Cargotalk November 2013

CargotalkSouth ASiA’S LeAding CArgo MonthLy

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Vol XIII No.12Pages 56

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Major Ports in indiaStudy unveils declining volume

Carrier transiCold

introduces new products for cold chain

PortsAn unfinished agenda

Indian

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editorial

SanJeetEditor

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the shipping and port sector in India is expected to receive a boost in the near future with the increase

of projected trade volume. A reviving economy in the major markets viz USA and Europe and search for new markets by Indian exporters are the indications that the Indian ports will have to face tough times once gain in managing the prospective growth. It is commendable that the Government of India as well as private companies have taken some significant moves to create capacity at the Indian Ports. And, launching of International Transshipment Terminal (at Vallarpadam in Kochi for instance) may be termed as a landmark initiative in this direction.

Some recent researches reveal that growth in long distance and containerised trade has led to the growth in establishment of transshipment hubs. It is not possible to establish direct shipping connections between every country because either there may not be enough volume, or the ports may be located distantly from each other. Therefore, a set of direct or transshipment connections are required to link all country pairs by maritime shipping. For this purpose, the transshipment terminals and intermediate hubs have been started. The emergence of major intermediate hubs favoured a concentration of large vessels along long-distance, high capacity routes, while smaller ports can be serviced with lower capacity ships. Consequently, the emergence of intermediate hubs has permitted liner services that would other-wise be economically unfeasible.

The need to develop transshipment hub ports in India was documented by the Planning Commission in its Tenth Five Year Plan. The Vallarpadam terminal in Kochi has been identified as a trans-shipment terminal for the sub-continent by the Government of India. The ob-jective of the Vallarpadam Terminal, the first-of-its-kind in India, was to cut down logistics costs for shipping lines, transshipping cargo in and out of the country. Currently, the contai-nerised cargo, to and from India, is transshipped through the ports at Co-lombo, Dubai, Singapore and Salalah. However, from the very beginning the terminal was facing tremendous chal-lenges to receive big vessels because of the existing Cabotage Law, which discourages coastal shipping, and as a consequence transshipping. It is com-mendable the Government of India recently relaxed the law to some extent, especially for this new terminal. The prospective investors for the shipping and port infrastructure sector are now eagerly waiting for a greater change in the mind set of the policy makers for the interest of the country’s economy.

WInDS oF CHAnGES In PorT SECTor

EditorSanJeet

Sr. Assistant EditorRatan KumaR Paul

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Cargotalk


SECTORS national news8 I Allcargo acquires 100% stake in LCL company ‘Econocaribe Consolidators’

TIACA invites Hall of Fame Award nominees

10 I Tata Sons to carry forward its legacy in aviation

12 I Emphasis on increase of skilled manpower

Mergers & aCquisitions14 I Kewill takes over India’s leading logistics software company Foursoft

logistiCs serviCes16 I Safexpress on the growth track: Completes18 Logistics Parks, more to be launched by 2016

skill develoPMent19 I Tirwin Management Services becomes one of IATA ATCs

on the Move18 I neil Vernon joins Virgin Atlantic Cargo as regional Vice President

Anupam Shah takes over Chairman EEPC India

industry events30 I Supply Chain Workshop in Bengaluru emphasises on collaboration and IT

32 I ELSC Conclave gives out strategies, ideas to innovate

36 I Calendar of International Events

Cargo PerforManCe34 I Airlines’ wise exim cargo performance from Delhi International Airport for September 2013

35 I Airlines’ wise exim cargo performance from Mumbai International Airport for September 2013

36 I Airport-wise domestic cargo performance from Indian airports for July 2013

38 I Airport-wise international cargo performance from Indian airports for July 2013

ProduCt disPlay48 I Carrier Transicold introduces new atmosphere control technology for perishables

COLUMNS

viewPoint20 I Indian Logistics Industry: Making headway despite challenges

study rePort27 I Major Ports in India show decline in cargo volume

guest ColuMn40 I What Ails Indian Ports

50 I Future of organised retail in India: need for Policy Support

aCadeMiC institutes54 I UPES to enter Shillong to provide aviation and logistics courses

ContentsNovember 2013

n Cover story22 I Calling indian Ports: Big vessels diverted for long pending issuesThe port and shipping sector has witnessed significant growth during the last two decades, especially in terms of traffic handled. This has pushed port facilities to be utilised at maximum level leading to congestion. Though the Government of India, in association of private players has taken a number of initiatives to build the required capacity, certain policy issues and low pace of implementation of a set agenda desisting big vessels from calling Indian ports


National NewsNews in Brief

t he apparel export for the month of September 2013

has registered by 14.95 per cent showing the US$ 1.11 billion for September 2013. This is the sixth consecutive month where garment exports grew at an average of 13 per cent. Commenting on this growth A Sakthivel, Chairman AEPC said that the trade body organised fairs last month, they went to BSM new York and Spain and we got the positive signals of the revival of the economy in USA and EU. “We are

requesting the Government, to put exports in the priority sector which was accepted by the Padmanabhan Committee, and can solve the problem of credit crunch for the Industry,” he said. He also maintained that the lowest trade deficit in the last six month is good news for the entire industry. “The good monsoon, positive manufacturing core sector and

revival of the US economy can spin the game and export may be very good this year,” Sakthivel added.

M enzies Aviation Bobba (Bangalore) recently

received the notification from the International Air Transport Association (IATA), confirming its status as having successfully obtained the ISAGo (IATA Safety Audit for Ground operations) registration.

According to Venkata Reddy, CEo, MABBPL will be one of India’s first major cargo terminal operator (CTo) to be registered on the ISAGo registry,

helping to set worldwide industry benchmarks. “We are committed to offering our customers risk-free and safe cargo handling as far as possible whereby the airlines can focus on their core business. The enormous challenges faced by our business will not affect our dedication to offer a secure working environment that

benefits our airline customers, the air cargo community and our staff,” reddy said.

t he International Air Cargo association (TIACA) is seeking air cargo industry

nominations for its 2014 Hall of Fame Award from across the world. The award has been presented annually since 1997, recognising business leaders whose contribution to the growth and development of the industry deserves to be recognised for its innovative spirit, leadership and achievements. Candidates for the award can be nominated by any individuals in the

air cargo business and the closing date for submissions is november 15, 2013.

The 2013 Hall of Fame Award recipients were Philip Wei, past Chairman of China Airlines, and Bill Boesch, President of Logistics, Council for Logistics research. The presentation takes place each year at a special gala dinner to honor the winners during the Association’s AGM and Executive Summit.

TIACA InVITES HALL oF FAME AWArD noMInEES

allcargo acquires

100% stake in lCl company ‘econocaribe Consolidators’

a llcargo Logistics has announced that it has acquired

100 per cent stake in the US based company Econocaribe Consolidators, through its wholly owned subsidiary, Ecu Line. according to Allcargo sources. Established in 1968, Econocaribe is the 3rd largest LCL consolidator (NVOCC) in the US. Econocaribe specialises in freight consolidation and FCL services to Latin America, the Caribbean, Europe, the Mediterranean, the Middle East, Africa and Asia. They also offer import LCL/FCL transportation services from around the world into the United States. “Econocaribe has been our partner in the US and we have worked very closely with them. They have an extremely efficient and capable management team that has taken the company to being amongst the top NVOCCs in the US,” said Shashi Kiran Shetty, Executive Chairman, Allcargo Logistics India.

Menzies aviation Bobba obtains isago registration

APPArEL ExPorT GroWS

BY15 PEr CEnT In SEPTEMBEr


Meanwhile, the 51:49 per cent stake holding new venture between Tata Sons and Singapore Airlines has applied

for Foreign Investment Promotion Board (FIPB) approval to establish a new airline in India.

Tata Sons believes that the civil aviation sector in India offers sustainable growth. There is sufficient distinction in

demand and that is the reason for Tata Sons to enter into two initiatives— recently with Air Asia in the low cost carrier segment and now with Singapore Airlines in the full service segment.

“It is Tata Sons’ evaluation that civil aviation in India offers sustainable growth potential. We are delighted that we are partnering in this endeavour with the world renowned Singapore Airlines,” said

Prasad Menon, Chairman of the proposed joint venture.

According to Mukund Rajan, Member-Group Executive Council, Tata Sons, greater competition in civil aviation in India will foster benefits for the passenger in terms of greater choice in fares and services. “The trend of increasing urbanisation and growth in travel across India has opened up more opportunities for a differentiated full service offering. With the right world-class partner, in Singapore Airlines, we are confident we can participate in the undoubted growth potential of the sector, and create significant value,” he said.

He also maintained that Tata Sons will fully participate in the management and operations of the airline. As with its other joint ventures with globally respected companies, Tata will play an active role in operations, and leverage its understanding of the Indian industrial landscape and contribute with its long years of experience towards the creation of a fruitful partnership and collaboration.

rajan underlined the history of previous efforts of Tatas and SIA to partner with each other to launch a world-class airline in India. “We would like to ensure that we are able to realise the original vision of launching a full-service, world-class airline that India can be proud of. The Tata Group’s own contribution to the aviation industry in this country is also well known, and we hope to carry forward the legacy of having launched in past decades one of the world’s most admired airlines (Air India),” he emphasised. He, however refrain to make any comment on their business plan. The venture now is waiting for the FIPB and other regulatory approvals to give a final shape to the proposed airline.

We would like to ensure that we are able to realise

the original vision of launching a full-service, world-class airline that India can be proud of.

Mukund Rajan Member-Group Executive Council

Tata Sons

We are delighted that we are partnering

in this endeavour with the world

renowned Singapore Airlines

Prasad Menon Chairman

National NewsAirlines News

tata Sons to carry forward its legacy in aviationAfter the recent announcement of the agreement (MoU) between Tata Sons and Singapore Airlines for the launch of a full-service airline in India, there was a lot of discussion in the travel trade industry about its significance for this market. TravTalk spoke to officials from Tata Sons responsible for this venture, on what prompted them for this new launch.

n RATAn KR PAUl


at this day-long conference, several government officials, trade practitioners and industry experts were present to discuss

the current aviation industry scenario, future opportunities, challenges and requirement of skilled man power. Yvonne Ziegler, Dean University of Applied Science Frankfurt; Prabhat Kumar, Joint, Secretary, Ministry of Civil Aviation, Government of India; A Sengupta, Dean College Management & Economics Studies, University of Petroleum and Energy Studies; Kapil Kaul, CEo South Asia, CAPA; Deepak Brara, Director Commercial, Air India; Saroj Dutta, former ED, Jet Airways; Suresh Nair, GM-India, Sri Lanka, Bangladesh & nepal, AirAsia Group and several other eminent industry players addressed the conference.

