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Supply Chain Outlook: Understanding COVID-19 disruption in the shortterm
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Cross-border Trade: Embracing digitalisation in Customs
Contract logistics Delivering a complete Solution to Suit
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contents
Volume XI Issue VI
may 2020
Publisher & Editor-in-Chief Smiti Suri Special Correspondent / Sub-editor Upamanyu Borah Principal Correspondent Ritika Arora Bhola Correspondent Saurabh Sharma Event Coordinator Pallavi Jain Director Ajeet Kumar
18 COVER STORY
Contract Logistics: Delivering a complete Solution to Suit interview Gopal R, Global VP, Transportation & Logistics
Practice, Frost & Sullivan.................................. 44
Marketing Manager Rahul Arora Gagan Duggal Marketing Executive Akash Gupta Rahul Jain Accounts & Administration Lavish Thakur Designer & Visualiser Ashok Saxena
Andreas Bullwinkel, Chairman, Container
Terminal Wilhelmshaven JadeWeserPortMarketing GmbH & Co. KG.................................. 45
shipper speaks
srinivas moorthy, AVP - Distribution,
Oaknet Healthcare........................................... 46
Regulars Frontline............................ 6 Buzz...................................... 8 Technology....................... 42
focus Supply Chain Outlook: Understanding COVID-19 disruption in the short-term.............................. 10
special feature Cross-border Trade: Embracing digitalisation in Customs.................................................................34
30,338
News............................. 48-53 Events.......................... 54-55 appointments.................. 56 Report................................ 58
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 by Smiti Suri,
and is printed at Compudata Services, 42, DSIDC Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014
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frontline
Another technology being developed is charging electric trucks through a rail being laid in the middle lane of the road. These rails of 20 km are going to charge electric trucks as they move on them and then travel a distance of some 100 or 200 km on a full charge.
A recent World Bank report commended four Arab countries including Saudi Arabia and Kuwait for having implemented the most number of reforms to ease international trade. Kamarajar Port was originally designed as a satellite port to handle dusty cargo such as coal and iron ore and help free Chennai from such cargoes polluting the city.
SpiceJet recently initiated the ‘Marine Krishi Udaan’ by introducing dedicated freighter flights from Chennai and Vishakhapatnam to Surat and Kolkata to
boost India’s shrimp farming.
Nitin Gadkari Union Minister for Road Transport & Highways and MSMEs
Our spares and services network is very global in nature and it ensures that we have a minimum amount of reliability and availability. We do multiple sourcing, including India where we have a significant amount of our spares and components base. Anand Stanley President and Managing Director, Airbus India and South Asia
We are proud to partner with GMR Hyderabad Aviation SEZ Ltd (GHASL) for this first-of-its-kind initiative by an airline in India. The Free Trade Zone and the end-to-end service provided by SpiceXpress will greatly boost businesses, saving valuable time for our partner companies. Ajay Singh Chairman and Managing Director, SpiceJet
Including its flagship facility at Tughlakabad near Delhi, 41 of CONCOR’s 86 ICDs are running on land leased from Indian Railways, for which it pays a land licence fee of `1,175 per loaded twentyfoot equivalent unit (TEU). There are about 50,000 accredited ground handlers in India, and the employee cost is one of the highest for the industry, estimated at around `120 crore a month. During FY2018-19, As many as
102 airports out of 137 airports managed by AAI together made losses of `1,646.66 crore. 6 | CargoConnect may 2020
The epidemic outbreak has brought about challenges to global logistics. With the help of eWTP, we’re trying our best to ensure speedy transport and delivery to move the supplies to remote communities where they are most needed. Juntao Song Secretary General, eWTP
DP World and the Renault F1 Team partnership is a first step in the exploration of ways to make the global automotive supply chain more efficient by lowering costs, increasing speed and transparency, and mitigating the environmental impact. Sultan Ahmed Bin Sulayem Group Chairman and Chief Executive Officer, DP World
buzz
Lifeline UDAN continues bolstering India’s war against COVID-19
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nde r ‘L i f e l i n e UDAN’ initiative of Mi n ist r y of Civ i l Av iat ion (MoCA), 465 cargo flights have been operated until May 05, covering a distance of 4,51,038 kms and carrying a p p r o x i m a t e l y 8 3 5 .9 4 tonnes of medical supplies. To ensure a steady supply of essentials, even in the most remote locations, the MoCA core g roup wa s formed wit h importa nt stakeholders for undertaking Lifeline UDAN initiative to transport essential medical cargo across the country to support India’s war against COVID-19. Correspond i ngly, hub a nd spoke lifeline services were started from March 26. State-run Air India and Alliance Air has operated the largest number of flights under Lifeline UDAN– 278. Air India, Alliance Air, IAF and private carriers are operating flights to deliver essential items including medical supplies with special focus on the Northeast
8 | CargoConnect may 2020
region, island territories and hill states. Air India and IAF collaborated primarily for J&K, Ladak h, Nort heast a nd other island regions. Helicopter service provider Pawan Hans Ltd have also been operating in J&K, Ladakh and North East region transporting critical medical cargo and patients. Till May 05, Pawan Hans have carried 2.27 tonnes of cargo, coveri ng a distance of 7,729 kms. Domestic Cargo Operators SpiceJet, Blue Dart, Indigo and Vistara are operating cargo flights on a commercial basis. Low-cost carrier, SpiceJet op erated 819 c a rgo flights during March 24 to May 05 covering a distance of 13,83,854 kms and carrying 5,946 tonnes of cargo. Out of these, 294 were international cargo flights.
Express transportation and distribution company, Blue Dart operated 278 cargo flights covering a distance of 3,09,272 kms and carrying 4,683 tonnes of cargo from March 25 to May 05. Out of these, 14
465 flights 836 tonnes 4,51,038 kms were international cargo flights. Budget-carrier, Indigo h a s op erat e d 95 c a rgo flights during April 03 to May 05 covering a distance of 1,59,158 kms and carrying around 470 tonnes of cargo and including 38 international flights. This also includes medical supplies
carried free of cost for the government. Full-service carrier, Vistara has operated 23 cargo flights during April 19 to May 05 covering a distance of 32,321 kms and carrying around 150 tonnes of cargo. On the International front, an air-bridge has been established with East Asia for transportation of pharmaceuticals, medical equipment and COVID-19 relief material, with effect from April 04. The quantity of medical cargo brought in by flagcarrier Air India counts to 972 tonnes. In addition, Blue Dart has airlifted medical supplies of around 114 tonnes from Gua ngzhou a nd Shanghai, and 24 tonnes from Hong Kong, since April 14 up to May 05. SpiceJet has also uplifted 204 tonnes of medical supplies from Shanghai and Guangzhou, along with 16 tonnes medical supplies from Hong Kong and Singapore, until May 05.
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Supply Chain Outlook: Understanding COVID-19
disruption in the short-term 10 | CargoConnect may 2020
focus of corona affected patients and related deaths; many industries have come to a standstill. Economists now expect a global recession, the length and depth of which will depend on the virus and government intervention. ”As COVID-19 spreads globally, we are seeing increased supply chain disruption, but also changes in consumer spending habits,” comments Sarah Watt, Senior Director Analyst with the Gartner’s Supply Chain Group. “Supply has been impacted in three primary ways: limited access to employees due to quarantines, factory closures or manufacturing slowdowns and limited access to logistics to move goods. Most supply chain organisations are in crisis management, assessing impacts and response on a daily, if not hourly basis.” Sectors such as tourism, aviation, hospitality and trade has faced the first brunt of the severe travel, assembly and activity curbs imposed by the governments across the world, followed by a wider impact on other sectors as economic activity has stalled. In line, sectors such as consumer durables, automobiles and pharmaceu-
Until three months back, nobody had even imagined that the impact of the 2019 novel coronavirus (2019nCoV) disease on life and property would be this huge, that it will slowdown the global economy drastically, that it will affect all the industries radically and make industrialists run for survival literally.
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Ritika Arora Bhola
he coronavirus or COV I D -19 outbreak, which is reportedly said to be created in the Chinese laborator ies a nd later spread throughout the world, has caused drastic disruptions in supply chains globally. With constant lockdowns, regular increase in the number
ticals are currently feeling the brunt of supply constraints. India, one of the fastest-growing economies in Asia, too, is hugely feeling the economic impact of COVID-19. Early estimates by the government suggests, India’s economic growth could take a hit of up to half a percentage point in FY21 because of the disruptions caused by the COVID-19 outbreak. But independent economists see a deeper cut of up to one percentage point.
“On top of the likely consumption slowdown, production is also going to be hit,” says D K Pant, Chief Economist at India Ratings and Research. In the current situation, “no one is going to pile up inventories”. Given all this, the main question logistics industry professionals are asking, is whether this will have long-term effects on supply chain management and how long it will take for the manufacturing industry and the economy as a whole to recover.
Preparing the Supply Chain
Developing a cogent supply chain response to the outbreak is extremely challenging, given the scale of the crisis and the rate at which it is evolving. However, there are measures that can be taken now even if you’re not fully prepared. And although its longterm consequences have yet to fully play out, the COVID-19 outbreak already provides some lessons about how you can better prepare your company to deal with future large-scale crises. “Even as businesses and economies combat the slowdown caused by the COVID-19 pandemic, the international logistics and supply chain is steadily evolving to rise up to the challenge,” says Aditya Vazirani, CEO of Robinsons Global Logistics Solutions. “Logistics and supply chain companies are exploring and adopting new models that are more agile, with a focus on optimisation and non-linear operations that can absorb disruptions of this magnitude,” says Vazirani. According to Vazirani, supply chain leaders should focus on four main areas to mitigate disruption from the coronavirus: Educate ground staff: Effective handling of packages is this crucial to ensure they do not contract any virulent material through the consignments. Educating the staff to adhere to the requisite precautionary protocol and marinating the discipline, is crucial when they are out on the field. Optimise processes: From effective management of warehouse space, human resources and transport fleet, to streamlining processes through freight integration, effective optimisation across the supply chain is vital to ensure lean operaCargoConnect may 2020 | 11
focus
Air freight industry grapples with enormous losses Supply has been impacted in three primary ways: limited access to employees due to quarantines, factory closures or manufacturing slowdowns and limited access to logistics to move goods. Most supply chain organisations are in crisis management, assessing impacts and response daily. Sarah Watt, Senior Director Analyst, Gartner
tions. Creating internal processes that allow efficient monitoring and management of these processes can go a long way in creating value and sustainable operations. Digitise the supply chain: Setting a digital supply chain network is no longer just a matter of upgrading technology but ‑need of the hour for logistics and supply chain service providers. By leveraging Internet of Things (IoT) and Artificial Intelligence (AI) for smart warehouse automation, tracing and tracking and generating end-to-end visibility for a connected and optimised supply chain is vital so as to tide over not just the current crisis but also for building up an agile network that is well prepared to take in similar disasters in the future. Evolve as value creators and partners: Understanding the impact of COVID-19 outbreak on various sectors, it could be anticipated that the global economy would take a considerable time to bounce back. As the lifeline of global trade, it is of significant importance that the logistics and supply chain network service providers step up to evolve as real value creators and partners in the process of rebuilding the financial world. Businesses across the world would need a stronger backbone to rely on, once international borders open again. 12 | CargoConnect may 2020
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he International Air Transport Association (IATA) updated its analysis of the revenue impact of the COVID-19 pa ndem ic on t he global air transport industry; it now estimates that industry passenger revenues could plummet to $252bn. This estimate is based on the assumption that severe travel restrictions will hold for up to three months, followed by a gradual economic recovery later in the year. Government intervention remains the only way to ensure airlines are able to survive for the long-term, and countries are already pledging their support to their respective aviation industries in order to protect employees, airlines, and the wider aviation business. “The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst case scenario is looking better than our latest estimates,” IATA’s Director General and CEO, Alexandre de Juniac expressed. “Without immediate government relief measures, there will not be an industry left standing. Airlines need $200bn in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit,” Juniac adds. Although the cargo sector has seen an upsurge in demand in the wake of shipments of emergency supplies, IATA says the reduction in passenger flights means some capacity has been withdrawn because airlines accommodated significant capacity for cargo on passenger aircraft. Although airlines are reintroducing freighters a nd somet i mes even adapting passenger aircraft to cargo operations in order to support the global supply chains, operators are facing challenges in countries where cargo crews are being subjected to t he same quarantine measures as passengers.
