PAGES 108 inclusive of cover
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Responding to disruptions in Pharma supply chain
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Omni-channel Warehousing model gaining traction
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Doing it their way: Young and Brilliant leaders
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Spotlight 2019: Analysing India’s logistics ecosystem
Logistics Industry outlook
Insights and Forecasts
VOL XI ISSUE II january 2020 | `20
contents
Volume XI Issue II
january 2020
Publisher & Editor-in-Chief Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent / Sub-editor Upamanyu Borah Correspondent Saurabh Sharma Reporter Pallavi Jain
22 COVER STORY
Logistics Industry Outlook 2020: Insights and Forecasts
focus Responding to disruptions in Pharma supply chain................................................ 12 special feature Omni-channel Warehousing model gaining traction........................................... 40
interviews Tushar jani
Group Chairman, Cargo Service Centre (CSC) India...................................................... 74
hussain bin rajab
Co Chief Investment Officer, Economic Development Board (EDB), Bahrain..................... 82
Dr Abhijit Singh
features
Executive Director, Indian Ports Association (IPA)............................................. 84
Divyanshu Tambe
Executive Director– Transport & Logistics, Private Equity, M&A Transactions, EY............................. 86
Regulars
Doing it their way: Young and Brilliant leaders.......................................... 48 Spotlight 2019: Analysing India's logistics ecosystem.................................... 62
30,332
Frontline............................ 6 Hub........................................ 8 Buzz.................................... 10 Infrastructure.............. 78 Technology....................... 80 News............................. 92-97 Events........................ 98-102 Upcoming events........... 103 appointments................ 104 Peopleconnect.............. 106
Director Ajeet Kumar Marketing Manager Rahul Arora Marketing Executive Akash Gupta Rahul Jain Uday Arora Accounts & Administration Lavish Thakur Designer & Visualiser Ashok Saxena All materials printed in this publication is the sole property of CargoConnect. The printed matter contained in the magazine is based on research and analysis and information provided by the spokespersons featured. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily reflect the same. CargoConnect is owned and published by Smiti Suri, and is printed at Compudata Services, 42, DSIDC Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014
6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 97113 83365, 98109 62016 Email: cargoconnect@gmail.com sales@surecommedia.com Website: www.surecommedia.com
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frontline
For startups, government schemes may help boost Blockchain momentum in the New Year.
Road Transport and Highways department has already started FASTag system for toll collection. This has been implemented up to 51-52 per cent till date, and will be done completely by next month. Earlier, our toll collection was `68 cr per day. After implementing the FASTag system, it has gone up to `81 cr per day. Nitin Gadkari, Road Transport & Highways Minister
When making the country progress is our priority, our effort should also be to end the imbalance and disparity between the villages and cities. We should make farming attractive and increase the produce with the use of technology to only provide for the country but the world.
Indian Railways will implement `18000 cr project to operate trains at a speed of 160 kmph on the busy Delhi-Mumbai and Delhi-Kolkata routes. The US will help facilitate global banks to fund the purchase of equipment worth $85 mn to be erected at Chabahar port which India is developing in Iran.
The traffic on NW-1, which is the Haldia-Varanasi stretch on the Ganga, grew from 5.48 MT in 2017-18 to 6.79 MT in 2018-19. Under the third phase of Pradhan Mantri Gram Sadak Yojna, the government has set a target of completing road stretch of 1.25 lakh km by 2024-25 in the country. India’s aviation industry had benefitted significantly during the second half of fiscal 2019 due to the decline in industry capacity owing to the grounding of Jet Airways.
Narendra Singh Tomar, Union Rural Development Minister
Both India and Iran have agreed upon accelerating Chabahar project. Completing the Chabahar-Zahedan railway and connecting it to Iran’s national railway can elevate the position of Chabahar port, revolutionise regional commerce and help transport goods on a cheaper and shorter route. S Jaishankar, External Affairs Minister
It is important to have slot guidelines as airports have increasingly become congested. It is important for India to have an independent co-ordinator to monitor the airport slots and apportion them to all the airlines equally. Once adopted, more international airlines will be able to fly into India. Dimiter Zahariev, Manager Worldwide Airport Slots, IATA
The US has emerged as a strong trade partner with India, showing growth in exports (approximately 12 per cent led largely by furniture, vehicles, textiles and apparel) and imports (which grew by 6 per cent driven largely by metals, plastic and rubber).This is expected to provide huge opportunity for India. Steve Felder, Managing Director, Maersk South-Asia
6 | CargoConnect january 2020
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hub
India awaits more advanced cold storage capacities
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ndia currently has a total cold storage capacity of 226.7 lakh tonnes as against the required capacity of 350 lakh tonnes. Of this, a capacity of 53.55 lakh tonnes was created under different schemes since the NDA government took over in 2014-15. Currently 68 per cent of the existing cold storage capacity is used for storing
potato and yet farmers are not getting the right price. The situation in other commodities is no better. According to a 2015 study carried out by the National Centre for Cold Chain Development (NCCD), an autonomous body under the Agriculture Ministry, India needs cold storage infrastructure of 350 lakh tonnes to take care of the needs of farmers in the country. Earlier this year,
Crisil Research estimated that investment of `16,000-21,000 crore is being lined up in the sector between 2019 and 2023 for optimising the domestic post-harvest value chain and to feed the downstream food processing industry. However, to set up a multicommodity cold storage of 10,000 tonnes capacity, investment of around `20 crore is needed with a payback period of 6-7 years.
cold storage infrastructure
226.7 350 (lakh tonnes) (lakh tonnes) total cold storage capacity in India
capacity required in India
8 | CargoConnect january 2020
State
No. of cold storage
Capacity (in lakh tonnes)
Uttar Pradesh Gujarat Punjab Andhra Pradesh
1,817 827 430 224
98.82 30.32 14.13 11.40
Since 2014-15, a total of 1,104 cold storage facilities with a total capacity of 48.24 lakh tonnes were created under Mission for Integrated Development of Horticulture (MIDH). As many as 208 cold chain and value addition infrastructure facilities with 5.3 lakh tonnes capacity were built under Pradhan Mantri Kisan Sampark Yojana (PMKSY) till October 31 2018. Currently, 95 per cent of the cold storages are owned by the private sector, 3 per cent by cooperatives and the remaining 2 per cent by public sector undertakings. Since, bulk of the capacity is owned by the private sector, there is greater need for the central and state governments to rise up to the occasion and support the beleaguered industry. According to experts, the long term solution for higher farm income and farmers’ prosperity is the growth of a viable food processing industry being fed by a robust network of cold storages and transport infrastructure to keep the farm produce remunerative, keep moderate retail food inflation and maintaining the food security of the nation. Crisil expects the cold storage industry to grow at a CAGR of 13-15 per cent over fiscals 2019-23, mainly driven by rising demand for processed food, fresh fruits & vegetables, seafood and bio-pharmaceuticals in exports markets.
buzz
Moving into 2020, the warehouse is a carefully managed control centre and very often the strategic hub of E-commerce within an ever-extending supply chain. Exciting as it is to be entering a new decade, the business landscape has been transformed, with the arrival of many different challenges, some of which depend on where in the world your warehouse operations are located. In Asia and other developing countries priorities centre around ensuring reliable Internet connectivity and efficient transportation. In Europe and the US, attentions are directed elsewhere - towards making investments in automation to achieve order fulfilment targets and retaining the workers needed to sustain growth objectives. One key trend that every region shares, is the arrival of social commerce and digital transformation, with business transactions at all levels continuing to migrate online, albeit at very different rates.
Trends shaping warehouses of the future
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key global trends to watch out for in 2020
Drop shipping will increase substantially E-commerce and direct-to-consumer growth will continue to transform the fulfilment operations of retailers, manufacturers, plus their wholesalers and 3PLs. Many manufacturers and wholesalers have already started drop shipping and have disintermediated their retail partners. This trend will accelerate because it allows the seller to improve profit margins and create direct customer relationships, by building up their direct-toconsumer channels. Logistics service providers/3PLs are also benefiting from this trend, by obtaining business from retailers that are looking to outsource some of their direct-to-consumer fulfilment. Time- the next source of competitive advantage Price is no longer the main competitive differentiator. How long it
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takes to receive an item is becoming just as important, as Amazon has shown the industry. Fulfilment responsiveness (the time it takes from order receipt to final delivery) will increase over the next three years. In a recent ARC Advisory Group study, 77 per cent of respondents reported they expected it to increase in importance, significantly higher than the results for the same question in 2016. Future-proofing reverse logistics Reverse logistics was already an issue for many sellers and will become even more so in the future, thanks to the so called ‘Instagram effect’. Research into online shopper’s shows 34 per cent will make more impulse buys as social media sites make it easier to buy products directly, through in-platform selling tools. Once Instagram launches its ‘Buy on Instagram’ and
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10 | CargoConnect january 2020
‘Instagram Checkout’ tools, it goes without saying that these impulse shoppers will end-up sending more of their purchases back to retailers. Social media buyers are expected to account for a fifth of all online shoppers who make returns. Selecting the best picking method for multiple order profiles Picking methods like batch pick and sort will become more common, as they are ideal for cost efficiently processing high volumes of small orders as quickly as possible. Multiple orders or shipments can be picked simultaneously and then grouped into individual orders, greatly increasing the throughput possible in a warehouse by reducing travel times to gather stock items. Digital or E-commerce orders can then be released in the shortest possible time for the lowest cost possible – essential if extra resources are to be utilised during returns management. If the warehouse is exceptionally busy, with a large number of pickers and different product SKUs, wave picking can also be highly efficient. This is because it cuts down on congestion between locations and allows orders
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to be grouped into zones for optimum productivity. Maximising on WMS output An efficient warehouse runs on technology and the investment interest of warehouse executive’s show that tried and tested technologies such as a warehouse management system (WMS) and partial automation using conveyors or automated sortation systems remain their top priorities. Once these essential items are in place, other supporting technologies including transport management systems, voice recognition for picking and putaway, AGVs, and palletisers are also top investment priorities. New workarounds to cope with labour shortages For 2020 and beyond, multiple methods of strengthening warehouse workforces will be necessary, ranging from increasing pay, to offering enhanced training and benefits. Investing in operatives, for instance, by offering personal development and soft skills training opportunities, will be essential for companies to attract and retain the people they need to achieve their e-commerce and omnichannel expansion goals.
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Responding to disruptions in pharma supply chain It will not be an overstatement to say that pharma supply chains are the elixir of life, particularly at times, when there is a dire need of delivering critical life saving drugs. Last decade has been promising for the pharmaceutical industry owing to the uptick in healthcare spending by the bourgeois class but organisations can’t afford to lose sight to the fact that supply chain cost and quality of drugs are still the issues which demand utmost scrutiny.
A
t the present time when India is vying to become a global phar ma supply chain hub, not only for the advanced markets but for the emerging nations as well, there are various challenges which need to be tackled, and leading pharmaceutical firms have all the potential it requires to realise this objective by putting low-cost manufacturing and R&D practices in the system, but eventually it will require an optimised and efficient supply chain network in place as products have proliferated exponentially and become more complex, driven by patient’s growing therapeutic needs, hence cost and timely delivery of drugs will drive the pharma supply chain towards global competitiveness. Companies are looking at the next phase of growth, but there is a significant gap between the strategic vision and operational reality. 12 | CargoConnect january 2020
Saurabh Sharma
Current market trends
With the rise in spending on healthcare services by the middle class, the pharma industry has witnessed a significant growth most recently. The revenue of the top 10 pharma companies grew at about 19 per cent while the industry grew at about 18 per cent. According to estimates by Associated Chambers of Commerce of India (ASSOCHAM), India’s pharmaceutical industry is poised to exceed $55 bn by 2020 while the generics drugs market continues to expand; after growing by 22 per cent in the past decade, Indian exports now have a 20 per cent share of the global generic drug exports market. By 2020, India is expected to capture between 10 per cent and 12 per cent of a $350 bn global generics market. To assess the state of India’s end-toend pharma supply chain, which serves local and global markets, and to identify the imperatives for the future it is preemptive discern how the pharma companies are aligning their supply
According to estimates by ASSOCHAM, India’s pharmaceutical industry is poised to exceed $55 bn by 2020 while the generics drugs market continues to expand; after growing by 22 per cent in the past decade, Indian exports now have a 20 per cent share of the global generic drug exports market.
 
CargoConnect january 2020 | 13
chain network to make the best out of dynamic market and rise in the demands of quality drugs at moderate prices. Pharma supply chains in India now face greater pressure to enhance their performance to prepare for the future and create a competitive advantage.
Impediments to a seamless Pharma supply chain
With technology advancing many folds in each passing decade, it is quite easy now to move lifesaving drugs from manufacturing factory to customers within the required time. IoT and AI have made it possible. IoT helps to communicate and control the conditions, such as temperature of the drug and AI in deciding and optimising the best route for delivery. Avinash Kumar Talwar
Head - MRO & Pkg Material Sourcing (Strategic & Plant) - Global Supply Chain, Dr Reddy’s Laboratories
Since pharmaceutical firms go through a slew of complex processes and operations they are likely to encounter many challenges, from manufacturing to distribution. Though manufacturing and development operations can be optimised through in-house research and innovation but the real challenges are faced in distribution and transport for which the supply chain network has to be free from various inconsistencies. Talking about the predicaments of pharmaceutical supply chain in today’s global marketplace, Avinash Kumar Talwar, Head- MRO & Pkg Material Sourcing (Strategic & Plant) - Global Supply Chain at Dr Reddy’s Laboratories says, “Risks can arise from increasingly destructive natural disasters, cyber-attacks, or geopolitical actions. Unforeseen factors that cannot be controlled could influence the cost of goods, lead to delays or prevent deliveries, and negatively impact the budget of a well-prepared organisation.”
With above, today, there are a lot of internal and external challenges for Indian pharma, more from the external point of view when you look at global scrutiny. This is happening due to pressure from the regulatory agencies, the quality issues which they have outlined for implementation by industries across the world. Challenges that are affecting the overall performance of supply chains and need to be tackled are as follows: Supply chain costs- Supply chain costs depend heavily on the type of product. Specialised cold chain requirements for vaccines and other complex formulations can significantly increase supply chain cost. Quality and Regulatory issues- In the domestic market, the Central Drugs Standard Control Organisation (CDSCO) has increased the coverage and frequency of inspections to address the issue of low-quality drugs. Procurement- Issues with the quality of raw materials have spiraled over the past few years, leading to batch failures, production delays, and lack of availability of resources across plants. Drug Counterfeiting- It has profound and devastating impact on patients, so it has to be surveyed with utmost care throughout a channel.
Pharma supply chain costs are higher than best-in-class firms
14 | CargoConnect january 2020
India’s pharma companies face four supply chain challenges
Disruptions are likely to stay on and will be on the rise in days to come because of various factors, mainly of competition and pressure on service efficiency with minimum cost. The vulnerability altogether cannot be done away with only lean supply chain net work. T V Madhusudan
GM- Distribution, RPG Life Sciences
By 2020, India is expected to capture between 10 per cent and 12 per cent of a $350 bn global generics market.
16 | CargoConnect january 2020
Increased competition- Multiple products are on the market with very similar specifications, bioequivalence, and price points, marketed by both Indian and multinational firms. This fuels the need to continuously innovate and reduce the costs of existing drugs to remain competitive. Large number of vendors- In the next five years, a pharma company’s active supply base will double because of an increase in exports and growth of intermediates, recipients, and other raw materials. With companies exploring new synthesis routes and new technologies, raw material requirements are far more complex, and their availability is scattered. T V Madhusudan, GM- Distribution at RPG Life Sciences marks the inadequacy of infrastructure to complement lean supply chain channels. “Disruptions are likely to stay on and will be on the rise in days to come because of various factors, mainly of competition and pressure on service efficiency with minimum cost. The vulnerability altogether cannot be done away with only lean supply chain net work,” explains Madhusudan. Providing an effective temperature controlled end-to-end logistics is yet another issue which is indispensable in order to maintain the quality of the drugs throughout the operation. “Absence of single operator for end-to endlogistics makes it a challenge to overcome. Online tracking in all modes of transportation is also a prerequisite,” says Vinay Phatak, Head Quality South Asia, Bayer Pharmaceuticals.
Impact of tech renaissance
Technology remains one of the most crucial aspects for pharma companies to focus on. Leaders admit that one immediate result is greater transparency, which leads to better decision making. Technology can be used to integrate functions across the network, increase visibility of products across the value chain, and automate processes to improve the supply chain’s responsiveness and reliability. “Multiple technologies are evolving not only to improve supply chain efficiencies but also to ensure safety and security of the products. Communication and data exchange are part and parcel of the supply chain journey; these are being made stronger and faster. Track and trace systems along with Blockchain technologies are evolving across the globe along with strong GPS and VPS. We need to gracefully adopt and adapt it to remain in competition with the rest,” elaborates Prabir Das, Head- Packaging Tech Services, OSD (India), Mylan Laboratories. Integrating enterprise softwareAlthough most pharma companies have an enterprise resource planning (ERP) system, it is often used for specific operations and not integrated with the larger network. For example, if a company is using ERP software to manage inventory, the location of raw materials and finished products is available only at a plant level and not at a crosssite level. Companies can achieve significant operational efficiency with more effective implementation and use of ERP systems.
 
Multiple technologies are evolving not only to improve supply chain efficiencies but also to ensure safety and security of the products. Communication and data exchange are part and parcel of the supply chain journey; these are being made stronger and faster. Track and trace systems along with Blockchain technologies are evolving across the globe along with strong GPS and VPS. Prabir Das
Head- Packaging Tech Services, OSD (India), Mylan Laboratories
Increasing automation- Large pharma companies are focussing on automation across the value chain. However, very little CAPEX has been invested in automation. Companies with effective automation have streamlined the work flows with few handovers and end-to-end transparency on costs and business value. Tracking and visibility across the value chain- With rapid growth in the industry, pharma companies must use tracking technologies to streamline distribution and reduce lost revenue as a result of damaged products and recalls. Greater visibility during planning also optimises inventory levels across all nodes. As pharmaceutical and healthcare industries maintain a continual stock of drugs from suppliers and distributors across varied locations, an efficient temperature-controlled cold supply chain is the prerequisite for maintaining the quality of drugs, where technology has a vital role to play. Packaging companies are increasingly incorporating innovative design features and utilising more advanced technologies, to produce and manage
pioneering products and ever more sophisticated systems, which help eliminate excursions in temperature in the cold chain. Pharmaceutical shipments are temperature-sensitive, controlling temperature excursions during transit is a challenge and this concern is prevalent across the pharma industry. For some critical lifesaving drugs, even the slightest excursions can irreversibly alter the efficacy and potency of the drug. Generally, for oral solid dosages (OSDs) the requirement is to maintain temperature below 25 degrees throughout the logistics cycle of the product (factory-to-customer). During transit, at nodal change points (especially in case of air shipments), if the pallet is exposed to temperature excursions waiting for the next connecting flight, batch release at country of destination becomes an exercise for qualified person (QP) responsible for release. QP would need enough scientific proof to demon st rate t hat t he produc t is robust a nd ef f icac y/potenc y has not been impacted due to the temperature excursion. Talwar remarks, “With technology
Supply chain technology is lacking for India’s pharmaceutical industry
18 | CargoConnect january 2020
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When it comes to complex injectable drugs, biologics and vaccines, we need to address slightly more complex cold chain challenges. These formulations need more stringent shipment controls (2-8 degrees, subzero, etc.), and cold chain needs to be maintained across the entire supply chain network, right from loading till the time it’s delivered to the patient. Vickram Srivastava
Planning Head- Supply Chain, Zydus Group
Providing an effective temperature controlled end-to-end logistics is yet another issue which is indispensable in order to maintain the quality of the drugs throughout the operation. “Absence of single operator for endto end-logistics makes it a challenge to overcome. Online tracking in all modes of transportation is also a prerequisite. Vinay Phatak
Head Quality - South Asia, Bayer Pharmaceuticals
20 | CargoConnect january 2020
advancing many folds in each passing decade, it is quite easy now to move lifesaving drugs from manufacturing factory to customers within the required time. IoT and AI have made it possible. IoT helps to communicate and control the conditions, such as temperature of the drug and AI in deciding and optimising the best route for delivery. Of course, without network connectivity, all this instruments will have zero intrinsic values. As we call it the Industrial revolution 4.0, it is going to change the way we operate fundamentally. With 5G network coming soon, it opens up more possibilities and will solve issues that were not possible to solve yesterday.
Collaboration and Improvements
Innovations in the pharma supply chain cannot be realised in isolation but it has to occur across the ecosystem. However, some important initiatives are beyond the control of pharmaceutical firms. Strong interaction with government and industry bodies will be essential to make this happen. Government has updated the Indian Pharmacopoeia Commission to improve quality standards, but responsibility does not stop there. For example, policies governing testing and release need to be reexamined to reduce risks to patients. Regulatory improvements are a good sign, but stricter governance and vigilance to enforce the standards are clearly needed. A number of collaborative industry-company consortiums are pushing for improvements, but most lack a robust task force to monitor implementation. Striking a discourse on the need of collaboration between pharmaceutical manufacturer and logistics service providers, Talwar believes, “Organisations focus on their core strength but they depend on other partners in the ecosystem for rest of the functions. It is very important to have appropriate engagement with service providers depending on the value addition from their service. In other words, one can’t solve all the problems, so it is always good to partner with facilitators who are experts in offering those services.”
Meanwhile, talking about the improvements in packaging and labelling, Das reveals, “Different types of labelling with visual precautions help a lot in identifying the consignment. Level of education and awareness building at the grassroot level often helps to improve the processes. Choosing the right transport mode and carrier also play critical role. Road, Rail, Water, Air connectivity and their judicious combination with strong networking through effective communication help to minimise cost and cycle time, keeping the product quality intact.” Vickram Srivastava, Planning Head- Supply Chain at Zydus Group points out, “When it comes to complex injectable drugs, biologics and vaccines, we need to address slightly more complex cold chain challenges. These formulations need more stringent shipment controls (2-8 degrees, sub-zero, etc.), and cold chain needs to be maintained across the entire supply chain network, right from loading till the time it’s delivered to the patient. Freight forwarders and LSPs need to work closely with industry players on technology advancement keeping cost and affordability in mind.”
Looking ahead
The paramount mission, which has been the genesis of generic pharma industry is to make critical lifesaving drugs available across the globe at an affordable price without compromising on quality of the drug, hence the speed at which the product reaches the market/customer is very crucial. To realise their full supply chain potential, India’s pharma companies will need to revamp their models and processes. A supply chain transformation will be essential. This comprehensive change will require commitment from top management, coupled with a capable execution team that can help sustain the benefits. Although this is no small task, consumer goods companies that have built world-class high-performing supply chains have emerged as market leaders. Now is the time for pharma companies to follow suit and prepare for the future.
HAPPY NEW YEAR
coverstory
22 | CargoConnect january 2020
Logistics Industry
outlook 2020 Insights and Forecasts
The feature, Outlook 2020, concentrates on the ongoing progress and major developments in India’s logistics sector and allied industry. It also makes an effort to evaluate what the future holds for the sector. Ritika Arora Bhola
ndia’s logistics industry leaders are definitely steaming their high hopes and expectations from the year 2020, as it has promised to deliver positive outcomes on policies and goals conceived by experts in the last few years– in terms of worldclass infrastructure, cutting-edge technology/digitalisation, AI backed supply chain optimisation, global standards of working, increased international participation, logistics start-ups on rise and foreign investment in various sectors of the industry. Logistics is expressively considered as India’s sun-
shine sector, poised to reach a size of $215 bn by 2020. The sector is said to have witnessed heightened investor interest and growth throughout 2019. In India, the logistics industry continues to grow and prosper due to the improvement in retail, manufacturing and various other sectors. The rise in E-commerce consumption as well as domestic logistics also added to an improvement in the Indian logistics market in 2019. According to reports, the market size of India’s logistics sector is anticipated to reach $215 bn by 2020, logging 10.5 per cent compounded annual growth rate (CAGR) over 2017.
