and logistics parks in Gujarat, adding 2.5 million sq ft of Grade A leasable area. This will further cement its position as India’s largest developer of modern industrial and logistics real estate.

(Authored by Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group)

The Highest Circulated/Read & Referred Logistics Industry Magazine

guestcolumn

Nuances of Supply Chain integration Arun Kumar Dutta

D

eputing digitalisation in the supply chain is more than just saving on money. It can create competitive advantage and increase the company’s growth.

Companies must transform the way they do business and take the leap into marketing their supply chain digitally otherwise they will be left behind.

Six parameters companies should follow for enhancing supply chain processes: 1. Digitisation 2. Automation 3. Collaboration 4. Analytics (Data Analysis) 5. Flexibility 6. Control

A digital supply chain is the correlation of all the data describing what is in the container – the design, sourcing, manufacturer, classification, order, shipment, regulation, cost, and so much more – and presenting that information in a consolidated platform.

What do we need to optimise the digitisation of Supply Chains?

1. Share more data with suppliers.

2. Collaborate more closely with suppliers.

3. Involve suppliers more closely into the planning process.

4. Have more real-time visibility into supplier processes.

5. Suppliers to invest more money into their local IT systems.

The unchanged water in supply chain is upstream. Freight cost reduction in the sourcing of raw material and component parts can have direct impact on the delivery of finished goods.

Nowadays, companies are emphasising on reducing cost of their production, but they should not compromise with the quality. They should ensure that they do not bring down their image in the market environment.

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Lured by the promise of cheaper labour, companies are blind to the tactical costs of manufacturing overseas. While they may save money on unskilled labour and by achieving economies of scale, they ultimately will pay more because of longer lead times, increased inventories, the need for more management resources for planning and logistics, and constraints on their ability to respond quickly to changing demand. Despite these and other hidden costs, offshore manufacturing has become a fact of life. Now the challenge for many companies is to manage the resulting global supply chain effectively.

Supply chain management: Strategy, Planning, and Operation are a depth presentation of concepts and, techniques of the profession.

The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers and customers themselves. It consists of all stages involved, directly or indirectly, in fulfilling a customer’s request.

Reducing cost for products affect the supply chain.

Following are the summarised form: 1. 1st selection of Product (design…………).

2. Adding the required raw materials & product components.

3. Geographical “location’’ of the available product materials and components, distance from the manufacture unit, freight cost, etc.

4. In case, materials and components are required to be fetched from outside India than it has to be imported after required collaboration with vendors and a strong co-ordination with settling down on a cost effective price to get the same on time.

5. Skilled labours for procurement.

6. Planning Procurement - time frame fixed by the company management, manager (Production), executives and all those involved during the production process.

(Authored by Arun Kumar Dutta, Operation, Logistics and Warehouse, Flyjac Logistics Pvt Ltd - a Hitachi Transport System Group)

Shipper Speaks

Transporters should be Rewarded on Performing Better Having more than 22 years of industry experience across Pharma/OTC/Retail and 3PL industry verticals, the contributions of Ravi Kumar Tummalapalli, Head of Logistics for APAC/China/Japan, Teva Pharmaceuticals, have been end-to-end in all sub-functions of the Supply Chain, such as Demand Planning, Supply Planning, Network Planning, Logistics & Distribution, Contract Manufacturing, NPD Support, Export & Import, International Logistics, and much more. Tummalapalli, in a conversation with Smita Kumar, reveals the company’s secrets behind a seamless supply chain. Excerpts:

How important is logistics for the over-all scheme of your business?

Logistics is very important and a key function of our business, rather, it is prudent to say, of any product manufacturing industry. It might have been less sensitive to some sectors and very critical to few like the Pharmaceuticals Industry, to make the product available at the right place at the right cost, and also of the right ‘quality’. Typically, though the sensitivity of quality may not be of so much relevance for FMCG or White Goods Industry purely, because the products are non-consumable and not sensitive to environmental conditions, but as every industry has its own challenges, FMCG industry is very sensitive to the cost of logistics in view of high volume and low value product portfolio. This is one of the essential parameters the manufacturers consider while identifying the right location for the manufacturing site, considering the advantages of being closer to raw material suppliers and the distance to reach the target customers.

Pharma logistics is little different, here volume is less and value of the product is high. Also, the sensitivity of handling

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the products is critical in order to maintain right quality, integrity of packaging, temperature controls and another very important thing is the safety of shipment. Most of the regulated markets have defined very clear guidelines of Good Distribution Practices, while India too has published Draft Guidelines recently, for public opinion. These guidelines help the manufacturers collaborate with the Logistics Service Providers to develop and qualify the logistics network.

How do you ensure smooth co-ordination between suppliers, transporters and other departments in your supply chain?

Supply chain is becoming more and more matrix. Given the inherent nature of the function, collaboration starts internally very early within all the relevant functions fast at the product development stage itself.

Hence, by the time the product is ready for commercial production, the suppliers are already aligned with the requirements of the company, and the collaboration with transporters and LSPs is based on their selection criteria. Most of the organisations prefer to have an annual selection

criteria based on multiple factors such as Past experience in the industry and with the company, Service levels, Turnaround time for truck placement, Successful settlement of insurance claims, and of course, Cost of service delivery. Once the selection process is completed, contracts are signed and the list of preferred transporters/ LSPs are internally circulated to all the departments. Now, in the age of technology, interactions with the suppliers and transporters have become quite fast and automated.

Even companies are suggesting to reduce the paper work and automate the invoice generation and payment process as well.

Are there any unique or innovative strategies that you have adopted for better supply of your products?