“Since the beginning of 2020, globally over 2,00,000 flights were not able operate due to various governments isolation alert announcements restricting travel. Going forward, this resulted in the total drop of passengers which had a Tsunami effect on capacity of cargo globally. Added to that, the announcement of domestic flights suspension was a red alert of things to come, followed by the ongoing coronavirus lockdown restrictions,” explains veteran freight forwarder and Joint Managing Director of Zeus Air Services, Bharat J Thakkar. “With vital capacity having disappeared just like that, airlines committed to operate additional freighters to and from India. But, with freighter demand at its peak, airlines sought permission from DGCA to allow them to operate empty passenger planes to somehow meet the demand. After DGCA granted permission to utilise passenger aircraft for cargo-only flights, private carrier
focus
Steps have already been taken to identify specific goods and ensure their imports, especially pharmaceuticals. Certification agencies have been directed to ramp up capacity to issue certificates expeditiously. There is a need to ensure liquidity and keep the cost of capital. Sanjeev Sanyal, Principal Economic Adviser, Ministry of Finance
SpiceJet on April 07 operated the first ‘cargo-on-seat’ service, carrying 11 tonnes of vital supplies in passenger cabin and belly space from Delhi to Chennai. Since then, other private airlines such as IndiGo, Air Asia, Vistara have joined the efforts against c or o n av i r u s and are
The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst case scenario is looking better than our latest estimates. Airlines need $200bn in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit. Alexandre de Juniac, Director General and CEO, IATA
using their aircraft to transport medical and food supplies across and beyond the country,” Thakkar notes. “The impact on the exposed sectors of shipping and airfreight is obvious. The question is how long will the impact be felt and how deep will be the fall in demand and prices,” says Sanjay Gupta, MD at Divine Freight Solutions. “There is no evidence that COVID-19 can be transferred on cargo but the air cargo industry is bracing itself for the impact of measures taken to slow the spread of the outbreak. The impact although is still uncertain, with demand under pressure, but there are expectations of an eventual surge in volumes,” Gupta elaborates. “As a logistics provider, connect i ng all ends to ensure smooth operation is becoming a challenge. We are managing with limited resources of airline capacity, and also not all exporters are accepting the huge surge in pricing. As such, either the orders are being cancelled and/ or exporters are adopting at the wait and watch policy, hoping that capacity would increase and also prices come down,” Gupta sighs. For forwarder SD cargo, involved in the handling
Since the beginning of 2020, globally over 2,00,000 flights were not able operate due to various governments isolation alert announcements restricting travel. Going forward, this resulted in the total drop of passengers which had a Tsunami effect on capacity of cargo globally. Bharat J Thakkar, Joint Managing Director, Zeus Air Services
COVID-19 shook the world. It looks like a war-ravaged situation. The supply chain is badly affected. There is disruption in supplies because of curtailment of air services and the enormous increase of freight cost. It is a very tiring time for all of us. T V Madhusudan, GM- Distribution, RPG Life Sciences
and transporting of time-sensitive cargo and ambient-temperature pharmaceutical products, the pandemic business continuity plan in place ensure their operational resiliency. “We will be working through this hard phase to transport and distribute medicines with using air operations. We have also backed up our operations with all reefer cold vans vehicles to ensure an uninterrupted cold chain,” says Deepak More, Managing Director for SD Cargo. CargoConnect may 2020 | 13
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The global economy would take a considerable time to bounce back. As the lifeline of global trade, it is of significant importance that the logistics and supply chain network service providers step up to evolve as real value creators and partners in the process of rebuilding the financial world. Aditya Vazirani, CEO, Robinsons Global Logistics Solutions
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We are managing with limited resources of airline capacity, and also not all exporters are accepting the huge surge in pricing. As such, either the orders are being cancelled and/ or exporters are adopting at the wait and watch policy, hoping that capacity would increase and also prices come down. Sanjay Gupta, Managing Director, Divine Freight Solutions
Pharma supply chains feel COVID-19 hit, but not severe
14 | CargoConnect may 2020
he novel coronavirus is putting pharma's complicated global supply chain under strain, no question. Besides, as the outbreak continues to spread across countries, concern about the potential for disruption to the manufacture and distribution of pharmaceutical products has intensified. T V Madhusudan, GM- Distribution, RPG Life Sciences couldn’t agree more. “COVID-19 shook the world. It looks like a war-ravaged situation. The supply chain is badly affected. There is disruption in supplies because of curtailment of air services and the enormous increase of freight cost. It is a very tiring time for all of us,” says Madhusudan. The Indian government has put in place several preemptive measures to ensure there is no disruption to supply chains by speeding up customs and port clearances for specific goods including active pharmaceutical ingredients, and now it will focus on ensuring adequate cash flow in the system “We have taken a lot of preemptive measures in terms of keeping supply chains going...in terms of the health,” Sanjeev Sanyal, Principal Economic Adviser to the Ministry of Finance said. “Now we are taking preemptive measures to make sure that the cash flow remains.” Steps have already been taken to identify specific goods and ensure their imports, especially pharmaceuticals, Sanyal says. “Certification agencies have been directed to ramp up capacity to issue certificates expeditiously.” “There is a need to ensure liquidity and keep the cost of capital. The government also needs to ensure its own payments and tax refunds are on track,” Sanyal adds. According to Sameer Baisiwala, Analyst at Morgan Stanley, the impact of COVID-19 on Indian pharma has so far been limited due to existing inventory levels across supply chain but this can change if supply shortages from China continue. India has a meaningful dependence on China for its raw material supplies. The global generic supply chain, however, can remain unaffected if the active pharmaceutical ingredient/intermediate shipments from China normalise over next two to four weeks, Baisiwala says.
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The pandemic business continuity plan in place insures our operational resiliency. We will be working through this hard phase to transport and distribute medicines with using air operations. We have also backed up our operations with all reefer cold vans vehicles to ensure an uninterrupted cold chain.
India has a meaningful dependence on China for its raw material supplies. The global generic supply chain, however, can remain unaffected if the active pharmaceutical ingredient/ intermediate shipments from China normalise over next two to four weeks. Sameer Baisiwala, Analyst, Morgan Stanley
Deepak More, Managing Director, SD Cargo
With Chinese supply chains recovering and getting back to normal, companies in the auto, electronics and pharma sectors would choose a mix of air and sea as modes of transport over the next few months. One can imagine the plight of all the service providers across the logistics & distribution chain. Sunil Bharadwaj, DGM – Strategy & Supply Chain, Raymond
Shippers’ rising woes
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a ndem ics a re a ser ious wake-up call for companies with global operations, as well as for their supply chain professionals to develop several alternate sourcing and manufacturing plants in different regions of the world to mitigate the risk from such adverse conditions. As resources become constrained, firms must constantly re-prioritise delivery of products and services that are absolutely critical to meet customer needs and provide market stability. Equally important is a thorough understanding of activities that must be de-prioritised to allow effective repositioning of available resources. In fact, in certain cases, firms are importing certain spares, RM, etc. to save on lead times and keep their factories running, says Sunil Bharadwaj, DGM – Strategy & Supply Chain, Raymond. “One can imagine the plight of all the service providers across the logistics & distribution chain.” CargoConnect may 2020 | 15
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Many freight forwarders and their staff could work from home, but supply chains are affected as truckers, warehouse staff, and cargo handlers are restricted from carrying out operations. The key is acting smart and pre-planning. The indirect effects are likely to be as important economically. Sameer Gupta, Chief Manager (Supply Chain), JK Tyres & Industries
“With Chinese supply chains recovering and getting back to normal, companies in the auto, electronics and pharma sectors would choose a mix of air and sea as modes of transport over the next few months,” Bharadwaj anticipates. Freight booking portal Freightos said that any backlog caused by the extended closures could motivate some time-sensitive importers to shift modes from ocean to air. An extended shutdown would likely push that rebound in demand and prices beyond the seasonal norm for ocean, and perhaps even more so for air as some shippers choose to expedite delivery of backed up orders. Shipping lines have started skipping calls at Jawaharlal Nehru Port Trust (JNPT) and Adani group-run Mundra port because no exports and 16 | CargoConnect may 2020
Ship owners are contemplating not to dock at Indian ports as post off-loading of import containers they have to sail out without export containers. This could also lead to an increase in freight rates for imports to cover-up for their export leg cost. Adarsh Hegde, Joint Managing Director, Allcargo Logistics
There is a heavy rush at JNPT, and Customs House Agents (CHAs) are not allowed to enter the port offices. This is further delaying the process of clearance. We are in dark whether the port or Container Corporation of India (CONCOR) would continue to charge on detention/demurrage/ ground rent, etc. Prashant Bhatmule, Head- Outsourcing, JK Paper
import clearances are happening at India’s both top container gateways. Problems in clearing import containers from the ports and nearby container freight stations (CFSs) and the lack of exports due to factory closures in the wake of the ongoing lockdown to slow the spread of coronavirus have started to disrupt export-import (EXIM) trade and carrier schedules. “Exports on the other hand have been adversely affected due to the slowdown/shut-down of factories owing to non-availability of labour. Ship owners are contemplating not to dock at Indian ports as post off-loading of import containers they have to sail out without export containers. This could also lead to an increase in freight rates for imports to cover-up for their export leg cost,” says Adarsh Hegde, Joint Managing Director at Allcargo Logistics, India’s top logistics firm. Non-clearance of import containers from CFSs has also led to a huge imbalance in the availability of empty containers to support exports when it re-starts. “The COVID 19 effect is so much that even the normal documents are getting delayed for delivery for import supplies. Banks are also receiving documents delayed, leading to unavailability of papers for import clearance,” says Prashant Bhatmule, Head- Outsourcing at JK Paper, with citing other concerns. “There is a heavy rush at JNPT,
and Customs House Agents (CHAs) are not allowed to enter the port offices. This is further delaying the process of clearance. We are in dark whether the port or Container Corporation of India (CONCOR) would continue to charge on detention/demurrage/ground rent, etc. If yes, this is going to be a heavy loss for any industry. Even after receiving clearance form Customs, the customers are closed for delivery, making the alternate arrangements to be made for stocking, leading to additional cost and handling of goods.” Going forward, Bhatmule expects the government to interfere and avoid such charges levied on the industry. “Additionally, transport rates have gone up due to the unavailability of transport vehicles. On one side, there is no business, and on the other side there are extra charges to be paid. Where will the industry go?” “Many freight forwarders and their staff could work from home, but supply chains are affected as truckers, warehouse staff, and cargo handlers are restricted from carrying out operations,” says Sameer Gupta, Chief Manager (Supply Chain), JK Tyres & Industries. Gupta warns that warehousing might come under strain as companies look to build up inventory. “The key is acting smart and pre-planning. The indirect effects are likely to be as important economically.”
coverstory
Contract logistics Delivering a complete Solution to Suit
18 | CargoConnect may 2020
I
Contract logistics companies possess a deep understanding of how different industries work to best manage the logistics of a variety of companies. They combine the skills and experience of their operations managers and supply chain designers, to visualise, implement and operate logistics solutions allowing them to deliver value to their customer’s business. All this has one goal, to increase the overall performance of logistics processes and reduce costs.
nternational trade has seen major change in recent years; in the past, logistics involved simply moving goods from one place to another. Today, the market demands comprehensive services and specific logistics processes, making contract logistics the ideal solution for companies wishing to monitor and manage their operations. Contract logistics is defined as the comprehensive process from production to distribution at the final point of sale. Simply put, it is the interface between manufacturer, supplier and end user. This means that contract logistics is not simply the process of moving goods, but a far more comprehensive course of action that merges traditional logistics with supply chain management processes. Contract logistics companies, particularly third-party logistics (3PL) providers handle activities such as designing and planning supply chains, designing facilities, warehousing, transporting and distributing goods, processing orders and collecting payments, managing inventory and even providing certain aspects of customer service. However, today, with fourth-party logistics (4PL) entering the picture, the main logistics operator (who thus far has been functioning as a 3PL provider) coordinates operations with a fourth stakeholder who is in charge of managing the supply chain, creating a value chain in which many different stakeholders play a role.
Upamanyu Borah
logistics in Asia Pacific region is anticipated to grow at a CAGR of more than 5.5 per cent during the forecast period (2019-2024). The fast-growing economies in the region, growing industrial production, increasing consumer purchasing power, and high young population, fast growing retail markets present significant outlook for the contract logistics market. The region is also a home to a large number of SMEs which are going online to increase their business opportunities. Contract logistics offers the e-commerce businesses of all sizes advantages such as easy management of business, advanced technological solutions, reduced risk, and scalability. The rapid growth in e-commerce is also resulting in high demand for warehousing space. The operators are spending millions of dollars to secure a warehouse in strategic location which allow them to reduce delivery times.