Underlining the increasing importance of capacity building to cater to the future demand Kumar pointed out that India would be the 3rd largest aviation market by 2020, where about 170 thousand skilled manpower would be required by 2017. “Currently, there is a huge shortage of skilled manpower for the aviation industry,” he admitted. He also stressed on a conducive policy and changed mindset among the industry stakeholders.

While making a presentation on gradual growth of aviation market in India and CAPA’s latest traffic forecast for this country, Kaul maintained that during next 10 years international passenger traffic will grow 10 per cent year-on-year. “Already, there is a tremendous pressure on infrastructure and demand for skilled manpower, which would be further aggravated in the years to come, unless pragmatic solutions come from the policy makers and facilitators,” said Kaul. He also maintained that the industry is facing serious challenges because of a continued policy and regulatory vacuum. He, however, argued that despite the policy and regulatory challenges, a significant amount of the cost of the aviation industry can be reduced by enhancing skill and

management sides, by the industry practitioners on their own.

Participating in the panel discussions, Brara expressed disapproval to the ‘Policy vacuum’ concept. “We should think judiciously about the changing scenario and gradual development in the field of aviation sector in India. And, these cannot happen without policy support from the government. It is rather our responsibility to bring discipline in the industry for everybody’s growth with a level playing field. For example, the airlines should stop suicidal pricing policy,” he argued.

nair stressed that pricing is determined by market forces and regulators should get away from it. He foresees great future for low-cost/low-fare airlines in India.

In his remarks in the panel discussions, Dutta urged for early adoption and implementation of the long-awaited Civil Aviation Policy for the greater interest of the aviation industry as well as the economy of the country. “Without a clear and transparent policy, India will fail to attract foreign investors towards this industry, despite the new FDI policy initiatives,” Dutta cautioned.

National NewsCivil Aviation

need of the hour: Increase skilled manpowerThe University of Applied Sciences Frankfurt hosted an Aviation Conference on Capacity Building in the Indian Aviation Industry on September 20 in new Delhi.


kewill, a Francisco Partners portfolio company, is a global leader in multimodal transportation management software, providing

organisations with a comprehensive end-to-end platform for managing the complexities of transportation, logistics and trade compliance. The company is creating a business with in excess of US$110m in revenues and 7,500 customers, across more than 100 countries. Kewill now has all of the top 10 global logistics providers amongst its customers.

“India offers huge opportunity to IT solutions providers for logistics industry. IT solutions for logistics and supply chain management would be in great demand in this emerging market, which ahs immense potential of being a manufacturing and

logistics hub in the South Asia region,” said Farrell. He also underlined the steady increase of global trade (import & export) to and from this country. As a result, there will be tremendous business opportunities for 3PL and 4PL companies in India. “Technology solutions for better visibility, documentations, EDI connectivity and cost management will be the core areas to make a difference in the whole logistics chain. In addition, proper asset management, ability to grow skilled manpower, value addition, a proactive and changed mindset will also be the focus areas to strengthen the logistics and supply chain system. And, IT solution providers will have to play the key role in this regard,” He underlined.

“Kewill transportation management platform gives customers the insight, agility and tools they need to deliver better customer service and streamline global supply chain execution for strategic advantage,” added Puzey.

According to the Kewill officials, the acquisition of Foursoft will provide an opportunity for many Kewill and Four Soft customers to expand their supply chain visibility and control, through a broader multimodal transportation and supply chain execution platform. “As part of the transaction, Kewill has gained a leading software innovation centre in India,

with its employees having multimodal transportation domain expertise. In addition, Kewill will benefit from Four Soft’s J2EE framework that enables

code creation with 40-60 per cent being generated automatically,” maintained Farell.

Kewill’s aim is to offer easy, cost effective and tailor-made solutions for this market. The company is targetting three key groups as its customer base—logistics service providers, manufacturers and retailers & distributors. “our solutions will be catering to multimodal transport service providers fulfilling the demands— from order management to trading and distributions,” said Puzey.

According to Farell, the acquisition of Four Soft is a strategic move by Kewill that will help the company to deliver immense value to its customers, partners, employees, and shareholders.

“With this acquisition, we have put in place the foundation to support organic growth over the coming years, as well as the resourcing and skills necessary to quickly deliver,” he maintained. Asked about the distribution and sales network of the company after this acquisition, Puzey shared that Kewill would utilise direct as well as sales agent network in India. Currently the company has its own offices in five metro cities viz Hyderabad, Chennai, Bengaluru Delhi and Mumbai.

Mergers & AcquisitionsLogistics Technology

Kewill, a leading provider of multimodal transportation and logistics management software for seamless supply chain execution, has acquired Foursoft—its assets and also its subsidiaries. With the acquisition value of US$ 43.4 million, the assets of Four Soft including over 500 employees have transferred to Kewill. In an interview with Cargotalk Bob Farrell, CEO and Evan Puzey, CMO-Kewill spoke on the impact of this development for this emerging market.

key solutionFour Soft brings leading edge software to extend and enhance the Kewill MOVE platform - a comprehensive end-to-end solution for managing the complexities of transportation, logistics and trade compliance. The Kewill MOVE platform helps companies reduce costs, manage volatility and gain greater visibility across the logistics value chain. The acquisition will provide an opportunity for many Kewill and Four Soft customers to expand their supply chain visibility and control, through a broader multimodal transportation and supply chain execution platform.

Bob Farrell CEO-Kewill

Evan PuzeyCMO-Kewill

takes over india’s leading logistics software company FoursoftKewill


one of India’s foremost supply chain & logistics companies, Safexpress serves over 5000, enterprise customers and has presence in

over 600 locations across India. Said Jain, “We are aggressively moving forward with a strong focus on developing world class infrastructure for supply chain & logistics business. At various industrial hubs, we are building medium to large logistics parks which will cater to the supply chain requirements of India Inc.”

Despite the slowdown, there is still demand in the market. However, managing that demand is one of the

biggest challenges faced by the logistics companies in India. “Logistics parks provide us a competitive edge to manage demand. They help us to manage load and traffic, provide space for movement & proper material handling and make us more efficient,” he added.

growth strategyThe company has recorded a double digit growth in the first six months of this fiscal and is expecting to maintain this growth in the next six months ending March 2014. To sustain the profitability and work towards better growth, the company is focusing on two different sets of business strategies. “one set of strategies consists of managing things which are in our control and the other consists of the ones which are not in our control. We plan our ‘in-control’ strategies as per the ‘not-in-control’ strategies. For instance, in last six to eight months, three Indian states announced different sales tax figures as well as entry & exit check point rules. That’s not in our control and we need to have a strategy to cope up with such a situation. But, more importantly, given the ever-changing environment variables how fast do we change our plans, alter our strategies and execute the same is definitely in our control.”

Apart from two sets of business strategies, the company is also focusing on growth strategy. “The key elements in this being ‘consistency’ in transit time as well as service quality, which helps our customers to plan their supply chain efficiently,” he said. Safexpress is also utilising mobile-based technology for augmenting the information sharing with its customers.

Logistics ServicesOne-on-One

one set of strategies consists of

managing things which are in our control and the other consists of the ones which are

not in our control. We plan our ‘in-control’

strategies as per the ‘not-in-control’

strategiesRubal Jain

director – corporate Strategy Safexpress

Safexpress on the growth trackCompletes18 Logistics Parks, more to be launched by 2016

n AnITA JAIn

Having already launched 18 logistics parks across India, Safexpress is all set to unleash few more logistics parks in next three years to fully harness the growth opportunities in the supply chain industry in India. According to Rubal Jain, Director – Corporate Strategy, Safexpress, there is a huge potential for the warehousing business in India.


On the MoveAppointments

neil Vernon has joined Virgin Atlantic Cargo as regional

Vice President Sales for Asia Pacific region. neil spent 13 years as part of the bmi cargo team and has huge experience in the European, Middle Eastern, African and South Asian cargo markets. At Virgin Atlantic Cargo, he is based in Hong Kong and reports to nick Jones, Head of Sales, and is responsible for revenue for the

entire Asia Pacific region.Prior to joining Virgin

Atlantic Cargo Vernon was regional Manager, Middle East and Africa at bmi cargo. He was responsible for overall sales and operational activity. At bmi, he held a variety of positions including UK Account Manager, Business Development Manager and Commercial Manager for Europe and Asia.

EEPC Indiaanupam Shah has taken over as

the new Chairman of EEPC India (formerly Engineering Export Promotion Council). Prior to this, he was the Senior Vice Chairman of EEPC India. He has also been the Past President of Merchant Chamber, Kolkata. He succeeded Aman Chadha.

Shah (age 46), has done his B.E. (Electrical Engineering) from Boston University, USA. Further, he did his MBA (Marketing & Corporate Strategy) from University of Michigan, USA. Shah is taking over at a time when the engineering sector faces difficult times in export markets. With his engineering- management background, vast exposure and experience in the international market, he is expected to provide key inputs to the policy makers.

Shah is the Director of Kolkata based Nipha Exports, which is a premier engineering export house exporting a wide range of high technology engineering products to Middle East, the USA, Europe, Australia, Africa and South-East Asia.

Virgin Atlantic Cargo

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Currently, Tirwin provides DGCA approved and IATA accredited training for Dangerous Goods regulations. ATCs are independent

training facilities that are authorised to teach IATA training programmes that covers all segments of airline and aviation industry. Tirwin is already an IATA Accredited Training School (IATA ATS). “However, IATA ATS and ATC frameworks are totally different. only Dangerous Goods regulations training are covered under ATS whereas ATC covers varied airline and aviation training from micro functional to macro management subjects,” said Govindarajan.

An ATS offers a DGr training that is approved by the civil aviation authority of the country and the certification issued by the ATS is recognised by IATA, whereas under ATC, the training module, material, examination and certification are of IATA.