Supply Chain strategies are always evolving, to meet the needs of business. a) Raw materials suppliers – Mostly, there is a great apprehension in sharing information with the suppliers. On the contrary, if data is shared transparently with the suppliers like demand forecast visibility, monthly manufacturing plan etc, it helps their back-end supply chain also, to be agile and efficient, which is

mutually beneficial. b) Vendor-managed inventory – By providing forecast visibility and integrating the supply chains, we can optimise the inventory of materials and reduce warehouse space which is very expensive for maintenance in the GMP environment. c) Increasing the inventory turns by reducing the inventory cover, vendor-managed inventory helps better use of working capital deployed. d) Centralised procurement is very important in today’s competitive world which will help the consolidation of material requirements which may be used in multiple manufacturing sites. e) Finished product storage needs to be closer to the customer which will then provide better service levels. This is effective only when the company has good forecast accuracy and demand planning processes. f) Although it is a tedious process to have assorted pick-pack operations in the warehouse, it gives good results to reduce inventory and deploy only what is needed at the C&F or distributor locations, mainly for high value products. g) Improvised packaging to more standardised box packaging and Temperature controlled transportation are few other aspects.

What percentage of your logistics work is outsourced? Which functions are performed by your logistics partners and which ones are controlled internally?

When it comes to warehousing requirements, partially are owned by the companies but most of the regional warehouses and C&Fs are outsourced.

All raw material warehousing and factory-based finished warehouses are managed by the company due to high quality of GMP requirements, also partially due to regulatory requirements.

Outsourcing is a never-ending process, particularly in pharmaceuticals manufacturing, since the companies like to focus on core competencies of product development, R&D, regulatory and Quality of the products. In the current period, discussions are happening for outsourcing export documentation,

pick-pack operations, secondary packaging, which will then integrate well with already outsourced services.

Tell us the most common problems faced by your company during the supply chain process. What steps do you take to overcome these?

Supply is a very dynamic function which encompasses the challenges of all other functions to achieve the organisation’s goals. Some initiatives are designed while some issues crop up needed to be resolved without jeopardising regular operations. Listed below some of such experiences: h) Raw material suppliers – While developing new products normally, there are very few raw material suppliers with the capability needed. Hence, the companies tie up with a maximum of two raw material suppliers with R&D phase. After successful commercial launch, people tend to divert their focus to other projects and suddenly, see the key supplier not being consistent in meeting company requirements. We need to ensure there are adequate suppliers qualified to meet the needs of the company even if one of them defaults. i) Transportation – There shall be a robust process to qualify the transporters, measure their performance and reward them if they are performing better. This is very rarely practised as most of the companies only have the process to penalise the transporters, in cases of damages or delays. j) Warehousing and documentation – Today, all routine and operational activities can be automated. Similarly, in the Pharmaceuticals Industry while the manufacturers need to focus on core product development, they shall outsource warehousing and documentation services with clear expectations and Service Level Agreements. k) Logistics innovation and network design : In India, logistics has been a function of individual learning through experience. Of late, there are couple of universities which have recognised this function (considering it science) as a critical one and acting accordingly. l) People development - We ignore this element many times, though it is a major resource

for ensuring our supply chain. Since many logistics functions are routine, it is essential for people to focus on accuracy and efficiency while they shall keep upgrading their capabilities to take up additional responsibilities. Managers shall provide opportunities for coaching and guidance for career progressions.

Any changes which you have witnessed in trade patterns and customer behaviour?

Yes, in the past decade or so, we have come a long way with technology enablement. Trade has become more dynamic, competitive and also high-tech.

There are less state/country boundaries and there are more open competitions.

In the Domestics (India) market, GST has brought in considerable change in the way we used to do business.

We used to have state tax, central tax, manufacturing tax (excise) and multiple other taxes which have been brought under one umbrella of GST. This has made business easier for the manufacturers as well as consumers.

With the introduction of GST, there are no state boundaries, the major responsibility comes on the Supply Chain/Logistics manager, to ensure the products reach in the expected quality and time.

Similarly, Customer expectation has increased a lot with the digital age visibility. All the products are available online for the customer to compare and choose, pricing is also transparent.

Hence, there is no way anyone can fool the consumer. Consumer also expects the product s/he wants to be available anytime, and hence, inventory management becomes very critical to keep the customer loyalty to the brand.

In a nutshell, the last decade has seen quite a lot of changes in the industry which we didn’t witness in the previous twenty years. Things have been changing exponentially and we will have to wait and watch what the next 10 years will bring to the table.

FEBRUARY 2019 - CargoConnect

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news

Modi inaugurated Bogibeel Bridge: India’s longest rail-cum-road bridge PM Calls India’s longest rail-road bridge in Assam a ‘lifeline’

Prime Minister Narendra Modi inaugurated India’s longest railroad bridge over Brahmaputra River in Assam recently. The double-decker Bogibeel Bridge is 4.94-km-long and now is the Asia’s second longest rail-cumroad bridge.

Modi said, “The Bogibeel Bridge is a ‘lifeline’ for the state’s denizens.”

On the one hand, it connects Dibrugarh and Dhemaji districts whereas on the other hand, it’s definitely going to remove travel time and communication bottlenecks to a number of districts in neighbouring Arunachal Pradesh, and is likely to play an important role in defence movement along the Indo-China border -- also in Arunachal Pradesh. The Bogibeel Bridge is part of infrastructure projects planned to improve logistics along the border in Arunachal Pradesh. This includes the construction of a trans-Arunachal highway on the Brahmaputra’s north bank, and new road and rail links over the river and its major tributaries.