Asia Pacific’s strength
The degree of outsourcing in contract logistics is low indicating significant room for growth. Globally, the share of outsourced contract logistics in the total market stands in the range of 10-15 per cent only. With Europe and North America suffering from both stagnating retail sales and manufacturing production growth, Asia is taking advantage, driving growth for the global market as a whole. Although economic growth rates in developed nations are forecast to pick up slightly, they will continue to be far surpassed by emerging markets. None of this is especially new, but it is the reality the market faces. Going forward, China and India are two significant potential markets for outsourcing in the Asia Pacific region. According to industry insights, Asia Pacific is the leader in the global contract logistics market accounting for a share of more than 30 per cent. The market for contract
Source: Mordor Intelligence CargoConnect may 2020 | 19
DB Schenker plans to scale up its operations in the country by expanding its warehousing capacity as well as deploying technological solutions capable of processing shipments at a quicker pace. Our existing online platform eSchenker features track and trace capabilities meant to improve fluidity and transparency. Further, there are opportunities to introduce new and advanced technologies such as scanning, auto picking, and locational capability, at our upcoming facilities over the next few years. Vishal Sharma
CEO – Cluster India and Indian subcontinent, DB Schenker
India’s lucrative market
Talking about India, the country’s contract logistics market is relatively less developed when compared to other countries in the region. Most of the retail spending in the country goes to the unorganised sector and the possibilities of outsourcing are very less. However, with a lot of new businesses being started in the region or expansion of existing businesses in the manufacturing and consumer goods sector being observed, contract logistics market players can potentialise on a lot of opportunities for growth. The challenge as ever will be to operate successfully in a logistics and supply chain environment which is so often dramatically different. “Logistics industry in India is becoming more organised. There is growth seen in infrastructure by way of quality warehousing and professional service by providers,” says
20 | CargoConnect may 2020
Karthi Baskar, Deputy Managing Director at Kintetsu World Express (KWE) India. The industry is going through re-alignment post-GST, new logistics regulations are coming in. This will help remove “multiple level of handling and anti-profiteering” which will benefit the customer on the long run, allowing them to reduce logistics cost. Undoubtedly, with GST becoming a reality, its benefits are being derived; companies are able to build their supply chain design purely from the first principles of the supply chain and not really from taxation point of view. What one would probably see going forward is large scale high efficiency models which will come into play. There are several value-added services within contract logistics contract logistics that players can provide to its customers which were hitherto a challenge due to myriad tax regimes. These are now simplified under GST and players can offer their
customers these services under one roof opment pattern, occupier's preference, With GST becoming a reality, from their facilities. This in return is freefunding structure and technology incluits benefits are being ing up space within customer manufactursion in its sub-components. Softwarederived; companies are able ing facilities, they are now able to put their supported process is growing dynamito build their supply chain cally in the sector bringing greater beninfrastructure to better use. design purely from the first efits to businesses.” Also, like any other sector, the logistics principles of the supply industry is bound to grow and solve major Contract Logistics Solutions: challenges just by adopting new technolochain and not really from Active players in the Indian gies. Among the various transformations taxation point of view. market technology has been enabling in the logistics sector, the most apparent in recent Whether satisfying customers need for a times have been the ability to enable platforms that enhance medium-sized storage and supply chain solution, or a connectivity between a fragmented logistics services commulti-branch national logistics infrastructure, contract lomunity and end users, and enhanced visibility and acgistics players has the scale, scope and technology to procountability across supply chain stakeholders resulting in vide customers the freedom to focus on their core business. operational efficiencies and reduced costs. TVS SCS is a top third-party logistics company in the “The industry is going through a phase of transformacountry with integrated supply chain solutions across the tion, and it is the need of the hour for new logistics soluworld, directly or through joint ventures and subsidiaries. tions which can streamline processes while helping providIts services include contract logistics, warehousing, transers increase visibility in terms of assets,” says Vishal portation, freight forwarding, packaging, design and solutions to sectors like automobile, beverages, IT, Healthcare, Sharma, CEO – Cluster India and Indian subcontinent, Telecom, Retail, FMCG and Defence, globally. DB Schenker. Emerging technology trends will further R Shankar, CEO - India, TVS SCS was more than exspur the industry towards modernisation and growth, with cited to inform on their offerings that include a comprehendigitisation and automation playing a major role. sive and complete bouquet of services comprising Sourcing, Taking into account the same, Mayur Toshniwal, Inventory Planning & Management, Demand Forecasting Managing Director, Future Supply Chain (FSC) notes, & Planning, Network Planning, Transportation and Ware“The change is visible in different fronts including devel-
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housing, Last Mile B2B Delivery as well as the entailing ment for faster processing and real-time updates across value-added services. the value chain. “TVS SCS provides appropriate technologies for sup“Our aim is to develop solutions that help our customply chain visibility and effectively use data for decision ers manage their supply chains, optimise inventories and support. Our operations are efficiently delivered at the significantly reduce logistics costs,” says DB Schenker’s optimal cost with best-in-class quality. Customer reviews Sharma. “We are using Artificial Intelligence (AI), especially for our internal processes, predictand operations management are all done ing market trends, network optimisation, through real-time dashboards which aids route management, and freight rates in initiating swifter corrective actions,” Whether satisfying where large sets of data are available and explains Shankar, adding that the comcustomers need for a pany has seen proof of the pudding in accessible.” medium-sized storage and their enhanced metrics. “We are also “To provide cutting edge technology supply chain solution, or a working on proof of concepts for IoT services to aid large enterprises as well as multi-branch national based solutions with regard to material SMEs since we contribute to 40 per cent of logistics infrastructure, handling solutions and asset utilisation the nation’s exports, DB Schenker recentcontract logistics players ly introduced Connect 4.0 Ocean platform in terms of vehicle tracking and security has the scale, scope and to allow customers to track shipments in for inventory in-transit.” technology to provide real time, access to features like quotes in DB Schenker, the transport and logiscustomers the freedom to tics division of the Deutsche Bahn Group real time, get an estimated delivery time focus on their core business. offers a complete range of international and also manage booking of freight consignments,” Sharma goes on to inform. air and ocean freight, contract logistics “The services will soon be available for and global supply chain solutions from a air as well.” single source. The company has a portfolio of clients With the diversified Future Group as its anchor client, spread across verticals like Aerospace, Electronics, Industrial, Automotive, Retail & Consumer and Healthcare. The FSC provides contract logistics solutions, cold chain solutions (both warehousing and transportation), as well as company plans to double its warehousing capacity from express delivery function to companies across all sectors, the current 3.5 mn sq ft spread across 53 warehouse locations and enhance efficiencies through technology deploywith large market share in e-commerce, food and FMCG, 22 | CargoConnect may 2020
Whether an opportunity is an addition of a new capability to their existing services or a foray into a new sector, if TVS SCS has the conviction that there is business potential and scope for scale, the company is upfront to take the next step in the new initiative. We have demonstrated capability as an independent service provider and also seen remarkable success in joint and collaborative ventures. However, the nature of the business model will depend largely on the type and geography of the new initiative. R Shankar
CEO - India, TVS SCS
and fashion industry. The company operates a pan-India distribution network, offers integrated warehouse management systems with highly automated state-of-the-art technology systems, and hub and spoke transportation model that enable innovative service offerings to the customers in an optimised and cost-efficient manner. As of June 30, 2019, FSC operations are run through 80 distribution centers across India, covering approximately 8.09 mn sq ft of warehouse space, while its ‘hub-and-spoke’ distribution model comprising 13 hubs and 126 branches across India. “We have efficient program management capabilities along-with supply chain experts to handhold the transition effectively and this is aided by strong processes,” says Toshniwal of FSC. “Our flagship Distribution Centre (DC) - MIHAN's technological prowess is unmatched in India. The entire supply chain process at our MIHAN DC is automated. High-speed cross belt sorter, boom conveyors for inbound and outbound operations running up to 4kms, laser scanners, put-to-light technology, voice picking and 12m high spiral conveyor enable efficient and cost-effective
24 | CargoConnect may 2020
operations. We have the capacity to throughput a million articles every day,” informs Toshniwal. KWE India, the Indian subsidiary of Japanese logistics giant Kintetsu World Express (KWE) is one of India's leading, end-to-end, comprehensive logistics solutions provider. As a one-stop international logistics services provider, KWE India offers international air and sea freight forwarding, customs handling, import & export of goods, warehousing, and lastmile delivery to both B2B and B2C businesses across India. The company's strength lies in its ability to offer a full-range of reliable, value-added and optimal supply chain solutions that are significantly more comprehensive than mere ‘door to door’ services offered by typical logistics companies. “KWE India builds flexibility into the supply chain to increase visibility, drive efficiency and lower costs. Our specialisation in supply chain management design 3PL, fulfilment and hybrid models to optimise and support our customers supply chain, helps reduce costs and release precious capital from their domestic and global operations,” says Baskar.
We have put-to-light and high-speed cross belt sorters, which help make critical operational processes smooth. In our multiuser facilities, we have products with low to high complexity, with varied dimensions and goods that need appropriate handling. Through voice pick technology, we have made the picking process faster and more efficient. With the introduction of inbound and outbound automation, we are able to reduce loading and unloading time by around 1/3rd. Mayur Toshniwal
Managing Director, Future Supply Chain (FSC)
Potential offerings
agement, demand forecasting, demand planning, network Apart from covering all aspects of logistics planning, conplanning, transportation, warehousing to last-mile B2B trol and supply chain process from collection through to delivery,” states Shankar. final delivery, contract logistics players work alongside their Today, the world faces accelerating social, economic and customers to tailor a range of flexible value-added services demographic changes and supply chains must prepare to to meet the latter’s specific business needs. With a number change with it. Over the last century, supply chains have of diverse solutions at their disposal, cusdemonstrated that achieving high perfortomer’s requirements are satisfied with mance requires fast recognition and reToday, the world faces sponse to the challenges and opportunione or a host of many components. accelerating social, ties posed by the changing world. From TVS SCS works closely with their cuseconomic and demographic tomers and their customer’s partners to serving a single purpose of delivering the changes and supply chains plan and implement the most cost-effecproduct from point A to B, supply chain must prepare to change tive solution whilst meeting the service and logistics has become an important with it. levels they require. lever to improve profit and differentiate “Being a knowledge services and opone’s proposition in a complex business erations company, we believe in partnering with our cusenvironment. Therefore, for every corporation, it has betomers by understanding their pain points and then cocome necessary to invest in their supply chain team, or rope creating solutions that are enabled by the emerging techin highly qualified, reliable and established end-to-end nologies and IT processes. Our collaborative approach integrated logistics solutions provider. adds significant value to our customers. We bring in our DB Schenker’s value-added services not only improve global expertise of delivering best-in-class operational operations workflows, but also facilitate strategies to postpone final assembly and labelling of products, till final performance to our customers. Our value-added services consumption takes place. “We provide effective automotive range from sourcing, inventory planning, inventory manlogistics solutions that include procurement, distribution and aftermarket logistics, besides extending consumer, electronic, healthcare and pharma, and industrial logistics solutions. We believe that offering value-added services globally such as labelling and packaging, reverse logistics, FTWZ (for past payment of duty), cargo insurance, white glove delivery, etc. can help our customers focus on their core competencies, providing a seamless integration of our services,” voices Sharma. Similarly, KWE India, besides their core services, offer a wide variety of valueadded services such as kitting/assembly, testing, order fulfilment, packaging/repackaging, configuration/customisation, labelling, repairs, quality inspection, customs clearance procedures, and fiscal representation that are provided according to customer’s specifications. “Our tailored value-added services are especially designed to offer customers optimum flexibility, ensuring that they consistently meet their partner's needs,” remarks Baskar. 26 | CargoConnect may 2020
KWE India is committed to proper orientation at all levels, which has resulted in a quality culture in the organisation. Over time, we have emphasised more on understanding customer needs and the essence of quick decision making. Our warehouses are driven by KPIs and SOPs. We handle large no of SKUs/lines from diverse industry sectors and adopt a customer-centric approach. This has helped in establishing long relationships with our customers. Karthi Baskar
Deputy Managing Director, Kintetsu World Express (KWE) India
To meet the diverse business needs and add flexibility in the supply chain, FSC also offers a wide range of valueadded services which include kitting, promo-bundling, labelling, packaging, bar-coding, stickering, quality control and returns management.
A complete solution to suit
Today, companies need leaner supply chains and logistics solutions providers have demonstrated their ability to help customers with better utilisation of capital, assets, space and manpower. The extensive and complementary services of a logistics provider’s partner businesses, in addition to the services of contract logistics, ensure a complete solution to suit. Through the course, logistics solutions providers nurture experts and resources that work relentlessly to ensure customer satisfaction. More than service, their quest is to deliver a great experience to our customers. At this point, logistics players like DB Schenker, TVS SCS, KWE India, and FSC not only provides one-stop solutions but also empowers customers. KWE India offers complete integrated supply chain management solutions bolstered with leading edge technology and the most comprehensive distribution network available. With large investment in Singapore’s APL logistics and GatiKWE- the joint venture company between Gati and KWE, the company now has a full array of service for all transportation modes in house, which help them leverage and stay focussed to: Increasing customer productivity and efficiency Developing certainty and reliability Leveraging on the fast, accurate and detailed network Be all the more responsive to contract logistics Baskar rejoins, “With keeping in view the local infrastructure and available modes of transportation, KWE India’s dedicated corporate solutions team study data and
inputs provided by customers and helps build long term solutions.” Although, creating a network among business partners across key markets while catering to individual requirements can be a challenge. Keeping this in consideration, with support of their worldwide network of branches, DB Schenker connects all important global economic regions and offers logistics solutions tailor-made to the customers’ requirements. “We cover all stages of the supply chain – from supplier to customer delivery, from reverse logistics to aftermarket support, in different industries such as automotive, pharma, infrastructure, and so on,” raises Sharma. With a clear vision of offering customised solutions as per the requirement of clients, supply chain experts at FSC visualise the complexities of this volatile business environment a nd adopt a holistic approach to design solutions and add velocity to their customers businesse s . Ac c o r d i n g t o Toshniwal, FSC examines and understands the business requirements of its customers and designs an optimal custom i s ed solut ion. “Focussing on major aspects of the supply chain like inventory planning and route optimisation, we analyse various scenarios and then plan and operate end-to-end supply chain of our customers.” While TVS SCS offers support in the all areas of supply chain, their offerings in international freight forwarding and EXIM supply chain management are value-added services. “We have adapted the newest of technologies for all our services with the objective of deciphering our customer’s pain points and effectively finding lasting solutions to those,” says Shankar.
Flexible fulfilment option
Today, logistics solutions providers also see the growing need for warehousing and are investing in expanding their warehouses across the globe. They have also started investCargoConnect may 2020 | 27
New Initiatives
A
longside the focus to consolidate logistics services to boost customer's bottom line, logistics solutions providers should constantly keep on evaluating new business opportunities. Players should be on the lookout for new service offerings with an intuitive understanding of not only their customers' operations, but also their culture and their business objectives. Today, as the country prepares itself for better logistics, the increasing influx of international players are prompting domestic 3PLs and logistics solutions providers to expand their footprint and focus on transportation service, warehousing and investing in logistics parks. This has opened up prospects for partnerships, and domestic companies now have exposure to the advanced technologies introduced by global players. Recently, Nippon Express Co Ltd- a Japanese global logistics services company, entered into a strategic partnership with FSC. The partnership aims to leverage Nippon Express’ competency in diverse sectors for the Indian market aspiring to become India’s leading logis-
tics player. In return, FSC will demon- inventory management, procurement and strate its 3PL capabilities, attracting po- product sourcing for the full range of tential new business opportunities from military and non-military commodities Nippon Express’ existing Japanese and required by the Ministry, including food, MNC clients. clothing, pharmaceuticals, medical equipWhether an opportunity is an addi- ment and general supplies. As part of the tion of a new capability contract, TVS will introduce improved proto their existing services or a foray into a curement processes Domestic companies new sector, if TVS SCS that will lead to reducnow have exposure to the tions in stockholdings has the conviction that advanced technologies and commodity prices there is business potenintroduced by global tial and scope for scale, and generate £500m players. the company is upfront (INR 500 crore) worth to take the next step in of efficiencies to the the new initiative. “We UK Ministry of Dehave demonstrated capability as an inde- fence over the next 13 years. pendent service provider and also seen Until now, TVS SCS has made three remarkable success in joint and collab- acquisitions in the UK. orative ventures. However, the nature of In the case of KWE India, the comthe business model will depend largely pany plans to develop and strengthen its on the type and geography of the new domestics and cross-border transportation for countries such as Bangladesh, initiative,” attests Shankar. In 2015, TVS SCS, in a consortium Nepal and bring added value to its existwith technology company team Leidos, ing customers. As mentioned previously, won a key contract from UK Ministry of KWE as part of its expansion invested in Defence (MoD) for its procurement solu- GATI, a pioneer in domestic transportations. The contract, worth £5bn, will see tion in India, and also acquired APL LoTVS play a key role in data management, gistics globally.
ing in tools that make complex warehouse operations more efficient. This will, in turn benefit their existing as well as prospective customers who can avail their services to achieve higher operational efficiencies. McKinsey Global Institute estimates that the transportation-and-warehousing i ndust r y has t he third-highest automation potential of any sector; contract logistics and parcel companies particularly stand to benefit from it. Additionally, with the e-commerce boom, efficient sorting has become increasingly important, particularly in parcel operations. Advanced conveyor systems use scanners that can pick up bar codes on any side of a package to determine the appropriate action. Autonomous palletizers use robotic arms to build pallets from individual units and cases, often using advanced analytics to determine the optimal placement for each box. 28 | CargoConnect may 2020
FSC has developed built-to-suit warehouses for their customers from different sectors with varied requirements. “Our integrated solutions combine all the necessary services (warehousing and distribution) to drive efficiency and ensure a responsive and reliable supply chain,” says Toshniwal, adding that FSC is at the forefront of process automation and technological enhancement. “We have put-to-light and highspeed cross belt sorters, which help make critical operational processes smooth. In our multiuser facilities, we have products with low to high complexity, with varied dimensions and goods that need appropriate handling. Through voice pick technology, we have made the picking process faster and more efficient. With the introduction of inbound and outbound automation, we are able to reduce loading and unloading time by around 1/3rd.”