CargoConnect january 2020 | 23
Logistics A sunshine sector Logistics is often regarded as the main component of a country’s economy since it provides cost-effective resources which are required by other industries. Ankur Minda, General Manager (Land and Leasing), Allcargo Logistics couldn’t agree more. Minda definitely believes that logistics plays a vital role in strengthening the economy. “It is the lifeline for every other commercial sector. The industry is evolving at a fast pace as infra developments and tech advancements make inroads into the country.” In the last few years, there has been a significant rise in the volume of freight traffic moved by the LSPs. This has caused a ripple effect and benefited other domains like transportation, warehousing, freight forwarding, express cargo delivery, container services, shipping services, etc. The opportunities in the logistics sector, according to Minda, are mainly driven by the E-commerce boom and the shifting of manufacturing business to India. Slew of steps like DFCs, FTWZs, CFSs, MMLPs, etc. will help organise the sector in future. On the opportunities and challenges that however still exist in the segment, Minda jots down some key points: Lack of integration in transport networks, information technology, and warehousing and distribution facilities. Transportation Issues: More than 60 per cent of movement of goods is done by road transportation in India, which
Aditya Virwani COO, Embassy Group
Growth in manufacturing sector, rising consumption, boost in international relations, emergence of organised retail in the country, increasing private and international investments in infrastructure along with the dynamic growth in e-commerce will maintain prosperity in the sector for the next few years to come. 24 | CargoConnect january 2020
proves to be quite inefficient, because of poor road infrastructure, multiple checkpoints, and congestion. Warehousing: Lack of Grade A warehouses in the country due to high land costs and unavailability of single window system for giving clearances, and simplifying processes. Rules and regulations differ at different stages, are imposed by regional, national and local authorities. H ig h f uel cost s wh ic h i s i nc rea si ng t a r i f fs for transportation. Lack of quality workforce in this sector, and the available skill-set needs to be upgraded. Lack of adequate training in the sector, which has led to a crisis of skilled management as well as client service personnel. There has a tremendous impact of E-commerce on retail and logistics. Jasmine Singh, Nation Head– Industrial & Logistics Services, and Senior Executive Director- Advisory & Transactions Services, CBRE India says, “The ongoing trend of omni-channel retailing and supply chain development resulted in continued strong demand for modern industrial and logistics facilities in 2019. E-commerce is a key demand accelerator, as the handling of a product ordered online requires up to three times more space than a conventional sale; even as brick and mortar retailers also grow their industrial and logistics space needs. As technology permeates the sector, demand for quality space is increasing and corporates across segments are opting for large, modern warehouses. Advances in technology, particularly automation, will enhance the specifications and operations of logistics assets, thereby pushing older, inferior-grade properties down the demand pyramid.”
Rajesh Jaggi
Managing Partner, Real Estate, Everstone Group
We see huge scope in Value added services (VAS) in the future. VAS offers a huge opportunity to meet the customer demands and attain product customisation and delivery compliance in ILP (Integrated Logistics Plan). VAS include tailor made racking, lighting, floor amongst other things which leads streamlining services and partnership to optimise transportation, packaging and loading/unloading time etc., as a result reduction of overall logistics cost for the clients.
Chandranath Dey
Sr Director | Head – Industrial Operations, Business Development, Industrial Consulting & Supply Chain Consulting, JLL
Vishal Sharma
CEO, Schenker India
India’s logistics industry is projected to be US$ 215 billion by 2020 from US$ 160 billion in 2018. The robust policy framework supported by government initiatives, such as, GST implementation, Digital India Initiative, REIT, Make in India Initiative, Skill India Initiative and Reduction in Corporate Taxes from 25 per cent to 15 per cent, is expected to boost the core competencies of the Indian logistics industry.
Last mile logistics has become a trend among logistics professionals due to the growing demand of consumer goods and e-commerce. This would enable consumers to shop with the confidence that their items will arrive in a timely manner, especially in areas which are not as accessible through traditional transport methods.
Vikash Khatri, Founder, Aviral Consulting believes that some of the challenges of the logistics industry- poor visibility, low adoption of technology, unavailability of skilled manpower, scarcity of drivers, poor forecasting, and inadequate infrastructure are multi-dimensional. Khatri is optimistic on the opportunities of the sector which has grown rapidly postemergence of E-commerce. “Market is still fragmented and we see clear opportunity in consolidation. New age PE funded players will start driving on sustainability. The trend of optimisation in new age companies started in 2019 and expected to gain momentum in 2020,” assures Khatri. Talking about more new opportunities in the sector and how business would need to consolidate their market value, industry veterans highlight the following: Supply chain integration: Digitisation is playing a big role in accessing real-time data and information and creating more agile and efficient processes and operations. Businesses would need to integrate all the touch points in the supply chain to avoid operational silos and therefore wastage. Partnerships to reduce logistics costs: Companies will try to find the right logistics partners that use innovative solutions to solve supply chain problems. LSPs that can forecast accurately, reduce inventories by using just-intime (JIT) systems, have more accurate delivery ETA estimates, ultimately decreasing the amount of required administrative work considered over the rest for partnerships. Meeting customer expectations: Customers expect that their logistics services providers would continuously
innovate to reduce total costs and keep them informed throughout the process.
26 | CargoConnect january 2020
Emerging models and paradigms
Given current growth trajectories, the logistics industry in India is ready to grasp opportunities to leverage on new technologies and innovations on a global scale. This will support in improving efficiencies and transparency for our customer base. Vishal Sharma, CEO at Schenker India points out logistics automation and improved last-mile logistics as the two key trends that would prove to be ground-breaking solutions for the logistics industry. “Automated warehouses and fulfilment of logistic services through robotics would help to ease many operational processes and simplify supply chains, enabling higher levels of accuracy and efficiency, as well as providing better, more advanced technical jobs. Besides, lastmile logistics has become a trend among logistics professionals due to the growing demand of consumer goods and ecommerce. This would enable consumers to shop with the confidence that their items will arrive in a timely manner, especially in areas which are not as accessible through traditional transport methods.” Expressing similar sentiments, Khatri adds, “We foresee that key drivers of change in logistics are going to remain the same. Changes will be in adoption of upgraded or advanced technologies. We expect that in cross-border logistics penetration of Blockchain will increase, while in domestic sector usage of IoT and data analytics will gain momentum. Year 2020 will see a shift in approach towards environment and sustainability in logistics. First mega shift in the direction is change in
vehicle emission norms in 2020 while second change is expected in adoption of e-vehicles. Although for long haul it may take time, but up gradation to e-vehicle has started for the last-mile. On the warehousing front, last few years trend was towards better quality of warehouses but it is now moving towards smart and sustainable warehouses.” According to Mitra, transport corridors connecting two or more cities or regions will converge to form Mega Corridors and will lead to economic and technology clusters along these corridors. These integrated hubs will be the future centers of innovation, R&D and technical excellence attracting massive investment and government support. Further, Mitra contends that because the logistics market is undergoing consolidation largely based on scale and operational efficiency, Indian firms are looking at new logistics capabilities and more complex solutions from third-party logistics service partners. Emergence of 3PLs who give end–to-end service will propel the norm.
networks, integrated rail corridors, modern cargo facilities at airports, MMLPs, logistics clusters- DMIC and DFC initiatives taken by the government will create incremental job growth across the logistics sectors. Annual investments in the logistics sector are pegged to reach $500 bn by 2025 and employment is expected to surge to 40 mn by 2020. “The logistics firms will be moving from a traditional set-up to the integration of IT and technology to their operations to reduce the costs incurred and to meet the service demands. With the promise of steady growth and improvement, the service oriented logistics industry is ready to expand beyond the horizons in the first half of the next decade.” Meanwhile, Singh predicts that warehousing demand will strengthen further and India’s manufacturing sector will grow at a CAGR of 6.3 per cent between 2016-2025, second fastest in the world. Additionally, the warehousing stock is expected to touch 500 mn sq ft by 2030 and the share of Grade A stock will witness continuous increase. “Outlook of logistics sector is very positive,” says Khatri. GDP growth is expected to grow to approximately five per cent in FY 19-20. Long term view remains optimistic and growth is expected to further accelerate in coming years. We expect CAGR of eight to nine per cent in the sector.”
Annual investments in the logistics sector are pegged to reach $500 bn by 2025 and employment is expected to surge to 40 mn by 2020.
2020: What’s in store?
In the next five years, warehousing sector will see deployment of huge capital which is committed by PE funds in last couple of years in India. Minda states that world-class road
CargoConnect january 2020 | 27
Warehousing Underlying market opportunities
Despite economic slowdown, Indian warehousing sector is the one that has been witnessing consistent growth. Government adapted a transformative approach and streamlined regulations and reforms along with GST implementation which led to this growth. In addition, the introduction of logistic department in the ministry of commerce and significant changes in policies helped in the overall industrial growth. Aditya Virwani, COO, Embassy Group says that there was a 77 per cent year-on-year (YOY) growth in warehouse leasing. Virwani firmly recognises that growth in the manufacturing sector, rising consumption, boost in international relations, emergence of organised retail in the country, increasing private and international investments in infrastructure, along with the dynamic growth in E-commerce will maintain prosperity in the sector for the next few years to come. A recently published report on warehousing says that the manufacturing sector which accounts for 80 per cent of warehousing market is estimated to be at 739 mn sq ft in 2019 and is expected to grow to 86 mn sq m (922 mn sq ft) by 2024. At this rate, the current warehousing space is said to double in 3 years, until 2022. Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group informs that value-added services (VAS) offers a huge opportunity to meet the customer demands and attain product customisation and delivery compliance in integrated logistics plan (ILP). VAS include tailor-made racking, lighting, floor amongst other things which streamlines services and
partnerships to optimise transportation, packaging and loading/unloading time, etc. reducing the overall logistics cost for the clients. Customers give utmost preference to their convenience and value-added services help deliver these services with ultimate convenience to the customers. However, Jaggi stresses that acquisition of feasible land parcels is one of the major challenges that continues to impact the sector. Chandranath Dey, Sr Director, Head - Industrial Operations, Business Development, Industrial Consulting & Supply Chain Consulting at JLL expresses, “The robust policy framework supported by government initiatives such as GST implementation, Digital India initiative, REIT, Make in India initiative, Skill India initiative and Reduction in Corporate Taxes from 25 per cent to 15 per cent, is expected to boost the core competencies of the Indian logistics industry alike. In addition, there has been a major infrastructure push by the government to improve the country’s logistics infrastructure capacity. While, the length of operational National Highways has doubled from 71,000 km to 142,000 km during 2010-2019, there has been 40 per cent and 45 per cent growth in cargo handling respectively in Indian Railways and Indian Ports during the same period.”
Despite economic slowdown, Indian warehousing sector is the one that has been witnessing consistent growth.
Jasmine Singh
Nation Head – Industrial & Logistics Services & Senior Executive Director Advisory & Transactions Services, CBRE India
The ongoing trend of omni-channel retailing and supply chain development resulted in continued strong demand for modern industrial and logistics facilities in 2019. E-commerce is a key demand accelerator, as the handling of a product ordered online requires up to three times more space than a conventional sale; even as brick and mortar retailers also grow their industrial and logistics space needs. 28 | CargoConnect january 2020
Developments
One of the biggest disruptions in the warehousing sector has been an increase in the demand for warehouse leasing space and contribution of FMCG and retail sectors in the overall growth. Virwani says that the annual demand of around 32 mn sq ft has outshined the supply of 31 mn sq ft in the warehousing sector. This kind of growth has been witnessed very recently. With the increasing demand, lease transaction has also remained high. In fact compared to the total amount of 32 mn sq ft of industrial and logistic leases in 2018, 56 per cent was Grade A spaces.”
Ankur Minda
General Manager (Land and Leasing), Allcargo Logistics
Future looks really bright for logistics sector for next five years. Initiatives like Sagarmala Pariyojna and New National Waterways by the government of India will promote portled development in the country. It will be the key factors in creating jobs in water ways. The growth is backed by the boom in the e-commerce sector and expansionary policies of the FMCG firms.
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According to Jaggi, as technology is to set to play a significant role in the warehousing sector, it is anticipated that companies will partner with the technology counterparts to enable high – tech processes and compete with the global standards of warehousing. Meanwhile, Dey highlights the few very essential trends impacting the overall scenario of the warehousing sector: Facilities having global level specification, workmanship and upkeep- Efficient warehouse facilities with modern and dedicated technical specifications are essential to reach the end-consumers in time bound manner while maintaining the delivery quality. New age warehousing demands for planned developments with focus on parameters such as, height, floor load, fire protection, loading/ unloading platforms, truck movement, etc. Increasing footprints of International Funds and Developers- The incremental revenue opportunity in Indian warehousing segment and presence of multinational occupiers has resulted in to many international developers and funds moving in to the space, which includes IndoSpace, ESR, Logos, Blackstone, Morgan Stanley, ADIA, etc. Demand outstripping supply- Absorption has increased in the top eight cities from 10.2 mn sq ft in 2015 to 31.8 mn sq ft by the end of 2018 (24.1 mn sq ft till 3Q of 2019), and this has decreased the vacancy rate from 13 per cent in 2015 to nine per cent in 3Q of 2019. The growth in supply, although rapid, has not been able to match up to growth in demand and hence signifies reducing vacancies. 30 | CargoConnect january 2020
Vikash Khatri
Founder, Aviral Consulting
Year 2020 will see a shift in approach towards environment and sustainability in logistics. First mega shift in the direction is change in vehicle emission norms in 2020. While second change is expected in adoption of e-vehicles. Although for long haul it may take time, but last mile is up-gradation to e-vehicle has started. On warehousing front, last few years trend was towards better quality of warehouses but it is now moving towards smart and sustainable warehouses.
Future of Warehousing
Warehousing sector is witnessing sheen over the last few years as a dominant real estate asset class for the Indian logistics sector. There is a consistent growth in the demand and supply of Grade A and B warehouses in the last four years (2015-2018). JLL Industrial Services Research predict that the Indian warehousing sector would observe a 500 per cent growth in overall stock by 2020 when compared to 2010 with an extensive growth in Grade A from nearly zero to almost 45 per cent. The trend would likely to continue in near future.
Ocean Shipping Sailing through low tides The Indian maritime industry is undergoing a sea of change especially with the adoption of digitalisation. The Indian ports and shipping industry plays a major role in sustaining growth of the country’s trade and commerce. As per the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is moved through maritime transport.
Foreseeing the future of Maritime
The private ports which previously handled less than 10 per cent of the country’s total cargo traffic today have a share of more than 50 per cent. Coastal and inland shipping are expected to pick up despite the general slowdown. Although ‘cabotage relaxation’ has not brought about the desired results so far, it is expected to increase cargo movements in the coming years. An effort has also been made on increasing the shipping fleet in the country by manufacturing more
cargo vessels. All these are visible signs of progress being planned. Commenting on the same, Capt Srinivasan Sethumadhavan, General Manager, GAC Shipping (India) maintains, “The country definitely has vast economic potential and the government needs to do everything possible to unlock the same effectively to support the growth of maritime trade in the country." Sethumadhavan stresses on the need to improve the road and rail network and make available deep-draft berths at major ports. “The push towards making of a ‘Digital India’ is the need of the day." Agreeing to Sethumadhavan, Sanjam Sahi Gupta, Director, Sitara Shipping says, “There are clear signs that the Indian maritime sector is set for steady growth. The progress to a great deal also depend upon a few important factors like skilling and attracting talent to this sector, which has so far not been able to shed its stodgy image. Diversity is key and we need to encourage women participation in maritime. We need to ensure our people are trained par excellence. Besides, there is an urgent need for improvement of infrastructure as well.” Gupta feels, 2019 has been a challenging year, but with the industry facing so many disruptions, it is turned out to be an interesting year.
As per the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is moved through maritime transport.
Capt Srinivasan Sethumadhavan
General Manager GAC Shipping (India)
The country definitely has vast economic potential and the Government needs to do everything possible to unlock the same effectively to support the growth of maritime trade in the country. There is need to improve the road and rail network and make available deep-draft berths at major ports. The push towards making of a ‘Digital India’ is the need of the day. If the correct measures can be implemented, good potential lies ahead for the industry. 32 | CargoConnect january 2020
Sanjam Sahi Gupta Director, Sitara Shipping
There are clear signs that the Indian maritime sector is set for steady growth. The progress to a great deal depends upon a few important factors like skilling and attracting talent to this sector which has so far not been able to shed its stodgy image. Diversity is key and we need to encourage women participation in maritime. We need to ensure our people are trained par excellence. There is need for improvement of infrastructure as well.
Steve Felder, Managing Director, Maersk South Asia is also quite optimistic of the growth in the maritime sector and feels there’s a lot of scope in not only improving how logistics works, but also bringing down the cost of logistics through innovative measures and thus bringing about an extremely positive progress. Felder suggests, “It is important to note that while logistics has been a cost center for our customers in the past, it is no more the same. Our customers see us as a partner in their business to improve their delivery reliability and bring down their costs. We are facilitating this through our strategic approach of not limiting ourselves to ocean shipping but ensuring that we deliver end-toend logistics to our customers which simplifies their overall supply chain. By encompassing the entire logistical chain under one roof, we are transforming how logistics is being looked at.”
New offerings
Steve Felder
Managing Director – Maersk South Asia
We have had major digital transformations in the country, with the implementation of Blockchain. The Port Community User System have proven to catalyse trade processes and improve transparency. The technology enables all stakeholders to communicate one with another electronically and is helping in digitising the process of documentation, thereby ensuring transparency, avoiding error-prone transactions, improving efficiency and above all, reducing labour costs by diminishing the need for manual labour.
The year 2019 has been quite a positive year for the shipping and logistics industry, say experts. “We have had major digital transformations in the country, with the implementation of Blockchain. The Port Community User System (PCS1x) has proven to catalyse trade processes and improve transparency. The technology enables all stakeholders to communicate one with another electronically and is helping in digitising the process of documentation, thereby ensuring transparency, avoiding error-prone transactions, improving efficiency and
above all, reducing labour costs by diminishing the need for manual labour,” explains Felder. With above, the Sea Cargo Manifest and Transshipment Regulations (SCMT) which came into effect on August 1, 2019, was another step towards maintaining transparency with online submission of documents and a quicker clearance process. Further, a year into the implementation of Cabotage, there has been a meteoric increase in transshipment volumes in India by shipping lines with foreign flags.
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CargoConnect january 2020 | 33
Air Cargo Ready to take-off? Indian air cargo industry has come a long way and has seen tremendous growth and development in the last few years. But, to achieve its goal of becoming global cargo hub, it has to eliminate certain obstacles like inadequate infrastructure, poor connectivity, lack of skilled labour, high cost, low cargo volumes, etc. that come in its way. The Indian cargo industry needs to grow at a rate of about 12.9 per cent every year from 2018 to 2027 to achieve National Civil Aviation Policy (NCAP 2016) vision of reaching cargo volumes of 10 million tonnes (MT) by 2027. There is an urgent need to uplift Indian cargo market to achieve the overall vision. Talking about the key government initiatives in the last few years, Yashpal Sharma, Managing Director, Skyways Group explains, “The Government has taken various initiatives to improve the existing infrastructure at AAI run airports across India. They have also worked out plans to build few new airports. The UDAN scheme has turned out to be a big booster for regional connectivity and will thus make way for improvement of airport infrastructure at various regional locations of India. The government has already privatised six more airports in India and they will soon witness world class infrastructure for passenger and cargo. The private airports are enhancing capacities too. Lot of expansion of terminals and airports will create possibilities for more aircrafts which will mean greater cargo capacity. The cargo side im-
Yashpal Sharma
Managing Director, Skyways GROUP
The Government has taken various initiatives to improve the existing infrastructure at AAI run airports across India. They have also worked out plans to build few new airports. The UDAN scheme will turn out to be a big boost for regional connectivity and will thus make way for improvement of airport infrastructure at various regional locations of India. provements at various private airports are visible and heartening. General cargo, special cargoes like temperature controlled, etc. are all getting the right infra push from these airports and will make Indian supply chain comparable to any in the world.” Transshipment cargo which constitutes about 60- 70 per cent of total volumes handled by some of the leading global airports is quite low in India. The government has taken several initiatives to cope with the burgeoning traffic of cargo and to bring the country’s logistics on a par with global standards. In this regard the decision to reduce International air cargo dwell time from 72 hours to about 48 hours is worth mentioning.
The industry needs to grow at a rate of about 12.9 per cent every year from 2018 to 2027 to achieve NCAP vision of reaching cargo volumes of 10 MT by 2027.
34 | CargoConnect january 2020
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The government aims to do away with paper transactions and implement digital transactions wherever possible which will reduce the holding time of the cargo at air cargo terminals. The usage of new technology like IoT shall be useful in eliminating revenue leakage in the logistics chain. Plans are underway to leverage India’s geographical location as a transit hub between Europe and Southeast Asia and a gateway to the South Asian region. In this regard, government is adopting a systematic and inclusive approach with due exchange of thoughts with all the stakeholders in general and domestic and international airlines/ freighter operators through a digital platform to ensure transparency. Government is also planning to associate with the International trading partners to develop the trade-corridor for speedy movement of high-value air cargo. In order to promote India as a transit hub, the establishment of SEZs in the vicinity of major international airports is being planned and the availability of land is being explored. Industry leaders assert on the fact that India has all the ingredients to be a successful air cargo hub at its metro airports and that the government has been making significant efforts with association of cargo stakeholders in turning the country’s major airports into air cargo hubs. To complement the same, it is important that Indian carrier should use wide body freight aircrafts to create air cargo capacity by way of two way transportation of tourist to the in the Indian subcontinent. In this regard, Ministry of Civil Aviation (MoCA) has been extending all kind of encouragement to establish agreements between national and International carriers/freighters and other airline operators to provide access to key global cargo hubs. Regulating policies and streamlining of transshipment procedure to support seamless transshipment of air cargo from domestic to international flights and vice-versa on a tail-to-tail basis for quick and cost effective turn around are being implemented.
Future prospects
According to Sharma, to make India a transit cargo hub by 2025 is the ultimate dream of the air cargo industry. “This is a very ambitious target set by the government and will depend on various alignments within and outside the government agencies, port authorities, terminal operators and the freight forwarding community. India will need to make many more changes and ease the processes to facilitate transshipment at airports and ports. With the markets of Southeast Asia slowly getting get plagued with capacity constraints, India can surely add a great value in offering its shores and skies for being the ideal transit hub in the region.” Some key determinants for the future: The new air cargo policy aims to position India among the top five global air freight markets, in addition to creating air transshipment hubs at all major Indian airports, by 2025. 36 | CargoConnect january 2020
E-commerce Logistics Embracing the change The Indian E-commerce market is expected to grow to US$ 200 bn by 2026 from US$ 38.5 bn as of 2017. Triggered by increasing internet a nd sm a r t phone penetration, the ongoing digital transformation is expected to increase India’s total internet user base to 829 mn by 2021 from 604.21 mn as of December 2018. While, India’s E-commerce revenue is expected to jump from US$ 39 bn in 2017 to US$ 120 bn in 2020 growi ng at a n a n nual rate of 51 per cent, the highest in the world. Large international consumer and e-commerce companies are anchoring their presence in India. Therefore logistics will play a critical role in connecting these products, people and enterprises.
India’s E-commerce revenue is expected to jump from US$ 39 bn in 2017 to US$ 120 bn in 2020 growing at an annual rate of 51 per cent, the highest in the world.
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Ketan Kulkarni
CMO & Head – Business Development, Blue Dart ExpresS
Technology enabled innovations in payments, logistics, analytics and customer engagement are the major growth drivers. It is expected that the sector will get a further boost with a surge in consumer demand from Tier II and Tier III cities. The GOI has also recently announced a 100 per cent hike in the FDI limit (B2B models) which will further cultivate new opportunities within the e-commerce sector and encourage the participation of foreign players. Absorbing opportunities & challenges According to Ketan Kulkarni, CMO & Head– Business Development, Blue Dart Express, “Technology-enabled innovations in payment, logistics, analytics and customer engagement are the major growth drivers. It is expected that the sector will get a further boost with a surge in consumer demand from tier II and III cities. The government has also recently announced a 100 per cent hike in the FDI limit (B2B models) which will further cultivate new opportunities with-
in the E-commerce sector and encourage the participation of foreign players. While the growth potential is tremendous, there is intense competition amongst the players due to competitively priced products and ease of accessibility online, thereby increasing customer expectations.” Citing an example, Kulkarni adds, “An example of the above is the access to international brands as a result of crossborder trade of goods and services. Having said that, import duties and complexities in returns and exchanges are chal38 | CargoConnect january 2020
Rachid Fergati
MD, Indian subcontinent, UPS
Drones are already beginning to change the face of delivery. Drones is one technology which can be harnessed for the future for both business and humanitarian purposes. According to PwC, $127 billion is the total addressable value of drone powered solutions in all applicable industries.
lenging cross border E-commerce restricting its potential. Another major challenge for the segment is customers often opt for cash-on-delivery. Cash transactions result in high security, administration costs, etc. However, digital payment solutions are evolving fast to address these challenges.” Meanwhile, Rachid Fergati– MD, Indian subcontinent, UPS affirms that the last few years have been one of changing business and economic dynamics in India. According to a report by PwC, over the past two decades, India’s gross domestic product (GDP) has risen by more than US$1tr, in the process bringing millions of citizens into the fold of an emerging middle class. Therefore by 2021, India’s emerging and middle-class segments combined will comprise nearly 900 million people— which will open up new opportunities for growth and business. Fergati clarifies, more than challenges; it is about embracing a change. “E-commerce is about a larger ecosystem. It is about speed, accuracy and scale. There are three strategies businesses can employ to help their business cross trade borders when it comes to E-commerce. Find the right international partner: If the goods in the supply chain cross borders in different phases of completion and in different shipping modes, they need to think about how integrated the provider’s network is. Compliance procedures and regulations differ as geographical borders are crossed. The right logistics partner can help anticipate and ensure compliance at every stage, even before the shipment reaches the transit point. Have the right technology tools: E-commerce is about convenience for a shopper so it also requires creation of convenient delivery solutions, as the customers demand it. Visibility of the product is also critical since the shipper has already invested in the product and the consignee has paid for it. Consider risk of non-payment: Risk of non-payment can be a business limiting concern, especially for SMEs. Risks of
non-payment can be due to defaulting customers, loss of goods in transit etc. Solutions such as Trade Credit Protection, Cargo Insurance, etc. can help mitigate these risks and facilitate cross-border trade," states Fergati.