Navi Mumbai airport likely to be operational by 2020 Maharashtra chief minister Devendra Fadnavis had announced that the Navi Mumbai airport is likely to be operational by the mid-2020.

Speaking at the Global Aviation Summit, Fadnavis also said that as many as nine more airports are in the pipeline in the state besides the Navi Mumbai airport. “The Navi Mumbai airport will be operational by mid-2020,” Fadnavis said. The airport has the capacity to add 1 per cent to our GDP, he added.

While Pune airport is being developed to cater to one of the major IT hubs in the country, Nagpur airport is being developed for its strategic location in national and international flight routes, he further said.

A passenger and cargo hub will also be created in Nagpur, Fadnavis said adding the state is looking to increase cargo capacity to 40 per cent by 2025 from 28 per cent at present.

Leverage technology; AI to boost flying ecosystem: Prabhu Govt unveils national air cargo policy The Centre unveiled its much-awaited national air cargo policy, which seeks to make India among the top five air freight markets by 2025, besides creating air transport shipment hubs at all major airports over the next six years. The policy document released during the two-day Global Aviation Summit 2019 stated that it will encourage code sharing/inter-line agreements between foreign and Indian carriers.

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 goods; and transit international cargo by making India the transit cargo hub of choice to and from other parts of the globe.

The cargo policy also seeks to establish agreements between national carriers/ freighters and integrators to improve domestic connectivity as well as encourage the establishment of agreements between national and international carriers/freighters and other airline operators to provide access to key global cargo hubs. It also aims to promote the development of a last mile/first mile connectivity program at international/regional gateways, as per the document.

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Stressing the importance of Artificial Intelligence and Big Data, Civil Aviation Minister Suresh Prabhu stressed the need to leverage these modern technologies to improve the global flying ecosystem.

Inaugurating the first-ever Global Aviation Summit (GAS) 2019, the Minister said, “The sustainability of the aviation sector is also important and we must ensure that our flying practices remain ‘planet-friendly’. It is our bounden duty to ensure that our skies remain blue for all times to come... We are trying to professionalise the entire aviation sector. We have zero tolerance for safety violations.” He added that the Indian aviation sector has been growing at the rate of 20 per cent for the last four years -- the highest in the world and led by Prime Minister Narendra Modi’s vision, the country is ready with a robust growth strategy to pave the way forward.

In this context, Prabhu pointed out that the government has already announced a Drone Policy to ensure several drones are manufactured in India and will now launch a road-map for aircraft manufacturing in the country.

news

31 Indian cities to get two or more airports by 2040

Road projects worth Rs 6,000 cr in Jodhpur Road Transport and Highways Minister Nitin Gadkari had laid the foundation stone for and inaugurated six road projects worth `6,000 crore in border areas in Jodhpur. Gadkari claimed none of those would have potholes for next 150 to 200 years since the roads had been developed using concrete.

Gadkari said, “Even planes could land on and take off from these roads. My emphasis has always been on quality in work, reduction of cost, timely completion of projects and bringing new technology in road and bridge construction.” Gadkari dedicated works worth `2,000 crore to the nation after their completion and laid foundation for some projects worth `4,000 crore.

At least 31 cities in India would have two airports each by 2040 while Delhi and Mumbai would have a third airport by then, according to a “Vision 2040” document released by the Ministry of Civil Aviation recently.

The report released at a Global Aviation Summit in Mumbai says most of the large Indian airports are expected to be saturated over the next 10-15 years. Quoting the vision document released by the ministry, a civil aviation ministry official said, “India’s commercial airline fleet is likely to grow from 622 in March, 2018 to around 2,359 in March, 2040.”

“India may have around 190-200 operational airports in 2040. The incremental land requirement is expected to be around 150,000 acres and the capital investment (not including cost of acquiring land) is expected to be $40-50 billion,” the official added.

Rs 50,000 cr projects in the works to decongest Delhi Union transport minister Nitin Gadkari said that the Centre has sanctioned projects worth `50,000 crore to decongest Delhi and save it from air pollution, which has become a serious problem.

Speaking at an event to lay the foundation stone for the `2,820 crore corridor between Akshardham and Eastern Peripherial Expressway (EPE), Gadkari said that work on Dwarka Expressway (on Delhi side) and Kalindi Kunj-Sohna via Faridabad will start soon.

The Akshardham and Eastern Peripherial Expressway (EPE) — a part of the Akshardham-Saharanpur (Uttar Pradesh) corridor — will be completely elevated and pass through densely populated areas like Khajuri Khas and Geeta Colony.

Listing out the other projects sanctioned by his ministry to decongest Delhi and neighbouring Gurugram, Gadkari said that the `10,000 crore Dwarka Expressway (the work in the Delhi portion of which is yet to start), `4,000 crore Urban Extension Road 2 (the third ring road) and `7,000 crore Delhi-Meerut expressway will play a big role in addressing the problem of traffic jam in the city.

IndoSpace enters Gujarat with Rs 650 cr investment IndoSpace, India’s leading developer of modern industrial real estate and logistics parks, announced its foray into Gujarat with the launch of its park at Bavla near Ahmedabad.

IndoSpace is also planning to build two more logistics parks in Gujarat.

Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group, said the industrial park at Bavla not only marks their foray into Gujarat but also shows their clear determination to strengthen leadership in the light industrial manufacturing space. They plan to invest `650 crore in new parks across Gujarat. On its completion, the projects are expected to generate employment for more than 10,000 people directly and indirectly. Also, over 2.5 million sq ft of Grade A leasable area in 3 years, would be added.