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With the increasing demand for impeccable cusand WMS accessible – and affordable – to the rest of the tomer service, today's warehouses are pressured to raise business world. performance goals, to streamline its operations, and As demand for complete visibility and fast delivery improve efficiency in every aspect of warehousing accontinues to rise, FSC’s WMS and TMS modules, are able tivities. One of the most proactive ways of doing so is the to seamlessly fulfil that requirement. “By integrating client applications to our suite of applications, manual inuse of a warehouse management system (WMS) that is tervention is minimised. WMS helps us in designed to speed up order turnaround managing inventory, monitoring and anatime, improve inventory accuracy, proTransportation management vide instant order status information, lysing operations, enhancing productivity system (TMS) have become manage warehouse space and enhance and ensuring compliances. For end-to-end the 'must have' for companies labour productivity. visibility, from warehouse to customer, that work under the pressure Also, challenged by rising freight rates, our TMS portal which is integrated with of e-commerce and omnidriver shortages, tight truck capacity and Vehicle Tracking System (VTS), allows channel models. changing customer demands, players are real-time information flow and gives using more technology to work through transparency,” continues Toshniwal. these and other transportation-centric problems. As the true DB Schenker plans to scale up its operations in the workhorses of the supply chain management software country by expanding its warehousing capacity as well as cluster, transportation management system (TMS) have deploying technological solutions capable of processing become the 'must have' for companies that—working under shipments at a quicker pace. “We have been proactive in the pressure of e-commerce and omni-channel—need to adopting digital technologies to keep pace with evermove beyond clipboards, spreadsheets, and phone calls to evolving industry demands. Our existing online platform manage their increasingly sophisticated transportation eSchenker features track and trace capabilities meant to networks. improve fluidity and transparency. Further, there are opportunities to introduce new and advanced technologies Nonetheless, digitalisation platforms, technologies, such as scanning, auto picking, and locational capability, integration capabilities and applications are making TMS
Contract logistics players develop a good mix of asset light and asset heavy like commodity and non-commodity business or services to create a balanced portfolio.
Contract Models
T
oday, many companies tend to have an asset light business model where they own relatively fewer capital assets compared to the value of their operations. For companies, the purpose to choose and become asset light is also because it helps them offer customisation. At the same time, many companies also constantly look at churning the portfolio. They try to develop a good mix of asset light and asset heavy like commodity and non-commodity business or services. The intent is to create a balanced portfolio. Apart from that, today, it’s pretty much impossible to find a company that doesn’t utilise third-party vendors. Due to trends towards specialisation and outsourcing, companies increasingly focussed on core competencies are engaging greater numbers of third parties to perform key functions in their business value chain; third-party activity is typically responsible for driving approximately 60 per cent of a firm’s total revenue. DB Schenker doesn’t use any single
30 | CargoConnect may 2020
vendor policy but has collaborative arrangement with their partners, which leads them to build asset light business so as to provide efficiencies in services to customers and achieve scale of efficiencies. TVS SCS’s business operates on the framework of an asset light model. “We partner extensively with transporters and warehouse property owners. We also believe in partnering with start-ups if we identify a mutual benefit in the collaboration. We do this in order to provide agile and cutting-edge solutions to our customers,” echoes Shankar. “Our partnership with vendors who have been in a sustained relationship with us has helped them grow along with us; there is a mu-
tual trust and this greatly aids in joint capacity building.” For FSC, to remain asset-light is one of their fundamental philosophies. “We do not invest in buying warehouses or trucks. Our investment goes into technology, material handling equipment, etc. the movable stuff which goes into the warehouse. It enables us to grow rapidly, impart agility to our business offering to our customers,” explains Toshniwal. Being a global logistics company, KWE’s business directly comes from global customers, mostly. Alongside, the company seems to maintain an asset-light logistics business model to preserve service flexibility.
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usiness competition can be land transport. According to Sharma, fierce, especially in markets like with more companies starting to realise India with aggressive competi- the importance of a specialist like DB tors and where customer expec- Schenker who understands the changing tations change dramatically. It becomes landscape, gives them possibilities to lead imperative for businesses to find out what the space. Following this trend, the commatters to their customers at every mo- pany has been constantly helping cusment- is it lower price, more flexible or tomers to design better supply chains, premium service, the latest products? more adaptive and resilient. One such Businesses need to develop and consoli- initiative is the “reduction of lead time in date on unique selling points (USPs) that long-haul movements” obtained through taps into what customers want by being efficient track /trace/ongoing run time of more responsive to their needs and ex- the vehicle. pectations. It should be clear and obvious As an organisation, TVS SCS has been – no one should have to ask what makes early adopters of `Lean Principles' from the company’s offerthe Toyota Producings different. tion System, cites W h at ’s mor e? Shankar. The comDigitalisation platforms, pany imparts trainSkilled and motitechnologies, integration vated employees uning to its team to capabilities and applications derpin vibra nt, equip t hem wit h are making TMS and WMS growing businesses; knowledge applicaaccessible – and affordable – tion of waste elimiat t ract i ng t hem to the rest of the business nation and probmeans more than world. lem-solving tools. paying a competitive wage. AdditionAdd i n g t o t h i s , ally, the ever growShankar says, “We ing pool of smart customers are often have trained all our employees extenmore impressed by a good working atmo- sively in these areas and it is our endeavsphere, and benefits such as flexible our to continuously seek improvement in working and structured career develop- all aspects of our operations. We keep ment. High levels of employee motivation track of all our projects, processes, and are intrinsically linked to high levels of tasks as well as the financials to appraise employee engagement. the effectiveness and efficiency of innovaPost-GST implementation, DB Schen- tions and new initiatives.” ker has seen tremendous opportunities Apparently, KWE India is commitin expanding their domestic logistics of- ted to proper orientation at all levels, ferings through contract logistics and which has resulted in a quality culture
at our upcoming facilities over the next few years,” mentions Sharma. With the goal of developing an increasingly productive, efficient, and fully flexible automated warehousing environment, DB Schenker has collaborated with ‘IAM Robotics’ to create ‘Warehouse of the Future’. This new collaboration is intended to serve as a foundational platform for the use of automation and robotics technologies to help shippers work smarter, better, and faster. TVS SCS believes that adopting the right technology not only helps in productivity enhancement and superior quality in delivery but it also aids ergonomics by reducing the physical strain on warehouse operating staff. “We have a 32 | CargoConnect may 2020
in the organisation. Over time, the company has emphasised more on understanding customer needs and the essence of quick decision making. Baskar stresses, “KWE is focussed on measurable quality deliverables. Our warehouses are driven by key performance indicators (KPIs) and standard operating procedure (SOPs). We handle large no of Stock Keeping Units (SKUs)/lines from diverse industry sectors and adopt a customer-centric approach. This has helped in establishing long relationships with our customers.” KWE India is ISO 9001:2015 certified for its Quality Management System across India. Apart from that, the company has 14001:2015 certifications for Environmental Management System and ISO 45001:2018 for Heal and Safety. The company has also obtained good d i st r ibut ion a nd storage prac t ic e (GDSP) certificate for a warehouse in Hyderabad. FSC also operates out of good quality, global standard warehouses, which they either build or follow a strict mandate of compliance with property owners. “We have a strong network of 90 DCs which cater to the demands emerging not only from tier I but tier II and III cities as well. Our DCs are BS OHSAS 180 01 a nd ISO 90 01 cer t i f ied a nd equipped with state-of-the-art features,” highlights Toshniwal, adding that their DCs are scalable and can be converted to multi-user facilities to adapt to the changing needs of customers.
WMS and our warehouses are equipped with video analytics, facial recognition, IoT, RFID, and relevant technologies. In this way we ensure efficient storage, quick retrieval and effective order management,” says Shankar, emphasising on the company’s data analytics processes that assists in enhancing planning and inventory optimisation and higher fulfilment. Over a period, KWE India has also increased its reliance on information technology. The company has already launched its new version of WMS. In addition, with the use of TMS, the company is able to meet customer’s goal to cut the transport cycle times and reduce cash cycles and also lower the inventory.
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Embracing Digitalisation in customs 34 | CargoConnect may 2020
Globally, customs processes are of critical interest to the governments due to their trade and national security significance. However, there have always been chances that current manual processes overseeing customs operations can miss out risky trade and declaration profiles potentially putting nations and their trade apparatus at huge risk. That’s where ‘Digitalisation’ steps in as a saviour. Intelligent customs solutions offered with the help of advanced technologies like AI/ML can help customs experts zero in on the high risk profiles while continuously managing all trade movements without fail and getting better with their predictions over time. Ritika Arora Bhola
A
s logistics experts firmly believe, “Embracing digital is inevitable as that is now part of the business venture. “Digitalisation is literally ruling the logistics industry globally, certainly for the numerous benefits it offers like enhancing efficiency in supply chain operations via usage of Artificial Intelligence (AI), Blockchain technology, IoT, robotics and automation, data science, etc. Digitalisation also helps in cost optimisation and cutting-off paperwork entirely. It is being grasped by all the sectors related to the logistics industry globally – air cargo, maritime, railways, roadways to name a few. A couple of months back, under the global customs transit system, Transports Internationaux Routiers (TIR) Convention of the United Nations, 76 country sig natories unanimously agreed to digitalise its operations under Electronic TIR Customs Transit System (eTIR) to facilitate trade and the seamless movement of goods across borders. Olga Algayerova, Executive Secretary, United Nations Economic Commission for Europe (UNECE), in a press statement, had said, “The adoption of eTIR, which is the result of over 20 years of negotiations, marks a new chapter in the TIR Convention’s 70-year evolution. With more and more countries joining
special feature the convention in recent years, including major economies like China, India and several countries in the Middle East, this important step will help to harness trade and connectivity as drivers of sustainable development.” Highlighting the benefits of eTIR, the statement added, “The eTIR is expected to open new applications for the TIR system, particularly in the area of intermodal transport, for which the current paper procedure has proved cumbersome. This long-awaited revolution of the TIR system will not only provide a facilitated procedure for transport companies but will also further secure the TIR system for the benefit of all customs administrations using it. TIR also secures payment of customs duties and taxes by providing a guaranteed mechanism, thereby reducing trade transaction costs and facilitating higher growth of intra and inter-regional trade. The TIR system requires customs and national authorities to provide minimal manpower and facilities – which is limited to checks on seals and the inspection of load compartments or containers – and reduces transit delays and congestion at border crossings.”
Significance
Commenting on the development, Cyrus Katgara, Partner, Jeena & Company says, “We would embrace this
CargoConnect may 2020 | 35
special feature move as a positive and global collaboration move. This will help in real-time information flow. Having said this, ‘Digital’ means ‘Paperless’ and any move that requires no paperwork and requests physical verification which can be controlled electronically will be a Welcome move. eTIR should be adopted quickly as this is what we believe will put us in league with other nations and at par.” Agreeing with Katgara, supply chain and technology expert, Amar More, Director, Kale Logistics reiterates, “Globally eTIR will transform intermodal transportation with digitisation, paperless transactions and will have far reaching benefits for trade that will save significant time and money by streamlining procedures at borders, reducing administration and cutting border waiting times. Currently, crossborder road trade is manual and paper intensive, which makes trade slow, prone to errors, congestion at border check-points and less transparent. The convention will help traders have access to fast, easy, reliable and hassle free
Amar More
Director, Kale Logistics
36 | CargoConnect may 2020
Cyrus Katgara
Partner, Jeena & Company
We would embrace this move as a positive and global collaboration move. This will help in real-time information flow. Having said this,‘Digital’ means ‘Paperless’ and any move that requires no paperwork and requests physical verification which can be controlled electronically will be a Welcome move. eTIRshould be adopted quickly as this is what we believe will put us in league with other nations and at par.
international system for goods movement by multimodal means. It also help countries implement the World Trade Organisation’s (WTO)’ Trade Facilitation Agreement (TFA). eTIR will open doors to higher economic activity and growth both inter and intra-region.” Meanwhile, Adrien Thominet, CEO, ECS Group states that the TIR Convention already provides for an in-
Globally, eTIR will transform intermodal transportation with digitisation, paperless transactions and will have far reaching benefits for trade that will save significant time and money by streamlining procedures at borders, reducing administration and cutting border waiting times. Currently, cross-border road trade is manual and paper intensive, which makes trade slow, prone to errors, congestion at border check-points and less transparent. The convention will help traders have access to fast, easy, reliable and hassle free international system for goods movement by multimodal means.
ternationally recognised procedure to facilitate the cross-border transportation of goods in transit through the use of a standard and internationally recognised customs document, the TIR Carnet. However, in the modern world, Thominet says, “We can all agree that the use of a ‘paper’ TIR carnet can be seen as somewhat ‘archaic’: not only does t he dr iver needs to have it stamped at the various customs offices, but the customs officers also have to manually key in the information indicated in the Carnet into their National electronic customs systems. It is very time consuming.” Thominet affirms, “With the e-TIR system, the majority of the manual tasks will be automated, while all customs authorities will benefit from getting Advance Cargo Information Messages. This will lead to productivity increase, higher efficiency and improved quality since customs officers will be dedicating more of their time to risk assessments and controls rather than to manual and time-consuming activities. As a consequence, the eTIR system will speed up
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INDIA WAREHOUSING HANDBOOK 2020 India Warehousing Handbook
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special feature
Understanding the Unique Challenges Faced by the Customs World
Scope of an Intelligent Customs (IC) Solution Source: NIIT Technologies
the TIR procedure, accelerate the movements of goods by reducing the bottlenecks at the customs offices. Besides that, it will bring additional security and risk management opportunities in the customs processes.” On a similar note, veteran Indian custom house agent, P S Atree, Managing Director, P S Atree & Company puts down his views too. He informs that the TIR Convention was initially signed and ratified by India in the year 2017. The use of paper TIR Carnet was very cumbersome, therefore, in the year 2003, it was decided by the signing/contracting par38 | CargoConnect may 2020
ties/ countries to launch eTIR Project internationally to secure exchange of data between national customs systems related to international transit of goods for faster custom clearance at the national landlocked borders. With the introduction of eTIR system, Atree says, “Advance customs clearing mechanism through digitisation and digitalisation is now the worldwide requirement and practice and would go beyond those 76 countries signed TIR Convention of the United Nations.” Atree elaborates, “It not only saves time but also transaction costs thereby
reducing logistics cost. Low transaction and logistics costs benefits Exim trade, Intermediary service providers including freight forwarders and customs brokers as well as end users of the products. Meanwhile, worldwide there are tremendous innovations in every field of trade and commerce including service sector as regard to digitisation and digitalisation to take the respective fields to a new high. Indian government and customs brokers have also been taking significant initiatives to progress in tandem.” With an international perspective, Andreas Pauker, Head of Communi-
special feature
Adrien Thominet CEO, ECS Group
With the e-TIR system, the majority of the manual tasks will be automated, while all customs authorities will benefit from getting Advance Cargo Information Messages. This will lead to productivity increase, higher efficiency and improved quality since customs officers will be dedicating more of their time to risk assessments and controls rather than to manual and time-consuming activities. As a consequence, the eTIR system will speed up the TIR procedure, accelerate the movements of goods by reducing the bottlenecks at the customs offices.
cations, Lufthansa Cargo, Germany affirms, “On a global perspective, the logistics industry will profit from a digitalised customs transit system since it will make processes easier. The documentation of customs is facilitated through digital processes. Timeconsuming routes to the customs authorities are eliminated and the information is transmitted digitally. Additionally, paper transport documents will be reduced.”