According to Govindarajan, the ATC status by IATA will give Tirwin an opportunity to offer different training modules. “Initially we propose to focus on Air Cargo operations and management training and then take it forward,” he shared. There are specific air cargo modules that cover cargo-rating, live animal regulations, perishable cargo and cargo claims.

Benefits to the industryIn Govindarajan’s opinion, lack of skills and knowledge is the core issue in the air cargo & industry. Even though colleges and training institutions come up with new

courses on logistics, many suffer because of content deficiencies and defective delivery. “Tirwin believes that its highly experienced subject matter experts can make a difference in developing cargo professionals and equip them with contemporary global knowledge,” he stressed.

Tirwin is receiving responses for different cargo training modules. Its DGr training registers is also increasing. The institute recently announced International Maritime Dangerous Goods-Code training.

“Though, Tirwin is just five years old, I am associated with our community for almost four decades. We are in constant touch with the community since we do not stop just with training. We are committed to meet their expectations at all times,” he asserted.

Tirwin’s primary target segments include freight forwarders, airlines, aerodrome operators, ground handling agents and shippers. “However intentions are to take the ATC training to the aspiring generation- next as well in association with schools and colleges on pan-India basis,” Govindarajan added.

Currently, Tirwin also conducts training in all major metro locations. It has special instructors positioned in some of the Indian cities. “Today, we partner with trade bodies who arrange these training sessions in their places to keep the cost affordable. We believe this module works since we are in a position to train more people,” shared the Tirwin Coo.

Skill DevelopmentDGR Handling

Tirwin Management Services becomes one of iata atcsAccording to Ismail Albaidhani, Head Global learning Innovation, ITATA Training & Development Institute, Tirwin Management Services, an IATA Accredited Training School (ATS) for Dangerous Goods Regulations Training will now operate both as ATS as well as Authorised Training Centre (ATC) for ATC programme too. B Govindarajan Chief Operating Officer, Tirwin Management Services elaborates on the new developments while speaking to Cargotalk.

Even though colleges and training institutions

come up with new courses on logistics,

many suffer because of content deficiencies and

defective deliveryB Govindarajan

Chief Operating Officer Tirwin Management Services


Logistics ServicesViewpoint

interestingly, when the downturn sets in, there is a sudden dearth of quality 3PL / Logistics which can add value to a customer’s supply chain rather

than just taking on ‘outsourced problems’ related to manpower management, relevant license management and property leasing. The current Inr fluctuation, where the rupee slipped dramatically, sent shock-waves down the industrial backbone and forced every single organisation to look at costs in a far more focussed and objective manner. Logistics costs for an organisation could range from about 1.5 per cent to approximately 12 per cent of an organisation’s turnover depending on the industry and complexity of the supply chain.

It is therefore inevitable that organisations would do everything possible to ensure that when the markets are under pressure, logistics costs are minimised and value adds are sought for every rupee spent. In such times, companies look for 3PL service providers who can provide benefits of scale based on a diverse and well spread customer portfolio that they have. resources must be shared, automation and technology needs to be deployed and infrastructure needs to be easily scalable so that an uncertain demand in the market place can be catered to in quick time through inventory management and transportation optimisation. In an industry (supply chain) that is highly unforgiving,

scalability and operational excellence are vital especially when an uncertain market at large is cutting all corners.

areas of opportunitiesManufacturing companies are now more actively looking at inplant management within their factories of a flexi-scalable mode, rather than engaging with fixed workforce unless the skill set demands a high retention factor. While this has already been in an advanced stage in the automobile sector, other engineering companies are also catching up. Kitting and packaging while not new are definitely on the rise for 3PL operators who can provide a semi skilled workforce with scalability in numbers at short notice. on-site management for infrastructure projects is also being now outsourced to 3 PL companies. In short, any activity that requires inventory management, fast movement of goods and scalability of infrastructure and manpower deployment is now an open playing area for 3 PL companies.

According to DIESL’s analysis on the sector wise data, organised retail has seen a phenomenal growth in modern India over the past 5–7 years. The retail sector of India is now among top five fastest-growing markets globally and by 2015 it is going to touch US$637 billion. Most of it is going to be through modern retail i.e. through shopping malls, which

Indian Logistics Industrymaking headway despite challengesThe logistics and supply chain industry could well be termed as the barometer for the economic situation in the country. When there is a sudden emergence of multitude of small and medium so called “3Pl / logistics” companies, it is a clear indication that the economy is booming and the need to produce, store and move is at its peak. Vikram Mansukhani, national Operations Head – DIESl, discusses about the emerging opportunities, challenges before the industry and the ways out.

The retail sector of India is now among top five fastest-growing markets globally

and by 2015, it is going to touch US$637 billion.”

Vikram Mansukhani National Operations Head – DIESL


is expected to increase by 22 per cent by 2015. The number of malls is going to touch a promising figure of 500 approximately by 2015. The total mall area available in India is more than 900 lakh sq ft. All of this requires an extremely lean and JIT (just-in-time) supply chain to ensure that the store front never faces a stock-out and neither it is over-supplied. All of this will entail forward stocking locations by 3PL operators within city limits in easy striking distance of the final outlets as well as transportation consolidation given that parking and docking space is not freely available within high street market / mall areas.

In addition, the e-commerce market in India has grown by 34 per cent in the last seven years, was about US$ 600 million in 2011-12 and is expected to touch US$ 9 billion by 2016 and US$ 70 billion by 2020. According to Forrester, the Indian e-commerce market is expected to grow at a CAGr of over 57 per cent between 2012 and 2016, which is the fastest within Asia-Pacific region. The key factors that are driving this growth are the rise of Internet usage (growing at 20 per cent) and 3G penetration, and increasing smartphone users with availability of Internet on mobile phones. It is estimated that currently there are 27 million mobile Internet users in India, out of which 4 per cent are buying products on mobile. This figure is expected to increase to 20 per cent mobile shoppers in the next four years.

This explosion will need supply-chain capabilities that are nimble, widespread and provide visibility of inventory and delivery both to the manufacturer/retailer and the end consumer. Physical dispatch capabilities, minimising order processing errors, providing secondary in-city distribution channels and embedding technology into the entire transaction is the only way to survive.

diesl’s focusDIESL’s focus is to constantly upgrade its physical infrastructure, workforce skill sets, bring in automation/technology and deliver constantly improved services to its customers. With specific reference to e-commerce, retail, inplant logistics and on site management the company is positioning a mix of technology solutions (based on WMS and DMS), leveraging our in city distribution network, capability of providing skilled / semi-skilled and un-work force and wide spread warehouse availability on a pan-India basis.

Challenges and BottlenecksCustomers must agree to move to outsourcing of supply-chain management to 3PL companies. If organisations continue to maintain a force of supply chain experts within their fold and also outsource the management of actual supply chain to a 3PL, the net result will be an increased overall cost of logistics which finally transcends to overall higher

cost of product. The chosen 3 PL must be able to execute the KPIs on the ground far better than they display on PowerPoint slides. The 3PLs need serious help with labour regulations to make it more industry-friendly. Today, a warehouse is in many ways akin to a midsized factory and availability of skilled/ semi-skilled/ unskilled workforce is becoming more and more difficult. In certain pockets, the workforce is completely under ‘local influence’ and 3 PL operators are held to ransom at the most inopportune moments. The policy-makers must ensure that the entire local administration supports a work-friendly environment.

The policy-makers may also look at the feasibility of allocating land-banks to 3PL operators / logistics infrastructure developers over a 10 to 20-year loan moratorium within reasonably striking distance of main cities.

For the overall development of the industry, there is a need of a separate Ministry of Logistics. A separate ministry would benefit not only the logistics industry, but also the manufacturing, and retail industries as logistics is an integral part of ‘go-to market’ strategy for any B2B or B2C organisation. It is a much-required voice for the logistics industry, which today survives primarily on individual strengths and market forces at large.

Calling

Cover StoryShipping & Ports

22 i CaRGOtaLk i NOvEmbER 2013

Indian Ports

The port and shipping sector has witnessed significant growth during the last two decades, especially in terms of traffic handled. This has pushed port facilities to be utilised at maximum level leading to congestion. Though the Government of India, in association of private players, has taken a number of initiatives to build the required capacity, certain policy issues and low pace of implementation of a set agenda are dissuading big vessels from calling on Indian ports.

n RATAn KR PAUl

big vessels diverted for long-pending issues

in 2012-13, the Government of India has awarded 32 port projects at an estimated cost of rs. 6765 crores to add capacity of about 136 million tonne

per Annum (MTPA). This financial year also the government is targeting to award 30 projects to increase the capacity by 282 MTPA at an investment of around `25000 crore. It is pertinent to mention that approximately 95 per cent of the India’s trade by volume, and 70 per cent by value, is moved through maritime transport.

As a part of this overall effort, India’s busiest port JnPT has drawn up a plan to increase its capacity to handle projected container traffic of 10 million TEUs by 2016-17. The port has recently awarded the project to extend a container berth by 330 metres. JnPT has also re-invited the tender for the 4th Container Terminal which is designed to add 4.8 million TEUs capacity at an estimated cost of about `7000 crores. In the same manner, Mumbai Port Trust is also implementing capacity augmentation projects.

With 13 major ports and more than 180 minor ports, India’s 7, 517 km long coastline plays a vital role in maritime transport along with offering huge international trade capabilities. The current port scenario in the country offers a huge scope for expansion of international maritime transport; both for passengers and cargo handling. India’s 12 big ports, which account for about 58 per cent of the total cargo shipped through the country’s ports, handled 137 million tonnes (MT) of goods in the first quarter of FY14.

Container cargo volumes at these 12 ports stood at 1.87 million standard containers.

It is forecasted that by the end of 2017, port traffic will amount to 943.06 MT for India’s major ports and 815.20 MT for its

minor ports. India plans to triple cargo-handling capacity at its ports to 3.2 billion tonne by 2020 by investing private funds worth `3 trillion (US$ 50.56 billion).

To achieve the target, the Cabinet Committee on Economic Affairs (CCEA) has recently given its nod for setting up of new major ports in the states of West Bengal and Andhra Pradesh. The new major port at Sagar Island in West Bengal would be under Public Private Partnership (PPP) model.