Future analysis
The focus for all major players in the sector in 2020 will be to improvise on quicker delivery options which are now a priority for consumers shopping online. “The aim will be to further decrease the time between placing the order and delivery, an imperative factor to survive in specific categories and geographies,” admits Kulkarni, while he adds, “Another game changer will be the use of AI to sense, predict, automate and even understand the consumer and then deliver a more personalised experience for every individual. Voice Search technology is also gaining grounds as more and more E-commerce sites are now being restructured and optimised as per the evolving user journey. Individuals will now be able to use natural language search queries or conversational style speaking that will be understood by the search engine.” Fergati highlights the use of drones and emerging models for last-mile deliveries as two important E-commerce trends in the coming years. “Drones are already beginning to change the face of delivery. Drones are one technology which can be harnessed for the future for both business and humanitarian purposes.” According to PwC, +$127 billion is the total addressable value of drone powered solutions in all applicable industries.
Talking about the last-mile delivery, Fergati says, “It is emerging as a crucial differentiator for international logistics companies. Customers demand convenience for shipment pick up and visibility which has led to innovations and collaborations. By collaborating with locally entrenched companies, customers of global companies can drop or collect their shipments at a location closest to them. In general, E-commerce continues to radically reshape how both B2C and B2B companies serve their customers.”
The next giant leap
Technology enabled innovations like digital payments, hyperlocal logistics, analytics driven customer engagement and digital advertisements will likely support the growth trajectory of India’s E-commerce industry. “The growth in E-commerce will further boost employment generation, increase revenue from exports, increase tax collection and provide better products and services to customers,” feels Kulkarni. Fergati believes with the progress of economic reforms, increasing rates of internet penetration and the rapid adoption of new technologies, Indian consumers are enjoying unprecedented levels of access to goods and services from around the world. “Being an enabler of global trade, UPS recognises, that such a shift requires an effective supply chain to be well positioned at the intersection of connectivity, technology and efficiency to provide a smart business network to enable Indian businesses to reach global consumers and world markets,” concludes Fergati.
CargoConnect january 2020 | 39
special feature
Omni-channel warehousing model gaining traction As retailers venture to explore the most expedient and integrated solution for warehousing and distribution in order to meet the customer expectations, omni-channel warehousing model can be a go to alternative for automated order fulfilment in E-commerce and retail sector alike.
G
Saurabh Sharma
oing by the convent ion, t here is one single region-specific warehouse attributed to a group of retail stores that exist in the vicinity and another which is used by their E-commerce portal. Nowadays, companies have come to an understanding that in order to keep up with the ultra swift delivery options, offered by major E-commerce players, they are going to need a solution which can serve their purpose in the most suitable manner. Instead of running one warehouse per channel, companies are gauging the perks of operating omni-channel warehouses that interact with each other seamlessly. They are basically designed more on the lines of fulfillment centres. Omni-channel retailing involves seamlessly integrating the customer experience across all interaction channels– in store, on the web, and on mobile devices. As customers are likely to use almost every viable and economic buying channel at their disposal, companies need to be omnipresent. The 40 | CargoConnect january 2020
buying process is no longer predictable. It is dynamic and sporadic, driven by increasing internet and mobile use, and it has more ‘touch points’ than ever.
The Omni-channel business model
Many retailers have already started to show their predilection towards the strategy by integrating their online and stores channel to leverage their vast customer reach and the convenience of internet shopping to boost revenues. The retailers’ omni-channel retail capabilities were scored on a four-point scale spanning four key categories of online experience, channel consistency, instore pickup, and in-store experience. According to a report by Market and Markets entitled ‘India Omnichannel and Warehouse Management Systems Market Type (Omni-Channel Solutions and Warehouse Management Systems), Component (Hardware, Software, and Service), Deployment Type (On-Premise and On-Cloud), and Vertical - Forecast to 2024’, India’s omnichannel and warehouse management systems market size is expected to grow from US$231 million in 2019 to US$488
special feature
According to a report entitled ‘India Omnichannel and Warehouse Management Systems Market Type, Component, Deployment Type, and Vertical Forecast to 2024’, India’s omni-channel and warehouse management systems market size is expected to grow from US$231 million in 2019 to US$488 million by 2024, at a CAGR of 16.2 per cent. million by 2024, at a compound annual growth rate (CAGR) of 16.2 per cent during the forecast period. Worldwide, leading retailers have deployed several omni-channel initiatives. For example, Walmart offers paywith-cash option which lets customers order merchandise online and pay with cash at its stores. This permits customers who do not own a credit or debit card to buy online, which boosts online traffic. Sporting goods giant Decathlon is
yet another example who has managed to set up the best omni- channel retail and digital store capabilities in Singapore and planning to expand it in the retail stores across India. French retailer has equipped its stores with automated inventory management tools like RFID tags and a dedicated service counter to deliver efficient in-store pickup. It also provides cross-store inventory visibility for associates and customers and its option for customers to self-checkout with in-aisle kiosks. CargoConnect january 2020 | 41
special feature With 70 large, warehouse-like omni-channel stores, Decathlon’s product pricing is about 30-40 per cent lower than competing products since it sells everything from running shoes to mountaineering equipment under its own brands. This also helps the retailer earn higher operating margins. Similarly, office supplies giant- Staples has launched a ‘buy online, pick up in-store’ program to fight declining in-store sales and profits.
Demand driving advancement in Technology
Customer expectations are touching new heights; they expect to receive their goods on-time and in perfect condition. This expectation is met inside the distribution center where the appropriate systems and solutions have been deployed. Customers expect to be able to check the status of their orders from the time of ordering, throughout picking and packing, to the point of delivery. Every step of the fulfilment process must be handled efficiently, accurately, consistently and cost-effectively. According to Ushasri Tirumala, Senior VP & General Manager at Manhattan Associates “Talking about Omni-channel retail, customers expect new alternatives in fulfilment such as buy online, pickup in-store or ship from store. Effectively this transforms a traditional retail store into a fulfilment centre. This requires optimization of store inventory and fulfillment to deliver on customer expectations. Retailers also need to confidently offer these
42 | CargoConnect january 2020
Ushasri Tirumala Senior VP & General Manager, Manhattan Associates
Waveless picking reimagines traditional order fulfilment logic and offers a more flexible, E-commerce-centric fulfilment method. It continuously evaluates the order pool and automatically releases work based on variables such as order priorities and facility processing capacities.
flexible fulfilment options that meet profitability targets too.” Tiruamal says, “Recent advancements in robotics and automation have transformed warehouses. Every resource – man and machine – needs to be orchestrated through efficient workflows to maximise performance. Modern warehouse execution systems need to be embedded within a Warehouse Management System (WMS) to efficiently and seamlessly orchestrate workflow across the full spectrum of resources.” In a traditional supply chain, to move goods from the factory to the end customer, one needs to go through a multi-level supply chain built up of a factory warehouse, an international wa rehou s e, d i st r ibut ion ce nters throughout the world, and stores. The international warehouse handles mostly full pallets. So the distribution center
receives huge pallets of single products that then have to be unpacked and shipped to their respective destinations. Finally, the store sells the products by the piece. Therefore, if a retailer wants to ship goods straight to a customer (e.g., because of an online order), the only place where all the products are in stock is the store level. All this makes the adoption of technology, robotics and artificial intelligence almost indispensable. Go Sport is another French global brand in sportswear, equipment and fitness lifestyle, in association with Tablez, a retail group in India which has recently set foot in India and driving demand through digital and experiential marketing initiatives. According to Adeeb Ahamed, MD, Tablez Retail, “Go Sport brings to the table a variety of international and
  special feature
Omni-channel warehousing good to know facts Factors affecting omnichannel warehousing Increase in online sales, connected Indian consumers, and easement of FDI policies in India
are driving the overall growth of the India omni-channel market
The software segment has the
largest market share in India omnichannel and warehouse management systems market during the forecast period
Apparel and food and beverages verticals have the largest market shares in India omni-channel market during the forecast period
Souce: Research and Markets
Decathlon is yet another
example who has managed to
set up the best omnichannel retail and digital store capabilities in Singapore and planning to
expand it in the retail stores across India.
Automation is bound to have a physical impact on the warehouse; new areas will need to be set up for packing stations and consolidation.
Revamping traditional warehouse processes to
handle web-based orders is just one of the many impacts.
Leading retailers such as
Walmart offers pay-withcash option which lets customers order merchandise online and pay with cash at its stores. This
permits customers who do not own a credit or debit card to buy online, which boosts online traffic.
CargoConnect january 2020 | 43
special feature home-grown brands for its consumers, which no other multi-sport brand store has. The brand’s store format differs in comparison to other multi-brand stores”. The brand plans to open 20 such stores by the year 2024. It will double the stores if the responses for the first couple of stores is good in India. Speaking on the revenue expectations, Ahamed says, “The total sport branded segment is around $3.3 billion globally and is supposed to grow around five billion next year and further 9 per cent year on year. But we are
Adeeb Ahamed MD, Tablez Retail
Go Sport brings to the table a variety of international and homegrown brands for its consumers, which no other multi-sport brand store has. The brand’s store format differs in comparison to other multi-brand stores.
looking to get minute numbers compared to the international field because the consumer’s mindset in India differs from abroad. The Indian consumer looks for a value in the product. Vivekanand, Country Manager, India & APAC, GreyOrange is of the opinion that with rising expectations over the years, E-commerce has been compelled to upgrade to a great degree of automation to stay competitive and provide faster turnaround. Vivekanand says, “For instance, in a warehouse, technologies such as AI and robotics are being deployed to handle millions of parcels to be shipped every day. These technologies offer a clear cost benefit in terms of faster order fulfilment and delivery to consumers, higher accuracy in order consolidation, reducing returns and holding leaner inventory.” Also, with the implementation of Goods and Services Tax (GST), players are looking at larger state-ofthe-art warehouses which would be about five to ten times of their current facilities, making automation a critical 44 | CargoConnect january 2020
part of the supply chain process, believes Vivekanand. Automation is bound to have a physical impact on the warehouse; new areas will need to be set up for packing stations and consolidation. Revamping traditional warehouse processes to handle web-based orders is just one of the many impacts. In some cases, distribution centers will need to be relocated to cover a wider portfolio of goods. Apart from the physical aspect, there will be a significant impact on warehouse IT processes.
Impediments to restructuring
Any type of fundamental reform will require transformation in the entire supply chain infrastructure, therefore restructuring a traditional warehouse is undoubtedly a rigorous and capital intensive process which demands a thorough knowledge of omni-channel system of delivery. According to McKinsey & Company, the average supply chain is 43 per cent digitised, and those that have
achieved digitalisation can increase annual growth of earnings by 3.2 per cent. Unfortunately, supply chain leaders still experience a disparity between the actual gains and potential gains. Technology gaps have become commonplace as supply chain technologies were put on the proverbial back burner after an initial burst of innovation and implementation. There are many other challenges associated with enabling omni-channel warehouses, a few of which are enlisted below: High Upfront Cost: Initial cost of robotics and automation uptake peters out stakeholders from making any further investments. Lack of Inventory Visibility and Metrics: To address this challenge, businesses must develop an efficient order fulfilment process through the use of a fine-tuned WMS. Fragmented Supply Chain Processes: Larger companies generally have many private warehouses and distribution centres, managed by different in-house and outsourced operators that run on different systems and tactics. Unreliable Order Fulfilment Processes: An unreliable order fulfilment process can lead to shipping delays, which can deter customers from doing business with that company in the future. Ignorance of Technology: In order to match the global standard, traditional warehouses still need to grasp the latest trend in technology.
special feature Discussing the viability of autonomous robots and AI in omni-channel environment, Vivekanand elucidates, “Autonomous Mobile Robotics (AMR) systems ensure the consolidation of multiple orders efficiently and help them reach the consumers within the expected timeframe. Capable of operating 24x7, this adds to improved productivity, less returns and minimal loss of sales. By reducing multiple touch-points in a warehouse, helping in inventory management and storage, replenishment and order picking, fulfilment and automation thus, helps enhance productivity, reduce costs and enable compa-
nies to achieve greater Return on Investement (ROI) by optimising these various processes.” Order fulfilment is yet another aspect to be taken into account while contemplating on refurbishment of traditional warehouses. Tirumala says, “The traditional order fulfilment approach in the DC, known as ‘wave processing’ which is used by many to process large batch distribution orders, orders are picked in batches, based on assumed processing capacity. This worked satisfactorily for traditional wholesale channel order fulfilment. However, for an omni-channel operation, each order maybe unique with multiple small shipments involved. This new paradigm shift requires a different strategy known as waveless order fulfilment.” “Waveless picking reimagines traditional order fulfilment logic and offers a more flexible, E-commerce-centric 46 | CargoConnect january 2020
Vivekanand Country Manager, India & APAC, GreyOrange
By reducing multiple touch-points in a warehouse, helping in inventory management and storage, replenishment, fulfilment and automation thus helps enhance productivity, reduce costs and enable companies to achieve greater ROI by optimising these various processes.
fulfilment method. It continuously evaluates the order pool and automatically releases work based on variables such as order priorities and facility processing capacities. As soon as there is capacity in the fulfilment operation, new orders are processed. It is extremely valuable to today’s distribution centres, as the core science-driven methods support continuous analysis and real-time execution strategies,” Tirumala informs.
The transition towards Omni-channel
As days of dedicated warehouses for Ecommerce are in passing, warehouse managers must understand the necessity of new systems and processes to create omni-channel warehouses or remodeling the conventional ones in order to stay competitive in the E-commerce driven supply chain market. Supply chain players that understand the challenges of warehouse transformation and follows
the right best practices will succeed. Warehouse robotics may form a major component of the automation sector globally. The Indian warehouse robotics market is projected to grow at a double digit CAGR till 2024. Increasing technological advancements, rapid penetration of automation in warehouses, the fastgrowing E-commerce; a whopping $2.3 trillion market today, and need for enhanced quality and reliability in a warehouse are aiding to the growth of Artificial Intelligence (AI) and robotics. Going forward, the advent of positive omni-channel experience will continue to evolve under the influence of intermittent consumer demands. Profitability of an enterprise will always depend on key success factors such as well-orchestrated execution, availability of real-time information/analytics, optimised inventory, leveraging technology and the ability to fulfil the orders promised.
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doing it their way Young and brilliant leaders
These days, more than a quarter of leaders in the workplace are aged between 20 and 35 years old and with the huge number of startup companies being established every year, this figure is sure to increase significantly over the next decade. Read on to find out more about the importance of youth leadership development and how to develop young leaders in the workplace, as Upamanyu Borah discovers by interviewing six young leaders in their late 30s or early 40s who bring their own brand of management style to running their companies.
48 | CargoConnect january 2020
T
he supply chain sector is facing an age problem. By an informal count, the majority of logistics company CEOs are 50 years old, or older, and the pipeline of up-and-coming talent to replace them is running thin. The same trend holds true for the supply of prospective chief supply chain officers within global manufacturers and retailers. Generations after generation of leaders have followed the same path: Get thrown into the position to take over leading their former peers Spend 10 or so years guessing at what they’re supposed to do as a leader, and Then start attending leadership development programs which attempt to educate them on the effective ways to manage and lead Therefore, it’s wonderful that organisations are reviewing succession plans, developing depth charts and identifying their high potentials. While much of the industry is grappling with this succession plan, there are exceptions—companies in which younger CEOs are thriving. These include third-party logistics firms, emerging technology companies, family-owned logistics businesses, start-ups, and, less frequently, joint
v e n t u r e s. T he younger CEOs in these businesses, like their older counterparts, are passionate about what they do. As supply chain strategy continues to rise in the global business sphere, the need for their fresh perspectives will only escalate. Companies such as Spotify, Facebook, Airbnb, Asana were all founded or run by leaders under the age of 40. This has eroded the traditional belief that great leadership comes with experience. This movement has also inspired many young entrepreneurs to start their own ventures, and with the barriers to starting your own business go down, many start-up founders jump into founder roles right out of school. So despite their lack of professional experience, how can young leaders ensure they do just that; lead?
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Walk the talk As supply chain strategy continues to rise in the global business sphere, the need for their fresh perspectives will only escalate. Young leaders must take responsibility for their actions and behaviour, and for what they can’t make up in experience, they can by self-reflecting and understanding themselves as this will enable them to lead
their businesses and teams. Leadership takes a whole lot of courage and young leaders need to build strategies to help them overcome obstacles (which they will inevitably face) but also remember to have fun and enjoy their youth. Staying curious, leaning on mentors and being able to self-reflect will go a long way, both in the present and future. Adopting good practices early on will set up young leaders for success no matter what endeavour they choose. They need not wait for job titles or work experience to define their ability to lead; leadership starts from within and can happen at any age.
CargoConnect january 2020 | 49
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Foster diversity and inclusion
Lessons of diversity must become a part of our daily business. Diversity is not only a moral imperative, but it can actually make businesses more effective in the long run. Diversity and inclusion increase the capacity for innovation by expanding the range of a company’s ideas and options. To unlock the full potential of diversity, leaders needs to create a culture conducive to embracing new ideas; they must install enabling measures like open communication practices and a commitment to building diversity across the organisation starting with the top management.
Creating a high-performing workforce
Akshyat Bhatia Inland Product Manager, Maersk South Asia What you sow today, you reap tomorrow
Today, business goals need to be centred around sustainability and the environment. We need to take a hard look at existing products and offering to ensure we have targets linked to emissions, carbon footprint that revolves around sustainability. In addition to taking care of the ecosystem, what is also important for leaders today is to understand and act on the social responsibilities. This has to be done in such a way that the businesses truly make an impact on the communities that are the support systems for our businesses.
50 | CargoConnect january 2020
“We are all learning: no one gets it right every time. A more compassionate attitude towards ourselves and our teams and organisation, only helps us to stay in the game.”
Supply chain and logistics companies are undergoing major evolution – the quality of talent this industry attracts continues to improve, deeper tech capabilities are entering the marketplace and there is continuous innovation from landside logistics to ocean shipping. The pace of change seen in the last two to three years has been brisk – consumer demands are changing rapidly, and the supply side needs to keep up with that.
Look at the bigger picture
Today, logistics is a sector that attracts some of the highest venture funding, brightest talent and is the backbone of the economy. Innovation and digitisation are taking centre stage within logistics industry now and there is continuous improvement in terms of efficiency and productivity that we see across the sector. It is highly likely that logistics will continue to be one of the fastest growing sectors in India in coming years, especially with the ongoing E-commerce growth, creation of networks hub networks and freight corridors and increased need for warehousing.
Strengthen accountability
Leaders today need to build solutions based on insights and ensure they deliver a quality product which can eventually be scaled up. The key is listening to the customer and having an ‘outside in’ approach rather than ‘inside out’. It always starts with the customer and we need to go all the way to deliver what they want.
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Cultural intelligence
Yashpal Sharma MD, Skyways Group
Leadership today is not just about being followed but it is about building capabilities of the team and creating a strong democratic environment. It is about a deep sense of ethics and being driven by core ideals of justice and selfless behavior- collective envisioning, building a sense of emotional intelligence and having strong social skills in the organisation.
“Self-success is when over a long period of time one is able to up skill oneself and business to meet the challenge of each era. But a business can be called successful only when it can compete with the well-established and fearless new entrants of today’s era.”
Know your inclusiveleadership shadow
Being inclusive with the team is the key. Listening to them and appreciating their ideas and concepts is a must. Giving the new generation small leadership roles from time to time ensures the business gets a solid shot in the arm by their exuberance. Being a new leader requires a completely different set of skills than those that are needed as an individual contributor. It requires adjusting to a leadership mindset, understanding how to hold other people accountable for results, and empowering a team of diverse individuals to strive for a common goal.
Advances that will transform life, business
Logistics has added steam to the world in the last couple of centuries. Today, it is galvanising the world’s appetite to buy and sell in hours and not days or weeks. The industry is evolving at lightning speed and this is making the leadership of today transform itself.
The winning leap
Logistics Industry is on the cusp of major structural changes in terms of digitisation and adoption of newer technologies. At least the next 5-7 years will bring about vast transformations, and India is very well positioned by strong leadership, massive consumer base and a super aspiring workforce.
Developmental milestones
Keep technology only as a tool and not be totally dependent on it specially for communicating. Social skills should be constantly nurtured by personal engagements and not only through digital networking. Business strategy is a work in progress so re-write it periodically. Customer driven strategy will always win over text book strategy.
52 | CargoConnect january 2020
The Highest Circulated/Read & Referred Logistics Industry Magazine
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Uphold every single ethical expectation
Today’s young generation is different; it is more responsible and also that the law framework has tightened up. Besides, with better talent coming to the industry and increasing technology intervention and lesser manual work, young leaders are finding it comparatively easier to create professional work atmosphere. As
one party’s behaviour is linked to another one, the overall industry is moving towards more ethical behaviour and promoting professional work cultures.
should consider. Young leaders must work for building the brand of purpose and it has to be large and benefitting to all.
Be consistent with the purpose
The logistics industry, largely transport, does not come very clean, however, with newer laws, better education levels and technology, the environment is becoming more favourable and there is scope of transforming the image of the sector. As people in the industry are also working with increased enthusiasm and taking help of data and technology to improve efficiency, the ideals supplement the developments here.
Ethics, adaptability, grass root level of training and social consciousness are some key lessons new leadership
“Whenever you are faced with unexpected scenarios or challenges, one thing to do is to go back to the basics and analyse if there is a fundamental error. Both of these - even if they are unintentional - could be used as a way to assess how you approach something that is unforeseen.” Aditya Shah Executive Director, V-Trans (I)
54 | CargoConnect january 2020
The next-gen model
Setting up high standards
The future of logistics in India is very bright and challenging to compete with global standards. There is certainly increase in transparency and visibility as compared to the past, and it will be more going forward leaving less room for inefficiencies. The sector has got attentions of VCs too and we see decent fund inflow. Even the industry players are also building capabilities in bring more efficiency overall. The sector is witnessing consolidation and collaboration, mergers and acquisitions will throw smaller players out of the competition. The unorganised and small players will eventually either merge with the bigger ones or leave the sector.
People matters
A leader evolves every day and learning never stops, this is the basic principle that aspiring leaders should keep in mind. There is always scope for improvement. Today, leadership coaching is very prevalent and leaders at top work on the mindset and emotional behavior aspect. Some essentials for leaders are – care for you people, let them take risk while you stand behind them, take more portion of criticism and lesser of praise.
Announcing now! Logistics Excellence Awards
2020
The presentation of the annual CARGOCONNECT Logistics Excellence Awards is a glittering night of entertainment and luxury dining where you can join your logistics industry colleagues from across the world. This important event, which celebrates excellence and achievement in the logistics industry, will take place this year on the evening of Thursday 16th January 2020 at the renowned The Lalit Hotel, Mumbai. This superb evening features a Cocktail Reception, threecourse dinner, music, entertainment and awards presentation - a perfect occasion to host your best customers. Award recipients will receive regional and national recognition through both online and traditional media outlets.
16th January 2020 The Lalit, Mumbai
For nomination & Sponsorships, please contact Ajeet: +91 9810962016 ajeet@surecommedia.com  |  Rahul: +91 7011609817 rahul@surecommedia.com
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Raghavendran Viswanathan CEO & Co-founder, FreightBro Evolve alongside technology
Today, people seem to accept leaders with the right balance of experience and expertise irrespective of the age. Any form of leadership needs a moral element and walking the talk being the core of it. In my opinion, business ethics hasn’t changed a bit. Relationship is the core of any business and technology inclusion should therefore strengthen human ties in newer ways rather than breaking them.
A model for assessment and direction Decentralised decision making, more mentors than managers, allowing mistakes and collectively learning from them are the cornerstones of new leadership styles.