Digital Benefits
In order to avail the digital benefits, countries around the world are conscientiously digitising their customs administrations. As per the World Bank’s ‘Doing Business 2018’ report on the resulting impact of digitalisation on the time and cost of cross-border trade suggests, “The countries allow traders to exchange information with customs and other control agencies electronically. They also use risk-based assessments to limit physical inspections to only a small percentage of shipments, reducing customs clearance time. In addition, they participate in bilateral, regional, and multilateral trade agreements, making the time and cost for complying with border formalities negligible.” The report suggests the increasing usage of Electronic Data Interchange (EDI) and single-window platforms enable international traders to submit all import, export, and transit documents in one place. The report calls the single window the best-case scenario as the system allows traders to file standard informa-
tion and documents through a singleentry point to fulfill all import, export, and transit-related regulatory requirements, then shares relevant information with all parties involved in trade, including private participants such as banks and insurance companies, as well as public agencies such as immigration and vehicle registration authorities. However, in the transition to digital administration, the World Bank report cautions that, “The full potential of digitisation and electronic data interchange systems is not realised immediately. Implementing the systems takes time and involves change in operational practices, in training and in some cases, in the work habits of staff.” Acknowledging the same, Katgara comments on how digitalisation in customs procedure can help to harness trade and connectivity across borders and lists down few benefits it can offer:
Capturing information right from the goods left from factory till it get cleared at origin and destination This is on the basis of information electronically provided which will both countries stakeholders. The benefiting party will be Customers, Agents, Liners and Airlines. Cross-border Trade Believes in Ease of Operations and Procedures in compliance electronically. Secure Transaction in Customs Procedures blockchain concepts and Most secure and transactions will be handled in a secure manner. While More stresses, “In India, areas where digitalisation has improved, include cargo community system, single window system, automatic clearance for green channel declaration, electronic submission of certificates such as Certificate of Origin (CoO), fast track cargo, warehouse management system, and payment of duties and taxes. Digitalisation in customs will help centralise data control with accurate and verifiable information.” However, Cédric Millet, Chief Strategy & Digital Officer, ECS Group tells that some of the customs authorities are still requiring ‘hard copies’ of many documents like: certificate of origin, original invoices or packing lists to name a few. “Digitising the transmission of these documents will have two immediate positive effects,” Millet says. It will enable faster clearance, since these “e-documents” would be available for review at any time by the customs authorities, even before the goods arrive at destination.
Going digital can help make trade easier. Under the WTO TFA, there are provisions requiring WTO members to accept e-payments and electronic versions of certain documents where appropriate and possible. One country’s growth of international trade is greatly dependent on penetration of digitisation, which is also disrupting services sectors. P S Atree
Managing Director, P S Atree & Company
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special feature It will improve the quality, reduce costs and accelerate the movement of goods: no more cases where documents are lost and goods are stuck for days or weeks as they cannot get customs cleared until documents are found or re-issued. On the other hand, Atree feels that full implementation of the WTO TFA which includes digitisation initiatives as well, can reduce trade costs by an average 14.3 per cent with African countries and least developed countries (LDCs) forecast to enjoy an even bigger reduction. “Going digital can help make trade easier. Under the WTO TFA, there are provisions requiring WTO members to accept e-payments and electronic versions of certain documents where appropriate and possible. One country’s growth of international trade is greatly dependent on penetration of digitisation, which is also disrupting services sectors,” Atree insists.
Impediments
Digital infrastructure comes with its own unique set of challenges. Though, digitalisation is the need of the hour, but there are few setbacks which restrict stakeholders to adopt technology fully. In the case of cross border trade where goods are exchanged as a part of the trade between nations the growing cargo traffic usually involves several issues related to customs duties, processes and norms. Different countries follow different customs procedures while many nations have specific agreements with their top trading part-
Girish Kunder
Regional Manager - India, ECS Group
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On a global perspective, the logistics industry will profit from a digitalised customs transit system since it will make processes easier. The documentation of customs is facilitated through digital processes. Time-consuming routes to the customs authorities are eliminated and the information is transmitted digitally. Additionally, paper transport documents will be reduced. Andreas Pauker
Head of Communications, Lufthansa Cargo, Germany
ners, so the custom processes have become much more intricate. Monitoring the movement of billions and millions of tonnes of cargo and checking the documents associated with it manually is no longer feasible if the departments want to reduce leakage and stem illegal movement. With growing global trade, it’s not practical for customs authorities to constantly monitor the accuracy of commodity declarations to predict risky profiles for further examination, that’s where technology comes as a saviour. The logistics industry globally is moving in the direction of becoming digitalfriendly but it seems it will take another decade or may be more time to reach the goal. Katgara jots down few challenges which Indian logistics industry is currently facing: In our chain of working there are few agencies or stakeholders who still need hard copies of documents.
Awareness about the economic benefits of using digital technology takes time as well as collaboration among stakeholders. As a result, the logistics ecosystem is faced with operational difficulties, because of technological infrastructure for instance, IT systems and EDI facilities are under expectations. As such, it is not always possible to rely on a standardised system to transfer information electronically. But things are changing and awareness for logistics players in India to invest in adopting and upgrading technologies and reinventing processes to make them smarter and efficient is increasing.
If the government asks all stakeholders to stop accepting hard copies and get the digital version then we will soon achieve the goal. For example, issuing hard copy of AWB to the customer, Printing LEO S/Bill or OCC Bill/Entry. If all stakeholders start talking to each other on digital platforms. As per the reports, the Indian logistics sector, estimated to be worth $260 billion and growing at 14 per cent over the past five years, consists of shipping, port-services, warehousing, rail, road and air freight, express cargo and other value-added services. There are numerous key disruptors that are challenging the longevity of logistics service providers, and the key one being – digital infrastructure. Tech expert, More explains investments in digitising and trained personnel needed at the moment. “The Indian logistics industry has the absence of a digital culture with hesitation in initiating high financial investments in digital operations and data security and training personnel. Many believe in manual operations. Prevailing systems do not have proficiencies to handle more refined information trends, systematic procedures and processes that can be used to deliver advance business acumen and prudence required in the logistics industry. Investments in digitising the logistics industry will benefit both market players and the end users,” More says. Considering the above, Girish Kunder, Regional Manager - India, ECS Group says adoption of ne w technologies has always been a big challenge when it comes to digitisation.
special feature
Digitalisation: Still a distant dream?
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ot really, says experts as they feel they are moving in the right direction. As part of the ‘Ease of Doing Business’ initiatives, the Central Board of Excise & Customs, Government of India has taken up implementation of the Single Window Project to facilitate the trading across borders in India. With the implementation of e-SANCHIT, Indian Customs moving in a new direction, which would bring more transparency in the system that often referred as ‘dark web’ by the trading community. The ‘India Customs Single Window’ allows importers and exporters, the facility to lodge their clearance documents online at a single point only. Required permissions, if any, from other regulatory agencies would be obtained online without the trader having to approach these agencies. The Single Window Interface for Trade (SWIFT), has reduced interface with Governmental agencies, dwell time and the cost of doing business. CBEC had already executed major projects to automate Customs clearance processes and provide electronic data interchange (EDI) with all agencies. The objectives of SWIFT are in line with key programs of Government namely ‘Make in India’ and ‘Digital India.’ “India is on a fast track of customs digitalisation, by introducing a system of risk-based selectivity of import and export consignments, all participating agencies can focus on high-risk consignments while facilitating the clear-
ance of low-risk cargo. Further measures are underway to eliminate hardcopy documentation by allowing trade to submit digitally signed electronic versions of the supporting documents and print outs,” says More. New technologies like blockchain and AI are making their way to design systems that future proof and highly predictive. Katgara remarks, “All dreams can turn into reality if we work in the right direction. Share, implement and grow with digital technologies is our mantra.” While Pauker says, “Digitalisation in customs is expected to be achieved within the next years. Still it will improve step by step. It will start within a small amount of countries and develop further.” “When there is a will, there is a way,” says Millet. “The e-transmission of all documents necessary for customs clearance purposes will already im-
prove the quality, reduce costs and accelerate the movement of goods: no more lost documents and goods that cannot be cleared because of missing documents. The next step is the digitisation of the processing of these documents, via OCR (Optical Character Recognition) and RPA (Robotic Process Automation) technologies. If we add a layer of AI and Machine Learning (ML) in the process, it will help identify more efficiently the potential non-compliant cases,” Millet adds. “Definitely, we can achieve digitisation in customs clearance in the near future through awareness, focussed and transparent approaches, and collaborative initiatives for common benefits. Government of India has been in the process of making customs clearance work paperless, faceless by way of developing innovative technologies in the system,” Atree concludes on a positive note.
“Awareness about the economic benefits of using digital technology takes time as well as collaboration among stakeholders. As a result, the logistics ecosystem is faced with operational difficulties, because of technological infrastructure for instance, IT systems and EDI facilities are under expectations. As such, it is not always possible to rely on a standardised system to transfer information electronically. But things are changing and awareness for logistics players in India to invest in adopting and upgrading technologies and reinventing processes to make them smarter and efficient is increasing,” feels Kunder.
In today’s scenario, it is needed that all logistics stakeholders and agencies must have an integrated software system so that entire cargo handling operation can be communicated and the end-to-end chain is completed on-line without any interface with any organisation/department. In the recent years, Government of India has taken many initiatives for ‘Ease of Doing Business’ and Customs Department had also made majority of the customs clearance processes paperless by use of innovative information technology namely; E-Sanchit-Paperless Processing under SWIFT, Uploading of
Licenses/Permits/Certificates/Authorisations by PGAs; Direct Port Delivery; Revised AEO; RFID e-seal programme and Faceless Assessment under Turant Scheme which have resulted in fast/ hassle-free clearance and also reduced transaction cost and dwell time. “Nevertheless, the Department of Revenue (Customs Department) had made so many desired changes in their IT System but some more points need to be put online for which the trade is still required to submit physical/hard copies which delay the process of movement/clearance of cargo,” Atree sighs. CargoConnect may 2020 | 41
technology
covid-19 and the unbreakable supply chain
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he impact on supply chain
While nobody could have predicted the scale, speed, severity, or timing of the outbreak, could businesses be better prepared to deal with the consequences? This isn’t the first time they’ve faced supply chain disruption. In the last year alone, we’ve had the trade war, protests in Hong Kong, and various climate events which created unforeseen problems. The COVID-19 outbreak is arguably more impactful than all these events combined because it hasn’t just created hurdles, it’s completely stopped production, something many supply chains can’t absorb. But the reasons businesses are struggling to deal with the fallout are the same: supply chains are breakable. Five key reasons for this: Reduced inventory levels: just-intime manufacturing allows companies to increase efficiency and lower the cost of their supply chain, but it also leaves supply chains less resilient to sudden shocks and supply shortages. Rigid supply chains: This wouldn’t be a problem if businesses operated flexible supply chains. That way they could switch order volumes to alternative suppliers in times of stress. However, very few companies don’t do this, leaving them unable to identify and connect with alternative suppliers when there are sudden shocks to their
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supply chain resulting in a tangible impact on production. Manual supply chain management: A key reason that supply chains are rigid is because they’re managed manually. Making changes to orders or shifting suppliers is a lengthy and complex process and in times of stress is a luxury few companies have. Lack of supply chain transparency: Businesses are often unaware of what’s happening across their supply chain beyond the first tier, so they’re unable to know where threats to production capacit y exist. And this makes it near-impossible to proactively manage a situation like the COVID-19 outbreak.
While there are some signs that exports from China are beginning to move again, there is a growing likelihood that things will get worse before they get any better; as the, Coronavirus or COVID-19 outbreak spreads across the world, resulting in labour shortages and travel restrictions which are further disrupting the supply chains of global enterprises.
most crucially, they don’t just survive the disruption—they improve because of it. To get there, businesses need to go digital. It sounds elementary saying this in 2020. But the fact is paper and manual process power most supply chains. And there is zero chance of building a robust supply chain, let alone Graphic: Delloitt University Press
analyse data from an array of public and proprietary sources to learn from previous periods of disruption and suggest what supply chain leaders can do to meet oncoming challenges. At the next level, it could even automatically pivot to alternative suppliers when it notices that the businesses’ regular suppliers are likely to face some disruption. T h i s i s what it rea l ly means to move from reactive supply chain management to proactive supply chain management. And it’s what will truly turn the supply chain into a competitive advantage for the business.
Consolidated centers of production: The globalisation of supply chains has led to the development of s p e c i a l i s t p r o duc t io n zones—cities or countries specialise in the production of a few key products. These have helped ensure there is a plentiful supply of key supply chain components and lowered the overall cost of supply. Yet while this is beneficial when times are good, it can cause issues when there is disruption. That’s because there isn’t the capacity in other parts of the world to plug the gap in supply.
one that’s unbreakable, when buyers and sellers aren’t digitally connected. Making this digital connection is the foundational element for building an unbreakable supply chain. Once this happens, all parties can benefit from increased access to data. This will illuminate what’s happening across the supply chain. Decision makers can spot single points of failure and make informed choices about how to manage any disruption. And the enhanced ability to collaborate with sellers and other parties in the supply chain ecosystem means these decisions,
So how can businesses better prepare for periods of supply chain disruption?
There is a lot of talk about robust supply chains. Anti-fragility takes this a step further. Unbreakable supply chains aren’t just strong; they’re malleable to ensure they continue working no matter the disruption.
The solution is to build supply chains based around Nassim Nicholas Taleb’s concept of anti-fragility. There is a lot of talk about robust supply chains. Antifragility takes this a step further. Unbreakable supply chains aren’t just strong; they’re malleable to ensure they continue working no matter the disruption. But,
including finding new suppliers, ca n be i mplemented quicker, which is critical at times of stress. Establishing the digital foundation is also the prerequisite to applying the tools that bring the theory of an unbreakable supply chain to life. For instance, consider Artificial Intelligence (AI). It can
Is it time to rethink the structure of global supply chains?