“The government is aware of the issues facing the port and shipping sector, and we have taken initiatives to systematically identify and analyse the various issues, formulate appropriate solutions and take action to address the issues. In the port sector, we have directed our efforts to increase capacity and operational efficiency primarily through augmentation of capacity, mechanisation and improving the draft at the ports. The government has been encouraging private partners to invest in these efforts through the PPP model,

which have been very successful,” said GK Vasan, Minister for Shipping, Government of India.

recently, the Shipping Ministry came out with new guidelines for determination of tariff for projects and major ports in the country. The new guidelines are aimed to pave way for increased investment flows into the port sector. The new norms also set out performance standards for port projects to improve accountability and ensure improved quality of service.

Under the new guidelines, the highest tariff for a commodity at a major port fixed under 2008 tariff guidelines, indexed to 60 per cent of WPI would become the reference Tariff on which the bidding would take place. The private operator under the new guidelines has the freedom to charge any amount up to a ceiling of 15 per cent over and above the applicable indexed reference Tariff for that financial year provided the operator has achieved the minimum performance standards as committed by him in the Concession Agreement.

NOvEmbER 2013 i CaRGOtaLk i 23

p GK Vasan, Union Cabinet Minister of Shipping, along with Milind Deora, Minister of State, Communications, IT and Shipping and other dignitaries is inaugurating the 25th Year Celebration of JnPT



“The new guidelines allow the competitive market forces to play a greater role in tariff determination and impart flexibility,” said Vasan. Important projects which will be covered under the new guidelines include: the 4th Container Terminal at JnPT, Container Terminal at Kandla, Diamond Harbour Container Terminal at Kolkata Port and Bulk Terminals in Paradip, Cochin and Mumbai Ports.The projects already awarded will not be covered under the new guidelines. The 2005 and 2008 guidelines shall continue to apply to projects bid under them.

Private initiativesSpeaking to Cargotalk Prakash Tulsiani, MD, Gujarat Pipavav Port informed that the existing capacity on containers is 850,000 TEUs and 5 million MT on bulk. Liquid bulk capacity of an additional two million MT will come on stream by the end of 2013.

APM Terminals Pipavav is a Gateway Port in the Saurashtra region of Gujarat. Its geographical location is well suited to serve the industrial belt in eastern Gujarat, as well

as north and north west India. The port is well connected by rail, road and sea.

The port is fully equipped with its own marine department and is EDI linked to Customs, state of the art equipment, people and processes further enhancing the service offering.

recently the port commissioned three state of the art rail Mounted Gantry Cranes (rMGC’s) in January this year. The cranes span three tracks and can simultaneously operate on three trains. The rMGC commissioning was further enhanced by the Double stack High cube capability which we received in July this year – with this capability; APM Terminals Pipavav now offers the best rail product on the west coast of India.

“For the future, we are expanding – we are investing `800 crore to expand our facilities from the present 850,000

TEU to 1.5 Million TEU and allied equipment,” informed Tulsiani.

He also highlighted some challenges before the industry players involved in the port and shipping industry. “The major challenge at this time is the macro economic downturn which is a global phenomenon, however the policy makers could aid us by

creating a level playing field, relaxation on Cabotage and TAMP deregulation are two such policies that could help enhance growth.

He pointed out that the trade growth on the Indian west coast is now limited to under 1.5 per cent and compared to last year, APM Terminal Pipavav is growing its volumes at around 10 per cent. “It stands to prove that our clients are seeking a value proposition in difficult times and APM Terminals Pipavav is providing the answers,” he stressed.

Prakash TulsianiMD, Gujarat Pipavav Port

CoMModITy wIsE PoRT wIsE CAPACITIEsC A PA C I T y o F M A J o R P o R T s A s o n 3 1 . 5 . 2 0 1 3 (In MILLIon TonnES)

1 P.o.L 4.50 17.00 43.00(1)+3 17..65 17.65 3.00 2.30 19.01 49.17 1.50 32.00 66.60+0.8 5.50 278.90+4.80 +4.0 (3+2BJ) SBM (4) (4) (1) (1) (3)+SPM (5+SPM) (1) (5) (8+3SBM) (2) (43+8SBM+ (7)+A 2BJ)2 Iron orE 6.00 4.50 12.50 12.50 6.00 7.50 27.50 72.00 (2) (1) (1) (1) (1) (1) (1+3 Trans) (8+3 Trans)3 CoAL 7.00 20.00 21.00 12.55 5.40 (1) 65.95 (THErMAL) (2) (2) (3) (3) (11)4 FErTILISEr 7.50 1.00 0.80 9.30 (2) (1) (1) (4)5 GEn. BrEAK 6.74 12.75 27.30 33.50 17.92 1.00 13.49 12.35 14.70 7.40 11.53+6.0 19.42 0.90 179.0+6.50 BULK CArGo 0.51 (8) (9) (15) (14) (1) (10) (12) (8) (4) (25)+(A) (12) (1) (141)+A (22)+A 6 ConTAInErS 5.90 4.00 2.68 42.00 5.00 12.50 1.00 7.20 59.48 139.76 (4) (2) (1) (7) (1) (2) (1) (2) (9) (29) In lakhs TEUs 4.58 3.33 2.08 35.00 4.17 10.00 0.83 6.00 45.50 114.19TOTAL (Upto 31-3-2013) 17.14 46.75 102.30 67.33 85.59 31.00 33.34 44.66 76.77 36.40 44.53 93.22 65.88 744.91 +4.51 ( 17)+2BJ ( 15)+3SP ( 22) ( 24) ( 6) ( 15) ( 18)+SPM (15+SPM) (6+Trans) +6.0 +0.8 (12) 11.31 (33)+A (31)+A (22+3SBM) (236+8SBM+ +A 3 Trans+2BJ +A)Capacity Addition during 0.00 0.00 0.00 7.18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.18April 2013 to May 2013

TOTAL (Upto 31-05-2013) 17.14 46.75 102.30 74.51 85.59 31.00 33.34 44.66 76.77 36.40 44.53 93.22 65.88 752.09 +4.51 (17)+2BJ (15)+3SP (22) (24) (6) (15) (18)+SPM (15+SPM) (6+Trans) +6.0 +0.8 (12) 11.31 (33)+A (31)+A (22+3SBM) (236+8SBM +A +3 Trans +2BJ+A)

SL. COMMODITY KOLKATA HALDIA PARADIP VIZAG CHENNAI ENNORE VOC COCHIN NEW MAN MORMU MUMBAI KANOLA J.N.P. TOTALNO. -GALORE -GAO

Figures in the parenthesis indicate the number of berths. BJ - Barge Jetties, T - Transhippers, A - Anchorages, SBM - Single Buoy Mooring Source: Ministry of ShippingThe figures are Provisional.


Port CongestionsIndian ports are the gateways to India’s international trade, and are handling over 90 per cent of foreign trade. Though the bulk of Indian trade is carried by sea routes, the existing port infrastructure is insufficient to handle trade flows effectively. A Deloitte study unveiled that the current capacity at major ports is overstretched. The capacity utilisation at major ports has been increasing over the years owing to growing trade. The capacity utilization now is about 100 per cent signifying increasing congestion in all the major ports.

Another major challenge faced by Indian shipping industry is the relatively low hinterland connectivity with the ports. Indian ports are finding it difficult to handle additional traffic because of slow evacuation from ports. Therefore, it is important that connectivity of major ports with the hinterland is augmented not only to ensure smooth flow of traffic at the present level but also to meet the requirements of projected increase in traffic.

high Port ChargesAccording to an Exim Bank report, high port charges, like port dues, berth hire, pilotage and cargo-handling charges, in India are also affecting the Indian shipping industry. India is known to be having high ship-calling cost as compared to other competitor countries in the region. According to industry sources, port calling costs for a ship that can carry 1,200 standard cargo containers is US $ 19,000 (` 8.4 lakh) at Kochi. The rate is US $ 3,300 in Colombo, Sri Lanka, and US $ 5,700 in Jebel Ali, United Arab Emirates. This makes the Indian ports non competitive compared to other foreign ports. High prices would normally deprive a port, a part of its patronage (vessels and cargo owners), and thus reduce demand for port services.

Channel deepening The Deloitte study observed that the available depths in entrance/approach channels in Indian ports are inadequate for large size new generation vessels to pass through them. As a result, mainline vessels bypass Indian ports. This is particularly relevant for container vessels where inadequate depth in the port channels continues to be a major factor contributing to transshipment of a significant portion of Indian-origin.

Indian-bound container traffic in neighbouring ports outside India. This increases the transportation costs for Indian traders. With a view to overcoming this challenge, concerted measures to deepen channels in various major ports have been taken.

Cabotage ruleMovement of goods by coastal shipping is one of the most energy-efficient and the least environmentally damaging form of transport. Given that India has a long coastline of 7,517kms, coastal shipping can act as a complementary mode of transport to facilitate reduction of logistics cost. The developed countries recognize coastal shipping as an inseparable and important part of the overall transport network of the country. There is huge scope for its development in India. However there are some challenges faced by coastal shipping in India that include lack of integrated transport policy to promote inter-modal coordination, non-availability of concessional finance rates to acquire coastal vessels, cumbersome customs procedures, lack of quality manpower, high import duties on bunker oil & spares, etc.

The present Cabotage Law bars foreign vessels from carrying cargo between Indian ports (coastal trade) but exceptions are made if no suitable Indian vessel is available. The market of shipping industry being highly volatile, such protection creates a certain degree of stability for the Indian vessels. Few countries practice absolute Cabotage law while others practice a tailored one. According to the industry experts, In India, the Cabotage Policy is not absolute. It is regulated through provisions of Sec. 406 and 407 of the Merchant Shipping Act, 1958. The Draft Coastal Shipping Policy submitted to Ministry of Shipping for approval recognised that due to lack of containerisation and restrictions on feedering of the cargo under the current Cabotage policy, a considerable part of Indian cargo for transshipment through containers gets diverted to Colombo, Singapore and Jebel Ali Ports. If coastal shipping in India is opened up to foreign flag vessels, it will provide a significant boost to containerisation levels and related infrastructure. However Indian shipping

companies will lose significant market share hence their concerns must be heard. remarkably, recently the Government of India relaxed the Cabotage Law to some extent by allowing costal shipping from DP World’s International Container Transshipment Terminal in Cochin.

despite ChallengesRajat Khosla, Country Manager, India- FedEx Trade networks, observed that over the last few years, ocean freight business has been growing. As a whole, it has improved in terms of reliability and flexibility and has evolved into a more viable option for many companies. Most customers shipping via ocean still move goods via air, and each customer has varying reasons for the mode of transport they choose.