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India would fully operationalise Chabahar port soon Union Minister Nitin Gadkari had said recently that India is hopeful to fully operationalise the strategic Chabahar port in the Sistan-Balochistan province of Iran; and the government had allowed an Iranian bank to open a branch in Mumbai for related transactions. Gadkari, after Iran’s Minister of Foreign Affairs Mohammad Javad Zarif called on him, said that the meeting was ‘fruitful’ and both the sides could resolve several issues.

Gadkari said, “Chabahar port is very important for us. We are working very hard on it...Some problems were there, but the Iranian government and their minister... are also in the process to resolve all the issues as early as possible. I am confident that we will be in a position to start full function of Chabahar Port at the earliest.”

Zarif said, “We are very happy that both UCO Bank from India and Pasargad Bank from Iran are getting started with the business.”

The two banks will facilitate transactions relating to operation of berths at Chabahar port.

E-way bill to be integrated with NHAI’s FASTag to track GST evasion The GST E-way bill system is likely to be integrated with NHAI’s FASTag mechanism from April to help track movement of goods and check GST evasion.

The revenue department has set up an officers committee to integrate E-way bill, FASTag and DMIC’s Logistics Data Bank (LDB) services, after consultation with transporters.

“It has come to our notice that some transporters are doing multiple trips by generating a single e-way bill. Integration of e-way bill with FASTag would help fin nd the location of the vehicle and when and how many times it has crossed NHAI’s toll plazas,” an official expressed.

The integrated system on an all-India basis is planned to be rolled out from April, the official said.

JNPT amongst the world’s top 30 container ports The Jawaharlal Nehru Port Trust (JNPT) has been listed amongst the top 30 container ports globally, as per the latest Lloyds Report.

JNPT notched up five spots, to be 28th on the list, compared to its previous ranking.

This is a validation of all the efforts and strategic initiatives being implemented at JNPT in order to enhance overall port efficiency. Various new processes activated under the ‘ease of doing business’ initiative have not only helped in overall growth of the port business, but also allowed the EXIM trade to save time and cost which in turn have accentuated the growth story.

The JNPT also launched their App service to facilitate better tracking of consignment and ease the trade process for their EXIM partners.

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Çelebi wins ground handling license for Hyderabad Airport Turkey-based Çelebi Aviation Holding, a global ground handling service provider, said it has won the ground handling license for Hyderabad’s Rajiv Gandhi International Airport (RGIA). This is the third win for Çelebi since last year, after winning the license for the Bengaluru and Kannur airports.

Under the 10-year concession, Çelebi Aviation will provide ground handling services to make customer experience at the city airport seamless. The contract had been won on the basis of a highly competitive bidding process that assessed technical and financial qualifications of multiple global ground handling players who participated in the bid. Under the partnership, Çelebi plans to make an investment of $5-6 million (`35 crore-`42 crore).

COLD CHAIN 20

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Meet & network with over 200 cold chain supply chain professionals

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INDIAN COLD CHAIN MARKET 2020 The Cold Chain Logistics market in India is estimated to grow at a CAGR of 27% and expand at a CAGR of 23.88% in value terms, by 2019. Given automation and improved mechanisation in transportation and storing of products, the commodities can last longer under controlled temperature. PE Investment in Cold Chain Industry is one of the market trends..

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AP CM inaugurates Kurnool airport Andhra Pradesh Chief Minister N Chandrababu Naidu has said that Kurnool district in the Rayalaseema region of the State will emerge as a major industrial hub, with the greenfield Kurnool airport being inaugurated.

After inaugurating the major project, he said the foundation stone for the greenfield airport had been laid only 18 months and the terminal as well as the runway had been completed in record time. The trial run conducted recently was successful. The flights would take off from Kurnool airport this summer. “First, Kurnool will be linked with Amaravati, the capital, and later with Hyderabad, Bangalore, and Chennai. Air connectivity will bring in greater investment to the district and the region,” he said.

VO Chidambaranar port gets green signal for Rs 5,720 cr capacity expansion plan The expert appraisal committee attached to the ministry of environment, forest and climate change has recommended environment and coastal regulation zone (CRZ) clearances to V O Chidambaranar Port Trust (VOCPT) to expand the capacity of the Central government-run port located in Tamil Nadu’s Thoothukudi district with an investment of `5,720 crore.

The expansion of the inner harbour of VOCPT - one of the biggest yet undertaken at a major port, includes deepening the harbour basin and approach channel to handle ships with a draft of 15.2 metres, widening the port’s entrance, building six new berths and strengthening/upgradation of the existing berths. Deepening the approach channel and harbour basin will help VOCPT to dock very large container ships with a capacity to carry as much as 14,000 twenty-foot equivalent units or TEUs, as the shipping ministry looks to position the eastern coast port to compete with Colombo for transhipment after the cabotage restriction was lifted in May last year.

NMPT targets 44 mt of cargo handling in 2018-19 New Mangalore Port Trust (NMPT) is targetting a traffic throughput of 44 million tonnes (mt) in 2018-19. MT Krishna Babu, NMPT Chairman, said the traffic throughput in 2017-18 was 42.05 mt.

“Though NMPT is optimistic of reaching 45 million tonnes, it is challenging,” he said, adding that almost two months were lost because roads in the ghat section were closed following floods and landslides. These roads are the vital links for the port with the hinterland.

The port handled 31.91 mt of cargo during the first nine months of 2018-19 as against 31.01 mt in the corresponding period of 201718, registering a growth of 2.89 per cent. The average growth rate of all the major ports in the country was 3.77 per cent during the first nine months of the current fiscal.

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Concor coastal shipping service via Mangaluru Container Corporation of India (Concor) has launched the coastal shipping facility from Kandla Port to VOC Port in Tuticorin, via New Mangalore Port.