There's a ton of opportunities for millennials Today, with access to technology and ever changing dynamics of the industry and millennials trying to make an impact in logtech space, the slowness or inefficiencies of the logistics industry is looked as an opportunity to improve and innovate better solutions for the industry.
The new darling
There are a number of reasons why India’s logistics industry is lucrative. Firstly, the market size is huge. The industry is estimated to grow to 215 bn USD by 2020. Secondly, the industry is still largely fragmented which is why it is still mired in
56 | CargoConnect january 2020
“Success is an ongoing thing. For me, I am successful if I can build an organisation solving impactful global problems where all the stakeholders (employees, customers and investors) are excited to work with us on a Monday morning.”
inefficiencies. These inefficiencies are attractive to problem solvers and thus, technology has a lot of roles to play. Thirdly, E-commerce industry which was worth 48.5 bn USD in India alone, is still booming and has facilitated the automation of the first and last-mile delivery to a large extent. This still poses as a good playground for the logistics industry to capitalise on.
Futuristic approach to leverage talent
Leadership sprouts out of experience and hence getting your hands dirty by knowing things bottom up works wonders in any industry. Business models are changing and hence taking inspiration from relevant models from other industries can save time and resources. Executing these strategies requires attracting the right mix of people with grey hair and grey cells.
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Boost employee reputation
I reckon that mission driven capitalism is critical. The younger generations who are the early adopters of many new businesses appreciate well-run businesses which do not just care about shareholder value but stakeholder value.
“Change is scary. But going through multiple cycles of change and coming through successfully builds a circle of resilience. I think I just stay as indifferent I can to the big wins and the big losses I have in life and learn from them.�
Increasing value for all primary stakeholders should be paramount.
The importance of knowing you might be wrong
New leadership roles should imbibe the virtue of Intellectual humility and adaptability. Possessing general humility may allow us to see our own errors and push us to learn new things, intellectual humility brings with it more pronounced characteristics, such as understanding our own intellectual limits, a desire to seek the truth and the ability to be self-critical, among others, all of which motivate us to learn in a deeper and more holistic way. When we combine intellectual humility with grit and determination to learn and grow, we step in to a deeper place of understanding, cultivating the experience to make better decisions and add more value than ever.
Always on the move
Logistics is a large sector for employment and a key sector in ensuring growth of the economy. As countries develop, this sector is a primary driver of efficiency.
Ideas will inspire the next generation
While the sector will continue to grow as it is an essential service, we need to devise ways to get the best and brightest to work to solve the toughest logistics problems.
Courage goes to work
Mithun Srivatsa CEO, Blowhorn
58 | CargoConnect january 2020
Ideas are cheap. Implementation is what defines winners. Strategy can be helpful, but iterative learning on the ground is equally important. I suggest people to dive in and take big bold decisions.
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Demand inspiration and purpose in any job
Today’s young leadership is into generating new ideas and don’t believe in carrying any baggage, they think out of the box and go beyond the conventional way of doing business. Although, they understand the value of traditional approach, yet they keep evolving with time and technology. One traditional approach however remains constant among them- don’t be afraid of failure, keep trying until success is achieved.
Connected, empathetic, and judgment-free way
Leaders of today think more with their
that a leader should always think of the emotional value he can add to the company, client or customers.
Vishal Sharma Managing Director, Zeal Global Group minds not heart, I personally don’t find an issue there, but the ultimate goal remains that happiness and balance is shared by both the mind and heart while doing the job. I believe
“Success is nothing but the manifestation of an individual’s ability. When a person stands in front of a mirror and evaluates himself that he has done his best and achieved according to his ability, and accepts that value, it is what success is.”
No more to worry to get a logistics degree
Logistics wasn’t considered a career option and didn’t get its due place in our education system. If we look at it objectively, everything we use on a day-to-day basis is possible only because of logistics. Even then the trade has never got the recognition it deserves. But thanks to E-commerce, logistics as a career option is today recognised and has become a core subject at university level. Young professionals are opting for it as a career choice. These professionals are coming up with new ideas which have not only raised the bar of service standards but contributed a lot to the society by making things available to them which wasn’t thought of or cost viable. They are effectively, economically and readily making things available at the consumer’s doorstep.
Seamless logistics is the key element
The future of logistics will always remain bright irrespective of any situation. Technology/fashion/food trends will keep reshaping, even the way of conducting logistics business may change, but the essence of logistics will always remain the same. Logistics is meant to get you the new things introduced in the market or society. Future is even brighter in developing nations because demand will always be there for old and new things.
Success will come and go, but integrity is forever
There is no shortcut to anything even though we are taught that there is. Shortcuts should not be adopted when it comes to sincerity, honesty and dedication. Adopting these three things with passion will be essential to the success of next-gen leaders.
60 | CargoConnect january 2020
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Spotlight
2019
Analysing India’s Logistics Ecosystem The year 2019 saw India’s fast-growing logistics sector increasingly focus on B2B and last-mile augmentation. Poised to reach a size of $215 billion by 2020, the sector saw heightened investor interest and growth through 2019. Now that a foundation of change has been laid, it’s time to build something meaningful on top of it. 2020 is the year for building. Having said that, let’s take a look at the biggest trends of 2019 across key segments in the sector and what the future in 2020, and beyond, may look like. Upamanyu Borah
62 | CargoConnect january 2020
The development of transportation and logisticsrelated infrastructure such as dedicated freight corridors, logistics parks, free trade and warehousing zones (FTWZs), port modernisation, and container freight stations is helping improve efficiency.
T
oday, logistics is the most rapidly evolving industry in a developi ng count r y like India. It is considered as the backbone of the economy. Also, it is the mixture of infrastructure, technology and new types of service providers, which defines whether the logistic industry is able to help its consumers reduce their costs in the logistics sector and provide effective services. The development of transportation and logistics-related infrastructure such as dedicated freight corridors, logistics parks, free trade and warehousing zones (FTWZs), port modernisation, and container freight stations is helping improve efficiency. Technology adoption is accelerating in the transportation, warehousing and freight forwarding segments, and enhanced storage and service solutions are emerging as the driving force behind warehousing market growth. Currently, the value of the Indian logistics Industry in 2019 is said to be around $160 bn and the world anticipates this to grow to at least $215 bn by the year 2020. This growth can be attributed to the increasing number of E-commerce retailers and their stellar services to the citizens of the country.
Technology adoption is accelerating in the transportation, warehousing and freight forwarding segments, and enhanced storage and service solutions are emerging as the driving force behind warehousing market growth. Till the year 2020, there will be a huge online-shopping market for the logistics industry to tap into. The entrance of several MNCs into the FMCG sector of the country also creates new avenues of opportunity for the Indian logistics industry to grow.
$215 bn
will be the value of the Indian logistics Industry by 2020 as compared to $160 bn in 2019.
Till the year 2020, there will be a huge online-shopping market for the logistics industry to tap into. The entrance of several MNCs into the FMCG sector of the country also creates new avenues of opportunity for the Indian logistics industry to grow. The progress of these new and upcoming sectors has a direct impact on the growth of the Indian logistics industry’s inventory management and effective transportation and warehousing solutions for the retail industry. While the industry is doing substantially well, there are areas that definitely call for review and improvement. The ideas to improve the logistics industry in India currently revolve around reducing the costs of logistics for customers, while providing top-notch services with the given budget is one of the constant challenges the Indian logistics industry faces. Increasing affordability encourages corporates to heavily invest in logistics services through tie-ups or outsourcing help. A lack of proper storage and stockpiling training has also been experienced in the logistics industry. With companies and industry bodies establishing training and development centers, the industry can create trained professionals meant for the logistics industry rather than employing semi-skilled or skilled labour. CargoConnect january 2020 | 63
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A long way to go to become a top air cargo market? India should be in the league of the top five global air freight markets by 2025 - a remarkable statement to make and for which many are still waiting to see how the relevant authorities will get the ball rolling. Almost a year has gone by since that message was put out and that something is happening considering that one of the short-term goals was published in the National Air Cargo Policy (NACP). There’s no doubt that India’s air cargo market is a very important source of income for the country but faces the danger of being left in the dark if the promised changes are not followed up on and also that Indian carriers get their fair share of the market.
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Hopefully, there is something happening and views or comments from industry stakeholders may shed a different light on the subject. Realising t he importa nce a nd growth of air cargo industry and its impact on Indian economy, Airports Authority of India (AAI) in 2016 incorporated an integrated logistics network entity called AAI Cargo Logistics and Allied Services Company Limited (AAICLAS). As an integrated logistics network, AAICLAS focusses on cargo handling, security and documentation handling, supply chain, transshipment facility provider, airport free zones developer and project logistics. The entity also works as multi-modal interface linking air, surface and water transport as well as connecting to hinterland points in India, thus, becoming the largest networked and fastest growing logistics solution provider in India. According to Keku Bomi Gazder, CEO, AAICLAS, “The country’s air cargo industry has been experiencing a sluggish growth in the air cargo move-
The country’s air cargo industry has been experiencing a sluggish growth in the air cargo movements owing to the global and national economic slowdown. A moderate growth of 6.7 per cent was anticipated for India’s air cargo sector for the year 2019 due to the transition of E-commerce in the supply chain logistics. Keku Bomi Gazder CEO, AAICLAS
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Ratings agency Crisil said that the estimated Rs 600-700 cr domestic dedicated air freighter market stood at 0.8 million in 2019, logging a CAGR of 8 per cent in the last five fiscals. The domestic dedicated freighters fleet currently stands at just seven planes. The quantum of cargo moved by dedicated freighters hardly increased, bringing down their share of the pie from 23 per cent in fiscal 2014 to 16 per cent in fiscal 2019. At the end of fiscal year 2019, Indira Gandhi International Airport (DIAL), serving the national capital region of India, was the leading airport in terms of total freight handled. The airport handled more than one million MT of freight during the fiscal year.
2,88,532 tonnes
of freight handled at Indian airports until August 2019 (down 5.3 per cent) compared to 3,04,716 MT reported in the same month in 2018.
ments owing to the global and national economic slowdown. A moderate growth of 6.7 per cent was anticipated for India’s air cargo sector for the year 2019 due to the transition of E-commerce in the supply chain logistics. The evolving E-commerce has put pressure on sales channels for faster delivery and an optimum supply chain. This scenario has brought opportunities for the third-party logistics (3PLs) and warehousing service providers to integrate with the air E-commerce channel. Owing to the continued growth in online shopping, many 3PLs are offering more multi-modal services, which include air cargo service as a critical mode of transportation.” Among the potential initiatives planned and executed in 2019 concerning infrastructure, service facilitation and capacity augmentation at airports with India’s air cargo sector in the overall scheme of things, Gazder highlights: Opening of warehouse at Petrapole. Construction of Integrated Air Cargo Terminal at Chandigarh International Airport (CHIAL). Commissioning of International Courier in Trichy, Trivandrum and Kolkata. Opening of cargo terminals at Rajahmundry, Surat , Imphal, Agartala, Srinagar and Amritsar, Creating of additional International/Domestic air cargo handling capacity at the airports in Agartala, Patna, Srinagar, Pune, Trichy, Vijayawada, Port Blair, Jaipur, Mangalore, Dehradun, Jabalpur, Goa, Leh, Calicut, Varanasi, Bhubaneswar, Silchar, Dibrugarh, Hubbali, Belagavi, Jorhat, Dimapur and Shillong, with a sizeable investment. Non-scheduled Operator (NSOP) freighter operations commenced at Amritsar Airport. A better cost environment, reduced fuel taxes and more efficient airport regulations are most likely to be the key factors for continued growth of this industry. The government has already taken actions to increase the capacity of existing airports. Projects for the addition of new airports to boost tourism and to facilitate fast and economic travel within the country have also begun.
According to Gazder, the biggest opportunities in the making for India’s air cargo industry in 2019 were: Creation of new infrastructure for cargo with modern technology. Expansion in existing infrastructure for storage capacity enhancement. Installation of modern security and cargo handling equipments. Upgrading the Cargo Management System for transparent, smooth, proficient, IATA e-freight compliant paperless transactions. Initiative for extending incentive to airlines/freighter operators for increased freighter movement. Encouragement to E-commerce entrants to start or enhance their freighter operations. Commencement of In-line Baggage Screening System (ILBS) operations by AAICLAS at AAI managed airports. Commencement of Road/Air transshipment cargo movement between Dhaka and Europe, via Kolkata. As per the monthly data released by Airports Authority of India (AAI), Indian airports handled 2,88,532 tonnes of freight until August 2019, down 5.3 per cent compared to 3,04,716 reported in the same month in 2018. Ratings agency Crisil said that the estimated `600-700 cr domestic dedicated air freighter market stood at 0.8 mn in 2019, logging a CAGR of 8 per cent in the last five fiscals. Ironically, the domestic dedicated freighters fleet currently stands at just seven planes compared with about 680 passenger aircraft, including of the grounded carrier Jet Airways. The quantum of cargo moved by dedicated freighters hardly increased, bringing down their share of the pie from 23 per cent in fiscal 2014 to 16 per cent in fiscal 2019. At the end of fiscal year 2019, Indira Gandhi International Airport (DIAL), serving the national capital region of India, was the leading airport in terms of total freight handled. The airport handled more than one million MT of freight during the fiscal year. DIAL was also the leading airport in terms of the number of passengers handled. CargoConnect january 2020 | 65
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Still in choppy waters! The shipping industry in India is weighed down by time lags between order and delivery, market volatility, regulatory complexities, and so on. For India, with a maritime sector that needs a great deal of overhaul, much would depend on the support of the government and the vital involvement of the private sector. Nevertheless, with the government already relaxing, revising, and introducing regulatory reforms that would ease the functioning of maritime industry and services, there is a lot of scope for the clusters to be productive enterprises. The shipping ministry, towards facilitating Ease of Doing Business, has already identified various parameters for reducing dwell time and transaction costs at the major ports, which include elimination of manual forms, accommodation for laboratories to participating government agencies, direct port delivery, installation of container scanners, e-delivery orders, radio frequency identification-based gateautomation System, etc. These initiatives have already been implemented at Jawaharlal Nehru Port Trust and are being taken up at other major ports. In FY19, traffic increased 2.90 per cent year-on-year (YOY) to 699.05 mn tonnes (MT) and for FY20 (up to August 2019) stood at 293.80 MT. The total traffic handled at major ports from April to November 2019 was 463.07 MT as against 461.49 MT handled during the corresponding period of the previous year. The overall growth of the traffic handled was 0.34 per cent. Cargo traffic at non-major ports was estimated at 281.0 MT in FY19. The cargo traffic on National Waterways was 55 MT in 201718 and has increased by 31 per cent during 2018-19, while capacity at major Indian ports reached 1,477 MT in FY19. As on January 31, 2019, India had a fleet strength of 1,405 ships with dead weight tonnage (DWT) of 19.22 mn (12.74 million GT) including Indian controlled tonnage, with Shipping Corporation of India (SCI) having the largest share of around 30.52 per cent. Of 66 | CargoConnect january 2020
this, around 458 ships of 17.58 mn DWT (11.26 million GT) cater to India’s overseas trade and the rest to coastal trade. India’s total external trade grew to US$ 838.46 bn in FY19, implying a CAGR of 5.53 per cent since FY09. Merchandise exports during the year were US$ 331.02 bn while imports reached US$ 507.44 bn. India’s merchandise exports and imports stood at US$ 56 bn and US$ 86.75 bn, respectively, in July 2019. Adani Port and Special Economic Zone (APSEZ) became the first Indian port operator to handle cargo movement of 200 MT in 2018-19. Among major ports, highest cargo growth on YOY basis was registered at Vizag (8 per cent) followed by Cochin (5 per cent) and Deendayal (2 per cent). Amongst all ports, New Mangalore/V O Chidambaranar/Vizag/Cochin have grown by 10-13 per cent year-to-date (YTD) basis until October 2019. Smaller ports like Ennore and Deendayal have shown a sharp improvement YOY. The Government of India has allowed foreign direct investment (FDI) of up to 100 per cent under the automatic route for projects related to the
construction and maintenance of ports and harbours. Ports sector in India has received a cumulative FDI of US$ 1.64 bn between April 2000 and March 2019. A 10-year tax holiday is extended to enterprises engaged in the business of developing, maintaining, and operating ports, inland waterways, and inland ports. The government has also initiated National Maritime Development Programme (NMDP), an initiative to develop the maritime sector with a planned outlay of US$ 11.8 bn. As of Union Budget 2019-20, the total allocation for the Ministry of Shipping is `1,902.56 cr (US$ 272.22 million). Major Indian shipping companies are not doing well. Some are bankrupt,
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Cargo traffic at non-major ports was estimated at 281.0 MT in FY19. The cargo traffic on National Waterways was 55 MT in 2017-18 and has increased by 31 per cent during 2018-19, while capacity at major Indian ports reached 1,477 MT in FY19.
Operating an Indian flag vessel is at least 25 per cent costlier than a foreign vessel. The recent relaxation of licensing for container vessels led to Indian companies chartering container tonnage, which otherwise they could have possibly purchased. Shipping has had 100 per cent FDI for over two decades but this is yet to translate into major investment. anil devli
CEO, Indian National Shipowners’ Association
India’s total external trade grew to US$ 838.46 bn in FY19, implying a CAGR of 5.53 per cent since FY09. Merchandise exports during the year were US$ 331.02 bn while imports reached US$ 507.44 bn. India’s merchandise exports and imports stood at US$ 56 bn and US$ 86.75 bn, respectively, in July 2019. Among major ports, highest cargo growth on YOY basis was registered at Vizag (8 per cent) followed by Cochin (5 per cent) and Deendayal (2 per cent). Amongst all ports, New Mangalore/V O Chidambaranar/Vizag/Cochin have grown by 10-13 per cent year-to-date (YTD) basis until October 2019. Smaller ports like Ennore and Deendayal have shown a sharp improvement YOY.
463.07 MT
total traffic handled at major ports from April to November 2019 as against 461.49 handled during the corresponding period of the previous year.
while others are in insolvency process. Referring to investment problems, Anil Devli, CEO, Indian National Shipowners’ Association says the first step government should take is to make shipping competitive, as operating an Indian flag vessel is at least 25 per cent costlier than a foreign vessel. The recent relaxation of licensing for container vessels led to Indian companies chartering container tonnage, which otherwise they could have possibly purchased. Shipping has had 100 per cent FDI for over two decades but this is yet to translate in to major investment. “There is lack of specialised funding to Indian shipping companies. The cost of borrowing of an Indian company is higher by an average of 8-9 per cent compared to foreign companies while funding a 10-year-old oil tanker costing `280 cr,” says Devli. Nearly 41 per cent of Indian fleet is over 20 years and 13 per cent 16-20 years old. Indian flag vessels are trying, with limited success, to tap more cargo from road and rail to coastal shipping. In 2018-19, the Cabotage Law was relaxed for coastal transportation of EXIM but its impact will take some time. India with seven ports ranks second among countries in South Asia. Colombo, Sri Lanka is the most connected port and ranks first in South Asia. The port of Mundra, India has seen the largest increase in its index but is still lagging behind Colombo. Colombo benefits from cabotage restrictions in India, as these discourage carriers from trans-shipping in Indian ports, for which they are required to use Indian flagged ships. Interestingly, in 2019, India along with Bangladesh, Pakistan and Turkey maintained leadership in the ship scrapping segment of the maritime supply chain. However, industry experts are of the opinion that there is excess capacity in the market and ship demolition has not been very large for replacement. India is pursuing the voluntary application of requirements of the Hong Kong [China] International Convention for the Safe and Environmentally Sound Recycling of Ships of 2009 and to achieve this, is investing heavily in introducing upgrades to its facilities. CargoConnect january 2020 | 67
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Big setback for Indian Railways! Freight traffic handled by the Indian Railways almost remained static with a minor dip of 0.97 per cent during the first seven months of the financial year, owing to improved traffic from sectors such as minerals and ores, petroleum and container. This is despite a considerable dip in key sectors such as coal, cement, iron and steel and food grains. Till November 02, 2019, loading by the Railways was 689.88 MT compared to around 683.19 MT during the same time last year. The share of coal that contributes to over 48 per cent of the total rail-
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ways traffic dipped by 2.3 per cent to 333.1 MT, against 340.94 MT during April to November period of 2018-19. To boost industrial activities, Indian Railways had deferred its busy season charge of 15 per cent levied between October 1 and June 30. The move was expected to give an impetus to cement, steel, food grains and fertiliser loading. During the first seven months of 201920, iron and steel and food grains too saw a drop of 4.7 per cent and 4.8 per cent respectively, compared to the same time in 2018-19. “Currently, we are witnessing not only lower growth of the economy, but also an erosion of this multiplier effect, says Prem Kishan Gupta, Chairman and Managing Director, Gateway Distriparks. The freight sector suffers from oversupply even during normal times.
At present, due to the demand being at lower ebb, there is a severe pressure on prices and margins while the costs are going up annually. We started with an expectation of the intermodal sector growing at about 4-5 per cent. However, we have not seen even this level of growth in the sector during the first half of the current financial year. “Internationally, railways get more than 25 to 30 per cent of their business from intermodal sector while in India this penetration is a meagre 5 per cent,” informs Gupta. This is where the biggest opportunity lies for the Railways. In order to achieve this, the Railways need to convert their Public Freight Terminals (Goods Sheds) into intermodal terminals with paved container yards for stacking of containers and rewrite the rules for usage of such newly developed terminals.
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Till November 02, 2019, loading by the Railways was 689.88 MT compared to around 683.19 MT during the same time last year. The share of coal that contributes to over 48 per cent of the total railways traffic dipped by 2.3 per cent to 333.1 MT, against 340.94 MT during April to November period of 2018-19. Despite a dip in traffic, earnings from freight saw an increase of 2.3 per cent so far in 2019-20 to `70,814 crore as compared to `69,207 crore during the same period last year. There was a 4.19 per cent in coal and 15.15 per cent in minerals and ores earnings. The commodities that helped in maintaining the freight traffic from serious dip included minerals and ores with 7.27 per cent, petroleum products with 3.94 per cent and container traffic with 2 per cent increase.
`70,814 cr
earnings so far from freight in 2019-20 as compared to `69,207 cr during the same period last year. An increase of 2.3 per cent despite a dip in traffic.