When COVID-19 is brought under control we can all breathe a collective sigh of relief, but we mustn’t be naïve about the fact that something similar will happen again. In our globalised world, the next disruption is just around the corner, so it’s
imperative that businesses don’t rest on their laurels. The supply chain becomes a company’s biggest risk during times of disruption. But by making it unbreakable, it can become its biggest strength. Away from what businesses can do, there is also a question around whether global supply chains need a rethink more broadly. Are consolidated centers of production a good idea? Is there still a need for the same widget to cross the Pacific multiple times before arriving to the end consumer? And does technology create an opportunity to build an alternative,
more sustainable global supply structure? There are no easy answers to these questions. But as businesses look at adjusting their own supply chains, it might also be worth everybody coming together to see if there is a better way to structure the global supply chain to make it unbreakable as well.
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Challenges like COVID-19 triggers digital transformation Although the majority of Indian businesses are still very much in the crisis management phase of COVID-19, some companies are already exploring how they can set themselves up on the right trajectory for growth as they come out the other side. Gopal R, Global VP, Transportation & Logistics Practice, Frost & Sullivan speaks to Upamanyu Borah about which course corrections companies need to make considering technological advances, evolving customer behaviour, the need for organisational agility and supply chain resilience, and the expanded role of the state.
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hat are the longterm changes we’re likely to see as a result of the impact of the novel coronavirus on India’s supply chain network? COVID-19 crisis has tested the agility and risk preparedness of the entire supply chain, not just in India but globally. Implications have been-- constrained freight capacity, human resource limitation, and supply and demand shock. Addressi ng t he above three challenges will become the core of how the future supply chains would excel to deliver efficiency, continuity and customer satisfaction.
COVID-19 crisis has tested the agility and risk preparedness of the entire supply chain, not just in India but globally. Implications have been-constrained freight capacity, human resource limitation, and supply and demand shock. 44 | CargoConnect April may 2020 2020
Long term changes in India’s supply chain network are more likely to embrace the following transformations: Digital Reality: There are likely to be digital interfaces at more points in the supply c hai n; not just Point of Order, but order fulfilment, processing, delivery and stocking. Technologies like Augmented Reality (AR) glasses for warehouse productivity, drones for warehouse stocktaking, security and customer management interface will go digital. Marketplace everywhere: This will lead to more online fulfilment business and accordingly a supply chain to tailor to that. Big Data: Data will be leveraged for better predictability and future scenario analysis. Autonomous world: Autonomous applications to find more opportunities in intra and inter-logistics. Rise of digital platforms: This will enable better freight visibility for the future, thereby eliminating or if not, minimising supply-demand shocks in the supply chain. ‘Uberisation’ of trucks: Scalable transport solu-
tions will be a norm than a niche trend, helping with asset challenges and offering flexible capacity at all times.
How long before things goes back to normal? COVID-19 challenge is expected to impact demand and supply for close to three months acutely and possibly another three months to recover. Revival or getting back to stabil-
It is likely that the composition of future freight modes will also see changes as recovery sets in. The demand type will also see changes, both in consumption pattern as well as supply locations. ity will be impacted by an average of 40 per cent of lost business opportunities on an annualised basis for most businesses. The next t wo quarters therefore require helping revive the demand to growth stage and sustain thereafter.
From a supply chain and logistics perspective, things are likely to rebound in a quarter in terms of freight capacities across key trade lanes. Storage needs may nevertheless undergo shifts in location and pattern of requirement. It is likely that the composition of future freight modes will also see changes as recovery sets in. The demand type will also see changes, both in consumption pattern as well as supply locations. These need to be considered when realising the new norm.
What is the silver lining here? What can Indian supply chain and logistics companies learn from this situation? Despite all the technology and software capabilities of India in the global marketplace, domestic adoption of digital transformation, specifically in the logistics industry has been limited and low. But, this will change. Challenges like COVID-19 triggers digital transformation. The need is to build: Supply and demand visibility to mitigate risks, Accurate expectation of freight capacity requirements for the future quarters, months and days, and Limited dependence on shocks to operating capacity (manpower) of warehouses, etc. which is likely to trigger the digital provenance of modern logistics and supply chain. This is the silver lining for India’s logistics industry. The industry has to empower itself digitally to be the best among global participants, as we move into the future.
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"We don´t see any risk of running into a congestion situation at the port" ing and sales as well as in the financial departments into home-office and normal office workers, to deliberately increase the physical space to avoid them from coming in direct, personal contact with one another. This is a significant step taken towards lessening the chances of catching COVID-19.
German ports are taking a severe blow as the coronavirus outbreak and related plunge in shipments from China compound a container shortage and push up transport costs in Europe’s largest economy. But for the Germany’s only deepsea container port located in Wilhelmshaven, the situation although being the same is not severe, says Andreas Bullwinkel, Chairman, Container Terminal Wilhelmshaven JadeWeserPort-Marketing GmbH & Co. KG. Excerpts from his interview with Upamanyu Borah.
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hat adverse effect is the COVID-19 outbreak having on JadeWeserPort Wilhelmshaven’s operations, and how is the port tackling workforce challenges arising due to it? Like all other ports around the world, JadeWeserPort Wilhelmshaven is also suffering from reduced cargo volumes and blank sailings. However, the port management has taken a strong stand and is tackling the challenges COVID-19 has brought to the table, via an emergency plan which is in force since March 15, 2020. We have split our teams at the port office; in the market-
Could you inform about the specific consequences in Germany’s maritime trade with China as a result of the COVID-19 outbreak? Although we are witnessing a drastic shortfall in cargo volumes, there are no further consequences in our trade with China. Additionally, due to the fact that the transit-time from China to Wilhelmshaven is exceeding a fortnight at present, we believe there can be no danger regarding any kind of cargo being contaminated. If someone from the crew of any ship en route to our port shows signs of illness or infection, the master of the vessel must report this in advance to the port doctor, who will then decide whether the vessel be allowed to enter the p or t or not. Luc k i ly, we haven’t reported any such cases so far, and we are hoping that the situation will remain safe and stable, while we strengthen our business continuity with the right tools, technology and skills to deal with these turbulent times. The EU ports have reported a noteworthy decline in sailings, especially for ships from Asia. Currently, what is the traffic count at JadeWeserPort Wilhelmshaven from Asia? In this respect, JadeWeser-
Port Wilhelmshaven has been on the lucky side, so far. Only a small number of blank sailings have been reported.
With India’s Adani Ports & SEZ temporarily suspending operations and shutting export gate at a few of its container terminals, is the trade and container shipping business between Adani and JadeWeserPort Wilhelmshaven facing a severe downward trend? For Adani Ports and Special Economic Zone (APSEZ), this is definitely a very difficult situation. We can understand how hard it has been for the APSEZ authorities to take such a bold move. But we are confident that the highly professional team around APSEZ President Captain Sandeep Mehta will manage this extreme situation in the best manner possible with little disruption to normal terminal activities. Not to question, such measures will certainly have a ripple effect on cargo volumes, since we have also received information about blank sailings from India to Wilhelmshaven and vice versa, but implementing this was important for APSEZ at the moment. Going forward, we are not expecting a downward trend. Blank sailings continue to increase since the last couple of months. Taking into account large distances and sailing times, will the ports in far North West Europe face more serious shortages in April and onwards? As long as the shipping lines
continuously operate reliable strings, these kinds of challenges can be handled. It might present some bottlenecks here and there, but after a while, shipping lines together with their customers will find a new rhythm of matching demand and supply.
There is still the risk of a ‘prolonged spread’ of the virus which is already causing delays and congestions in existing supply chains. How is JadeWeserPort Wilhelmshaven further preparing for such an unpleasant event? As long as the crisis situation goes on, JadeWeserPort Wilhelmshaven will continue with its emergency plan to protect the management and workforce in the best way possible and guarantee customers normal and smooth service. Besides, we have plenty of
As long as the shipping lines continuously operate reliable strings, these kinds of challenges can be handled. space to offer, the logistics zone and freight village directly adjacent to the port boasts an area covering 160 acres. As such, we don´t see any risk of running into a congestion situation at the port. We are also at a position to be able to handle a large number of inducement calls, if requested. These are some of the advantages and benefits we offer being a new and modern port. CargoConnect may 2020 | 45
Oaknet’s complete logistics network is integrated with SAP Journey so far!
Oaknet Healthcare was formed in India in the year 2016 after acquiring South Africa's second biggest drug maker Adcock Ingram Pvt Ltd. A specialty pharmaceutical company with pan-India presence, Oaknet has three main areas of interest- Dermatology, Gynaecology, and Cardiology and anti-diabetic segments. A focus on underserved niches and unique marketing approach while creating digital connections with customers and partners differentiates the company from its peers. For example, the company has set up a database gathering together physicians, customers, and consultants which they plan to use as a launchpad for their marketing strategy. Within few years of operation, Oaknet took over certain anti-biotic products from Novartis AG and cardiovascular products from GlaxoSmithKline. In three and half years, the company attained the milestone of nearing 200 crores with around 25 per cent growth year on year.
The pharma industry operates in a specialised environment where requirements are unique. Therefore, they need to embrace the concept of achieving more, in a shorter time, with new digital technologies. Now that is what we call an agile supply Supply Chain best practices chain. Srinivas Moorthy, AVP – Oaknet has deployed SAP Distribution at Oaknet Healthcare ERP system which inteexplains Upamanyu Borah how a grates end-to-end supply strong association among process chain operations and ensures the seamless flow improvement, organisational of materials right from change and technology forecast and demand implementation is critical in driving planning to supplies. SAP monitors agile, purpose-led and transformative real-time availability change. of stock at several locations as well as with C&F agents. We update the
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stock available with retailers in SAP to monitor the secondary movement of stocks from stockists to retailers. The global and regional demand planning is anticipated based on the sales trend and seasonality factor which help to derive the production planning. As every product comes with a shelf life and is blocked for sales 6 months before the expiry of the products, the production planning is done quite meticulously to avoid shelf expiry as far as possible. Going forward, we look to soon deploy Artificial Intelligence (AI) tools for demand forecasting and supply needs.
Overcoming hurdles
Visibility of market inventory is a big challenge the pharma supply chain is currently facing, and Oaknet is no exception. At times, we tend to get a big quantity/value out of certain products from the market which could have been averted if the visibility was transparent. Therefore, we are now working with some of the tech companies to automate the secondary data and improve the visibility of market inventories.
Drivers of tech-enabled procurement
In a digitally transforming world, one should always look beyond and be ready for an agile supply chain environment. Scenario-based procurement and defer or prepone procurement based on business scenario as real-time visibility is available due to ERP technologies, order fulfilment can happen from anywhere to meet the plant demands. Besides, removal of GST has helped to achieve significant supply chain cost savings while carrying our sourcing strategies.
Warehousing tactics and strategies
Warehousing plays the vital role in integrating back and front end of the supply chain, however the challenges starts right from the selection of the location. Oaknet has two major production centers, 60% of the products are being manufactured at Baddi in Himachal Pradesh, 35 % in Goa and the rest in a few other locations. We have one warehouse in Baddi and one in Goa to cater to the production and dispatch from the manufacturing plants. Similarly, all the raw and packaging materials required at the production plants are being catered to from the stock at the warehouses.
Ensuring coordination
As the suppliers and hubs are in the vicinity of the manufacturing locations, the seamless co-ordination becomes easier.
Establishing network
Oaknet’s logistics network is strong enough to cater to the pan-India customer base. While the 1000+ work force on the field is tirelessly putting their efforts to rapidly build up capacities; it is duty of the logistics management team to ensure that their effort does not go in vain due to non-availability of a product at any point of time, anywhere in India. In the case of generic pharma, the patient or the consumer will not wait for the product to arrive at the counter. The product will immediately be replaced with a similar available brand or product, and regaining the doctor’s confidence will take time.
Keeping the same in mind, Oaknet’s complete logistics network is integrated with SAP system to monitor the real-time stock availability so as to arrange immediate replenishment where need arises.
We are now working with some of the tech companies to automate the secondary data and improve the visibility of market inventories.
Scopes for LSPs
LSP plays a vital role in ensuring the stocking, supplying and meeting demand of products at accurate at every level. They are crucial pillars and support supply chain processes starting right from procurement till the last-mile delivery. As such, we have outsourced all the logistical activities to the experts who we believe will manage better and spend time on monitoring activities. We offer our LSPs a framework of responsibilities which includes primary distribution, warehousing as well as reverse logistics. For instance, stock return or bringing back expired stock to the warehouse for destruction.
Oaknet has deployed SAP ERP system which integrates end-to-end supply chain operations and ensures the seamless flow of materials right from forecast and demand planning to supplies. Our current LSPs are Mihir Logistics, Spoton Logistics, Gati Express and Scorpion Logistics, to name a few.
Managing back-end supply
We collate centrally-received data from around 1500 distributors which is then uploaded into the SAP to find out the inventories at micro-level and take
action on realignment, while the secondary sales and stocks are monitored meticulously and the primary is push is being controlled accordingly. We always insist for primary push not more than 105% of the secondary.
Megatrends and Disruptions
Technology will play a major role in the coming years; a new generation of AI will techniques will enhance demand forecasting process. Also, there will be increased focus on optimisation of channel partners, especially at distributor as well as C&F agent level. Besides, the recent innovation that has positioned itself as an attractive model in the healthcare space is e-pharmacy. It will throw abundant challenges to the traditional distribution system. Conventional 'bricks and mortar' pharmacies usually have controlled drug distribution systems from the manufacturer, sufficient validation, and follow good distribution practices. Home delivery of pharmaceuticals can be a desirable convenience, but sometimes it can lead to problems with uncontrolled distribution. Also, cold chain infrastructure will get more traction coupled with government pressure to implement the Good Distribution Practice (GDP).
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n ews
ICD Mulund and Tarapur extended gateways for faster evacuation of DPD boxes from JNPT
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PM Modi asks MoCA to expedite the process of handing over 6 more airports on PPP basis
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rime Minister Narendra Modi, recently while holding a comprehensive meeting to review the strategies that could help in making India’s Civil Aviation sector more efficient, has asked the Ministry of Civil Aviation (MoCA) to expedite the process of handing over of 6 more airports on PPP basis, and to commence the tender process within three months. In the meeting attended by the home minister, the finance minister, MoS (civil aviation), MoS (finance) and senior officials of the government, it was decided that the Indian Air
Space should be effectively used in such a manner that the flying time is reduced benefitting the travelling public and also helping the airlines to save costs in close co-operation with the Department of Military Affairs (DMA). Although the statement did not specify the six airports that would be privatised, the staterun Airports Authority of India (AAI) has already recommended the public-private partnership (PPP) model of development for airports at Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy, news agency Press Trust of India (PTI) had reported in December 2019.