YR Belagal, Traffic Manager of New Mangalore Port Trust (NMPT), said the service aims to provide better connectivity from southern India to western and northern India through the sea route.

Concor, which will carry domestic and exim container cargo in coastal shipping, has made arrangements for lastmile connectivity through rail from New Mangalore Port to Bengaluru to cater to the trade fraternity in and around Bengaluru, apart from meeting the requirements in Mangaluru.

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HMM Starts China India Express Service with Mumbai Call Hyundai Merchant Marine has launched its China India Express (CIX) service with the first regular service call in Mumbai.

The 8,562 TEU Hyundai Loyalty, one of six vessels deployed on this service, visited the Bharat Mumbai Container Terminals Private Limited (BMCT) on January 2.

The service connects BMCT, operated by PSA International, to key Far East markets with the following port rotation: BMCT – Mundra – Karachi – Port Kelang – Singapore – Hong Kong – Gwangyang – Busan – Shanghai – Ningbo – Shekou – Singapore – BMCT. A total of 8,540 TEUs were handled during this first call in 42 hours.

Kandla Port makes way for bigger vessels by hosting MV Zardis In a first, Kandla Port recently handled MV Zardis with a LOA (Length overall) of 304.07 metres, making it the longest vessel to berth at the port.

In this voyage, the vessel would be loading 1041 TEUs of export containers to Bandar Abbas.

The arrival of MV Zardis at the port has elevated confidence about its capabilities and could eventually pave the way for it to emerge as a state-of-the-art container terminal fully capable to efficiently handle main line vessels including carrying out international transshipments.

The port states that this will help Kandla not only to generate container volumes but also in cost savings as it would greatly benefit scores of shippers, consignees, CHAs and transport fraternity who are in close proximity to Kandla as well as those located in the northern and western hinterland of India for whom Kandla is the nearest gateway port.

SpiceXpress starts freighter services between Guwahati and Hong Kong SpiceXpress has announced the launch of its dedicated freighter services between Guwahati and Hong Kong. SpiceXpress, the dedicated air cargo arm of SpiceJet, will operate a weekly flight between Guwahati and Hong Kong, its officials said.

The first flight took off on January 19 from Guwahati’s Lokpriya Gopinath Bordoloi International Airport carrying a consignment of fresh fruits and vegetables. With this launch, SpiceXpress will be the first to connect North East India with South East Asia through a freighter route. The company will deploy its Boeing 737 freighter on the route with an approximate carrying capacity of 18 tonnes.

The dedicated cargo flights to Hong Kong will help bring in huge opportunities for the North East region and allow them to expand their market outreach to the international markets. This in turn will also elevate the entire economy of the region.

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Allcargo makes space for Flipkart and Decathlon Allcargo Logistics’ warehousing arm has agreed to lease out a total of 3 million sq ft of space to Walmart-owned Flipkart and sporting goods seller Decathlon, in what is being billed as the single-biggest land-lease deal in the country’s warehousing space by volume.

Under separate agreements with the two companies, Allcargo Logistics & Industrial Parks will also invest close to `450 crore to build facilities for these two clients and receive an annual rent of `72 crore from from them, Chairman Shashi Kiran Shetty said. The company is also in talks to lease out an additional 3 million sq ft of land by March 2019, he said.

The two deals will add `120 crore to Allcargo’s annual revenue, Shetty said, adding that Allcargo’s total investment to make warehouses in the space will be about `1,000 crore.

FMCG 20

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Witness the leading voices from among Policymakers, Industry Players in the segment, Academicians & Researchers, as they discuss debate and ruminate on how the supply chain of this segment will be reshaped with the phenomenal growth and opportunities in India. Also, on how India is positioned to take advantage of the enormous changes in status quo disruptions, technology and practices in the FMCG supply chain.

INDIAN FMCG MARKET 2020 FMCG is the 4th largest sector in the Indian economy. A country whose middle class population is as big as the entire population of USA, is a market which no FMCG player can afford to overlook. India’s robust economic growth and rising household incomes are expected to increase consumer spending to US$ 3.6 trillion by 2020. FMCG market in India is expected to grow at a CAGR of 27.86 per cent and is expected to reach US$ 103.70 billion by 2020 from US$ 52.75 billion in 2017-18.

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international news

Air China ropes in Group Concorde as its cargo sales agent for Myanmar Group Concorde is now Air China’s cargo sales agent for Myanmar, effective January 2019.

Delhi-based Group Concorde represents more than 25 airlines and they operate out of 16 offices globally. “Winning the contract for Air China’s cargo sales in Myanmar is a significant addition to its portfolio and demonstrates its global presence,” the GSA stated.

Group Concorde is a diversified aviation services group in the cargo and passenger domains, covering segments as airline representations (General Sales and Service Agent), information technology & other related services to the aviation domain. The group has a globally sizeable presence and holds representation of prestigious international airlines in its portfolio.

Lufthansa to fly more freighters to India German carrier Lufthansa Cargo intends to increase its frequencies to India when it inducts four brand new Boeing 777 freighters during the course of 2019.

“Lufthansa cargo is in a lucky situation getting more freighters enter into its fleet.

Actually four 777 freighters will come during the year (2019); that will allow us to add frequencies to destinations we already serve like in Japan, in India, and in the US – routes where customers really seek more capacities. That’s good news for our customers I guess,” said Lufthansa Cargo board member Dorothea von Boxberg in a video interview posted on Lufthansa Cargo LinkedIn page.