Interestingly, the commodities that helped in maintaining the freight traffic from serious dip included minerals and ores with 7.27 per cent, petroleum products with 3.94 per cent and container traffic with 2 per cent increase. India’s core sector output posted a decline of 5.2 per cent in the month of September, as a sign of industrial slowdown. The eight core industries – including coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity – have 40.27 per cent in the Index of Industrial Production (IIP). IIP numbers had its worst performance over seven years in the month of August when it contracted by 1.1 per cent. A decline in railway’s coal traffic was due to a lower intake from power sector. Coal production has seen a drop of 21 per cent in September, which subsequently led to a dip in electricity generation by 3.7 per cent in the month of September. For the last three financial years, freight traffic and revenue of railways was on an upward trend owing to several policy measures taken by the government. Despite a dip in traffic, earnings from freight saw an increase of 2.3 per cent so far in 2019-20 to `70,814 cr as compared to `69,207 cr during the same period last year. There was a 4.19 per cent in coal and 15.15 per cent in minerals and ores earnings. According to sources, this was mainly due to rationalisation and rise in tariff. However, the main issue that needs to be addressed by the railways is that of transit time, says Gupta. Due to severe capacity constraints on most of its routes, Indian Railways is not able to ensure reasonable transit time. It also is not inclined to offer ‘Transit Time Assurance’ which is the norm in transportation of non- bulk cargo segment. This has been the main reason for a low penetration of Railways in the freight needs of manufactured goods sector. According to Gupta, while the demand for bulk freight transportation is growing at a nominal rate of 2-3 per cent, there lies a big opportunity for Indian Railways to grow its share in break bulk freight, particularly the intermodal segment which facilitates rail
The railways have been proactive in promoting the share of small parcel size in its freight basket. Railways have reduced the haulage charges for empty containers to reduce the incidence of cost of return haul. This has helped in increasing railway’s share in rail transportation of empty containers of shipping lines. However, this hasn’t helped much in increasing its share in laden container segment. Prem Kishan Gupta Chairman and Managing Director, Gateway Distriparks
transportation of small parcel size consignments. Therefore, the Railways stands to gain by increasing its share in manufactured product segment - consumer goods, consumer durables, engineering goods, automobiles, etc. Talking about other measures taken by the railways to increase freight load and revenue, except for increasing freight rates of coal and RMSP (raw material for steel plants), Gupta informs, “The railways have been proactive in promoting the share of small parcel size in its freight basket. Railways have reduced the haulage charges for empty containers to reduce the incidence of cost of return haul. This has helped in increasing railway’s share in rail transportation of empty containers of shipping lines. However, this hasn’t helped much in increasing its share in laden container segment. Indian Railways has also opened up many cargo types which were earlier restricted to be carried in containers by rail.” CargoConnect january 2020 | 69
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Bullish on growth due to increased demand for warehousing space India’s economic slowdown seems to have no major effect on the Indian warehousing industry. Demand for warehousing space picked up in the first half of 2019 on the back of growth of third-party logistics (3PL), engineering & manufacturing firms, and E-commerce segment that is leading to increased leasing by e-retailers. According to the report titled ‘India Industrial and Logistics Market View H1 2019,’ presented by the property consultant CBRE, the demand for leasing of ware-
Infrastructure development such as Sagarmala Project, DMIC, WDFC, EDFC, AKDIC, upgradation of Mumbai International Airport and other major shipping ports across the country to enhance connectivity and access to better locations for consolidated, efficient warehousing are the key factors behind the surge in warehousing growth. Prakrut Mehta
Director- Leasing, ESR India
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house space went up by 31 per cent to over 13 mn sq ft across eight major cities in the first half of this year. The report says the demand for warehousing/ logistics space was mainly driven by the third party logistic firms, which absorbed 56 per cent of the total space. The demand for large sized warehousing in tier II cities is also on the rise and is showing a big growth potential. Kinght Frank’s report titled, ‘India Warehousing Market 2019’ indicates that Kolkata witnessed the highest YOY surge with 191 per cent in the warehousing leasing volume followed by Bengaluru and Hyderabad which witnessed growth of 147 per cent and 96 per cent respectively. While cities such as Coimbatore, Guwahati, Ludhiana, Nagpur and Lucknow are also gaining prominence in terms of the growing demand for warehousing space. Prakrut Mehta, Director- Leasing at ESR India mentions infrastructure development such as Sagarmala Project, Delhi Mumbai Industrial Corridor (DMIC), Western Dedicated Freight Corridor (WDFC), Eastern Dedicated Freight Corridor (EDFC), AmritsarDelhi- Kolkata Industrial Corridor (AKDIC), upgradation of Mumbai International Airport and other major shipping ports across the country to enhance connectivity and access to better locations for consolidated, efficient warehousing as the key factors behind the sudden surge in warehousing growth. Besides, the increased penetration of smart phones in India has boosted the E-commerce industry and resulted in increased demand from tier II and III cities and the setting up of warehouse developments across the country to service these regions. These opportunities have resulted in a significant momentum as global funds; private equity investments have partnered with logistics development companies to drive India’s warehousing industry. As indicated by another report titled, CBRE APAC Investor Intention Survey, 2019, India was among the top five investment destinations in APAC; depicting industrial and logistics as one of the top segments expected to be targeted by investors in 2019.
Sa ndeep C had ha, Fou nder & CEO, Warehouster Capital Advisors India couldn’t agree more. “The government’s thrust to the sector with giving infrastructure status to the indust r y, t he ‘Ma ke i n I ndia’ pro gramme, development of multimodal transport networks and initiatives to set up industrial corridors and logistics parks have propelled the cause. Also, the introduction of real estate investment trusts (REITs) in India has galvanised the sector and the same is poised for a growth momentum. We are now in the midst of a consolidation phase with a lot of tech enabled practices in fray to improve the overall throughput,” says Chadha. Logistic parks are into creation to cut down the transportation costs and smoothen freight movement between hubs and warehouses. The year 2019 witnessed remarkable activities towards fast-tracking the establishments and streamlining the core processes allowing for scale and enhanced efficiency. A re-energised E-commerce sector means integration of online and offline into an omnichannel realm.
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Kolkata witnessed the highest YOY surge with 191 per cent in the warehousing leasing volume followed by Bengaluru and Hyderabad which witnessed growth of 147 per cent and 96 per cent respectively. While cities such as Coimbatore, Guwahati, Ludhiana, Nagpur and Lucknow are also gaining prominence in terms of the growing demand for warehousing space. Technology adoption is accelerating in the transportation, warehousing and freight forwarding segments, and enhanced storage and service solutions are emerging as the driving force behind warehousing market growth.
According to Chadha, companies like Rivigo have introduced relaytrucking in India, which is proving to be a game changer. As an outcome of this technological intervention, the fleet movement is round the clock and drivers share the route resulting into increased efficiency and reduced working hours for drivers. Also, leading aggregator’s team up with local retailers with their inventories integrated with the online platform. This saves cost and ensures faster delivery. So, this hub and spoke model is being evolved towards automation and reducing both cost as well as the time taken. In an asset-light scenario, Chadha informs, sharing assets instead of owning them is being adopted in the logistics sector. Everything from warehouses to trucks to electronic enablers can be shared between two or more entities. Such sharing is highly cost effective as it saves considerable expenditure on ownership of resources and assets. With a stagnant residential sector, developers are now looking at warehousing sector to diversify, mitigate
In September 2019, ESR collaborated with Future Group to invest close to 300 cr to develop logistics infrastructure assets in Nagpur and Jhajjar to service the north and central regions. The entity has also partnered with Lodha group to invest around $100 mn to develop a state-of-theart master planned Industrial park in Palava, servicing regions in and around Mumbai.
13 mn sq ft was the demand for leasing of warehouse space (31 per cent) across eight major cities in the first half of this year.
The government’s thrust to the sector with giving infrastructure status to the industry, the ‘Make in India’ programme, development of multimodal transport networks, and the introduction of REITs in India has galvanised the sector and the same is poised for a growth momentum. We are now in the midst of a consolidation phase with a lot of tech enabled practices in fray to improve the overall throughput. Sandeep Chadha
Founder & CEO, Warehouster Capital Advisors India
risks and increase the income. While micro and macro factors are suggesting strong demand, leading players in this sector are ready to play their part and contribute to the overall growth. In September 2019, ESR collaborated with Future Group to invest close to 300 cr to develop logistics infrastructure assets in Nagpur and Jhajjar to service the north and central regions. The entity has also partnered with Lodha group to invest around $100 mn to develop a state-of-the-art master planned Industrial park in Palava, servicing regions in and around Mumbai. While in July 2019, world’s largest furniture retailer IKEA has associated with IndoSpace to build their first modern, builtto-suite, world-class distribution centre in India, located in Chakan. Similarly, various global organisations such as Nissan, DHL, DB Schenker, Steelcase, Bosch and Aptiv has partnered with IndoSpace for their warehousing needs. CargoConnect january 2020 | 71
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Startups drive changes in trucking industry The trucking industry is now entering that phase of rapid evolution and that too at a very fast pace. Additionally, India’s strong economic growth has been a major driver of the trucking industry. This has further catalysed the growth of sectors such as infrastructure, real estate, logistics, mining, etc. A secondary driver to trucking growth is the government of India’s regular plans for infrastructure development across the country. This has involved a push for heavy investment in roads, warehousing areas such as FTZs and FTWZs, SEZs and a movement advancing towards more public private partnerships (PPP). Other factors that are driving this market include rising incomes, urbanisation, growth in the rural economy, Ecommerce, etc. GST, e-Way bill and now FASTags have done their part to bring required restructuring in the trucking industry. Moreover, it has successfully changed the end user’s behaviour towards necessity for technology adoption in near future. Add on to this, strong resolute to bring in infrastructural changes on National Highways and thereby, a formation of an inflexion point. Most importantly, a fresh crop of companies is trying to change the huge but fragmented logistics market, employing technology to achieve efficiency, better volumes and lower costs. The startups, backed by large private equity firms, are improving the working conditions of truckers, who put in long hours behind the wheel with little respite. Vikash Mohan, CEO, DHL SmarTrucking India says that apart from the above, the cold chain segment witnessed a spike in interest and discourse in 2019. As India’s perishables industry has come under increased focus, the industry has acknowledged the need to 72 | CargoConnect january 2020
reduce waste in the food supply chain, which stands at 35-40 per cent of the total production. The adoption of FASTags and last year’s revision of maximum load capacities have also created an opportunity for logistics providers to further streamline their delivery times, in addition to the speed improvements already facilitated by the evolution of the e-Way bill process. Besides, the change in load limits allows logistics companies to move more goods in a single trip. Mahendra Shah, MD, V-Trans (I) jots down some key innovations that the trucking sector witnessed last year: A market place for truck hiring was indeed a good idea and industry need; startups gave it a shot too. IoT in trucking clubbed with AI & ML helped in enhanced route optimisation, load utilisation, predictive maintenance, etc. Many companies attempted relay driver models. Highway construction and expansion in the country touched 10,800 km in 2018-19, which translates to nearly 30 km per day making it the highest pace of construction. In March 2019, National Highway projects worth `1,10,154 cr were inaugurated. According to data released by the Department of Industrial Policy and Promotion (DIPP), construction development including Townships, housing, built-up infrastructure and construction-development projects attracted Foreign Direct Investment (FDI) inflows worth US$ 25.05 bn were recorded in the construction development sector between April 2000 and March 2019. As per industry estimates, at present, the delivery time of goods has reduced by around 15-20 per cent. The electronic filing of e-way bills was initiated to do away with physical paperwork, which is expected to lead to faster travel and higher efficiencies for road transport operators. The e-Way bill will also lead to the creation of a large repository of data on inter-state transactions. The digitalised records can be used for efficient tax collection, risk management, and policymaking.
The adoption of FASTags and last year’s revision of maximum load capacities have also created an opportunity for logistics providers to further streamline their delivery times, in addition to the speed improvements already facilitated by the evolution of the e-Way bill process. Besides, the change in load limits allows logistics companies to move more goods in a single trip. Vikash Mohan
CEO, DHL SmarTrucking India
In spite of these benefits, transporters are facing a lot of uncertainties, which require urgent attention of the new government. The stakeholders are confident of the government’s ability and willingness to resolve this issue, as the centre has been working hard to put the logistics industry in the spotlight.
feature Mohan points out two areas where issues are arising. “On the one hand, the e-Way bill system has been rolled out with norms that sometimes conflict with the nature of the business for some transporters; while on the other hand, the smooth flow of the process is being hampered due to insufficient
India’s strong economic growth has been a major driver of the trucking industry. This has further catalysed the growth of sectors such as infrastructure, real estate, logistics, mining, etc. A secondary driver to trucking growth is the government of India’s regular plans for infrastructure development across the country. This has involved a push for heavy investment in roads, warehousing areas such as FTZs and FTWZs, SEZs and a movement advancing towards more public private partnerships (PPP). After GST and e-Way bill, FASTags have done their part to bring required restructuring in the trucking industry. Moreover, it has successfully changed the end user’s behaviour towards necessity for technology adoption in near future.
15-20%
is the approximate reduction in delivery time of goods as per industry estimates.
The overall economic slowdown in 2019 was the biggest challenge that the trucking sector faced. Some of the logistics companies have also deferred their planned expansions, and are setting relatively modest revenue targets. Transportation has seen the most significant impact of the slowdown, with companies cutting down plans to expand fleet.
A market place for truck hiring was indeed a good idea and industry need; startups gave it a shot too, while the increasing adoption of IoT in trucking clubbed with AI & ML helped in enhanced route optimisation, load utilisation, predictive maintenance, etc. These two are among the key innovations that the trucking sector witnessed last year.
Abhik Mitra
MD, V-Trans (I)
Mahendra Shah
CEO & MD, Spoton logistics
training of personnel on the use of the portal, on the part of transporters,” believes Mohan. Another key issue, Mohan mentions, relates to the generation of eWay bills. In the case of aggregated shipments which are valued at or above the value limit for which e-Way bill generat ion is ma ndated, a nd where the individual consignments fall below the mandated amount, transporters may encounter difficulties in completing the process. They may face problems in having the individual shippers complete the electronic paperwork, since it is not mandated for their shipments, but it is still the transporters’ responsibility to generate an e-Way bill since their total shipment is valued over the limit. Although the sector is riddled with problems such as entrenched interest of a network of middlemen and small operators limiting the free exchange of information between truck owners and
operators, Abhik Mitra, CEO & MD, Spoton Logistics feels the overall economic slowdown in 2019 was the biggest challenge that the trucking sector faced. Some of the logistics companies have also deferred their planned expansions, and are setting relatively modest revenue targets. Transportation has seen the most significant impact of the slowdown, with companies cutting down plans to expand fleet. Shah says, in total, the anticipated growth for FY18-19 was somewhere close to 10 per cent however due to slow down in consumption pattern and therefore slowdown in overall economy the businesses did not do as expected. However, Mohan was positive about technology injecting itself into all aspects of the industry and is looking at processes becoming more efficient, and that aggregators are attempting to bring organisation to the sector by linking truck suppliers with industry demand. CargoConnect january 2020 | 73
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Tushar Jani is a visionary leader; he has been for the majority of his long and successful career. He remains as the only person to have launched a successful freighter airline in IndiaBlue Dart. But what separates Jani from other entrepreneurs is his focus on empowering the people he employs. At present, Jani is the Group Chairman of Cargo Service Centre (CSC) India, the market leader in cargo handling in India, with more than 2,000 employees and airport warehouses in six cities, including Delhi, Mumbai and Chennai, offering a variety of services with an enhanced focus on pharmaceuticals. Listen to him as he speaks to Upamanyu Borah about India’s fast growing pharmaceutical industry, how is CSC equipped to create value addition to India’s cargo handling business substantially, and his four-decade-long career which is all about leadership and innovation.
In what way has the rising supply chain costs combined with increasing consumption put more pressure on logistics services? Today, Indian pharma industry’s export turnover is approximately US$ 15 bn, and the figures are rising. The country rank 4th in terms of generic drugs production, a 20 per cent market share globally, poised to grow to 40 per cent. India is also the largest supplier of vaccines and drugs to the international child welfare wing of the United Nations. As such, the size of the industry is becoming bigger and bigger, which means two things can happen- either costs can rise or get rationalised. Well, I believe costs will get rationalised, however when you bring standard and quality, costs eventually goes up. With pharma exports from India ever-growing, the country will have to adopt more new or existing protocols for the pharma supply chain such as Center of Excellence for Independent Validators (CEIV) Pharma or Good Distribution Practice (GDP) Guidelines and this will ultimately increase cost. It is important that we follow the established standards so that our drugs are accepted straight on to the shelf and India comes at par with Europe, the US or Far East. For instance, standards will always remain as differentiator for the companies audited by FDA on a surprise check basis. 74 | CargoConnect january 2020
We need to have a shared vision and goal for a common way forward
Further, moving a product from the factory to the terminal and from terminal to the tarmac under the required temperature, or either shipping it on an active container will add to the cost incurred. Additionally, what will be needed, especially in a country like India wherein a tropical wet and dry climate is more common, are cool containers going on from terminal to the aircraft, now this will also add to cost in terms of achieving standards. However, I presume where cost can get rationalised is, as volumes go up, more and more freighters will enter the market as it will not be feasible to use the belly space of airlines, and that is how cost can get rationalised. We can then achieve cost which is within the pattern or the limit of what a product can afford to offer.
How do you see real-time data automating the temperaturecontrolled supply chain? Do you fully leverage the opportunities that real-time supply chain insights provide? There are abundant technologies off the shelf and companies should be capable of transforming those or effectively manage and leverage them. Additionally, the temperature within the air cargo terminal is available on our website on real-time basis, while cool container temperature is available online when out on the tarmac, and once the shipment is in the cargo hold of the aircraft, we can be assured that temperature controls are being taken care of along with the positioning of the cold storage unit. Most recently, our mobile app ‘TURANT which offers a complete tracking of shipments- both export and imports in real-time manner as it’s being handled within the facility/warehouse, have expanded to offer an enhanced experience of AWB tracking for our trade partners. Going ahead, to fully leverage the opportunities that real-time supply chain insights provide, CSC is setting up an in-house control tower to monitor all shipments going through our facility. We are going to feed in data and information coming out from the factory till the shipment goes on board in the airplane which will also be made visible to our customers.
What is critical to fostering a strong airport community, in terms of pharmaceutical handling? Well, I think there are a few things but they all revolve around the word ‘common’. I think we need to have a common vision and goal, and then subsequently, we will have a common way forward. It is critical to bring together the airport community and explain to them the benefits of effectively handling air freight shipments of pharmaceutical goods which will benefit and boost both the airport and the supply chain, and that this is probably the way of the future. Being clear and elaborating on the strategies in order to get every employee on board to have a common vision, a common goal, and a common way forward for this, I think, CSC has been able to do that and that’s been the reason we’ve been so successful in a relatively short period of time. By getting everybody on the same page with focussed efforts to improve, not only competency, but also operational and technical innovation as a benchmark, CSC has been able to improve the business for everybody. India is investing in large-scale infrastructure projects which could transform the country's modal-mix from one that is now dominated by moving goods by road, to one that is more balanced and flexible. Looking ahead, what trends you believe will aid to the transportation of critical cargo? In India, 5-7 per cent of the pharma is shipped by air, rest all by road. But are they being transported or stored even in the most general temperature-controlled manner, the answer is probably ‘NO’. I see that the government is working out on a set of guidelines for domestic transportation of cargo which is expected to reveal new standards for the supply chain, be it general or critical shipments that will be secured within the required temperature. Now once those are established, critical pharma will most supposedly move by air. Then the ratio would be 60:40. Surface transportation will include the bigger share while air or multimodal will constitute the lesser. Cargo handling companies are expected to have ‘creative’ ideas to
gain business. With regard to that, what will be CSC’s ideal strategies for consolidation in the coming years? With India poised to consolidate its position in the generic drugs segment, the country will need more freighters. A normal average freighter weighs 90100 tons, which means accomodating roughly about 30-35 ULD positions. Therefore, the cargo has to keep on coming; we build a unit and store them in 15-25 °C. At present, MIAL is the only airport globally who is going to provide that kind of a required best-inclass infrastructure as an origin point; a freighter come and turns around in four hours time. I feel proud to assert that CSC is the largest pharmaceutical cargo handling company in India, and that we are always ahead of the game in terms of establishing standards, which we will continue to work on. At MIAL, our extended new pharma and perishable cargo facility with an investment of 60 cr will offer a great opportunity to exploit the standards. We will be achieving 14,000 tonnes capacity of cargo handling from the current 5,000 tonnes, we will have 6 docks from the current operational two docks, with setting up 130 ULD positions to be stored under minimal temperature. Besides, we are installing 2 to 8 degree celsius chamber in the acceptannce area so that the product is not deprived of its required temperature, along with a Cooltainer to fulfil almost any temperature requirement up to the tarmac. I think it’s pretty unique that as a cargo handling company we are trying to intervene in the product when our equity is only up to handling it. However, we are expanding our equity beyond handling into taking accountability and ownership of how to make the product much stronger because CSC believes that India should take a leadership position, and our endeavour is to be present in the 84 airports across India, and to tap into the fast developing global pharma market. Here, not only CSC but India has a great opportunity; I feel the country’s pharma exports will overpass IT exports. With above, it will also open doors for a huge manpower potential, the country will see more people joining the drug manufacturing industry. CargoConnect january 2020 | 75
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Always being an innovative and pragmatic entrepreneur, envisioned, founded and mentored numerous companies with continuing to stay ahead of times in the amazing journey spanning four decades in logistics, kindly share the evolution of the turning points! When I entered the industry in 1976, joining the 80-year-old family business of Clearing and Freight Forwarding, air cargo was at its nascent stage. Air cargo imports were received at Ballard Estate since there was no cargo terminal at Mumbai Airport while sea cargo was barely transported in ship as the concept of containers didn’t exist. In the early 80s, with the evolution of containers, I saw great opportunities as a clearing and freight forwarding agent. I remember, as a young man, I went to the commissioner of customs with an application to allow carry containers to textile factories, as they had to first bring the shipment to the port and then load it in the container, and this process drew more than 30 per cent losses. The commissioner understood the issue, agreed to my concern, and then suggested me to devise a robust procedure. Once all of that actually started materialising, losses shrank to only 2 per cent. After that I never looked back, I encouraged the shipping of more and more factory produce in containers, and that eventually became my forte. In 1979, DHL entered the Indian market with the aim for oil exploration. They use to have those geo-drawings in hard copy; those drawings come in courier from Singapore and are delivered to the oil exploring companies such as ONGC. I saw it as a great concept; meanwhile I already stated my air cargo company named Concord International in partnership with one of my colleagues. Those days garment industry was booming, although, they had a unique requirement to send their samples to the buyer for approval, and there were no courier companies. They either had to post or give it to a forwarding company. We were entrusted with that responsibility, we carried out the task to clear those samples as air freight and then ship it across to their destinations in partnership with Swiss Air. This turned out to be a huge success. Coming back, DHL was only concentrating on documents and there was 76 | CargoConnect january 2020
no courier service for shipping samples and such. That’s how Blue Dart came to inception in November, 1983. The same year, the American parcel company Gelco Express had set up a store in India. In 1984, the company was acquired by Federal Express (FedEx) and then the entire scenario changed. We started sending onboard courier with samples to London. Sometime we would ship one ton as courier. As such, we were the first to buy onboard courier on interna-
I have been part of a journey that witnessed the buying of first-ever aviation system, track and trace mechanism, NVOCC; and the first to set sail containers, facilitate multimodal transport and set-up pharma facility in the country. tional flights for samples shipping. All of that worked well and we prospered. However, people would often tell us that though we deliver samples from places like Tirupur to London in 48 hours or to the US in 72 hours, from Tirupur to Mumbai there were no delivery options or deliveries happening. So, we finally had to bring in the domestic division of Blue Dart with launching time definite services for our customers, the first in India by any courier company. Targeted at time-critical B2B needs, this guaranteed door-todoor time-definite delivery service by air, ensuring that documents and small shipments reached their destination the next possible business day by 10:30 am. In the 1990s, the NVOCC business in India began to take roots. One of my
then partnered companies called Swift Freight was the first to issue the Bill of Lading; we were the first one to bring in containers on our own, we were recognised almost like a shipping line. I was lucky to be part of such a revolution. Until 1995-96, Blue Dart had expanded; however no airline could carry our load as there was no such that existed. Besides, due to some regulations laid by the government on air shipments such as liquids and circuits, Blue Dart had to start its surface transport wing. We started running 12 trucks at the same time from Chennai. The demand started growing and then we felt the need for an aircraft. We soon bought three Boeing 737 aircraft from Indian Airlines, and that was how India’s first cargo airline was set-up. It has been the most profitable airline amongst all, from the time it started operations until today. It runs on 99 per cent bio-diesel and carries around 400 tonnes of cargo every night. Today, Blue Dart has six Boeing 757s. Going ahead, in 1986, when internet was still to be implemented in India, Blue Dart was the first company to offer trace and track services, through relay switches with the use of submarine cables which goes underneath the sea to Hong Kong and from there, the information and data was transferred across the world to the carriers and companies. FedEx who was our partner, always believed 50 per cent of the job should corely constitute enhanced transportation methods and 50 per cent should be to give accurate and worthy information to the customers. They wanted information out of India, so Blue Dart had to set up the track and trace mechanism, which later consolidated to indigenously developed inhouse software Cosmat II that gives track and trace for all consignments going out across the world since 1986. So, to summarise, I have been part of a journey that witnessed the buying of first-ever aviation system, track and trace mechanism, NVOCC; and the first to set sail containers, facilitate multimodal transport and set-up pharma facility in the country. I believe God has really been kind to me. I had the best of colleagues and partners, and I heartfully thank them all, because it is they who made it, I just played my little role.
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infrastructure
CSC India : Taking the Air Cargo business higher! In 2017, Mumbai Cargo Service Center Cold Chain Solutions (MCSCCCS)- a fully owned subsidiary of CSC was formed with an aim to save thousands of lives by providing competent pharma cargo handling services. Pramod Pereira, Assistant General Manager at CSC takes CargoConnect on a tour through the revolutionary CSC Pharma Excellence Center (CSC PEC), based at the Mumbai International Airport (MIAL) cargo terminal. The 5000 sq mt facility aims to be a neutral service provider to pharma clients, with a single-minded focus of being the catalyst for the development of pharmaceutical exports from India.
D
etermination to make a difference. And the drive to do one’s best. This is what has made CSC India, not just right at the top in the air cargo handling business, but also the preferred service provider for their large number of satisfied clients!
A firm beginning leads to strong growth Way back in 1992, Cargo Service Centre Holding (CSCH) BV was formed as a fully owned subsidiary of KoninklijkeLuchtvaart Maatschappij, popularly known as KLM. Initially, CSCH catered to cargo ground handling requirements of KLM Airlines globally, but soon spread its handling services to other airlines. Barely two years later, CSC India was formed in Mumbai, even as when the ground handling sector was still evolving. Right from its inception, the company strove to do its best; offering
78 | CargoConnect january 2020
clients top-notch service, and handling cargo in a precise, professional manner. The hard work paid off. In no time, the company opened centers in Delhi and Chennai. Today, they are recognised as a leader among air cargo handling companies, respected by renowned international and domestic airlines. Offices in all the major metros and a team of over 6000 experienced professionals across airport terminals and
Ahmedabad Pharma Terminal
facilities make every job at CSC an expertly executed one. And, for a company handling over 10,00,000 MT of cargo per annum, that is no small feat!