Major Port Authorities Bill will give autonomy to India’s major ports
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he Major Port Authorities Bill 2020 which proposes to repeal the Major Port Trusts Act 1963 was introduced in the Lok Sabha by Mansukh Mandaviya, Minister of State (Independent Charge) of the Ministry of Shipping amid objections by opposition parties who wanted the government to redraft the legislation to remove ambiguity. The bill seeks to provide regulation, operation and planning of the 12 Major Ports in India and to vest the administration, control and manage48 | CargoConnect may 2020
ment of the ports upon the Boards of Major Port Authorities and for matters connected therewith or incidental thereto. This will empower the Major Ports to perform with greater efficiency on account of full autonomy in decision making and by modernising
their institutional framework. The bill will also help i n bringing transparency in operations of the Major Ports. With the introduct ion of Major Port Authorities Bill 2020, the role of Tariff Authority for Major Ports (TAMP) has also been redefined. Port Authority now has the power to fix tariff which will act as a reference tariff for purposes of bidding for PPP projects. PPP operators will be free to fix tariff based on market conditions.
onsidering the request of Jawaharlal Nehru Port (JNPT) for prompt movement of import containers from its port terminals, the Jawaharlal Nehru Customs House (JNCH) in Nhava Sheva has allowed the speedy evacuation of DPD containers with rail facility and declared ICD Mulund and ICD Tarapur as Extended Port Gate of JNPT in respect of clearances of the containers. The JNCH announced that Container Corporation of India (CONCOR) shall act as a service provider in transshipping and handling containers and supply of rakes for carriage of containers with the objective of evacuating containers en bloc by Rail.
Maiden GuangzhouDelhi SpiceXpress freighter brings 14 tonnes medical supplies
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piceJet operated its maiden SpiceXpress freighter flight carrying around 14 tonnes of critical medical essentials including COVID-19 related supplies and protective equipment, from Guangzhou in China to New Delhi on April 29. The B737cargo plane left Kolkata for Guangzhou at 10:30 am on Wednesday. After loading all of the items, the plane flew back and reached Kolkata at 8:20 pm. The plane finally left Kolkata Airport at 9 pm and landed at Delhi at 11:15 pm the same day itself, the airline said in a release. During the course of the lockdown, SpiceJet operated special cargo flights to and from Abu Dhabi, Kuwait, Singapore, Ho Chi Minh, Hong Kong, Shanghai, Bangkok, Colombo, Dubai, Kabul, Myanmar, Sharjah, Male, Kuala Lumpur, Ukraine and a host of other places.
n ews NIP taskforce lays out `111 lakh-cr plan to revive economy
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task force headed by the country’s Economic Affairs Secretary Atanu Chakraborty has observed that creating new and upgrading existing infra projects w it h i nvest ments amounting to `111 lakh crore over the next five years will be key to driving India’s econom-
ic growth and becoming a $5 trillion economy by FY 2025. These projects will be implemented under the National Infrastructure Pipeline (NIP), a first-of-its-kind exercise, by consulting states, relevant ministries and departments. The Task Force on the NIP while submitting its final re-
port for FY 2019-25 to Finance Minister Nirmala Sitharaman on April 29 made the recommendations. Reportedly, two committees will be set up to monitor project progress, eliminate delays, and find ways to raise resources, along with a steering committee in each of the infrastructure ministries that would follow up progress to ensure successful implementation of the projects. The report, which comes in three volumes, identifies and highlights recent infrastructure trends in India as well as global in all sectors of infrastructure. It also captures sector progress, deficits and challenges. In addition to update existing sectoral policies, the Final Report also identifies and highlights a set of reforms to scale up and propel infrastructure investments in various sectors throughout the country.
Qatar Airways increases belly-hold operations to India
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atar Airways Cargo, the freight division of Qatar Airways has announced the addition of more air freight capacity to and from India from April 1, 2020 with the utilisation of belly-hold operations of freight-only passenger aircraft. The airline will operate 19 weekly Boeing 777-300ER and Boeing 787 Dreamliner cargo-only passenger aircraft to– Delhi (3 weekly flights), Hyderabad (2 weekly flights), Bengaluru (3 weekly flights), Chennai (4 weekly flights), Mumbai (5 weekly flights), and Kolkata (2 weekly flights). The flights will be operated on a turnaround basis without any cabin crew members or passengers on-board. The cargo carrier said the flights have been introduced as a result of strong demand for Indian products such as pharmaceuticals and fresh produce.
73.64 million MT cargo moved via India’s national waterways
Inland logistics volumes to drop 10-15% in FY 2020-21, says India Ratings
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n la nd log ist ics c ompa n ie s’ volumes are likely to fall 10-15 per cent in the financial year 202021 as the consumption demand could take a longer time for recovery, according to India Ratings. The first quarter of the year is likely to see a 40-60 per cent fall as the lockdown has been extended. According to the agency, the volume decline will be asymmetric across the value chain, with standalone truck operators showing the highest stress, followed by inland logistics players, ports and warehouses. “Operational recovery for
logistics players will be gradual and prolonged over 2020-21, as against a sharp V-shaped recovery,” the agency said. For 2021-22, Ind-Ra expects almost the entire value chain to recover above the pre-COVID-19 levels, except standalone freight operators, who will continue to struggle amid low volumes and high debt. “Despite logistics being categorised as essential ser-
vices, we expect volumes to decline, given the first-mile (cargo evacuation from port) and the last-mile (s upply- c h a i n b e tween inland container depots to company warehouses) c ha llenges. Severe shortage of labour and drivers along with health safety environment (HSE) checks at ports for foreign vessels may lead to congestion at ports/depots, which may impact their efficiencies,” it said. While the arrivals of vessels were normal in March 2020, the agency expects port volumes to reduce materially between May and June 2020 as global trade volumes shrink.
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he Inland Waterways Authority of India (IWAI), responsible for development and regulation of inland waterways for shipping and navigation under the Ministry of Shipping, has announced that the country’s National Waterways has carried approximately 73.64 million metric tonnes of cargo in FY 2019-20. To drive this endeavour, IWAI brought 8 new Ro-PAX vessels to be deployed on NW-1 and NW-2 for transportation of passengers, vehicles and goods. Aiming to increase cargo transportation through this mode to 120 million tonne by 2023, the shipping ministry recently announced that it will seek technical assistance grant of Rs 50 crore from the World Bank for Eastern Waterways Connectivity Transport Grid (EWaCTG) to develop rivers and canals as an alternate mode of transportation between India and its five neighbouring countries in the east. CargoConnect may 2020 | 49
n ews
APAC airline industry needs urgent support, says IATA
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he Inter nat ional Air Transport Association (IATA) has reiterated its call to Asia-Pacific states to take immediate action of providing financial stimulus packages to their airline industry impacted by the COVID-19 crisis. Major Asia-Pacific states are yet to act, and could see passenger demand in 2020 reduced between 34 – 44%,
with suffering revenue loss of $88 billion. In terms of passenger demand reduction, IATA said the Philippines, along with Ca mbod ia a nd Viet n a m, would be on the lower end of the range, while Thailand, Pakistan, Korea, and Sri Lanka would see the largest impact in 2020. IATA’s Regional Vice President for Asia-Pacific Conrad
Clifford said, “While each country will see varying impact on passenger demand, the net result is the same – their airlines are fighting for survival, they are facing a liquidity crisis, and they will need financial relief urgently to sustain their businesses through this volatile situation.” The global airline body’s country-specific projection reports 36 per cent drop in passenger demand in India and a reduction of 6.85 crore in passenger volume at origin destinations. This could result in revenue losses to the tune of $ 8,838 million which could impact the national GDP in losses of $ 12,709 million. The Indian aviation sector, according to IATA latest analysis, could suffer potential job losses of 22.47 lakh personnel, which was the highest among 27 Asia-Pacific countries. The list includes Australia, South Korea, Indonesia, Japan, Malaysia, Singapore, Thailand, and Vietnam among top aviation markets.
APSEZ to introduce new train-handling charge at Mundra port from May 1
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dani Ports and Special E c o n o m ic Zone Ltd (APSEZ) said it will introduce a new trainhandling charge on all trains handled at Mu ndra port, the Ahmedabad-based conglomerate’s flagship port, and India’s biggest commercial port by volumes handled. The new charge, to be applicable from May 1, has been set at “`2.60 lakh + GST per rake handling in/out with 48 hours”, APSEZ said in a customer advisory, adding that 50 | CargoConnect may 2020
it is being introduced “to utilise this infrastruct ure at Mundra port”. As a part of multi modal transportation, a shipping line ties up with various agencies — those who provide service by road or by rail — for taking a container from the port to
the container f r e ig ht s t at io n s (CFSs) or the inland container depots (IC Ds). T h i s i nvolves transmission of liabilities between these parties and a contract for the purpose of switching between ocean and rail or road at the port is between the line and the port terminal operator. The terminal operator is supposed to charge the shipping line for this which, in turn, recovers it from the customer. Instead, APSEZ will charge this to the rail operator.
Etihad launches passenger freighter flights to Chennai and Kerela
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tihad Cargo has announced the addition of five new routes which it will service using Etihad Airways’ passenger aircraft to increase the flow of essential supplies into the UAE and further provide east-west connectivity between major markets. Using bellyhold capacity on a mix of Boeing 777 and 787 aircraft, the carrier is introducing services between Abu Dhabi and Melbourne, Chennai, Kerala, Karachi, and Amsterdam. This is in addition to passenger freighters already operating cargo-only flights to 10 destinations– Seoul, Beijing, Bangkok, Singapore, Manila, Jakarta, Mumbai, Delhi, Bangalore and Riyadh. The new routes will ensure continuity of fresh imports into the UAE including fruits, vegetables, meat, fish and seafood, in addition to pharmaceuticals and medical supplies as the nation continues to take measures to ensure food security and national health as part of its response to the COVID-19 pandemic.
TVS SCS deploys 1,000 ‘Corona Warriors’ to support missioncritical logistics
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VS Supply Chain Solutions (TVS SCS) has deployed over 1,000 ‘Corona Warriors’ — employees and drivers involved in operations — at its 65 operating locations across the country to support logistics activities. The execution team is equipped with a personal protective equipment (PPE) kit ‘Corona Kavach’ in addition to being fully trained to maintain the norms of social distancing. TVS SCS is already working with the Karnataka government in managing healthcare equipment services and spares such as ICU equipment and ventilators at all primary and community health centers, taluk, district and government hospitals. The company is also offering mission-critical services and closely engaging with state governments and private healthcare organisations.
n ews Agri Ministry launches call centre to facilitate inter-state agri logistics
Amazon India to use COVID-19 Parcel Special Trains to ferry consignments
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he union agriculture ministry has started an All India Agri Transport Call Centre to address the transportation issues being faced, especially in inter-state movement of both perishable and non-perishable agricultural commodities. Truck drivers, traders, retailers, transporters or any other stakeholders who are
I
facing problems in inter-state movement of perishablesvegetables and Fruits, and agri products- seeds, pesticides and fertiliser, etc. may seek help by calling at 1800180-4200 and 14488. Both numbers are accessible from any cellular or landline phone. The call centre executives will forward the vehicle and consignment details along-
DPIIT solves 89% issues of trade, industry so far
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he control room set up by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, is playing a pivotal role in monitoring the issues and has reportedly resolved 89% queries related to industry and trade, faced by various stakeholders during the lockdown period. “Until April 28, out of the total number of 1962 queries registered, 1739 have been resolved/settled. 223 are currently under resolution,” the Ministry of Commerce and Industry said. Out of 1962 queries registered, more than 1000 queries
were received from five States/ UTs viz. Delhi, Maharashtra, Uttar Pradesh, Haryana and Gujarat. The Ministry informed that a dedicated team has been put in place to monitor and tracking the disposal of queries and to generate daily reports for information of senior officers in the depart-
with the help needed to concerned state government officials for resolution of the issues. The move to start an allIndia level call centre will help facilitate smooth movement of agriculture commodities to mandis and industries engaged in manufacturing essential items, which are exempted from the lockdown rule. ment. The team closely tracks the important queries by calling up the affected people and obtains their inputs while taking up the matter with the concerned agency. During the course of lockdown, any manufacturing, transporter, distributor, wholesaler or e-commerce company facing ground level difficulties in transportation and distribution of goods or mobilisation of resources can inform to the Department through a telephone number (+91 11 23062487) and email id controlroom-dpiit@gov.in. The telephone number is functional from 8 AM to 6 PM.
n a bid to enable faster deliveries to customers amid the nationwide lockdown, Amazon India has decided to transport its consignments via rail across the country and is leveraging the ‘COVID-19 Parcel Special Trains’ introduced by Indian Railways. The etailer said it has strengthened its partnership with the national transporter and has ramped up its operations to 55 lanes. “This enhanced network will enable sellers in Amazon India’s network to ship their products across the country and keep their businesses running, thereby, allowing people to access a more diverse selection of essential products,” the company said in a statement. Transportation Services Director at Amazon India Abhinav Singh said with the support of these special trains the company can further fulfil customer orders with enhanced speed and capacity.
Hyderabad Airport connects to African markets
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cargo-only PAX flight operated by Ethiopian Airlines landed at GMR-led Hyderabad International Airport from Ethiopia’s capital city Addis Ababa on April 28 at 8.16 PM, and returned back to the Ethiopian capital three hours later. With this new direct connection, Hyderabad Airport throws open new opportunities to reach out to the markets in Africa and beyond leveraging the cargo network of Ethiopian Airlines. Expected to operate one frequency per week, Ethiopian Airlines will be operating Boeing 777-300 aircraft with a capacity of 50 MT per flight.
CargoConnect may 2020 | 51
UPS helps Dr Reddy’s Laboratories ship mission-critical medical compounds to the US
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lobal leader in logistics, UPS has helped multinational pharmaceutical company, Dr Reddy’s Laboratories ship 30 tonnes of critical compounds for essential medicines from Hyderabad to the United States. The product was moved within the UPS network t h roug h t he Colog ne based air hub in Germany, and then to the UPS Worldport in
Kentucky, before reaching its final destination. To maintain product effectiveness, the entire shipment was maintained at +15° – +25°C throughout the journey. “In these uncertain times, our customers depend on us more than ever. Our employees are keeping America moving and meeting the urgent needs created by the pandemic,” David Abney, UPS Chairman and CEO said.
Reportedly, UPS has added over 200 company-owned and chartered air freighter flights in April to support Federal Emergency Managem e n t A g e n c y ( F E M A) ’s healthcare-related mission– Project Airbridge, a publicprivate partnership to get vital and life-saving equipment to where it is needed with greater speed. The vast majority of these additional flights, carrying products from Asia to the US and Europe, serve to meet the soaring demand to ship personal protective equipment (PPE), ventilators, emergency room monitoring equipment, test kits and other supplies necessary for the global response effort.