In August 2017, Lufthansa had increased its weekly frequency to Mumbai to four from three flights earlier in response to the tremendous demand for air freight capacity out of India. In addition to its 10 weekly freighter flights to India covering Mumbai, Bengaluru, Chennai and Hyderabad, the airline offers belly space on passenger aircraft, which operate to India.

Turkish Cargo builds trust in ‘Live Animal’ transportation operations Turkish Cargo, the fastest growing air cargo brand around the world, has become a member to the Animal Transportation Association, one of the international organisations which aim to transport live animals at secure and ideal conditions.

Turkish Cargo not only became a member to the Animal Transportation Association but also takes the IATA LAR (IATA Live Animals Regulations) in all its acceptance, storage and transportation processes for the live animal transportation service it provides to its customers in 124 countries around the world.

Turkish Cargo is committed to implementing any and all rules to ensure documentation, packaging, labelling and marking, specified under the said regulations, strictly during the live animal transportation process.

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Saudia Cargo sponsors the Saudi International Golf Tournament Saudi Airlines Cargo Company has sponsored the Saudi International golf tournament as a formal logistics partner held in Saudi Arabia for the first time with the participation of world-class golfers, taking place in King Abdullah Economic City (KEAC) at the Royal Greens Golf & Country Club, from January 31 to February 3, Omar Talal Hariri Chief Executive Officer stated.

The anticipated golf tournament is the first European Tour golf event to be held in the Kingdom with the participation of elite global golf champions such as the world number one Justin Rose, world number two Brooks Koepka, world number three Dustin Johnson and the world number five Bryson Dechambeau, also joining them the four-time major champion and the 71-time worldwide winner, Ernie Els, who will make his second trip to King Abdullah Economic City after he was a part of the grand opening of the Royal Greens Golf Club in April 2018.

international news

DB Schenker partners with Magento to boost E-commerce offering Changi Airport sees cargo throughput increase by 1.4 per cent y/y in 2018 Singapore Changi Airport has recorded strong passenger growth in 2018 whereas the airfreight figures reflect stable growth.

The airport handled 65.6 million passenger movements, which represents an increase of 5.5 per cent year-on-year.

Airfreight throughput increased by 1.4 per cent to reach 2.15 million tonnes for 2018. For the year, the top five markets for airfreight were China, Australia, Hong Kong, the United States and India.

Coming to December figures, the airport reported 4.5 per cent surge in passenger movements, that is a total of 13 million passenger movements. For the first time in a month, Changi Airport welcomed more than six million passengers. The busiest day of the year was 21 December 2018 (the Friday before Christmas), with 221,155 passengers passing through Changi’s terminals - also a new record for the airport.

Logistics firm DB Schenker in order to boost its E-commerce business, has entered into strategic partnership with Magento, one of the world’s leading providers of E-commerce platforms, to equip small and midsize merchants with a powerful new extension.

The new partnership will combine DB Schenker’s fulfilment experience with global logistics markets with the powerful customisation and flexibility of the Magento E-commerce platform. This will provide retailers a seamless connection between the front-end and back-end on a global scale.

Being available through Magento Marketplace, the extension delivers a quick, convenient and cost-efficient way to connect web shops and warehousing services.

The partnership evolved from increasing customer demand for web-shop order tracking. The offered solution includes all related warehousing activities, especially pick and pack, and delivery status updates along the entire supply chain.

Geodis collaborates with Project Verte in the US France-based logistics services provider Geodis is partnering in the United States with Project Verte, an ecommerce platform using proprietary software and blockchain technology to provide brands a transparent and community-driven marketplace.

With this collaboration, Geodis aims to help small-andmedium-sized brands boost their E-commerce capabilities and fulfillment needs.

In its official release, the company states: “Ecommerce continues to grow at record rates. From 2015 to 2021, Statista predicts that E-commerce will increase from 7.4 per cent to 17.5 per cent of overall global retail sales. However, as brands continue to grow their online sales, connection with consumers becomes difficult and even more important.”

CMA CGM - first ocean carrier to be listed on Freightos Leading shipping group CMA CGM Group has signed an ambitious pilot agreement with Freightos, the world’s online freight marketplace.

With this, CMA CGM has become the first ocean carrier listed on Freightos.

Online bookings, guaranteed pricing, and secured capacity on CMA CGM China-US trade lanes are available on the platform, with further extension to additional lanes planned in the near future.

Through this platform, CMA CGM will offer importers and exporters of all sizes direct access to instant pricing, routing, and concrete sailing information in seconds, as well as guaranteed capacity.

CMA CGM rates can now be found free of charge on the Freightos website.

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APPOINTMENTS Sanjay Sethi named new chairman of JNPT

IndiGo appoints Rono Dutta as CEO

Sanjay Sethi has taken over as the Chairman of JNPT, effective from 3rd January, 2019.

Sethi was the Additional Municipal Commissioner (Projects) for MCGM (Municipal Corporation of Greater Mumbai), prior to this appointment.

Sethi brings with him 26 years of experience at senior levels in Government of Maharashtra and Government of India. Some of the other key portfolios Sethi served are, CEO – MIDC; Additional Metropolitan Commissioner – MMRDA’ Secretary and Development Commissioner – Industries Department, Govt of Maharashtra; Municipal Commissioner of Thane and Nagpur; and Managing Director – Maharashtra State Electricity Transmission Co Ltd.

IndiGo has appointed global aviation veteran Ronojoy Dutta as as the Chief Executive Officer to put together a five-year business plan for India’s biggest airline that controls more than 40 per cent of the domestic market.