The strongest link in supply chain management Right from the outset, CSC was on the trajectory to the top. By 2001, the company was awarded the license to manage and operate a perishable cargo centre at Delhi airport. In 2009, the company was awarded the concession to build and operate a ‘Center for Perishable Cargo’ at Mumbai airport. This enabled the company to handle cargo in general, sensitive and perishable categories, in a trained and timely manner. This dedication to detail and precision has helped the company garner the confidence of its clients, who would trust no other company with their precious products!
The perfect prescription for pharma products! Today, with pharma zones for export consignments at Mumbai, Delhi and Ahmedabad, CSC stands tall, as the largest pharma cargo handling company in the country. It is a reputation built on a foundation of hard work and excellence enforced by a team of experienced employees. This was further validated in 2017, when Mumbai Cargo Service Center Cold Chain Solut ion s (MCSCCCS) - a f u l ly owned subsidiary of CSC - was awarded a concession to design and build the expansion of the cur-
Mumbai New Pharma Terminal
Delhi Pharma Terminal
rent perishable cargo terminal, as well as operate and manage the facility. At present, the terminal provides an end-to-end temperature-controlled supply chain for air export cargo handling all categories of perishable and temperature-sensitive (PTSP) products. Once the extension area is operable, it is set to become India’s largest airportbased export pharma facility, having a huge total area of more than 5000 sq mt – a massive size by any standard!
(ECZ)– An ‘Expert’ cold zone! The Export Cold Zone (ECZ) is a section that has been designed to deliver – both literally and figuratively!
structions. Current pharma products passing through the terminal include vaccines, generic medications, Active Pharmaceutical Ingredients (APIs) and blood samples. Online pre-alerts from forwarders keep CSC aware of the cargo that is expected to reach the terminal beforehand. Once inside, modern IT platforms supported by the Galaxy & GMAX systems enable real-time monitoring of the cargo. Determined to give its customers more, CSC developed a mobile app ‘TURANT’ to enable inMumbai Pharma stant updates and complete Terminal tracking of the shipment of both international and domestic cargo in real-time.
Years of expertise have enabled the company to ensure that this zone suits the requirements of the sector perfectly. Separate facilities for pharma and perishable cargo; with 6 of the 12 truck docks exclusively for pharma, and storage area on the mezzanine floor for up to 80 plus airline pallet positions for pharma cargo equates to 300 tonnes of pharma storage space. That’s a throughput of 14,000 tonnes of pharma monthly! And all this is stored in the most sterile environment, with strict adherence to quality control and using stateof-the-art software. The section has four 2° to 8° Celsius chambers each accommodating 2 ULD positions and one freezer chamber in the pharma sterile area as well. All the products are handled by experienced employees who have years of practice in logistics and cargo handling and are specifically trained. Further, certified pharmacists work alongside the staff, ensuring that cargo is handled well and treated appropriately as per storage/handling in-
‘Giving life a helping hand’
Aware of the fact that there can be no success without growth, the company resolved to do more for the community; to go ‘Beyond the Box’. The result was the revolutionary CSC Pharma Excellence Center (CSC PEC), a facility unlike any other in the country! Based at the Mumbai International Airport cargo terminal, the CSC PEC aims to be a neutral service provider to pharma clients, with a single-minded focus on being the catalyst for the development of pharmaceutical exports from India. Towards this end, they have set up a Conference Room and a well-equipped library, as well as established a training room where qualified professional pharmacists can hold critical sessions. The premises also houses a mini auditorium to enable the sharing of news and views from the pharma world by experts. The CSC PEC is strongly aligned with the company’s philosophy of giving more to the community. As they proudly assert, “We don’t just handle cargo, we touch people’s lives”. Indeed, with the sheer volume of cargo handled by them annually which makes a difference to billions of people, there can be no truer statement!
CargoConnect january 2020 | 79
technology
S
MAIN USES FOR IOT SOLUTIONS IN COLD CHAIN
mart cold chain management has never been more vital. High demand for refrigerated system capacities is spurred by the increased need for higher-quality fresh produce, preferably organic. Statista claims the global food and beverages market will grow by 10.3% annually, resulting in $153 mn in revenue by 2023. The pharmaceutical industry is also growing more reliant on cold storage facilities. The Pharmaceutical Commerce’s recent findings foresee a 12.7% yearly increase in cold-chain drugs, putting another strain on cold chain logistics. The situation is aggravated by the strict regulations governing the storage and shipping of perishables. For cold
ity, may lead to extra costs and spoilage. However, this loss can be eliminated. Boston Consulting Group’s investigation has revealed three major change drivers that will help to reduce food loss:
RESOLVING COLD STORAGE ISSUES ON THE GO
Unlike dry storage, cold storage operators have more to maintain. Warehouse refrigeration systems and frozen distribution centers supplied with chillers and freezers are the biggest energy consumers and require following strict design and construction requirements. They must operate 24-hours-a-day while sustaining the appropriate temperature levels for a wide range of com-
image 1
chain logistics, there are too many participants being held accountable for stocking, packaging, and hauling. Each minor mistake, be it improper temperature control, light, vibration or humid80 | CargoConnect january 2020
modities. According to Supplychaindive.com, cold storage facilities consume about $30 bn in power per day. This is why the supply chain industry and cold chain, in particular, is second
on the list of IoT investors. Cold chain operators must also manage post-construction challenges, such as maintaining energy efficiency, temperature balance, and seamless chain operation. To avoid breakdowns, cold storage providers deploy IoT-enabled monitoring solutions like embedded sensors. Installed throughout a cold chain facility, freezers, chillers or containers, these sensors collect data on environmental conditions and promptly send failure alerts via 3G/4G or LAN networks. They transmit the aggregated data to warehouse management systems fostering a coherent tracking network. There is no doubt that incorporating IoT-based solutions requires ongoing cold chain transformations. They must transition from outdated cooling containers to other shipping packages to ensure better temperature control, real-time data monitoring, automated reporting, and predictive analytics. In simple terms, IoT-enabled chains have the following sequence of action: (Refer image 1)
BRINGING AUTOMATION TO COLD CHAIN OPERATIONS
Apart from real-time asset tracking, the data obtained through the IoT-powered sensors allows stakeholders to better understand the risks involved, improve
image 2
operational output and distribution schedules. This inevitably translates into high customer retention, as cold chain logistics becomes more streamlined and visible. When IoT-based solutions come into play, there is no need to check temps or environmental conditions of cold storage manually. What is more, even goods freshness can be verified without human assistance. Accurate inventory control is another benefit received with IoT hardware. Wireless automated inventory tracking is less error-prone than standard methods. Earlier, each stock item required manual scanning with a device at checkpoints. If failed, the data acquired by cold storage operators could be inconsistent, resulting in audit deviations, spoilt commodities or huge penalties imposed. IoT technology makes a difference, eliminating the risk of shipping delays. (Refer image 2)
MANAGING COLD SUPPLY CHAIN REMOTELY
Previously, cold storage managers had to be physically present inside a cold storage facility to inspect deliverables and ensure their frictionless work. Considering wide cold chain geography with scattered warehouses or distribution centers, it used to put a lot of constraints around efficient supply chain management.
image 3
It also led to miscommunication between stakeholders, as there was no chance for cold chain transparency to increase. No insights into inventory levels, storage capacities, or regulatory compliance. With the advent of IoT smart sensors and cloud-based software aggregating the data received, cold chain partners can stay in the know regardless of their remote locations. Shipments, storage, and even last-mile deliveries can now be monitored via mobile applications. This connectivity enables cold supply chains to better handle hand-off
points too. For refrigerated cargo shipment, hand-offs often take place during containers movement to or from ports by trucks or rail, when unloading packages, storing commodities in warehouses, etc. The point is, most of the processes are still hand-operated, which often leads to shortened shelf list and cargo loss. By incorporating remote management systems, hand-off errors become easier to foretell and track. Cargo spoilage is minimised thanks to IoT hardware built-in containers, whereas vehicle routes get optimized with IoT loggers. (Refer image 3) CargoConnect january 2020 | 81
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We have seen the rise of Indian startups expanding in Bahrain Brief us about Bahrain Economic Development Board (EDB) and its business activities. The EDB is the investment promotion agency of the Kingdom of Bahrain chaired by H i s Roya l H ig h n e s s t h e Crown Prince. Our board of directors consists of members of the public and private sectors. We work collaboratively with key stakeholders from the public and private sector to develop the ecosystem to ease doing business in Bahrain and to attract high value foreign direct investment and jobs. Key priority sectors include: manufacturing, logistics, financial services, ICT, tourism, education, real estate and healthcare, and across all these sectors, we focus not only on traditional businesses, but also on startups and digitalization. Internationally, we have representation across all markets from US to Asia. Our operations revolve around how we can further develop the sectors that we know Bahrain has a competitive advantage. To do this, first, we take a look at the ecosystem in two parts, the first being regulations and manpower, which involves everything related to the regulatory framework of
doing business in that sector and the second is the identification of specific investment opportunities to develop the sector. Beyond the investment in Bahrain, the EDB maintains a long-term relationship with investors to ensure that they are satisfied and thriving in their operation in the Kingdom.
Please throw light on Bahrain’s logistics sector. The transport, logistics and telecommunications sector in Bahrain currently represents around 8% of overall GDP contribution. Growth in the transport and logistics sector is underpinned by the Government of Bahrain’s drive towards enhancing the value proposition which is spearheaded by the Bahrain Logistics Board, which was formed in 2015, and comprised of key representatives from the EDB, Ministry of Finance & National Economy, Ministry of Transportation & Telecommunications, Ministry of Industry, Commerce & Tourism, Bahrain Customs Affairs and the Office of the First Deputy Prime Minister. The Board is responsible for the efficiency gains achieved across all points of entry (air,
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The Kingdom of Bahrain may be geographically compact, but their growing economy offers excellent investment opportunities within a supportive business environment designed to help companies flourish. An investment promotion agency, Bahrain Economic Development Board (EDB) is the first point of contact for investors looking to establish their businesses in the Kingdom. Husain Bin Rajab, Co Chief Investment Officer at EDB in a têteà-tête with Ritika Arora Bhola talks extensively about India as an important market and investment destination, business activities at EDB, Bahrain’s logistics sector– its world-class infrastructure and technology and the impact of E-commerce in the country.
sea and road) and the development of a compelling logistics hub value proposition which has catapulted Bahrain to the position of being the fastest time and lowest cost to the GCC market. Indian companies are able to establish 100% owned regional distribution centers. Apart from the manufacturing and aluminum industry, there is also a growing focus on the FMCG industry. For instance, we are se ei ng i nvest ment s f rom FMCG firms like Mondelēz International, Arla Foods and a few others. We seemany Ind i a n F MCG c o m p a n i e s ’ heightened interest to expand to Bahrain. Other than FMCG, there is an increasing interest in the industrial plastics business. Bahrain’s steel industry segment is also quite strong. Not to mention, there is a good level of presence of fiber glass industries in the country. However, there is a growing focus and interest in components related to the oil and gas supply chain like B2B equipment and material supply and service businesses or utilities operations within the industrial sector.
How important is the Indian market for your business operations? India has been one of the most active markets for Bahrain. Historically, Indian companies were mainly interested in investing in the manufacturing and trading sector. The scope is now expanding to all the other sectors such as manufacturing, logistics, ICT, financial services, healthcare and education. In fact, one of the success stories of the Indian market in Bahrain would be JBF industries. They have invested around $230 mn in Bahrain in 2012 and their decision to setup was in large part influenced by the Free Trade Ag r e e me nt t h at Ba h ra i n mai ntai ns w it h t he USA.
Apart from that, Bahrain is also home to other prominent Indian companies such State Bank of India, ICICI Bank, Chemco, Electrosteel, Ultratech Cement,amongst others. Indian investors are aware of Bahrain as an investment destination also because of the strong political relationship between India and Bahrain. Since 2008, we have seen substantial increase in investments from the Indian market. During 2012 – 2016, when GST was introduced in India, we saw a decline in investments which is currently gathering moment um. From past 18 months, we have seen the rise of Indian start-ups expanding in the country. Especially for Indian companies who want to diversify, GCC remains an important consumer market because of spending power in the market as well as the growing infrastructure spend in the entire region.
Kindly elaborate on how you make atmosphere so conducive for foreign companies to invest in Bahrain? What are the benefits you offer them? The way we look at our value proposition, I would say, firstly is our strategic location. We are the closest country to the largest market in the Gulf Region– Saudi Arabia. It represents 50 per cent of GCC’s $ 1.5 trillion market. Secondly, our business-friendly regulatory framework. Foreign investors can have 100 per cent ownership in 98 per cent of the business activities in Bahrain, we have a transparent policy for each and every business activity. Thirdly is our taxation system; we have zero corporate and personal income tax which is applicable to all the industries and country-wide in the Kingdom. In addition to that, we have strong bilateral free trade agreements with the GCC, GAFTA, USA, Singa-
pore and EFTA. Fourthly, the cost of doing business in Bahrain,which is quite competitive in the region, savings can reach up to 30-45 per cent and this has been corroborated by cost comparative studies conducted by KPMG in 2018 for the Manufacturing and Logistics sectors.
Please elaborate on the kind of investment been done in the infrastructure and logistics sector in the last few years. Country-wide $32 bn worth of overall infrastructure spend is currently being deployed. The projects, therein, all cover multiple sectors including transport, housing, manufacturing, energy just to name a few. Bahrain International Airport’s $ 1.1 bn modernisation program involves a new passenger terminal, which is four times the size of the existing one and thus able to increase annual passenger capacity from 8 million to 14 million. Additionally, a new
freight via road and rail that will be linked to the inter-operable GCC – wide railway network.
In Bahrain, the E-commerce segment has been expanding rapidly over the past few years. In 2017, there was an estimated US$ 651 mn in online sales. Please elaborate on the impact of E-commerce in Bahrain. The rapid growth of E-commerce platforms in the past few years underscores the widespread paradigm shift that is increasingly challenging the status quo of traditional brick and mortar trade. Ecommerce platforms such as Amazon, Noon.com, Shein. com, Jolly Chic, Alibaba, and others are part of this evolution in trade. At this juncture, Bahrain is well positioned and poised to accommodate forward deployment logistics centers thus offering platforms a B2B2C solution via the Kingdom’s gateway. There is a
For Indian companies who want to diversify, GCC remains an important consumer market because of spending power in the market as well as the growing infrastructure spend in the entire region. cargo and logistics area will be developed on the northern apron of the airport to attract new business in the fields of courier and express logistics, e-commerce fulfillment and hub and spoke cargo operations with the long term ambition to increase cargo capacity to 1 mn metric tonnes per annum by 2024. As for infrastructure aimed at enhancing Bahrain’s hinterland access to Saudi Arabia and the wider GCC, the $ 4 billion King Hamad Causeway is on track for completion for 2025 will enable both passengers and
concerted effort, at the moment, to further cultivate and improve the Kingdom’s value proposition to accommodate customer fulfilment centers We are well aware that Ecommerce companies need to focus on the supply side of their operations and how they can optimise their supply chain operations at the backend. While, on the front-end, E- com merce compa n ies should focus on getting closer to the end users through centralised fulfilment centres and more efficient last-mile delivery operations.
CargoConnect january 2020 | 83
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Technological Advances changing the landscape of Indian maritime sector
Indian Ports Association (IPA), a Think Tank for the Ministry of Shipping, also rightly hailed as the Centre of Excellence (CoE) help major ports achieve eminence in their operations and management, thus contributing to the growth of the economy and the country at large. Dr Abhijit Singh, Executive Director, IPA in an exclusive interaction with Ritika Arora Bhola talks about how technological advances are transforming the ports sector and government policies boosting cargo volumes and capacity at the ports. Edited Excerpts: Technology has literally revolutionised the Indian maritime industry. Kindly tell us about advanced digital technologies being used at ports that has the capacity to transform the landscape of Indian ports sector? Number of measures like modernisation, mechanisation, process improvement, policy intervention and digital transformation has been taken to reduce time and cost in EXIM trade. A game changer initiative by Government of India to make high impact in Ease of Doing Business is the operationalising of centralised web-based Port Community System (PCS) across all major ports which enables seamless data flow be84 | CargoConnect january 2020
tween various stakeholders through common interface. The main objectives of the PCS are: Develop a centralised web-based application, which act as SINGLE WINDOW for the port community members/stakeholders to exchange messages electronically in secured fashion. Reduce transaction time and cost in port business. Achieve paperless regime in the ports sector. Data Repository for research and analysis. To move towards complete paperless regime, e-DO (Electronic Delivery Order) through PCS is made mandatory
along with e-invoicing and e-payment. An upgraded version, PCS1x was launched in December 2018, 24 out of 27 stakeholders are on board. PCS1x which has value-added services, latchon facility and can integrate with all other trade partner portals to facilitate end-to-end trade activities. Under new mandate, PCS1x should strive to evolve as National Logistic Portal which will also cater requirements of multimodal transportation such as rail, aviation, road, inland waterways and coastal movements. It will also have u n ique feat ure of e-market place which will facilitate trade and logistics to ultimately reduce transaction time of EXIM trade apart from being online. In addition, an Enterprise Business System (EBS) is being implemented at 5 major ports (Mumbai, Chennai, Deendayal, Paradip, Kolkata (including Haldia) with project cost of approx. 320 crore) to provide a digital port ecosystem that will adopt leading international practices without losing its alignment to existing local needs. A total of 2474 processes were rational-
ised, harmonised, optimised and standardised to arrive at a final re engineered process count of 162 processes. EBS would tightly integrate with PCS and other retained applications of ports like POS/TOS (PCS), etc. This will completely digitise most processes at ports thus making ports better trade facilitators.
What technological upgradation initiatives according to you are more relevant to Indian ports and should be taken for improving ports operational efficiency? Some of the measures taken up which are catalyst to improving operational efficiencies in addition to PCS and EBS are installation of highly efficient container scanners, gate automation, RFID system, automatic berth allocation, plot/yard planning, linking of rail booking with port systems, implementation of Logistics Data Bank Service for enabling track and trace movement of EXIM containers. Gateway Terminals India (GTI) at JNPT has deployed 14 new Rubber Tyred Gantry Cranes (RTGCs) thereby easing the congestion at the ports and reducing overall time to handle the shipments at ports. IT and automation are playing a major role in controlling and monitoring multiple port operations. At ports, IT adoption has already begun with daily use of port operating system. However, the primary utility of the systems currently is to record all the observations, data facts etc post facto – primarily for billing purposes, rather than increasing operational efficiency. As discussed earlier, EBS will tightly integrate with POS/TOS & PCS 1x, have scope of all these analytic features, and data inputs will be fed on real-time basis into the system to give real-time – operations improvement centric outputs. Mundra port has introduced digital navigation for internal container movement, Auto-Position Detection System, real time liquid tanks visibility, online container documentation, RFID based fuel management system, WorkForce Management System, and eClearances for dry and liquid cargos from customs. Krishnapatnam Port has installed an automatic fertiliser handling system which has reduced the time taken from 2-3 days to a mere 6-8 hours.
What emerging technologies are relevant to Indian ports to adopt in the near future? Untapped advanced technologies like Machine Learning (ML) and Artificial Intelligence (AI) can help ports make more sense of the data and get better insights for improving efficiencies and driving down the cost. The Blockchain technology and Smart Contracts can resolve issue of trust among various stakeholders and make information sharing and transactions secure and faster. These innovations and technological adoptions will help in transforming the Indian ports sector on par with leading international ports.
For improving the efficiency and productivity of India’s major ports, 116 initiatives have been identified, which will unlock 100 MTPA of capacity at these ports. Further, ports are also considering on adopting few emerging maritime technologies, such as: Dynamic Under Keel Clearance. Moor Master. Tracking Crane Operations using Sensor Technology. Tools such as Vessel Arrival Prediction, Vehicle Booking systems, Hinterland Truck Marketplace, etc., that can significantly help in streamlining port operations and, increase transparency. Advanced and under development technologies such as Hyperloop, 3D printing of spare parts for vessel repair. Shore-to-ship power supply Best in class Port Operating Systems (POS).
Major ports capacity has been re-rated with respect to global benchmarks. Please throw light on the current capacity at ports in India and global benchmarks on capacity which the country needs to achieve. The cargo handling capacity of all In-
dian ports is 2316.14 MTPA. Out of this, capacity available at major ports is 1452.64 MTPA and non-major ports is 863.50 MTPA. Globally ports follow the practice that cargo handling capacity should be 30 per cent more than the projected traffic to ensure that the preberthing detention of ships is minimised. It is important that planning for each commodity group should be promoted as each require different facilities and capacity. During 2018-19, total traffic handled at all major ports was 699.10 mn tonnes against the available capacity of 1452.64 MTPA. It is observed that while capacity utilisation of ports like Mumbai (80%) and Haldia (79%) are still relatively high, other major ports such as Ennore (Kamarajar), Chennai and Cochin are utilising less than 40 per cent of their available capacity. Even Kandla (Deendayal) and Paradip port, which handle the most amount of traffic have an utilisation rate of 43 per cent each in 2017-18. This is on account of the shift in cargo traffic handled towards non-major ports. Many non-major ports, such as Pipavav and Mundra in Gujarat are absorbing the excess cargo traffic. Inference is that sufficient capacity is available at major ports to cater future traffic even if it grows at 10 per cent rate for next 4-5 years. Two new major Greenfield ports are proposed to be developed at Vadhavan (Maharashtra) and Paradip Outer Harbour (Odhisha), which will also help in increasing capacity of the ports sector to handle India's EXIM traffic. Focus of the government is to execute and implement all strategic initiatives at ports in timely manner. A monitoring framework for the same has also been developed by the Ministry by using digital technology for updates on each infrastructure project. Further, the government is also planning to bring unused non-operational and non-major ports into mainstream of country requirement. Emphasis currently is on implementation of well-conceived infrastructure development projects, increasing the efficiency of port operations through the implementation of a package of recommendations to cut time and cost, digitisation of processes to reduce and finally eliminate human interface and to strongly address environment-related concerns. CargoConnect january 2020 | 85
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Widely considered as the backbone of the economy, offering employment to approximately 25 mn people, logistics industry is showing signs of maturing. Divyanshu Tambe, Executive Director– Transport & Logistics, Private Equity, M&A Transactions at EY in an exclusive interview with Cargo Connect gives a low down on the practices, required to be adopted by the stakeholders to drive sustainable growth for the sector.
Logistics: Transformative decade in the making There is need of longer contract period (3-5 years) for LSPs to plan and invest better, which would reduce operating costs. These investments include mechanisation, larger facilities, technology investment and hiring of management teams. 86 | CargoConnect january 2020
Kindly share your views on the Indian logistics industry, its evolution and high logistics cost. Logistics, the often quoted backbone of the economy, got the recognition as an industry in India in late 90’s and it took a few more years for it to come into boardrooms of India Inc. An industry that employs ~25 million people and one that cuts across the economy, touching all the End-User-Industries (EUIs) much-like Banking, Financial Services and Insurance (BFSI) sector, still has many discrepancies in estimating the overall cargo volumes/ size. Estimates on size vary from 14 per cent of GDP to 6.5 per cent of GDP – a rather long range. Asserting the logistics cost being high at 14 per cent of GDP, which needs to go down to a single digit of GDP, and projecting that the industry grows at 1.5-2 times of GDP growth, seems an incompatible pairing. Even at 6.5 per cent, it is a $180 bn revenue industry, with top 25 Logistics Service Providers (LSPs) constituting approximately five per cent of industry revenue – an acutely fragmented industry. In terms of scale and size of sector ($180bn) is about 2x auto, 5x pharma and 3x of FMCG. There are two components attributed to logistics cost– revenue to LSPs, and hidden-cost to EUI such as inventory cost, pilferage, damages, that doesn’t form revenue for LSPs. A simple instance is detention time for trucks at customer warehouse– it can be anywhere from one day to seven days. Now, such inefficiencies need to be solved by LSPs and EUIs in unison. As per our analysis, this hidden cost to EUI is almost 30-50 per cent of revenue to LSPs, depending on EUI. While logistics may be competitive in pricing, do you think that more needs to be done by all the participants in the ecosystem– LSPs, EUIs and government? Absolutely, there are larger questions for the logistics industry like efficiency, dependency on counterparty for EUI, strategic policies, competitive pricing, sustainablility, inventory and Purchase Order Management (POM) that need to be addressed by key stakeholders in order to drive the ecosystem in the most optimised manner. Apart from this, opportunities can
be harnessed with change in mindset of both LSPs and EUIs. EUIs need to start looking at Integrated Delivered Logistics cost for themselves, instead of looking at it as break-up of linehaul, warehousing and secondary distribution. Also, given the seasonality elements, they should look at their overall year-long cost and undertake planning accordingly. Additionally, lowest quote mindset needs to go from EUI for each leg of logistics because error or delay in one leg tend to snowball into larger problems across other legs, resulting in KPIs getting affected for EUIs. There is a need of longer contract period (3-5 years) for LSPs to plan the investments better, which would reduce operating costs. These investments include mechanisation, larger facilities, technology investment and
Government is planning to carry out the divestment of CONCOR by the end of FY20; it is likely to dominate the headlines for Q-1 of CY 20, as it is likely to emerge as the largest deal in the sector. hiring of management teams. Additionally, while selecting LSPs; more emphasis needs to be placed on Service-level Agreements (SLAs) and past track record. This would allow weeding out fly-by-night operators and encourage serious participation from organised LSPs. Government on its part has undertaken some structural changes like GST, E-Way bill, etc. They need to further ensure better enforcement of these policies, promote digitalisation and use data collected via GST/E-Way bills for better policy making.