“The numbers indicate the global freight forwarding market increased 3.1 per cent in 2012, and the growth was due primarily to sea freight forwarding. As rising fuel prices continue to challenge the air freight forwarding segment, shippers are choosing to utilise ocean for international moves.

FedEx Trade networks delivers a choice of three distinct international ocean freight forwarding solutions

providing coverage in major markets and trade lanes, including north America, Europe, India and Latin America The products are: FedEx International Direct Economy oceanSM, FedEx International Direct Priority and FedExSM International DirectDistribution ocean.

FedEx International Direct Priority ocean was launch recently, which offers services for cargo to ship from Bangalore, Chennai, Delhi and Mumbai for less-than-container load (LCL) and full-container load (FCL) shipments to new York/new Jersey. From the U.S. destination port, LCL shipments will be delivered via FedEx Freight to the final destination. FCL shipments will be delivered via FedEx Trade networks preferred carrier’s trucks. Along with a single customer contact at FedEx Trade networks, FedEx International Direct Priority ocean offers a reliable transit that can be 2-7 days quicker to final destination versus International Direct Economy ocean service.


Rajat KhoslaCountry Manager

India- FedEx Trade networks


on July 31, 2013, the Ministry of Shipping (MoS) announced new guidelines for setting of tariffs in major ports. The new guidelines

have come into effect from the same date and will be applicable to projects bid out since. The guidelines were adopted with a view towards providing flexibility to the major ports, and private terminal operators operating therein; to set market linked tariffs for their services. The major deviations in the final tariff guidelines as compared to the draft guidelines circulated earlier by the MoS are with respect to the tariff ceilings that are now applicable.

The draft guidelines did not specify any cap or ceiling on the market linked tariff which can be proposed by the port/operator; instead incremental revenue share (subject to a minimum of 50 per cent) was to be levied on the difference between the reference tariff and the actual tariff. As per the final guidelines, the tariff which can be proposed by the operator would be subject to a ceiling of 115 per cent of the inflation indexed reference tariff.

According to the ICrA study, although the new tariff guidelines do not permit full flexibility to the operators in terms of setting market linked tariffs (as proposed under the draft guidelines), the it can be considered to be positive for attracting investments into major ports.

“nonetheless, given the other structural issues hampering development at major ports - such as delays in obtaining requisite approvals, etc - the actual materialisation of project awards as planned by the MoS remains to be seen,” said ravichandran.

other Major issuesIn addition, other long term issues which hamper the growth of India’s port & shipping include, poor hinterland connectivity, both on rail and road side, inadequate investments in deepening the channel and berth draft levels, relatively low levels of mechanisation amongst the Major Ports and lack of a level playing field on tariffs between Major and non Major Ports.

In ravichandran’s opinion, as regards infrastructure within the ports,

Shipping & PortsStudy Report

Major Ports in india show decline in cargo volumeICRA (formerly Investment Information and Credit Rating Agency of India) has recently published a study on Indian port sector, which revealed the continuing pressure on major ports, with decline of iron ore and containerised cargo. Iron ore has dropped in the first five months of FY 2014, registering a 44 per cent decline on y-o-y basis. Container volumes have also declined by 5 per cent y-o-y due to the effect of slowdown globally. K Ravichandran, Sr. VP, Co-head Corporate Sector Ratings, ICRA highlights issues that create pressure on the port & shipping industry in an interview with Cargotalk.

There should be simplified tariff

principles for the existing operators within major ports

under the PPP regime, faster resolution of cases between the landlord ports and

private parties under PPP, and better

hinterland connectivityK Ravichandran

Sr. VP, Co-head corporate sector


Shipping & PortsStudy Report

the responsibility should be that of the Ports, either through their own resources or through privatisation. However, responsibility for connectivity would fall within the domains of external entities such as rVnL, nHAI and State Maritime Boards, wherein there can be some involvement of the concerned ports through SPVs wherein all the partners can be shareholders.

Commenting on the government policies and rules & regulations, he maintained that these could have been better for an orderly growth of the industry. “There should be simplified tariff principles for the existing operators within major ports under PPP regime, faster resolution of several arbitration cases between the landlord ports and private parties under PPP, further autonomy to the Boards of Major ports to decide on PPP projects, better hinterland connectivity and good co-ordination with State Maritime Boards so that the sector is developed in a holistic manner,” he suggested.

talking figuresAt JNPT and Chennai (which handle the majority of the container cargo at major ports), the decline in container volumes was pronounced, with 10% and 5% decline in TEU volumes respectively during April-August 2013. Revival of container volumes would be dependent on pickup in the overall manufacturing sector activities and correspondingly exim trade

Non-major ports faring better: The listed non-major port entities have, however, reported robust increase in throughput, with volumes of Adani Ports and Special Economic Zone Limited (APSEZL) and Essar Ports Limited (EPL) increasing by 35 per cent and 11 per cent y-o-y respectively. The growth at APSEZL’s flagship Mundra port has been driven mainly by upscaling of liquid cargo

and dry bulk volumes by 23 per cent and 68 per cent respectively, even as container traffic growth has been relatively muted at 11 per cent y-o-y. The growth at Essar’s port terminals has been on the back of expanded capacity and increase in offtake by its group companies, with Vadinar registering 10 per cent y-o-y throughput growth and Hazira registering 1 per cent growth during the quarter on yoy basis.

EPL also benefitted from the new volumes of the iron-ore terminal at Paradip, which had commenced operations in December 2012. Pipavav port, under Gujarat Pipavav Port Limited, has also reported a 17 per cent improvement in its volumes y-o-y and 5 per cent growth on a qoq basis on the back of significant revival of bulk volumes after a slight slump in Q4FY13.

Success & Achievement/ Logistics Services

GATI-KWE honoured by BCCI as Best 3PL Logistics Company 2013

gATI-KWE was awarded as the ‘Best 3PL Logistics Company

2013’ in the large enterprise category at ‘E & nE India Supply Chain & Logistics Summit and Excellence Award 2013’ held recently at Kolkata.

The Bengal Chamber of Commerce and Industry organised the E & nE India supply Chain & Logistics Summit & Excellence Awards. The Excellence

Award is presented to those companies that are making significant contributions in this field and offering best-in-class services to their clients. Vikash Khatri, Head - Product Development & Marketing, GATI-KWE, received the award on behalf of the company.

According to GATI-KWE sources, it currently has a reach of 99.3 per cent covering 653 districts out of 657 districts in India.


Industry EventsFrost & Sullivan

frost & Sullivan, aiming to be a “Growth Partnership Company”, works in collaboration with clients to leverage innovations that addresses

the global challenges and related growth opportunities. In the 2013 edition of the workshop in Bengaluru, Frost & Sullivan discussed specific areas that included – role of logistics service providers in generating new opportunities for the Indian manufacturing sector; capabilities of technology service providers and emerging IT solutions to fulfill evolving business needs of the logistics sector and implications of FDI in retail on the country’s manufacturing and logistics sectors.

The speakers and logistics service providers present at this workshop agreed that in the domestic market, growth can be achieved by providing collaborative

logistics and sharing information about warehousing space, position of trucking assets, etc. on the other hand; to tap the international market, it was revealed that LSPs need to enhance their overall cost competitiveness, visibility, service flexibility, and IT infrastructure to enable smooth and error-free information exchange.

“Lack of seamless collaboration between LSPs and their customers, and lack of cooperation within the LSP fraternity is resulting in several inefficiencies affecting all the stakeholders of the logistics fraternity,” observed Gopal R, Global Vice President, Transportation and Logistics Practice.

The workshop also emphasised on the importance of leveraging existing

and emerging solutions in mechanisation, automation, IT, and communications systems in order to achieve excellence in logistics. Mechanisation solutions such as dock levelers, forklifts, cargo tracking mechanisms including rFID, barcoding, and GPS systems, etc. were recommended by the logistics fraternity. “Mechanisation, automation, and IT solutions are increasingly becoming means to gain efficiency and attain international standards in process and performance. However, very few LSPs and end users actually use these solutions, primarily stating the non-affordability of such solutions as the limiting factor. Investments in such solutions need to be made by both LSPs and end-users.”

At a panel discussion at the workshop, the panellist concluded that the FDI in retail policy offers significant opportunities for domestic LSPs, but simultaneously they need to buckle up to deliver service levels to match international standards. According to them, warehousing, cold chain logistics services and value added services in packaging are the new areas of opportunities before the logistics companies.

The workshop also emphasised on the huge importance of skill development with an overview of available logistics and supply-chain courses and the profile of graduating talent from key logistics institutes in the country. It also discussed about the expectations of the logistics fraternity from the talent-pool and logistics institutes, with an appeal for improving education quality.

Supply Chain Workshop in Bengaluruemphasises on collaboration and itA study by Frost & Sullivan, which was unveiled at its workshop titled ‘Supply Chain Transformations 2013’, held recently in Bengaluru, says that the transportation and logistics market in India grew at a CAGR of 15.1 per cent between 2007 and 2012. But 2012 posed a challenging scenario that has been carried forward into 2013. The key challenges facing the Indian logistics sector today are decline in domestic manufacturing and output, and decline in export and import of goods that affected both domestic and international logistics services industry.


Considered as Asia’s largest end-to-end Logistics and Supply Chain Conference, the event witnessed attendance of over 450 attendees,

100 speakers and 35 exhibitors. The Conclave successfully revealed unique strategies to deploy in business models to meet the requirements of the new economic era, drive renewed growth and gain market share.

As a keynote speaker, Rob O’Byrne, Group Managing Director, Logistics Bureau spoke about the different levers which impacts the bottom-line of a supply chain. During his presentation, he discussed the ‘high leverage’ areas of supply chain management to gain the biggest bottom line improvement, ideas to focus on for real business improvement. Andrew Downard, Director, AD Supply Chain Group was the next keynote speaker of the day who focused on delivering better service, reducing cost and increasing innovation.

next step for leadershipThere were good numbers of panel discussions staged at the event to make the attendees understand the challenges, trends and strategies for the business in coming times. one of the most interesting panels was focussed on Supply Chain. Themed as – ‘Built to Last Supply Chain: Fast, Streamlined, Customized’; the panelists were P John Winnie, Director – Value Chain, GlaxoSmithKline Consumer Products;

Satish Karunakaran, Vice President – Planning & Supply Chain, Madura Fashion & Lifestyle; S K Tyagi, Director – SCM, raymond Ltd; Pramod Sant, Vice President – Logisitics, Siemens Ltd; Rajeev Mehta, Executive President – Business Development, Ultratech Cement and Tej Nirmal Singh, Director – Supply Chain, Ericsson India.