Previously, Dutta was the President of United Airlines, where he worked for around 20 years, holding senior leadership positions including Senior VPPlanning, Senior VP-Maintenance, VP-Finance and VP-Information Technology. He was the advisor to Air Canada and US Airways. Dutta was also engaged in long-term consulting contracts with Hawaiian Airlines and Air Canada.

Philippe Gilbert to lead UPS’ SCS business

Stingl scoops Panalpina sales and marketing role in Europe

PS in a recent move has announced the appointment of Philippe Gilbert to the newly created role of President, Supply Chain Solutions.

Gilbert, who took up his new role in January this year, will report to UPS Chief Operating Officer Jim Barber and will be based at the company’s global headquarters in Atlanta. He will also join the UPS Management Committee.

Gilbert will be responsible for Global Logistics and Distribution, Global Freight Forwarding, UPS Freight as well as the technology-driven truckload freight brokerage business at Coyote.

Knecht joins Imperial Logistics as CCO CEVA Logistics executive Sandro Knecht has joined Imperial Logistics International as the chief commercial officer.

He will be based at the company’s new offices in Zurich and report to recentlyappointed CEO Hakan Bicil.

His first objective is the establishment of a new business development team to drive future growth and uncover new business opportunities primarily within Imperial Logistics International. This will include the recruitment of key industry-focused business development executives who will spearhead growth within sectors such as Automotive, Chemicals and Industrial.

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Freight forwarder and logistics services provider Panalpina has roped in Christian Stingl as regional head of marketing and sales for Europe.

In his new role effective January 14, 2019, he will be based in Frankfurt and report directly to the regional CEO Europe with a dotted line to the chief commercial officer.

Christian Stingl has a vast experience in logistics with a proven track record of driving profitability at Danzas, DHL, Schenker, and CEVA, where he worked for the last four years as vice president Freight Germany.

Angus Clarke new Executive VP of Air France-KLM group French airline group Air FranceKLM has appointed Angus Clarke as executive vice president- Strategy.

In his role effective February 1, 2019, he will be responsible for defining and implementing Air France-KLM’s long-term strategy, in coordination with all the Group’s stakeholders, as well as business development opportunities in its different entities.

With 18 years of experience, Clarke has developed an expertise in finance and in assessing the performance of companies operating in the air transport sector.

events

AAI launches Skyfit Mobile App for Aviation Fraternity at Global Aviation Summit 2019 Minister of Civil Aviation Suresh Prabhu launched the official mobile application ‘Skyfit’ for the aviation fraternity on January 16, 2019. This was done at the Global Aviation Summit at the Grand Hyatt in Mumbai.

The application was launched in the presence of Minister of State for Civil Aviation Jayant Sinha; Civil Aviation Secretary R N Choubey; Civil Aviation Joint Secretary Shefali Juneja; AAI ED (LM&BD) Anil Gupta; and AGP Breathworks CEO & Founder Ashok Bhatt. The ‘Skyfit’ mobile application is available on Google Play Store and iOS. It is devised to address the occupational stress of the personnel in aviation, be it air traffic controllers, pilots, cabin crews, ground handlers, passengers or any other related one. The unprecedented Suresh Prabhu applauded the visionary initiative of Skyfit by AAI growth in aviation has posed severe threat to the safety of aviation, in terms of the pressure created by capacity vs demand, on the existing infrastructure and resources. The worst hit of all is the human resource. The occupational stress due to cognitive work load of the personnel, especially in aviation can be a challenge for safe aviation. Long term exposure to the stress is posing severe health issues like hypertension, ischaemic heart disease, diabetes, peptic ulcers and psychoneurotic disorders for the people employed in the sector. Various measures have been discussed in the past like improving job planning and reliability of the work systems, improving the work environment, reduction of working hours, etc.

Report on Political Economy of Rice Trade between Bangladesh, India and Nepal released Bureau of Research on Industry and Economic Fundamentals (BRIEF), an economic research organisation, organised the launch of its latest report on ‘The Political of Rice Trade between Bangladesh, India and Nepal,’ on January 22, 2019 at India International Centre, Lodhi Road, New Delhi. The report was released by Sanjay Chadha, Additional Secretary, Ministry of Commerce, amidst other dignitaries. The study was supported by The Asia Foundation, New Delhi and co-authored by Afaq Hussain and Riya Sinha. The study was conducted in 2018 with the objective of assessing the factors that play a role in the shifting trade patterns between the selected countries and achieving food security.

The study highlighted some of the challenges that exist in rice trade from India to Bangladesh and Nepal. Some of these include non uniform farming practices due to small land-holding resulting in inconsistency of paddy quality, infrastructural challenges at the border points, deterioration in quality of rice due to high waiting time at the border points, lack of transparency, traceability and accountability in the procurement and supply chain module between the various entities in the chain – farmers, millers, warehouses and the fair price shops are some of the challenges highlighted in the report.

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events

Railways’ CONCOR begins coastal operations

Ministry of Railways’ public sector unit, Container Corporation of India Ltd (CONCOR’s) maiden voyage vessel- SSL Mumbai was flagged off from Kandla Port to Tuticorin Port byPiyush Goyal, Minister of Railways & Coal & Nitin Gadkari, Minister of Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation in the presence of Vinod Chavda, Member of Parliament (at Kandla Port) on 10th January, 2019 through remote control from Transport Bhawan, New Delhi. Girish Pillai, Member (Traffic), Railway Board; Gopal Krishna, Secretary, Ministry of Shipping; V.Kalyana Rama, CMD, CONCOR; and senior officers of Ministry of Railways & Shipping were also present on the occasion.