How have been the deal-activities in Logistics for 2019? Logistics industry had one of the most active years in deal-making, totaling approximately USD 1.4 bn led by fund-
ing for tech-enabled logistics companies. Over 65 per cent of capital flowed into tech-logistics. Key deal drivers have been the consolidation led by domestic strategics, foreign strategics with substantial India presence, and endusers who want to have strategic control on logistics.
What will be the themes of dealactivities in 2020? Deal-activity is likely to remain strong in 2020 with participation from foreign players and private equity players. Larger domestic players and privateequity backed platforms are likely to continue consolidation to enter adjacent sub-sectors and increase customer diversification. Foreign strategic players are keen to participate in growth in sub-segments of contract logistics, express and E-com logistics, especially to service their customers in India and to chase growth. Real-estate capital will invest in pre-leased warehouses– either in platform or forward sale of asset with end-game of REIT for warehousing assets. Government is planning to carry out the divestment of CONCOR by the end of FY20; it is likely to dominate the headlines for Q-1 of CY 20, as it is likely to emerge as the largest deal in the sector. The business makes strategic fitment for three to four large players and will witness keen competition. This alone would be a $1.5 bn transaction. Apart from this, we expect additional $1 bn of mergers and acquisitions and private equity deals in CY20. Capital market activity is likely to remain limited as companies are still sub-scale. According to you, which sub-sectors have witnessed interests from Capital Providers and where is it getting deployed? Though consolidation is driven by the need to increase service offerings into adjacent sub-sectors, demand of techcapabilities, capital investment has been made for expansion into new geographies, tech-platform development, CapEx/asset building and organisation building. Sub-sectors that dominated deal activity are E-commerce logistics, tech-platforms and in Traditional logistics - contract logistics, express delivery, ICD and CTO. CargoConnect january 2020 | 87
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N Sivasailam Ministry of Commerce & Industry, GoI
subash k talukdar Lupin
Surendra deodhar Reliance Life Sciences
yogesh lawania biocon
makarand sane sun pharma
rajesh pednekar Healthcare SF
Swapnil Thakkar Piramal Enterprises
Raja Sundaramurthy Mylan Laboratories
Brijendra Kumar Niraj Choudhary GSK Pharmaceuticals Mankind Pharma India
hiren dave roche products india
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ravi kumar t v madhusudan tummalapalli RPG Life Sciences teva pharmaceuticals
Chaitanya Lad Cipla
Lathaa Subramaniam Hetero Drugs
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Reema Trivedi Gandhi Automations
sudhir mohan bansal pfizer india
manoj singh mumbai international airport (gvk)
Vinay Phatak Bayer Pharmaceuticals
Koshy Abraham Chempakanelloor Cipla
Rajeev Manwani GSK Pharmaceuticals India
Pramod Pereira Cargo Service Center Pvt Ltd
Rajiv Bhattacharya V Xpress
Rajesh Rao Exeltis Pharma
Ashu Gupta Koye Pharmaceuticals
himanshu maloo avinash kumar talwar Johnson & Dr reddy’s Johnson laboratories
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Venugopal Bangera Manas Sahoo Fresenius Kabi (I) Mumbai Cargo Service center Airport Pvt Ltd
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rajesh j rao cadila pharmaceuticals
prabir das Mylan laboratories
Gaurav Bhatia Cipla
capt t s ramanujam logistics sector skill council
Alan Fernandes Sanofi India
Pradeep Kumar Sharma Sun Pharma
Manish Gahlaut Novartis India
Lalit Patil Roche Products India
Anand Garg Dr Reddy’s Laboratories
Ryan Viegas delhivery
Sanjay Manjrekar Bayer Health Care India
Vilas Rebello Teva Pharmaceuticals
vickram srivastava Zydus Group
Yogesh Ghorpade Macleods Pharmaceuticals
Arun Manjeshwar Roche products india
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Excited to be part of this exclusive forum which brings together top pharma supply chain professionals from across the country on one single platform. Vickram Srivastava | Planning Head- Supply Chain, Zydus Group
Thanks to PHARMACONNECT for discussing challenges as opportunity towards achieving sustainability in pharma supply chain. Lalit Patil | Manager- Warehouse Management, Roche Products (India) You are doing a wonderful job by connecting all elements of Pharma Logistics. Surendra Deodhar | VP- Materials Management, Reliance Life Sciences PHARMACONNECT is utmost required: Hear and share about the latest research and ideas in the pharma supply chain. Yogesh Ghorpade | Senior ManagerLogistics & Supply Chain, Macleods Pharmaceutials
Through this conference, we can work together to create a sustainable pharmaceutical world. Dimple Parikh | Head- Logistics, Lupin
This event is a great platform for Pharma SCM experts to share best practices & network with industry colleagues. Rajesh Rao | Head- Planning, Logistics & Distribution, Exeltis Pharma This event affords a platform for cross-pollination of ideas to make pharma logistics sector in India strong and weather the difficulties that every business faces. Makarand Sane | GM & Head- Export Logistics, Sun Pharmaceutical Industries PHARMACONNECT is a good platform for knowledge sharing on pharma supply chain. D D Reddy | General Manager – Warehouse, Aurobindo Pharma PHARMACONNECT 2020 conference offers a conducive platform to manufacturers and service providers to deliberate upon upcoming trends and challenges which may help companies to upgrade their existing capabilities and also solve newer issues. Anand Garg | Senior Director & Head- India Supply Chain, Dr Reddy’s Laboratories
PharmaConnect provides a platform to interact with stakeholders from diverse domains. Such a revealing conference apposes people to share views on the practicality of the pharma chain networks. Looking forward to a great connect. Avinash Kumar Talwar | Head- MRO & Packaging Material Sourcing (Strategic & Plant) Global Supply Chain, Dr Reddy’s Laboratories If we have to take the pharma business on growth path then the industry must collectively embrace the agenda dedicated to enhance quality efficiency and security with system driven processes and no human intervention. Today, customers have 100% expectations for the price they pay to move their high value products on time Forwarders are the unsung heroes of the global economy. Bharat J Thakkar | Co Founder & JMD - Zeus Air Services, Past President- Permanent Advisor Board-ACAAI PharmaConnect is an ambitious initiative that strives to bring together the pharma industry to challenge, collaborate & create a transformative supply chain. Rajeev Manwani | Global Category Director, GlaxoSmithKline Consumer Healthcare, Singapore PharmaConnect is a conglomeration of supply chain and professionals, looking forward to participate in the event. Best wishes to the organisers for a successful conference. vinay phatak | Head- Quality - South Asia, Bayer Pharmaceuticals
PHARMACONNECT conference is a wonderful platform which provides appropriate information relating to pharma manufacturing and supply. It’s a need of the pharma industry. Thrilled to be a part of it. Koshy Abraham Chempakanelloor | Head- Central Planning & Strategic Projects, SCM, Cipla PHARMACONNECT is one of the key pharma events organised in India which brings together all the pharma supply chain professionals and stakeholders. It is my pleasure to be a part of this wonderful event and I look forward for productive deliberations on growth opportunities and challenges in the industry. I appreciate the passion, hard work and dedication of the entire team of PHARMACONNECT. Wishing a very Happy New Year and good times ahead. Manoj Singh | Senior Vice President & Head- Cargo, Mumbai International Airport (GVK) I believe that Supply Chain is one the business areas where Cooperation & Competition can coexist in most healthy way. Forums like PharmaConnect 2020 become medium for the same. Such networking can lead to better outcomes for Patients & Citizens by bridging the gaps. Theme for 2020 conference is steps towards that where participants will focus on integrated networks through Innovation & Technology coupled to experience driven practical aspects. Looking forward to be part of the same. Hiren Dave | Senior Manager- Sustainable Value Chain, Roche Products (India)
n ews Bengaluru becomes first airport in India to have independent parallel runways
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empegowda International Airport, Bengaluru has become the first in the country to operate independent parallel runways by
India aims to bring down logistics cost to below 10% of GDP: Union Minister Som Prakash
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ndia aims to bring down logistics cost to below 10 per cent of the GDP from about 14 per cent at present to increase the competitiveness of the manufacturing sector, said Som Prakash, Minister of State for Commerce and Industry.
Currently, the logistics cost in India is 30-40 per cent higher than the global benchmarked logistics cost. Therefore it is a big challenge for the government to reduce it. The aim is to reduce it to 10 per cent of the GDP or less. The government is also planning
to invest around `100 lakh crore in logistics infrastructure in the next five years. “We are also in the process of coming out with a new National Logistics Policy and creating data bank by getting feedback from different stakeholders,” the minister added.
India to open new ports to connect Iran’s Chabahar
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ndia, Iran and Afghanistan have decided to open Mormugoa and New Mangalore Port in addition to JNPT, Mundra, Kandla and Cochin as part of designated route under the Chabahar Agreement for connecting South Asia’s biggest country to strategically located port. This was decided at the second meeting of the Followup Committee for implemen-
tation of the trilateral Chaba har Agreement between India, Afghanistan and Iran at the level of Joint Secretary/ Director General. All the three countries welcomed steady progress in port operations by India Ports Global Ltd company since the taking over of the port operations at Shaheed Beheshti Port at Chabahar in December 2018.
AAI recommends centre to privatise 6 airports including Amritsar, Varanasi and Trichy A study will be conducted by Federation of Freight Forwarders’ Associations in India (FFFAI) to streamline cargo transit through ShahidBeheshti Port, Chabahar.
Bidding process for the fourth round under RCS launched
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inistry of Civil Aviation has launched the 4th round of Regiona l Co n n e c t iv it y S c h e m e (RCS)-Ude Desh Ka Aa m Nagrik (UDAN) to further enhance the connectivity to remote and regional areas of the
country. Focus of this round would be the priority areas like NER, Hilly States, J&K, Ladakh and Islands. The provision of Viability Gap Funding for Category 2/3 aircraft (more than 20 seaters) has been enhanced for opera-
92 | CargoConnect january 2020
opening the new 4000-metres long, 45-metres wide south runway. Thus BLR Airport now enables aircraft to land or take-off simultaneously on both runways. Though the south runway began with limited operations, it will gradually scale up flight operations. The runway will initially have CAT I certification, and, as operations stabilise, will progressively manage CAT III B operations, enabling landing and takeoff in extremely low visibility conditions.
tions under RCS flights in Priority Area(s) the Union Territories of Ladakh and Jammu and Kashmir, the States of Himachal Pradesh, Uttarakhand, North-Eastern States and Lakshadweep and Andaman & Nicobar Islands.
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he Airports Authority of India (AAI) has recommended the Centre to privatise airports at Amritsar, Varanasi, Bhubaneswar,
Indore, Raipur and Trichy. The recommendation came as the central government has already privatised airports at Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati for operation, management and development through public-private partnership (PPP) model in February this year.
n ews Highway projects worth `15 lakh cr ready to be offered in next 5 years: VK Singh
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n ion M i n i ster V K Singh has said that inf rast r uc t ure sec tor could play a mega role in bolstering the economy and the government is ready with a
basket of highway projects worth `15 lakh crore to be offered in next five years. Singh said infrastructure encompasses areas that can generate huge employment
and kick off economic progress. “The sector that is going to make a difference in ensuring that the recovery is fast and the recovery is big is the infrastructure sector - whether it is railways, road, airports or communication. We have a basket of approximately `15 lakh crore projects which have to be given out in these five years that are coming up. These include economic corridors, port connectivity, connecting important places, SEZs and tourist places,” said Singh.
Transparent mechanism set up for export freight payment, related charges in foreign exchange
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takeholders in India’s export trade have set up a mechanism for payment of freight and its related charges to shipping lines and other logistics intermediaries. This was aimed to curb ‘profiteering’ in the exchange rate when the payments are made in Indian rupees. The Standard Operating Procedure (SOP), a first-of-its-kinds mechanism for payment of freight and freight related charges for exports, was chalked out at the behest of N Sivasailam, special secretary (logistics) in the Department of commerce.
“The issue was dealt with by the State Bank of India, shipping lines, exporters and other industry associations, after which a circular has been issued on February 18 and converted into a trade notice. It deals with how exchange of foreign exchange (FE) rate needs to be determined and this has now been agreed transparently amongst all of us. You may find a paisa up or down, but you will now not find profiteering on foreign exchange,” said Anil Devli, CEO, Indian National Shipowners’ Association (INSA).
India accedes to IMO's Hong Kong Convention on safe ship-recycling
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ndia, one of the world’s five major ship recycling nations, has acceded to the International Maritime Organisation’s (IMO) Hong Kong Convention, the treaty that will set global standards for safe and environmentallysound ship recycling. Shipping Secretary Gopal Krishna and Director General of Shipping Amitabh Kumar deposited the instrument of
accession to the treaty with IMO Secretary-General Kitack Lim at the 31st session of the IMO Assembly in London. India’s accession brings this key convention a significant step closer to entering into force, with the required 15 states now party to it and with India's ship recycling volume considerably contributing to the required recycling capacity.
Air India cargo carries 40 tons of solar equipment in Mumbai-Nairobi Dreamliner 787
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he cargo operations of Air India with its Dreamliner 787 carried 40 tons of solar televisions and speakers in four consignments from Mumbai to Nairobi between December 6 and 18. “Air India is privileged to carry solar panel shipment on Mumbai to Nairobi Dreamliner 787 partnering in
carrying environment saver products to reduce carbon emissions. Kenya has a huge demand for off-grid electricity to power household equipments and Air India has recently restarted the Mumbai-Nairobi with our Dreamliner 787 after many years,” says the AI Cargo official.
Andhra Pradesh government proposes `10,000 cr Greenfield seaport at Ramayapatnam
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(Shipping Secretary Gopal Krishna and Director General of Shipping Amitabh Kumar depositing the instrument of accession to the Hong Kong Convention on safe and environmentally sound ship recycling to IMO Secretary General Kitack Lim)
he government of Andhra Pradesh along with RITES Ltd has approached the Ministry of Environment to develop a new 3437-acre non-major state port with a capacity of 125,000 deadweight tonnage (DWT) at Ramayapatnam in the district of Prakasam. The site for the `10,000 cr port is situated 575 kilometres south to Vizag port and 250 kilometres north to Chennai port. According to the earlier reports, Chief Minister YS Jagan Mohan Reddy asked his officers to get ready with plans for the building of ports in Ramayapatnam, Machilipatnam, Dugarajapatnam, Nakkapalli, Kalingapatnam and Bhavanapadu. CargoConnect january 2020 | 93
n ews Allcargo Logistics forays into express logistics with acquisition of Gati
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llcargo Logistics, India’s largest integrated logistics solutions provider has forayed into the express logistics space by acquiring a controlling stake in Gati – a pioneer in the segment. Through this transaction, Allcargo has added another domestic service to its portfolio by entering a segment which has been growing exponentially. As part of the deal, Allcargo will buy up to 1,03,85,332 equity shares at `75 per share from
some of the existing members of the Promoter and Promoter Group of Gati – Mahendra Kumar Agarwal, Mahendra Investment Advisors Pvt Ltd and TCI Finance Ltd (TCI), and Gati. Allcargo will also subscribe to a preferential issue of 1,33,33,340 equity shares of Gati at `75 per share, subject to the approval of the shareholders of Gati. If the open offer is fully subscribed, Allcargo will end up with a 44.6 per cent stake in Gati.
FSC and Nippon Express aspire to become India’s leading logistics players
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ippon Express, acting through its subsidiary Nippon Express (South Asia & Oceania) and FSC have signed a Business Collaborat ion Agreement ( BCA) to joi nt ly ex plor e growth opportunities for new and existing customers based on their strategic partnership and expand revenues for both the companies. The two companies will jointly start the business collaboration in January 2020.
er. Bot h compa n ies have agreed to formalise a steering committee and Nippon Express will depute its representatives to operate alongside FSC’s management.
Singapore, Gulf nations seek integration into India’s port community system
low them to integrate into the PCS because it’s possible to have a one-shot approach to India business, India regulation, India trade or India options through such integration,” said N Sivasailam, Special Secretary (Logistics) in the Department of Commerce.
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S-based private equity major Blackstone Group has entered into a 50:50 joint venture with realty developer Hiranandani Group to build, own and operate Industrial, logistics and warehousing assets across India. Though this venture, both the entities will be investing over Rs 2,500 crore initially to develop the 12 million sq ft industrial and warehousing assets portfolio of Hiranandani’s logistics venture GreenBase and additional assets built up coming through acquisitions of land or warehousing assets in other locations.
Delta Cargo to exploit New York– Mumbai service The partnership aims to j o i nt ly l e ve rag e Nip p o n Express’ competency in diverse sectors for the Indian market aspiring to become India’s leading logistics play-
ingapore and some of the Gulf countries are keen to integrate into India’s port community system or PCS as the government moves swiftly ahead with digitisation to promote transparency
Blackstone forms joint venture with Hiranandani for logistics foray
and facilitate ease of doing business for the country’s export-import trade. “Countries like Singapore and several of the Gulf countries are in discussions with the government to al-
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elta Airlines Cargo will target the pharma, automotive and perishables sectors on its new service between New York JFK and Mumbai. The weekly service has begun on December 22utilising B777-200LR capacity. Key export products from India are anticipated to be pharmaceuticals, automobile parts, perishables,
courier shipments and general cargo. Delta is supported in the market by its partner Sharaf Cargo, which will be the airline’s general sales agent for India.
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4 Floor, M.R. Arcade (Opp Vijaya Bank), Near Byrathi Cross, Hennur-Bagalur Road, Bengaluru 560077 Tel/Fax: +91-80-28445044 ext 111 Web: www.awotglobal.com GLOBAL NETWORK: CHINA, HONG KONG, TAIWAN, KOREA, USA, CANADA, SINGAPORE, VIETNAM, THAILAND
n ews Adani Ports acquires 40.25 per cent stake in Snowman Logistics
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dani Ports and SEZ Ltd (APSEZ) has ventured into cold chain logistics business by acquiring a 40.25 per cent stake in Bengaluru-based Snowman Logistics for `296 cr.
IndoSpace leases out Ranjangaon facility to Jabil Circuit
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verstone-backed IndoSpace, a developer of industrial real estate and warehousing facilities, has leased out 60,000 sq ft of light manufacturing and assembly facility at Ranjangaon, Pune to Jabil Circuit India, a
subsidiary of NYSE-listed Jabil, a global manufacturing solutions provider. Spread across 104 acres, the IndoSpace facility in Ranjangaon is a fully integrated industrial park located in MIDC Ranjangaon. The park
consists of more than 2.4 million sq. ft of modern warehouses and light manufacturing facilities that are designed to meet the manufacturing, logistics and supply chain needs of global companies.
KWE India launches ‘Slip Sheet Handling’ for air-freight shipments
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intetsu World Express India, the Indian subsidiary of Kintetsu World Express (KWE), has launched an innovative logistics service – ‘Slip Sheet Handling’ for air freight shipments from Kempegowda International Airport, Bengaluru. This is a contemporary solution being launched to address material handling and enhancing ULD optimisation which KWE has pioneered and introduced successfully in many global markets, resulting
in freight savings of 6 to 9 per cent. This innovative solution of KWE India is set to revolutionise air transport and storage challenges by offering an economical material handling solution for cargo handling and storage applications. When combined with a push-pull attachment and buffers, PVC or cardboard slip sheets allow customers to ship, receive and warehouse unit loads on inexpensive slip-sheets rather than pallets.
Leap India to deploy more pallets
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EAP India has announced expansion of its pallets on increasing domestic and international demand for warehousing. It expects the demand for pallets on lease to go up to 4 million during the current financial year from three million deployed currently. Commenting on the development Sunu Mathew,
MD, LEAP India said, "We have become leader in bringing palletisation to the country and are happy to work with each and every leading brand from FMCG, Beverages, Automobiles, Food, ECom merce, la rge logistic players, etc. in t h e c o u n t r y. We s e e enough opportunity in both
Pallets and FLCs. We are all geared up to tap this huge opportunity as we are well positioned to expand our pallets base.”
The price of the deal was at `44 per share, an 8 per cent premium to the market price of December 27, and a 12 per cent premium to the 60-day volume-weighted average price (VWAP). This will trigger an open offer of 26 per cent in Snowman Logistics’ shares. The acquisition was made through APSEZ’s wholly-owned subsidiary, Adani Logistics. The company has acquired the stake from Snowman Logistics’ parent company, Gateway Distriparks.
Maersk’s OceanPro continues accelerating innovation
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ceanPro by Maersk, the first of its kind start-up accelerator within the shipping and logistics industry has announced the graduation of its second cohort of start-ups showcasing the AI, ML led solutions developed by them over the last 120 days. OceanPro successfully launched its first set of 7 start-ups last year that saw approximately 50 per cent conversion to a production scale solution provider. One of the solutions developed from the initial cohorts is now being used in inland tracking by 3 countries. Another Virtual Reality (VR) solution developed also reached 12000+ employees giving them immersive learning experience of a Triple E vessel (one of the largest classes of container ships in the world).
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TIACA opens its doors to more air cargo players
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he Inter nat ional Air Cargo Association (TIACA) says they are making significant changes in their approach to reach out to all stakeholders in the air cargo value chain in a rapidly
evolving and challenging global trade and commerce. They are aiming to truly repr e s e nt a nd u n ite t he a i r cargo industry. As a first step, TIACA is restructuring its member-
ship fee by introducing a separate category for these small, medium and start-up companies allowing them to become a full member at a reduced rate. TIACA is also widening its vision to work on new initiatives with members from sectors which are new and unique but very crucial to the future of the air freight industry. In another move to increase focus on stakeholders formerly not part of TIACA, an agreement is signed with Neutral Air Partner (NAP), a premier global network of 250 leading air cargo architects and aviation specialists from 150 countries. As part of the deal NAP members will automatically become a full member of TIACA.
Port of Antwerp freight volume up 1.3% to 238 MT
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he freight volume at Port of Antwerp in 2019 is up 1.3 per cent to 238 MT. Despite some segments being under pressure due to economic reasons, the Port is making overall progress, on the sustainability and mobility fronts too. In 2019, Port of Antwerp developed further as a major international port. Despite in-
creasing tension in world t rade it ac h ieved st rong growth this year once more in terms of total freight volume. Container freight in particular gained market share (up from 27.5 per cent to 28.2 percent), while the dry bulk segment for its part saw its total volume expand by 3.4 per cent. In breakbulk on the other hand, with steel as the main product,
the consequences of turbulence in world were clearly felt, resulting in an overall contraction of 13 per cent. In the liquid bulk segment too the volume was down, by 4.4 per cent, due mainly to the slowdown in economic growth and fluctuations in oil prices.
Kerry Logistics launches regional operations in Bahrain to access GCC markets
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he Bahrain Economic Developme nt Boa rd (EDB) has announced that one of Asia’s largest thirdparty logistics providers Kerry Logistics Net work has launched operations in the Kingdom. The Hong Kongheadquartered company’s investment in Bahrain is part of their regional footprint ex-
pansion plans to enhance access to key markets such as the Saudi market– the Gulf’s largest market. With access to Saudi Arabia and the opportunity to scale across the wider $1.5 trillion GCC markets, Kerry Logistics cited the EDB as part of their decision-making process in launching opera-
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tions in Bahrain. Raymond Cheng, Director– Middle East & Africa at Kerry Logistics said, “There is enormous potential to grow and scale our services across Saudi Arabia, the GCC and beyond. The Kingdom has acted as a commercial bridge between the East and the West for thousands of years.”