According to Singh, supply chain strategy needs to be inline with the global product strategy of a company. He said, “The biggest challenge today is to align both local supply chain and global product strategies. In such cases, a company should always revisit or revise their strategies frequently to bring in customer satisfaction. Also, companies should be flexible enough to tweak their strategies as per their target customer needs.” Echoing similar thoughts, Sant said, “Companies can’t have long term strategy as customer needs are changing at a faster pace. Also, we need to adapt to changing technology and customer needs and at the same time ensure that the changes are not impacting on the bottom-lines.” He also informed that companies should absorb knowledge coming from both customers and competitors.

The power-packed business sessions and panel discussions at the event were well attended and proved to be an excellent knowledge-sharing platform for the industry. The event was followed by the seventh Express, Logistics & Supply Chain Awards 2013.

Industry EventsConclave Report

ELSC Conclave gives out strategies, ideas to innovate

10 elements of a vested agreement by andrew downardn Rule 1: Outcome Based vs

Transaction Based business model

n Element 1: Business Modeln Element 2: Shared Vision

statement and statement of intentn Rule 2: Focus on the WHAT, not

the HOWn Element 3: Statement of

objectives/workload allocationn Rule 3: Clearly defined and

measurable desired outcomes n Element 4: Performance metrics

for desired outcomesn Element 5: Performance

managementn Rule 4: Pricing model incentives

are optimised for cost/service tradeoffs

n Element 6: Pricing model (margin matching/incentives framework)

n Rule 5: Insight vs Oversight governance structure

n Element 7: Relationship management framework

n Element 8: Transformation management

n Element 9: Exit management plann Element 10: Special concerns and

external requirements

n AnITA JAIn

The seventh edition of Express, logistics & Supply Chain Conclave 2013 was recently concluded in Mumbai on the positive note. Themed as ‘Fast, Streamlined, Customised – The next Step of leadership’, the two-day event was packed with multiple business sessions and Supply Chain forums focused on CPG, Chemical, Hi-Tech, e-Commerce, Container and Procurement strategies.


DElHI InTERnATIOnAl AIRPORT CARGO DEPARTMEnT, IGI AIRPORT, nEW DElHI

(AIRlInE-WISE IMPORT/ExPORT CARGO PERFORMAnCE FOR THE MOnTH OF SEPTEMBER 2013)

Total 15728 2385 18113 14173 32286 100.00%Cargo handled in September ‘12’ 14314 2207 16521 13442 29963 % VARIATION 9.88% 8.09% 9.64% 5.44% 7.75%

1 CathayPacific 982 56 1037 1972 3009 9.32%2 Jet Airways 1105 81 1186 1624 2810 8.70%3 Air India 1244 275 1519 1105 2624 8.13%4 Emirates 679 1140 1818 693 2512 7.78%5 British Airways 1180 64 1243 824 2067 6.40%6 Singapore 681 12 693 745 1437 4.45%7 Lufthansa Cargo Airline 662 68 730 659 1390 4.30%8 Thai Airways 275 28 303 938 1241 3.84%9 Etihad Airways 444 86 530 556 1087 3.37%10 Fedex Express Corpation 540 2 542 451 992 3.07%11 Qatar Airways 494 100 594 396 990 3.07%12 Kalitta Air 467 0 468 363 831 2.57%13 Uzbekistan 528 24 552 258 810 2.51%14 Swiss Intl Airline Ltd 500 17 517 261 778 2.41%15 KLM 451 25 476 238 714 2.21%16 Malaysian Airline System 301 20 321 375 696 2.16%17 Air France 401 3 405 201 606 1.88%18 Virgin Atlantic 355 16 371 228 599 1.86%19 All nippon Airways 361 2 363 201 564 1.75%20 Finnair 394 9 402 126 529 1.64%21 Turkish Airlines 406 25 431 93 525 1.62%22 Japan Airlines 138 13 152 282 433 1.34%23 Saudia 273 111 384 25 409 1.27%24 Aeroflot Cargo Airlines 280 85 365 38 403 1.25%25 China Southern Airlines 107 0 107 279 386 1.20%26 China Eastern Airlines 178 0 178 208 386 1.19%27 Martin Airline 154 2 155 193 349 1.08%28 Lufthansa Cargo Ag 157 5 162 130 292 0.90%29 United Airlines 243 4 246 45 291 0.90%30 Air China 113 0 113 170 283 0.88%31 Indigo Cargo 162 1 162 34 196 0.61%32 Spice Jet 158 0 159 29 188 0.58%33 Hercules Aviation 150 0 150 35 184 0.57%34 China Air 120 0 121 58 179 0.55%35 Mahan Air 117 9 126 9 135 0.42%36 DHL Express 0 0 0 134 134 0.41%37 Blue Dart 92 3 95 34 130 0.40%38 Air Arabia 112 0 112 11 123 0.38%39 Gulf Air 97 24 121 2 122 0.38%40 Air Mauritius 94 16 110 1 111 0.34%41 Air Shagoon Pvt. Ltd. 109 0 109 0 109 0.34%42 Asiana Airlines 49 0 49 60 109 0.34%43 oman Air 97 5 102 2 103 0.32%44 Ethopean Airlines 57 2 59 26 85 0.26%45 Sri Lankan Airlines Ltd 48 0 48 12 60 0.19%46 Biman Bangladesh 35 0 35 19 54 0.17%47 Air Astana 38 15 53 0 53 0.16%48 Ariana Afghan Airlines 40 0 40 0 40 0.12%49 Kuwait Airlines 1 30 31 3 34 0.10%50 Kenya 19 1 19 1 21 0.06%51 royal Jordanian Airlines 19 0 19 1 19 0.06%52 UPS 0 0 0 17 17 0.05%53 Turkmenisthan Airlines 8 4 12 0 12 0.04%54 Mihin Lanka Airlines 7 0 7 4 11 0.03%55 Pakistan International 2 0 2 2 5 0.01%56 Kam Air 4 0 4 0 4 0.01%57 Jetlite 0 0 0 3 3 0.01%58 Iraqi Airways 2 0 2 0 2 0.01%59 Tajik Air 1 0 1 0 1 0.00%60 Druk Air 0 0 1 0 1 0.00%61 Safi Airways 0 0 0 0 0 0.00%62 Eva Air 0 0 0 0 0 0.00%63 Kyrgyzstan Air Company 0 0 0 0 0 0.00%64 Air Moldova 0 0 0 0 0 0.00%65 Flywell Aviation Pvt. Ltd 0 0 0 0 0 0.00%66 Spice Jet 0 0 0 0 0 0.00%67 Abakan Avia 0 0 0 0 0 0.00%68 Uni-Top Airlines 0 0 0 0 0 0.00%69 Flywell Aviation 0 0 0 0 0 0.00%

S. No. Airlines Export With- Export Export with Import Total Cargo % Out Peri- Perishable Perishable (MTs) (MTs) of Total shable (MTs) Cargo (MTs) (UPL) (MTs)

Cargo Performance Export/Import


MUMBAI CSI AIRPORTExPORT/IMPORT CARGO TOnnAGE HAnDlED

In SEPTEMBER 2013

S.No. Airlines Export Export Total Import Total General Perishable Export Exp+Imp

1 Jet Airways 1118.85 909.64 2028.49 2283.91 4312.40 2 Emirates 1317.05 1502.48 2819.53 732.46 3551.98 3 Lufthansa 615.87 560.59 1176.46 1313.07 2489.53 4 Air India 656.78 1228.00 1884.78 381.90 2266.68 5 Singapore Airlines 647.19 216.51 863.70 1220.87 2084.56 6 CathayPacific 748.28 127.66 875.94 936.88 1812.817 Etihad Airways 857.86 74.75 932.61 799.10 1731.72 8 British Airways 573.24 213.85 787.09 642.07 1429.16 9 Qatar Airways 509.33 280.35 789.68 588.69 1378.37 10 Saudi Arabian Airlines 858.59 208.46 1067.05 47.75 1114.80 11 Turkish Airlines 742.90 79.67 822.57 217.24 1039.81 12 Ethopian Airlines 786.44 102.80 889.24 11.27 900.51 13 Swiss Intl. Airlines 288.71 119.34 408.05 381.15 789.21 14 Malaysian Airlines 402.85 32.33 435.18 280.11 715.28 15 Air France 357.52 133.81 491.33 200.57 691.90 16 Thai Airways 257.76 61.06 318.82 370.78 689.60 17 Virgin Atlantic 272.89 32.36 305.24 276.07 581.31 18 Federal Express 334.69 36.94 371.63 180.14 551.77 19 Bangkok Airways 70.04 401.37 471.41 2.61 474.02 20 Kenya Airways 400.66 1.66 402.33 7.86 410.19 21 Martin Air 0.00 0.00 0.00 372.41 372.41 22 UPS 110.25 0.00 110.25 259.70 369.95 23 Air Cargo Arologic C/o Lufthansa 0.00 0.00 0.00 319.15 319.15 24 South African Airlines 291.46 0.22 291.68 11.99 303.66 25 Gulf Air 112.54 141.03 253.57 3.97 257.54 26 KLM Airlines 178.09 68.29 246.38 0.00 246.38 27 Kuwait Airways 96.40 118.71 215.11 3.76 218.87 28 Air Mauritius 180.42 1.34 181.76 2.58 184.34 29 Air Arabia 53.72 107.71 161.43 1.59 163.02 30 Delta 0.00 57.92 57.92 102.55 160.47 31 oman Air 93.22 54.68 147.90 3.40 151.30 32 Korean Air 64.94 15.63 80.57 49.95 130.52 33 Fin Air 111.10 9.95 121.05 0.00 121.05 34 United/Continental Airlines 74.71 7.76 82.46 33.00 115.46 35 Air India + Air India Carriers 0.07 100.13 100.20 3.60 103.80 36 EL-AL Airlines 44.70 1.31 46.01 39.67 85.68 37 Srilankan Air 60.01 7.89 67.90 13.58 81.48 38 Blue Dart 41.41 0.00 41.41 23.30 64.71 39 Iran Air 47.80 3.22 51.02 11.74 62.77 40 Indigo Air 53.51 4.62 58.13 0.82 58.95 41 Yemenia Airways 27.72 12.15 39.86 0.02 39.88 42 Pakistan intl Airlines 13.54 0.00 13.54 1.90 15.44 43 royal Jordanian 13.85 0.55 14.40 0.34 14.74 44 Air China 8.20 0.00 8.20 1.16 9.36 45 Egypt Air 8.47 0.00 8.47 0.29 8.75 46 Austrian Air 0.00 0.00 0.00 0.00 0.00 47 Baharin Airlines 0.00 0.00 0.00 0.00 0.00 48 Kingfisher Airlines 0.00 0.00 0.00 0.00 0.00 49 northWest Airlines 0.00 0.00 0.00 0.00 0.00 50 Qantas 0.00 0.00 0.00 0.00 0.00 51 Island Aviation (Maladvian) 0.00 0.00 0.00 0.00 0.00 52 Charters 0.00 0.00 0.00 0.00 0.00 53 others 178.45 19.76 198.21 193.12 391.33