CED and JBS Academy partner for Skill Development Activities at Gujarat The Centre for Entrepreneurship Development (CED) - a Government of Gujarat Organisation, and JBS Academy Pvt Ltd (JBSAPL) have partnered for creating awareness on skill development activities for the budding generation of Dhrangadhra and Ahmedabad, focussing on the youth desiring to have employment through Skill Development in Logistics and other employable education sectors with also providing them gainful employment in the sector.

With the financial support from CED, the Academy conducted two Awareness Seminars at Dhrangadhra and Ahmedabad on 26th and 31st December, 2018.

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upcoming events Maritime Conclave 2019 Organised jointly by the Union Ministry of Shipping and the Union Ministry of Petroleum and Natural Gas, Maritime Conclave 2019 will be held at East Coast Railway Stadium, Bhubaneshwar, Odisha, between February 14 -15, 2019. It is a major contemporary platform for investment promotion in the maritime sector that signals India’s commitment to the development and scaling up of logistics infrastructure in general and maritime transport in particular.

To know more visit www.maritimeinvest.in 13th World Cargo Symposium Organised by IATA, the 13th annual World Cargo Symposium, to be held at Marina Bay Sands in Singapore from March 12 - 14, 2019, will bring together key stakeholders from the entire air cargo supply chain, with featuring plenary sessions, specialised tracks, workshops and executive summits, tackling aspects related to Technology & Innovation, Security & Customs, Cargo Operations, and Sustainability.

To know more visit www.iata.org ChemLogistics India

Scheduled from April 16 – 17, 2019, at Mumbai Exhibition Centre, Mumbai, ChemLogistics India – ‘International exhibition on Chemical Warehousing, Transport & Logistics’, will feature an exhibit of Automation & Control Systems, Distribution Systems, Freight Forwarders, Logistics Information Systems & Technologies, Materials For Storage, Special Purpose Materials, and much more.

To know more visit www.chemspecindia.com/chemlogistics

ApparelCONNECT 2019 Deemed to be India’s biggest event for apparel logistics professionals - APPARELCONNECT 2019, organised by Surecom Media is scheduled on May 16, 2019. The event will offer great opportunity to meet and network with over 200 apparel supply chain professionals.

To know more visit www.apparelconnect.in

air Cargo Europe The world’s largest exhibition and conference for the air cargo industry - Air Cargo Europe will be taking place from June 4 - 7, 2019 in Munich as part of transport logistic. Four days of exhibition and a half-day conference will provide air cargo professionals the perfect platform to expand knowledge, network and initiate business.

To know more visit www.aircargoeurope.com 9th India Warehousing Show Taking place from June 20 - 22, 2019 at Pragati Maidan Exhibition Complex, New Delhi, the 9th India Warehousing Show 2019 will be a platform where one can see latest technologies available, make new business contacts and catch up with industry colleagues at the exhibition while getting first hand exposure to latest market trends & insights. The event will showcase highlights of the business calendar for the entire Supply Chain industry in India in the Logistics & Transportation industry.

To know more visit www.indiawarehousingshow.com COLDCHAINCONNECT 2019 Organised by Surecom Media, the first edition of COLDCHAINCONNECT 2019 is a one-day conference to be held on July 25, 2019. Dedicated to the cold chain professionals, the conference will offer knowledge sharing & networking extensively, all Under one Roof.

To know more visit www.coldchainconnect.in 26th World Road Congress Organised by the World Road Association (PIARC), The XXVIth World Road Congress will take place from October 6 - 10, 2019 in Abu Dhabi, United Arab Emirates. With more than 1,200 international experts, leaders in the field of transport and active in the 22 Committees of PIARC, this Congress will focus on “Connecting Cultures - Enabling Economies”.

To know more visit www.aipcrabudhabi2019.org

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PEOPLECONNECT Mahesh Thakkar

Chairman & Managing Director, Hermes Travel & Cargo Pvt Ltd

In 1972, my brother and I started Hermes. With high ambition and matching penchant, the group further ventured into Real Estate and Manufacturing. Today we are in space where every enterprise of us is successful and each has a niche of its in own-including Cargo.

What is the biggest challenge you have faced in your career?

The most critical challenge for me

was to keep the Hermes flagship in Travel and Cargo going after I lost my dear son Mukesh.

Whilst his position in the Company cannot be ever replaced, I am pleased to see my grandson Rohan take on the mantle of Hermes, supported by his able team Your success mantra? And whom do you consider your Guru in business?

I am a firm believer of the saying “what you can do tomorrow you can do today, what you can do today you can do right now”.

I don’t have a Guru perse, but I look up to Azim Premji who served as the chairman of Wipro Limited. He is an incredible philanthropist and business entrepreneur.

Apart from work, what are your other interests and hobbies?

I am a horse-racing enthusiast. I have had the good fortune of owning over 100 horses who have won in over 300 races. I had been a steward for 3 years.

Needless to mention, my several business’s score topmost, on the list of my interests.

Which management lesson would you like to give to the ones who aspire to be in this industry?

It is important to work with dignity, to embrace failure and to understand that there is no substitute for hard work and perseverance. I would also like to advise the aspirants to carry out work honestly and ethically. CC

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Interviewed by Upamanyu Borah

Tell us about your journey so far!

I have had a rewarding and successful journey so far. I have been in the logistics business for 60 years, having started my career by joining the family business in 1953 which gave me the much desired platform to steer my capabilities in logistics.

50,000

Sq.Mtr total warehouse area across six airports

100+

Customers trust us to deliver their goods on time

600,000+

Tons general cargo handled per year

150,000+

Tons perishable cargo handled per year

12,000+

Sq. mtr cold storage area across three airports

2000+

employees across our network of airport warehouses

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