AirAsia inaugurates new Da Lat connection
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uala Lumpur-headquartered low-cost carrier AirAsia has introduced flights to Da Lat, capital of Lam Dong province in the Central Highlands of Vietnam. AirAsia is the first international airline to offer a direct connection between the Malaysian capital of Kuala Lumpur and Da Lat. The route, launched on December 20, is operated four times a week by narrow body Airbus equipment. Da Lat represents AirAsia’s seventh destination in Vietnam, adding to Hanoi, Ho Chi Minh City, Da Nang, NhaTrang, Can Tho and PhuQuoc.
Air cargo community system launched at Atlanta Airport
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artsfield–Jackson Atlanta International Airport, the air freight community in Atlanta, and IT business Kale Logistics Solutions, has collaborated to create North America’s first air cargo community system (ACCS). The ACCS allows stakeholders to communicate electronically with each other, as well as other stakeholders such as shippers, airlines, trucking companies, customs brokers, freight forwarders and cargo handlers. The platform also facilitates and streamlines the movement of goods and information to and from the airport.
audia launched Sairports SAL at Saudi
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audi Arabian Airlines (Saudia) recently launched the Saudi Arabian Logistics (SAL) Co., the new independent entity within the Saudia Group which will act as the main cargo gate and ground handling and logistics services hub across the Saudi airports. Omar Talal Hariri, CEO, SAL said. “SAL aims to provide integrated logistics operations and ground handling services. It acts as a link between land and sea shipping and the Saudi airports in line with the National
DB Schenker opens strategically-located warehouse in Stabio, Switzerland
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B Schenker has opened a cutting-edge warehouse strategically located in Stabio, southern Switzerla nd. T he new bra nc h boasts several accreditations and a flexible and dynamic structure ideal for handling different products. Stabio is located adjacent to the border with Lombardy,
the largest Italian region by GDP. The strategic location makes it ideal to serve customers of the demanding Italian fashion industry. The warehouse is a dedicated free zone area and several major European airports can be reached within half a day, including Paris, Frankfurt, Luxembourg, Zurich and Milan.
Apart from fashion logist ic s, t he wa r e hou s e w i l l serve customers and products in the general cargo, high tech, pharmaceuticals, and food and beverage categories. The Stabio branch will offer made-to-measure B2B and B2C delivery solutions for all customers within Switzerland.
Maersk opens 11k sqm logistics centre in Vietnam
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aersk has opened an 11,000 sqmts logistics centre in Bac Ninh province to address the growing demand in North Vietnam market. The warehouse is strategically located at the Vietnam Singapore Industrial
Park (VSIP), within 25 kms from Hanoi centre and 120 kms to HaiPhong port. Approximately 40 percent of the warehouse is occupied by Turkish home appliance company Vietbeko, while the remaining capacity is filled by
Icelandair Cargo to handle FedEx shipments in Iceland
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celandair Cargo has agreed a three-year deal to handle all shipments to and from
Iceland for FedEx and TNT that will go into effect in early 2020.
customers from various segments, including automotive and FMCG. Icela ndair Cargo is to make changes to its European flight schedules as a result of the deal. There will be a significant increase in the Reykjavik freight carrier’s flights to Liege in Belgium, an important base for FedEx/TNT. The carrier will fly seven times a week to Liege, as well as three times a week to East Midlands Airport in the UK. It will cont i nue to offer its reg ular freight capacity across Icelandair’s route network.
Industrial Development and Logistics Program, which is one of the pivotal themes of the Vision 2030, especially in the light of the gigantic economic transformation the Kingdom has been seeing. SAL will improve the quality of logistics operations and support the Kingdom’s vision towards transforming the country into a global logistics hub handling all types of cargo and shipping operations.
CMA CGM agrees deal to sell ten terminals
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he CMA CGM Group has signed an agreement with China Merchants Port (CMPort) to sell a portfolio of stakes in 10 port terminals to Terminal Link, their joint-venture set up in 2013 and owned 51 per cent by CMA CGM and 49 per cent by CMPort. The sale price is $968 mn was announced on November 25, 2019, as part of a plan for the Group to reduce its debt. Through the various planned transactions, the CMA CGM Group expects to raise more than $2 bn in additional cash by mid-2020, while extending its debt maturities and reducing its debt by more than $1.3 bn. The transaction is expected to close in Spring 2020, pending approval by antitrust authorities and the relevant regulatory bodies.
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FIEO organises 2nd edition of Logix India 2019’
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ith the active support of Ministry of Commerce & Industry, the Federation of Indian Export Organisations (FIEO) organised the 2nd edition of Logix India 2019- International buyer seller meet from December 12 14, 2019 at New Delhi. The key objective of the event was to develop an effective international trade and
provide an efficient and costeffective flow of goods on which other commercial sectors depend upon. The event also focussed on investment opportunities in infrastructure development, warehouse consolidation, technology integration, and IT enablement, skilling of manpower, etc. More than 120 International delegates from 26 countries attended the event to develop
superior logistics linkages with the Indian counterpart. The three day mega event was inaugurated by Hon’ble Minister of State for Commerce & Industry, GoI, Som Parkash in the presence of senior govt officials, diplomats, leaders of the trade and logistics industry, FIEO office bearers and various other stakeholders. Parkash in his key note address said that the
government aims at reducing logistics cost to 10 per cent of GDP. T he gover n me nt i s planning to invest around 100 lakh cr in logistics infrastructure in the next five years. Parkash also apprised that the Government is in the process of coming out with a new National Logistics Policy and creating data bank with feedback from different stakeholders.
Gandhi Automations bags Warehouse & Logistic Innovation award of WASME
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orld Association for Small and Medium Enterprises (WASME) presented its Warehouse and Logistic Innovation award to Gandhi Automations during the 23rd International Conference for SMEs (ICSME) on December 17, 2019 at WASME International Secretariat in Noida. The conference themed 'Achieving inclusive and sustainable goal through SME 4.0 by promoting SMEs' with the support of the Ministry of MSME.
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12th CII Logistics Colloquium culminates in Kolkata
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onfederation of Indian Industry (CII) in association with West Bengal Industrial Development Cor porat ion (WBIDC) organised the 12th edition of Logistics Colloquium- a forum for logistics players, policymakers, industry stakeholders, freight operators, and supply chain professionals from Eastern India, on November 16, 2019 at The Great Eastern, Kolkata. The Theme of this year’s edition was ‘Connectivity for Tomorrow: Multi Modal with better Supply Chain Network’. Top brass of
the logistics industry from the Southeast Asian region were part of the colloquium. Addressing the stakeholders, Dr Amit Mitra, Hon’ble Minister in Charge, Departments of Finance & Excise, IT & Electronics, Industry, Commerce & Enterprises, MSME and Textiles, Govt of West Bengal said that there has been a 191 per cent surge in warehousing in the state, and the Inland Water Transport World Bank project, the Rollon/Roll-off (RORO) project, the Amritsar Kolkata Industrial Corridor, the Asian High-
India Cold Chain Show 2019 concludes on a high note
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ndia Cold Chain Show 2019, held from December 4 - 6, 2019 at Bombay Exhibition Centre, Mumbai saw participation from leading
stakeholders and industry players from across the globe. In a span of three days, key buyers flocked the venue to discover cost-effective range of
way Project, the Kaladan Multimodal Project and several other initiatives have put West Bengal a nd Kol kata ver y prominently on the logistical map of the nation. With logis-
tical investments coming to the state due to its huge catchment area, the state’s GDP has shot up to 12 per cent due to sig n i f ica nt gover n ment spending on asset creation.
products, solutions and technologies encompassing cold storage, refrigeration, ripening chambers, reefer transport, tracking andIoT, packaging, cold storage infrastructure, cold logistics, cold chain supply segments and much more. The ‘Cold Chain Summit’
and ‘Pharma Distribution Con ference & Workshop’ brought together over 50 leading industry speakers and successfully created a platform to learn, gain insights, socialise and find out about emerging trends in the cold chain in India. Leading professionals from pharmaceuticals, food processing, retail, meat and seafood, dairy, ice-cream, cold supply chain and other enduser industry segments attended the event on cold chain and refrigeration to explore the best brands, innovative products and market trends in the cold chain.
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NACFS celebrates Silver Jubilee with gettogether & thought-provoking deliberation
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he National Association of Container Freight Stations (NACFS) celebrated its Silver Jubilee in New Delhi on November 14 and 15, 2019. It was a grand occasion comprising a trade get-together on November 14 evening and a conference having the theme ‘Logistics – The wheels to reach $5 trillion economy’ the next day. Both the events were attended by NACFS members from all over the country, key dignitaries, as well as a wide cross-section of the trade.
Participants in the conference were P K Das, IRS, Chairman, CBIC; N Sivasailam, Special Secretary (Logistics), Ministry of Commerce and Industry; and Rabindra Kumar Agarwal, IAS, Joint Secretary, Ministry of Shipping, among others. In his welcome address at the conference, R R Joshi, President, NACFS, highlighted the growth of the association, from a handful of people to 360 members, today. Going ahead, he said NACFS will continue to work towards raising the standards of all CFSs and ICDs by apply-
ing the best international practices and adopting digitalisation which would go a long way in achieving Ease of Doing Business.
Kakinada CBA organises knowledge session during FFFAI EC Meeting
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or the first time, Kakinada Customs Brokers Associat ion (KCBA) hosted the 2nd Executive Committee Meeting of FFFAI (for the tenure of 2019-21) on December 13 – 14, 2019. On the occasion, KCBA also organised a knowl-
edge session on ‘Customs Broker’s Protection Measure and The Way Forward’ followed by Kakinada Port visit by the Office Bearers and EC Members of FFFAI. The knowledge session was conducted by Joshua Ebenezer of M/s Lakshmikumran & Sridharan At-
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torneys, which is an eminent law firm. Joshua made his presentation on protection measures to be taken by customs brokers and how to progress in the current regulatory and economic scenario. Interesting and thoughtprovoking in terms of discus-
sions and interactions, the evwnt saw participation by C ha i r ma n- Vijay Ku ma r; Chairman Elect- Shankar S h i nde; I m m e d i at e Pa s t Chairman- S Ramakrishna; Vice Chairmen- PS Atree, M Satyanarayana, Vinod Sharma and Alan Jose; Honorary Secretary- Dushyant Mulani and a good number of EC Members of FFFAI from across the country.
DP World wins 'Overall Excellence Award in Supply Chain' at CII Scale Awards 2019
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lobal trade enabler DP World in India has won the prestigious ‘Overall Excellence in Logistics and Supply Chain’ award at the CII-Supply Chain and Lo-
gistics Excellence (SCALE) Awards held on December 12, 2019 in Bengaluru in recognition of the efficient and tailormade supply chain solutions offered by the company. Rizwan Soomar, CEO and MD, DP World Subcontinent said, “We are pleased to receive this prestigious award as it recognises our efforts to create a better supply chain ecosystem in the country. Through our capabilities in port terminal, rail, warehousing, inland rail terminals, cold chain services, 3PL, express services we give our customers more options to move their cargo in a smarter, faster a nd efficient manner.” DP World has been recognised under the category of ‘Terminal Operator- Sea Port’, ‘Express Courier’, ‘E-commerce Logistics’, ‘Third Party Logistics,’ and ‘Cold Chain a nd Temperat u re Controlled Services’.
AoWD organises knowledge sharing session in Capital
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ssociation of Warehouse developers (AoWD) organised a knowledge sharing session with Kirby Building Systems - A group company of Alghanim Industries systems on November 22, 2019 at the Radisson Blu, Kaushambi in New Delhi. The event was well-attended by the warehouse owners, developers, and other stakeholders. Issues related to creating new facilities, PEB structure and maintenance of existing PEB structures and safety were discussed. Interesting trends in the industry were noted during the session.
Almajdouie Logistics honoured with LSP of the Year award
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lmajdouie Logistics has won the Frost & Sullivan KSA Logistics Service Provider Company of the Year Award for the fourth year in a row. Anoop Zutish, President and Managing Partner, Frost & Sullivan Global presented the award to Almajdouie Logistics CEO, Mohammed Ali Almajdouie at the 2019 Middle East Best Practices Awards Banquet, which took place in Dubai, UAE on December 11, 2019. While receiving the award, Mohammed Ali Almajdouie said, “This prestigious award reflects the combined efforts of our entire team and our shared commitment to exceeding customer’s expectations. It also inspires us to work even harder to improve our high standards of ingenuity and business excellence.”
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Dachser India & terre des hommes join hands for CSR event in Pune
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achser India’s customers and business partners attended a lively panel discussion about the topic 'The role of CSR in the conscious corporation' which took place on December 11, 2019 in Pune. The event, organised by Dachser India and the NGO- 'terre des hommes', built an excellent platform for attendants to discuss how a corporation can make a bigger impact on the lives of the marginalised.
PROFILE
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Gandhi Automations introduces strongly built Automatic Rolling Shutters
andhi Automations ma nufact ure mo torised rolling shutters to a maximum width of 30,000 mm and height of 40,000 mm with boundless array of choices to please both artistic deliberations as well as working prerequisite. The rolling shutters are automatic, uses vigorous drive expertise with manual override in case of power failure and are dense, noiseless, and dependable with low decibel level. Motorised rolling shutters are perfect for circumstances where side room is less and security is required. Rolling shutters need very less headroom above the structural o p e n i n g. T h e y c o m b i n e strength with elegance along with toughness and are designed for both external and internal applications. Auto-
matic Rolling Shutters are made-up of interlocked galvalume, galvanized insulated and non-insulated, stainless steel, patented aluminum profiles and patented bright steel bar rolling grills. Automatic Rolling Shutters are strongly built to endorse trouble-free process and long life. Motorised rolling shutters can also be planned as per customer’s conditions or conforming to IS6248.
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Installing rolling shutters can protect external entrances from damage during severe weather. In some hurricaneprone states, new homes or ones doing major improvement projects are required to install approved rolling shutters. In other parts of the country, they are also popular for energy savings and security benefits. When installing a shutter over a normal-size
window, an inexpensive pull strap operator is effective. For larger shutters or heavier extruded ones, a hand crank is a good choice. This is still reasonably priced and easy to use. For the most convenience, electric operators are available. With modern electronics, groups of shutters can be operated from just one control. For further details, visit www.geapl.co.in
Logistics and Supply Chain
Air Cargo EVENT: Aviation Festival Asia ORGANISED BY: TERRAPINN DATE: February 18 - 19, 2020 WHERE: Suntec Convention & Exhibition
EVENT: 8th Global Logistics Show ORGANISED BY: Infinity Expo DATE: February 20 – 22, 2019 WHERE: Somaiya International
Convention Centre, Bombay GLS is the premier meeting place for the India's Logistics and Supply Chain Sector. In its 4 edition, it brings together 5000 professionals involved in the handling, moving and transportation of goods throughout the supply chain, with proving as an ideal place to meet new contacts and win new business. To know more visit www.globallogisticsshow.com
EVENT: Breakbulk Asia ORGANISED BY: Hyve Group PLC DATE: March 18 - 19, 2020 WHERE: Shanghai World Expo Exhibition
& Convention Center, Shanghai, China Leading conference and exhibition for project cargo and breakbulk professionals offering an unparalleled opportunity to connect with the industrial project supply chain – shippers and service providers, local and international – who are involved in today’s megaprojects that revolve around China's One Belt, One Road program. To know more visit www.asia.breakbulk.com
Centre, Singapore Aviation Festival Asia aims to be the gateway for the attendees to the world’s fastest-growing aviation market. It provides the attendees with the opportunity to meet senior executives in the Asian aviation industry and focuses on the ancillary strategies, price management & distribution for the modern airline along with AI, data-driven technology and the future of aviation. To know more visit www.terrapinn.com
EVENT: IATA World Cargo Symposium 2020 ORGANISED BY: International Air Transport
Association (IATA)
DATE: March 10 - 12, 2020 WHERE: Hilton Istanbul Bomonti Hotel &
Conference Center, Istanbul, Turkey IATA’s 14th World Cargo Symposium will continue to move the industry from talk to action with this edition. WCS 2020 will feature plenary sessions, specialized tracks, workshops and executive summits, tackling aspects related to Technology & Innovation, Security & Customs, Cargo Operations and Sustainability. To know more visit www.iata.org
EVENT: 10th India Warehousing
Show
ORGANISED BY: Reed Manch
Exhibitions
DATE: June 18 – 20, 2020 WHERE: Pragati Maidan, New Delhi
Bringing the future at your doorsteps, the India Warehousing Show brings the industry in its full dimension, gathering all facets of logistics, warehouse infrastructure, material handling, storage, automation and supply chain. The show acts as marketplace and driver of innovation and success, creating an ideal platform, positioning your company to the forefront of success. To know more visit www.indiawarehousingshow.com
Event: All India Cold Chain Show Date: July 2 - 4, 2020 Venue: India Expo Mart Limited,
Greater Noida, Delhi Organised by: Federation of Cold Storage Associations of India (FCAOI) The Federation of Cold Storage Associations of India (FCAOI) is organising an annual national seminar on cold chain and storage industry. The show offers ample of business and networking opportunities to industry leaders from across the world. Alongside the seminar, a dedicated exhibition will take place which will showcase leading companies offering cold chain technologies and the best of products and services. To know more visit www.aiccs.in
EVENT: Air Cargo Forum 2020 ORGANISED BY: The International Air Cargo
Association (TIACA) and Messe München DATE: November 10 - 12, 2020 WHERE: Miami Beach Convention Center, Miami, Florida, USA The International Air Cargo Association (TIACA) is the only organisation representing all segments of the air freight supply chain. TIACA’s Air Cargo Forum (ACF) is a biennial event bringing together thousands of airfreight decision makers and supply chain operators from across the globe. To know more visit www.tiaca.org
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appointments
Harjeet Kaur Joshi becomes first woman to helm Shipping Corporation
Harjeet Kaur Joshi has been appointed as the full-time Chairperson and Managing Director of privatisation-bound Shipping Corporation of India (SCI), becoming the first woman to helm the country’s biggest ocean carrier by fleet size. Joshi’s appointment was confirmed by the appointments committee of the cabinet in October after the Public Enterprises Selection Board picked her to lead SCI. Prior to the new role; Joshi was serving SCI as Director (Finance) and was also holding the additional charge of CMD.
Sangita Reddy takes over as FICCI President
Sangita Reddy, Joint Managing Director, Apollo Hospitals Group, has taken over as the President of industry chamber FICCI for 2019-20. Reddy succeeds Sandeep Somany, Vice-Chairman and Managing Director, HSIL. Reddy has been a member of The World Economic Forum digital committee and was also an elected Member of the Steering Committee on Health for the Twelfth Five Year Plan (2012-2017) by the Planning Commission, GoI. She was an Executive Member of NASSCOM and was on the Board for Development Institute, USA and GAVI.Org.
JDA appoints Vinok Sequeira as SVP for Asia-Pacific
JDA Software, Inc. has appointed Vinok Sequeira as Senior Vice President (SVP), associate success for the Asia-Pacific region including the India CoEs. In his new role, Sequeira will be responsible for aligning the associate success team in APAC with the marketing and sales force in the field, customer success teams working with its’ customers and product development teams. Sequeira started his career at JDA in 1997 and has been into the building of CoEs in the region. He is leading the company in hiring, engaging and developing supply chain talent.
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Brussels Airlines names Dieter Vranckx as new CEO, CCO
Dieter Vranckx will become the new Chief Executive Officer and also the new Chief Commercial Officer of Brussels Airlines as of January 2020. In 1998, Vranckx held the position of Operations Manager at Sabena, before joining Swissair in Zurich in 2000 as Sr Manager, Network Planning- Europe. At the end of 2001, he was part of the network planning team setting up the newly created SN Brussels Airlines network. Between 2001 and 2016, he headed several departments within the Lufthansa Group. Since May 2018, Vranckx has been Chief Financial Officer and Deputy CEO of Brussels Airlines.
Wes Wheeler appointed to lead UPS Healthcare and Life Sciences Unit
Wes Wheeler, currently CEO of Marken, a whollyowned subsidiary of UPS, has take over as president of UPS’s global Healthcare and Life Sciences unit. Wheeler joined UPS as part of the company’s acquisition of Marken in 2016. He started his career as a project manager for Exxon Research and Engineering. Since then, he has served in numerous leadership positions including VP of marketing, SVP of global manufacturing and supply at GlaxoSmithKline etc. Wheeler joined Marken as CEO in 2011.
Finnair Cargo appoints Pasi Nopanen as Asia’s Sales Director
Pasi Nopanen has been appointed as Finnair Cargo’s Sales Director for Asia. Nopanen will take up his position from March 2020– joining from Qatar Airways – and will be
based in Shanghai. Nopanen has extensive experience in the air cargo industry, having worked for airlines and freight forwarding companies during his career. He is currently vice president- cargo global sales at Qatar Airways.
Michael Castagnetto named President of Robinson Fresh
CH Robinson has promoted Michael Castagnetto to President of the Robinson Fresh division. Castagnetto has been with CH Robinson since 2005 and has held various leadership roles throughout his career including sourcing manager at Food Source, GM of the tropical and dry vegetable categories, Director of global supply and VP of global sourcing. In that time, he was a key player in the evolution of the company’s fresh business into one of the leading supply chain product and services companies in the fresh food industry.
Volvo Group appoints Nils Jaeger as President of Volvo Autonomous Solutions
Nils Jaeger, currently President Region EMEA, Volvo Financial Services, has been appointed President of the new Volvo Group business area Volvo Autonomous
Solutions. In his new role, Jaeger will report to the Volvo Group president and CEO Martin Lundstedt and be a member of the Group management team. Jaeger will lead a new business area responsible for further accelerating the development, commercialisation and sales of autonomous transport solutions from the Volvo Group.
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People connect
Tulsi Nowlakha Mirchandaney Managing Director, Blue Dart Aviation
When our work has a sense of purpose, it makes life meaningful and exciting Only a fortunate few chalk out their careers at an early age. I was not one of them. I applied for an airline job for all the wrong reasons, primarily to fund my future education. Not a woman’s job at the time, and not too many of us even today. Yet, working in the less stylish entrails of the aircraft as one of the ‘backroom boys’ — the endearing term used for airline cargo employees at the time — soon had me hooked. It’s been a long, varied journey of over four decades in the airline and express business, working with a wide cross-section and some of the most talented people during my tenure at all the five major cities across the country. My involvement in the startup of India’s first cargo airline, Blue Dart Aviation was a great privilege and a unique opportunity. It was a proud, pioneering effort that charted a new path in the Indian skies. Today, Blue Dart Aviation is the oldest private airline in the country.
The biggest challenge Building and sustaining an organisation that endures in an uncertain and volatile aviation environment is an ongoing challenge.
Values for success
Achievement or success is not
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an exercise in solitude, but an outcome of experiences, confrontation, choices and the contribution of people and events that have touched our lives. When our work has a sense of purpose, it makes life meaningful and exciting. All the effort, focus, discipline and learning become inputs towards a significant end.
Interests and hobbies Architecture is my second love after aviation. The power to give form and beauty to function within a limited space never ceases to amaze and inspire. I also enjoy reading, occasionally playing the piano (not well) and pottering amongst my plants.
Message for aspirants
One of the most fulfilling aspects of our work is the fact that we support the critical supply chains of numerous industries, we facilitate trade and commerce; we contribute to our country’s economy and are amongst the largest employers globally. In a rapidly evolving environment, with increasingly sophisticated technology interface, and the demands for sustainability, there are huge opportunities for innovation and development across the supply chain. I would encourage the youth, especially young girls, to consider our industry as a viable career option. It’s an exciting space to be in.
Interviewed by Upamanyu Borah
J
ourney so far!
18-19 March 2020 Shanghai World Expo Exhibition & Convention Center (SWEECC) Shanghai, China
global reach market know-how
new business
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www.jsw.in/infrastructure
Taking maritime gateway to ascending heights Vision: 200 MTPA by 2021
JSW Infrastructure Sustainable growth is our motto of progressing towards a successful tomorrow. JSW Infrastructure is proud to be at the forefront of India’s push for infrastructure development. It’s an opportunity for us to leverage our potential and contribute meaningfully to our nation’s economic development. As an integral part of the US$14 Billion JSW Group, we build and function strategically located eco-friendly ports along the coastal belts of India and abroad. We believe in consistently delivering world-class services to our customer and help them grow exponentially.
BUILDING CAPACITIES
DEVELOPING CAPABILITIES
ENHANCING CONNECTIVITY
We constantly endeavour on expanding strategically by venturing into new avenues in the field of ports and logistics
We operate highly sophisticated ports, compliant with large-sized vessels and focus on greener shipping solutions
We are dedicated towards strengthening connectivity, leveraging our expertise in movement of cargo via coastal shipping and inland waterways
OPERATIONAL PORTS: Jaigarh | Dharamtar | Goa | Fujairah | Paradip Iron Ore Terminal UPCOMING PORTS: Paradip Coal Terminal | Nandgaon Jetty