TOTAL 13682.07 7102.78 20784.85 12328.07 33112.92

Airlines Handled By MIAL & AI


(E) Other Airports 129 142 -9.2 453 585 -22.6 Grand Total 70495 66165 6.5 261950 270049 -3.0 (A+B+C+D+E)

TRAFFIC STATISTICS D O M E S T I C F R E I G H T

1 Chennai 6297 6364 -1.1 23580 27016 -12.7 2 KOLKATA 7321 6897 6.1 27400 27081 1.2 3 AHMEDABAD 3226 3027 6.6 11676 11932 -2.1 4 GOA 172 251 -31.5 706 1017 -30.6 5 TRIVANDRUM 199 101 97.0 502 503 -0.2 6 CALICUT 12 17 -29.4 62 53 17.0 77 GGUWAHATI 558 551 1.3 2130 2007 6.1 8 LUCKNOW 290 173 67.6 922 683 35.0 9 SRINAGAR 330 244 35.2 1524 1174 29.8 10 JAIPUR 710 695 2.2 2435 2281 6.8 11 COIMBATORE 519 634 -18.1 1969 2260 -12.9 12 MANGALORE 21 19 10.5 83 104 -20.2 13 AMRITSAR 17 4 325.0 57 20 185.0 14 TRICHY 0 0 - 0 0 - 15 VARANASI 32 24 33.3 118 103 14.6 16 PORTBLAIR 223 98 127.6 786 513 53.2 TOTAL 19927 19099 4.3 73950 76747 -3.6

(A) 16 International Airports

(B) 6 JV International Airports

(C) 7 Custom Airports

(D) 17 Domestic Airports

17 DELHI (DIAL) 16995 15927 6.7 62210 65830 -5.5 18 MUMBAI (MIAL) 15609 15550 0.4 59409 62981 -5.7 19 BANGALORE (BIAL) 8134 6867 18.5 29365 28043 4.7 20 HYDERABAD (GHIAL) 3109 2762 12.6 11620 11077 4.9 21 COCHIN(CIAL) 739 795 -7.0 2936 3031 -3.1 22 NAGPUR (MIPL) 437 430 1.6 1557 1641 -5.1 TOTAL 45023 42331 6.4 167097 172603 -3.2

23 PUNE 1592 1489 6.9 6158 7222 -14.7 24 VISAKHAPATNAM 210 139 51.1 676 601 12.5 25 PATNA 407 119 242.0 1541 657 134.6 26 CHANDIGARH 264 218 21.1 1006 941 6.9 27 BAGDOGRA 236 132 78.8 576 559 3.0 28 MADURAI 104 56 85.7 440 240 83.3 29 GAYA 0 0 - 0 0 - TOTAL 2813 2153 30.7 10397 10220 1.7

30 BHUBANESWAR 272 273 -0.4 1081 1063 1.7 31 INDORE 378 342 10.5 1577 1420 11.1 32 JAMMU 148 132 12.1 524 429 22.1 33 RAIPUR 275 245 12.2 1050 927 13.3 34 AGARTALA 589 442 33.3 2159 1970 9.6 35 VADODARA 140 164 -14.6 601 786 -23.5 36 IMPHAL 359 421 -14.7 1260 1467 -14.1 37 BHOPAL 68 91 -25.3 278 332 -16.3 38 RANCHI 198 139 42.4 732 544 34.6 39 AURANGABAD 66 65 1.5 232 288 -19.4 40 UDAIPUR 0 0 - 0 0 - 41 LEH 74 87 -14.9 395 465 -15.1 42 TIRUPATI 0 0 - 0 6 -100.0 43 RAJKOT 15 15 0.0 59 86 -31.4 44 JODHPUR 1 0 - 5 3 66.7 45 DEHRADUN 0 0 - 0 0 - 46 DIBRUGARH 20 24 -16.7 100 108 -7.4 TOTAL 2603 2440 6.7 10053 9894 1.6

Freight (in Tonnes) For the Month For the period April to JulyS. No. Airport July 2013 July 2012 % Change 2013-14 2012-13 % Change

Cargo Performance Airports in India


Calendar of EventsInternational Logistics Events

2nd Cold Chain Pharmaceutical logistics November 22, 2013new Delhi, IndiaThe conference will provide a unique platform for industry experts involved in temperature sensitive logistics to share their experience on topics like distribution & management system, regulatory approvals, emerging trends and challenges, technological innovations in cold chain logostics, infrastructure development, cost effective logistics strategies within the country and how it is impacting the Indian pharmaceutical industry.l Contact: 80-49331000l Fax: 80-49331003l E-mail: [email protected]

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the 10th China air Cargo summit 2013 November 20-22, 2013Shanghai, Chinal Contact: [email protected] Tel: (8621)31266433l Fax: (8621) 31267471

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nordic air Cargo symposiumApril 7-8, 2013Sheraton Stockholm HotelSwedenl Contact: Euroavia Internationall Tel. +46-33-129841l Fax +46-33-228388l email: [email protected]

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13th annual Cool Chain europeJanuary 27-19, 2014Luxexpo, Luxembourg-Kirchberg, Luxembourgl Contact: +44 (0) 20 7368 9300 l E-mail: [email protected]

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5th annual China supply Chain & logistics showcase 2014 March 11-12, 2014Shanghai, Chinal Phone: +86-21-5172 0000l Fax: +86-21-5172 0088l Email: [email protected]

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european supply Chain & logistics summit 2014June 16-17, 2014Barcelona, SpainDavid MillerCustomer relation Managerl Tel: +44 (0)20 7202 7690l E-mail: [email protected]

sCM logistics & Manufacturing world 2014June 23-24, 2014Suntec Singapore International and Convention Centre, Singaporel Contact :Terrapinn l Tel: +65 6222 8550l Fax: +65 6226 3264l E-mail: [email protected]

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global liner shipping asia ConferenceSeptember 2014novotel Singapore Clarke Quay, SingaporeMaritime Customer Servicesl Tel: +44 (0) 20 7017 5510l Fax: +44 (0) 20 7017 4745l Email: [email protected]


r ecently, Turkish Cargo inaugurated a new storage area in a ceremony held near

the end of runway 06/24 at Ataturk International Airport, Istanbul. According to the airline sources, the newly built facility will play an important role in the growth of Turkish Airlines’ cargo operations. The technical features of the new

storage area are: total area- 70m X 150m; storage for 333 ULDs and 1000m² for handling mail; 700m² of cold weather storage space; 5 cold storagespaceswith2providing2C˚-8C ,̊2providing15C˚-25C˚andoneadjustable temperature settings. A capacity for 56 ULDs in cold stores is also available. All cold storage has independent power generation.

Turkish Cargo launches new storage area in Istanbul

TRAFFIC STATISTICS I n T E R n AT I O n A l F R E I G H T

17 Delhi (DIAL) 33524 30280 10.7 128809 122319 5.3 18 Mumbai (MIAL) 38249 40873 -6.4 154963 160034 -3.2 19 Bangalore (BIAL) 13644 12907 5.7 51781 49480 4.7 20 Hyderabad (GHIAL) 3884 3756 3.4 16816 15097 11.4 21 Cochin (CIAL) 4940 2904 70.1 15191 11700 29.8 22 nagpur (MIPL) 27 32 -15.6 126 131 -3.8 Total 94268 90752 3.9 367686 358761 2.5

(B) 6 JV International Airports

(C) 7 CUSTOM AIRPORTS

(A) 16 International Airports

23 Pune 0 0 - 0 0 - 24 Visakhapatnam 0 0 - 0 0 - 25 Patna 0 0 - 0 0 - 26 Chandigarh 0 0 - 0 0 - 27 Bagdogra 0 0 - 0 0 - 28 Madurai 0 0 - 0 0 - 29 Gaya 0 0 - 0 0 - Total 0 0 - 0 0 -

Freight (in Tonnes) For the Month For the period April to JulyS. No. Airport July 2013 July 2012 % Change 2013-14 2012-13 % Change

(D) 17 Domestic Airports 0 0 - 0 0 -(E) Other Airports 0 0 - 0 0 - Grand Total (A+B+C+D+E) 125292 125892 -0.5 485160 493691 -1.7

1 Chennai 19634 21938 -10.5 75811 85551 -11.4 2 Kolkata 4513 4149 8.8 14576 14442 0.9 3 Ahmedabad 1360 1187 14.6 5785 4194 37.9 4 Goa 138 114 21.1 595 571 4.2 5 Trivandrum 2532 4591 -44.8 9180 17864 -48.6 6 Calicut 2055 2515 -18.3 8819 10100 -12.7 7 Guwahati 0 0 - 8 0 - 8 Lucknow 166 251 -33.9 386 497 -22.3 9 Srinagar 0 0 - 0 0 - 10 Jaipur 20 22 -9.1 76 91 -16.5 11 Coimbatore 79 40 97.5 285 176 61.9 12 Mangalore 0 0 - 0 0 - 13 Amritsar 92 122 -24.6 388 454 -14.5 14 Trichy 435 211 106.2 1565 990 58.1 15 Varanasi 0 0 - 0 0 - 16 Portblair 0 0 - 0 0 - Total 31024 35140 -11.7 117474 134930 -12.9

Cargo Performance Airports in India

international news


Guest ColumnShipping & Ports

Port operations involve synchronised and intricate planning, organisation and execution of interrelated chores ranging from ship’s manoeuvres in

the breakwaters to moorings, from stemming the vessel to a suitable berth as per plan in harbourmaster’s office to arranging equipments and labour in the labour office, from optimal load and discharge of the vessels to supply of fuel and other wherewithal. not only does it place the onus of responsibility on the port authorities for minimum stay of the ships in port, but also the optimum utilisation of resources. However differing levels of capacities, material resources and their ways

of deployment, staffing and stevedoring, natural conditions, depths encountered while ships make way through water to ports, rate of discharging vis-à-vis evacuation levels, connectivity with hinterland, efficiency of land logistics, presence of related amenities like customs clearance and green channels, IT infrastructure and numerous other factors cause aberration in efficiency of ports. This carries more gravity, considering the Indian scenario, which has a status quo of a big maritime nation with an large coastal line encircling the half of the country. International trade, being a large contributor in the economy, plays a significant role

What ails Indian Ports?