WFS rolls out ‘cargo handling facility’ at Liège in record 72 hours
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orldwide Flight Services (WFS) launched a new ‘emergency response’ cargo handling operation in just 72 hours at Belgium’s Liège Airport following a request from the airport to help increase its c apac it y t o ac c e p t mor e freighter flights carrying urgent medical equipment into Europe to tackle the impact of t he COV I D -19 pa nde m ic across the continent. Located within a brand new but previously unoccupied airside warehouse, the new cargo facility was made available to WFS by Liège Airport authority, following which the world’s largest air c a r go h a nd le r pr omp t ly transferred highly-trained, experienced cargo handling staff from its operation in 52 | CargoConnect may 2020
Brussels, ensuring full compliance with the company’s first priority of operational safety and security. Essential equipment, including forklifts, slave masters, slave pallets and a truck dock, was also sourced from nearby WFS stations in both Belgium and the Netherlands.
WFS expects to handle up to 14 freighter flights per week during this emergency response phase of operations, which is currently expected to continue until the end of May. WFS will also be providing handling services for outbound cargo shipments from Liège Airport.
Saudi Arabian Logistics moves operations to state-of-the-art facility at KKIA audi Arabian Logistics (SAL), a SAirlines subsidiary of Saudi Arabian Corporation and the main
‘cargo gate’ across the Kingdom’s airports has moved its export and domestic cargo handling and express mail services into a newly-launched ‘Cargo Village’ at King Khalid International Airport (KKIA) in Riyadh. Three quality and important services will be provided at the new venue during the first phase, which are export cargo handling, domestic cargo handling and express mail services effective April 20, 2020. SAL customers will now get faster services as the operational capacity has doubled and expected to reach 450,000 tonnes a year at a total area covering 67,000 square meters. There are 10 aircraft aprons and 15 docks inside for loading and unloading of goods for trucks, along with free parking areas for customers.
Ethiopian’s cargo infrastructure bolsters COVID-19 response to the growing demand Ithenforresponse air cargo services following spread of COVID- 19, Ethiopian
Airlines has deployed its massive cargo capacity to facilitate the flow of essential cargo such as medical supplies wherever they are needed. The state-of-the-art Pharma Wing of Ethiopian Cargo and Logistics Services, which is housed within the largest transshipment terminal in Africa, has been central to the airline’s effective handling and shipping of medical supplies across Africa and beyond. Equipped with temperature-controlled pharma handling storage area of 54,000 sq m, the facility is suitable for handling medical supplies in different temperature ranges through the use of active containers and real-time temperature monitoring system. Dedicated and trained staff stationed at the facility ensures that all operations are carried out in line throughout the supply chain with adhering to the rules and regulations of IATA and other regulatory bodies.
Virgin Atlantic plans 90 cargo flights per week in May K-based airline Virgin Atlantic Uoperate has announced that it plans to 90 cargo flights per week in
Turkish Cargo becomes only airline to receive all 3 IATA special badges
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urkish Cargo has become the first cargo airline to concurrently achieve all three ‘CEIV Pharma, CEIV Fresh, and CEIV Live Animals’ certifications, under the IATA CEIV (Center of Excellence for Independent Validators) program. “We are passing through the days pointing how vital the air cargo industry is for trade across the world as well as transportation. We really make much of the IATA CEIV certificates that prove that we meet the international standards at our special cargo operations, during such a vulnerable and critical period,” Turkish Airlines Chief Cargo Officer Turhan Özen expressed.
The certifications, which are valid for a three-year period, comes after the carrier satisfied the requirements in the wake of the training, assessment and validation processes created by the International Air Transport Association( IATA). “The air cargo industry now enters a period whereby the vulnerability at the special cargo services is augmented, and the CEIV program intends to ensure that the sensitive cargo is transported and delivered at the highest standards, meticulously and punctiliously, as much as possible,” Global Head of Cargo at IATA Glyn Hughes commented.
May as manufacturing activity begins to restart and coronavirusrelated demand continues. Virgin Atlantic said the move aims at connecting the UK with major international freight markets such as the US, Hong Kong, China, India, Israel and South Africa. The airline will also operate cargo-only flights through Dublin for the first time in order to cater to Ireland’s medical technology, electronics and other industries by achieving same day connections to New York JFK, Los Angeles, Hong Kong, Tel Aviv and Johannesburg. The services will be operated using the airline’s Boeing 787-9 aircraft, which can carry up to 55 tonnes of cargo.
GEFCO keeps automotive supply chains rolling
IMO, WCO urge customs and ports to maintain continuity of essential supply chain
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rade by sea must continue to flow to maintain the continued provision of essential goods, including vital medical supplies, during the unprecedented global situation arising from the COVID-19 pandemic. This is the message from the heads of the International Maritime Orga n isat ion (IMO) and the World Customs Organisation (WCO). IMO Secretary-General Kitack Lim and WCO Secretary General Dr Kunio Mikuriya strongly urged customs administrations and port state authorities, togeth-
er with all other concerned agencies, to establish a coordinated and proactive approach to maintaining the
integrity of the global supply chain so that the flow of vital goods by sea is not unnecessarily disrupted. It is critical that customs administrat ions and port
state authorities continue to facilitate the cross-border movement of vital medical supplies and equipment, critical agricultural products, and other goods, to help minimise the overall impact of the COVID-19 pandemic on economies and societies, the joint statement said. The two organisations emphasised the utmost importance of communication, coordination and cooperation at both national and local levels, between ships, port facilities, customs administrations and other competent authorities.
logistics specialist, Atonnesutomotive GEFCO has transported 750 of key automotive spare
parts from China to France using eight chartered flights. The consignments included turbo compressors, pistons, control panels, doors and mouldings and were flown in preparation for the restart of assembly plants in Europe. The logistics provider collected parts from several suppliers across China using road transport, which were then consolidated and loaded onto chartered aircraft in Shanghai. The planes were flown to Vatry and Charles de Gaulle airports in France. GEFCO said it secured storage of the parts in local airport warehouses to ensure fast access for automotive customers as soon as production resumes. CargoConnect may 2020 | 53
Gandhi Automation receives two awards for AI excellence
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ntrance Automation a nd Load i ng Bay Equipment company, Gandhi Automation has received Automation Industry Leader Award and Robotics/Automation Supplier of the Year Award at two separate events held in Jaipur
and Mumbai respectively. The company received the Automation Industry Leader 2020 Award at the Trade and Technology Exhibition Conference and Awards organised by TASO, an exhibition company, at Jaipur Exhibition a n d C o nv e n t i o n C e n t r e
(JECC) in Jaipur from February 23-25, 2020. The second award, Robotics/Automation Supplier of the Year, was conferred on the company at the Manufacturing Supply Chain Summit organised by Future Supply Chain – India's top 3PL ser-
vice provider. The event was held at The Westin Garden City in Mumbai from March 4-5, 2020. In a press note, the company stated, “We have further upgraded our systems by moving on to Artificial Intelligence. Our products are now being designed with sophisticated systems, which can be integrated with building management systems.”
IndoSpace wins prestigious ‘Firm of the Year - India’ award
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ndoSpace, India’s largest developer of Grade A industrial real estate and logistics parks has been named as the ‘Firm of the Yea r - I nd ia’ by t he prest ig ious ‘PERE’ magazine, the real estate arm of Private Equity International, at PERE Awards 2019. Rajesh Jaggi, Vice Chairman – Real Estate, Everstone Group said,
54 | CargoConnect may 2020
“We are honoured to win this prestigious award. It is heartening to see our efforts being recognised as the best in class in the industry and echoes our philosophy of providing state of the art modern logistics and warehousing facilities across the country. 2019 was a significant year for us as we expanded our footprint across the country.” IndoSpace is the only pan-India network of modern logistics and warehousing parks with a portfolio of over 36 million square feet across developed and under-construction projects comprising of 35 parks in 9 cities.
3SC unveils ‘Demand Curve 2.0’ for accurate planning and forecasting needs
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S Supply Chain Solutions Pvt Ltd (3SC), a Gurgaon-based supply chain advisory firm focussed on enabling supply chain solutions via advanced analytics, launched a new tool ‘Demand Curve 2.0’ at an event on March 09, 2020 at Le Méridien Gurgaon. The event was graced by Guest of Honour Dirk Reich, a seasoned supply c hai n expert who heads multiple organisations such as Instafreight GmbH, LoG-hub, and R+R International Aviation AG, besides being an active board member at Imperial Logistics Ltd, IPT AG and Skycell AG. Sarita Das, Co-Founder & Director, SS Supply Chain Solutions expressed her unreserved gratitude to all the attendees who were part of the product launch, while Lalit Das, Founder CEO, 3SC Supply Chain Solutions proposed the vote of
thanks to all who helped in making ‘Demand Curve 2.0’ a resounding success. Demand Curve 2.0’ is remarkable forecasting software designed by a team of erudite professionals from IIT Kharagpur. It is an advanced
version of Demand Curve, embedded with combining techniques to improve forecast accuracy and reduce processing time. Credited with outstanding computational power and intelligent Machine Learning (ML) algo-
rithms, ‘Demand Curve 2.0’ takes account of external factors like social media engagement, brand advertisement, competitive pricing, stock policies and promotional activities before generating precise forecasting results.
Oman Air Cargo obtains Global Recognition for strong growth
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man Air Cargo, a division of the national carrier of the Sultanate of Oman, has earned a prestigious recognition for its strong growth. The division was awarded the Fastest Growing International Cargo Airline of the Year (Highly Acclaimed) at the Air Cargo India 2020 awards gala night held in Mumbai in February. Mohammed Al Musafir, SVP – Oman Air Cargo said, “We are honoured to receive this award on such an important, international platform. We thank all our customers and industry partners for their trust and faith in Oman Air Cargo, which has helped us in our development and growth over the years, and we look forward to their continued support.’
CargoConnect may 2020 | 55
appointments
Shailendar Kothari appointed Managing Director at Jettainer Americas
ULD management firm Jettainer Americas has appointed Shailendar Kothari as its new Managing Director, who will be responsible for the company’s operational activities, as well as business and market opportunities in the Americas. During his career, Kothari worked for Pan-Am, Deutsche Lufthansa and the Lufthansa Group. He was also employed as a Senior Ramp Supervisor at Oman Aviation in Muscat. Most recently, he was Director for Global Category Management at Lufthansa where he took the responsibility for the Group companies’ procurement of all warehouses, aircraft handling services and logistics.
GertJan Roelands new SVP of Sales & Distribution at AF KLM Martinair Cargo
Gertjan Roelands has been appointed Senior Vice President of Sales and Distribution of Air France KLM Martinair Cargo, where he will be in charge of all global commercial activities, including digital services. In his current position, Roelands is responsible for the Area Europe at the cargo group. He previously held managerial positions in various passenger division departments including Pricing & Revenue Management, Sales, at KLM Netherlands and Global Sales at Air France-KLM. Before joining cargo in 2015, Roelands was Vice President Commercial for Africa & Middle East at Air France-KLM.
UPS Board appoints Carol Tomé as CEO
United Parcel Service Inc (UPS) has appointed Carol Tomé as Chief Executive Officer, effective June 1. Tomé will become the 12th CEO in the more than 100 year history of UPS. She has been a member of the UPS Board since 2003, and is Chairperson of the Audit Committee. Tomé is the former Executive Vice President and Chief Financial Officer of The Home Depot- No1 US home improvement retailer, where her responsibilities included corporate strategy, finance and business development. During her 18-year tenure as CFO, she is credited with helping to deliver a 450 per cent increase in The Home Depot’s shareholder value.
56 | CargoConnect may 2020
Rich Corrado to become CEO at Air Transport Services
Wilmington-based Air Transport Services Group Inc, which specialises in aircraft leasing and air transport services, has named Richard Corrado who is currently president of ATSG, to the additional role of CEO. Since 2010, Corrado has helped enhance and extend ATSG’s business model, now an industry standard known as “A+CMI.” Corrado was among the first in the industry to recognise and plan for the growth in e-commerce transactions, and the opportunity to place ATSG’s midsize, medium-range Boeing 767 freighter aircraft at the center of new time-definite express networks that e-commerce merchants require.
NAP’s founder Christos Spyrou joins TIACA board
Nominated at TIACA’s most recent board meeting, Christos Spyrou, CEO and Founder of Neutral Air Partner (NAP), has joined the Board of Directors of TIACA (The International Air Cargo Association). Christos Spyrou brings 30 years of air freight industry experience to TIACA’s Board. His specialist areas include advanced air freight consolidation management, neutral air freight wholesale, ULD utilisation and equalisation, gateway planning, networking, and effective selling and sourcing for the professional air freight broker and forwarder.
Boeing appoints Susan Doniz as Chief Information Officer Boeing has named Susan Doniz as the company’s Chief Information Officer and Senior VP of Information Technology & Data Analytics, effective from May. Doniz has more than 25 years of global technology leadership experience, including strategic roles at SAP, Aimia and Procter & Gamble. Doniz joins Boeing from Qantas Group, where she has served as Group Chief Information Officer since January 2017 across the Group’s companies, including Qantas Airlines, QantasLink, Qantas Loyalty and Jetstar.
Vytis Zalimas assigned as the new CEO of JET MS
Jet Maintenance Solutions (JET MS), a global provider of integrated aircraft maintenance, repair and overhaul solutions for business and regional aviation has assigned Vytis Zalimas as its new Chief Executive Officer, effective March 9. Zalimas has been leading and transforming different sales and customer care teams for more than 12 years at ICT, banking and aviation industries. For the past five years, he held the position of Head of Corporate Customers at Telia Company and Head of Contact Center at a major banking institution in Baltic countries.
CDB Aviation promotes Sign Kadouh as Head of Asia Pacific
Full-service aircraft leasing platform, CDB Aviation has promoted Sign Kadouh to Head of Asia Pacific from his previous position of Head of Commercial, Asia Pacific. In addition to continuing to lead the Asia Pacific commercial team, Kadouh also will be the operational leader for Asia Pacific. Kadouh joined CDB Aviation in February 2017 as Senior Vice President, Commercial. Prior to CDB Aviation, Kadouh served as Vice President, Legal, at International Lease Finance Corporation and AerCap.
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`240/-
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Priority Cargo: Right Here, Right Now
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Total (outside India)
240+600+42 =`882/-*
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`480/-
480+1200+84 =`1764/-*
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240+440+34 =$714*
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720+1800+126 =`2646/-*
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$360
360+660+51 =$1071*
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58 | CargoConnect may 2020