Indrajit singh Merchant navy officer


and shipping trade becomes even more pronounced as 95% of the international trades is routed through ships. our ports are getting congested day-by-day. A few ports have already exhausted their capacity and others are on the verge of the same. The growth of marine traffic is gradually outpacing the growth of handling capacities in ports. When we are handling 4,000–6,000 TEU ships, world-class ports are handling 8,000–10,000 TEU ships. When we are striving at increasing throughput, the others have many times better throughput than us. Singapore is a glaring example where economy of the city state survives on the state-of-the-art port-operations. When we have lost time and money for the cargo enroute to India getting transhipped in Dubai, Singapore and Columbo; the better ports of the world are directly inviting the mother-vessels.

The major ports of India are being governed by Major Port Trusts Act, 1963 which has deputed a board of trustees to govern the ports. The ports run on subsidies and donations from the Centre, and the trustees get hard nuts to crack when requesting funds from the Centre for infrastructural developments or enhancements of existing material and non-material resources. The Centre often goes astray as port infrastructure developments require relatively massive capital and the projects are risky in nature. It’s no wonder that major ports have shown sluggish growth trends in comparison to minor ports. Add to this the fact that, out of 187 minor ports, only 48 are operational. The CAGr of minor ports outstripping that of major ports endorses the thought of investment in minor ports.

Procedural delays and lack of related amenities in Indian ports cause longer dwell-time. It takes around seven days for exports to clear off in India, whereas three days in Singapore. Also, on an average eight different papers are required for clearance here, whereas just four are needed for Singapore. Also, Indian Customs mostly use intrusive examination techniques, while better ports use non-intrusive cargo examination, saving time and costs.

natural conditions do pose impediments. The narrow channels, fairways and traffic separation schemes of the port approaches are mired with shallow depths. Silting and absence of breakwaters shrink depths/widths of navigable waters. Add to this,

tidal variation and ‘squatting’ of ships. The depths near Lower and Upper Gasper in Bay of Bengal is challenging for even mid-size ships. Even the deepest container ports in India are unable to handle 10,000+ TEU ships and ULCCs. The average depth in major Indian ports is around 12–13 metres. Periodic dredging and maintenance of adequate depths including increments of existing depths in approach fairways requires huge expenditure and hence the problem persists.

Indian ports lag behind in handling transhipments. our ports are de facto so laggard in this respect that inbound or outbound trades of India get transhipped in Colombo, Dubai and Singapore expending revenues of shippers and consignees. rather, we send our cargo by feeder vessels to them, elongating transit times and costs. It’s rather the opportunity foregone, our share of revenue flows to neighbouring Sri Lanka.

But, a sigh of relief comes to Indian merchants of late in the form of International Container Transshipment Terminal (ICTT) being made operational.

The resource utilisation levels are dismal and uneven staffing levels in ports induce eccentric performance figures. In many of our ports, we are either getting along with old/obsolete handling equipments, or we have acute shortage of equipment or under-utilisation of equipment. right from the berthing plan to stemming of vessels on board, from equipment allotment to individual ship to gang allotment to commanding hatches, from the availability of nets, slings, pay-loaders and cherrypickers to forklifts and straddles everywhere, there is a scope for better planning and execution. These factors also contribute to per unit cost of handling in ports, which has shown a

continuous rise in all ports over the last decade.

Long waiting periods for getting suitable berths increases the overall time spent in port. Ships lying at anchor in ports lose money. The Port of Kandla is at the top where the average waiting time is around four days. JnPT performs the best with hardly a few hours of waiting, and hence with least dwell-time.

The lack of good and integrated IT infrastructure is yet to be assimilated in port operations. This induces lack of visibility and coherence in clearances. All stakeholders don’t communicate on a single platform, which further complicates and lengthens the overall time in port. Some good softwares are already in place like Vessel Traffic Management System (VTMS) and the newly-deployed Integrated Port Management System (IPMS). But the desired level of adoption is yet to be achieved. An end-to-end capable software application will not only speed up the overall time for export or import processing, but also ensure that all parties are posted with the latest information and actions for the shipments.

Indian ports are moving towards revamping to keep pace with rising marine traffic and diversified international trade requirements. The Government is taking steps to encourage private players to participate in port-development projects. 100% FDI is permitted in port projects and tax incentives are offered for various projects. The Five-Year Plan for ports propounded in 2007, has got a dint of Maritime Agenda 2010-2020 with greater emphasis on investment in shipping sector, increase in capacity and tonnage under the Indian flag and many other factors. The Mundra port (SEZ) has come up under Adani Group speedily with state-of-the-art handling, evacuation and connectivity with the hinterland. The corporatisation of Ennore port is a big step towards increasing efficiency, though it is met with mixed reactions. Despite all these moves, many more nautical miles are yet to be traversed before the IALA buoys of best operated port is visible on rational horizon.

Indrajit SinghThe author is a merchant navy officer and specialist consultant for shipping

Long waiting periods for getting suitable berths increases the

overall time spent in port. Ships lying at anchor in

ports lose money.”


Family AlbumTrade Associations

fffai elects new committee with debashish dutta as Chairman for 2013-15The Federation of Freight Forwarders’ Associations in India (FFFAI) hold its elections recently in Mumbai to elect new office bearers for the term 2013-2015. Debashis Dutta representing Calcutta Custom House Agents Association was unanimously elected as Chairman. Samir Shah, Sailesh Bhatia, Shailendra Jain, Shankar Shinde, D.Vijaykumar and C. Karthikeya Prabu were elected as Vice Chairmen. Amit Kamat was elected as Honorary Secretary for the second consecutive term. Sarafaraz Khan was unanimously elected as Honorary Treasurer. Shantanu Bhadkamkar is now the immediate past Chairman of FFFAI.

fffai


Family AlbumCricket Tournament

aCCM organises aCP – air Cargo Premier league The Air Cargo Club of Madras (ACCM) recently organised a two-day long Cricket Tournament at yMCA – nanadanam Cricket Ground in Chennai. This year, the tournament has been named ‘ACPL – Air Cargo Premier League, participated by 22 teams. The winner and runner-up of the tournament were worldwide Logistics India and Capricorn Logistics respectively. The sponsors of the event were VTL Logistics (India), Kerry Logistics, Indev Group, Visesh Cargo & Travels, Capricorn Logistics, seawaves shipping services, Aachi Cargo Channels and LA Freight Lift.

Cricket tournament


Family AlbumIndustry Event

industry stakeholders honoured for great jobsThe much desired and prestigious Awards presented during the industry gathering on the occasion of Express logistics and Supply Chain Conclave reached a new high this year. With huge participation from the cross section of express, logistics supply chain industry from across the country, the main attraction of the event was the glittering award winning ceremony.

elsC awards 2013


elsC service excellence Categoryn Best express service Provider of the year - domestic Blue Dart Expressn Best express service Provider of the year - international DHL Express (I) n Best road service Provider of the year Gati-Kintetsu Expressn Best 3Pl Company of the year Safexpress Mahindra Logistics n Best air freight service Provider of the year DHL Global Forwarding DelEx Cargo India n Best sea freight service Provider of the year Kuehne + nagel n Best freight forwarder of the year Schenker India n Best air Cargo Carrier of the year FedEx Expressn Best air Cargo terminal of the year Cargo Service Center India – Mumbai & Delhi Terminalsn Best inland service Provider of the year APM Terminals India


Family AlbumTrade Associations

BChaa discusses industry issues at its agM in MumbaiThe Brihanmumbai Custom House Agents Association (BCHAA) recently held its Annual General Meeting (AGM) in Mumbai with full participations of its members. At this gathering; George Joseph, President, BCHAA highlighted the major activities and achievements of the association during last one year. He also spoke about the present challenges and issues before the Customs Brokers in India that BCHAA will raise for viable solutions.

BChaa


Product DisplayCold Chain

india is the largest producer of fruits and the second largest producer of vegetables in the world. It is the largest producer of milk with 105 million

MT per year, produces 6.5 million tons of meat and poultry and 6.1 million tons of fish. However, the extent of processing is very low.

“Indian cold chain industry is still in a nascent stage with large number of small and unorganised players. However, we are witnessing a clear shift towards usage of better technology, equipment and operating processes,” observed Mehta.

He maintained that Carrier has played a very important role in reducing the waste of perishable commodities such as milk, fruits and vegetables. over the last few years, organised retail and food service industries have emerged as new segments of cold chain mainly due to changing consumption pattern.

In addition to the existing meat, poultry, ice-cream and dairy segments, there is a fast emergence of quick service restaurants, food processing and pharma as potential segments. “The entry of multinational retailers such as Wal-Mart, Tesco, Carrefour and Metro will help in bringing modern standards and protocols in food processing, handling and retail in India and will certainly lead to the emergence of cold chain,” Mehta pointed out.

Xtendfresh ContainerxtendFrESH Container helps to improve global transport and shipping temperature control with a complete line of equipment

for refrigerated trucks, trailers and containers, and is a part of UTC Climate, Controls & Security, a unit of United Technologies Corp.

The xtendFrESH system is designed to be more affordable than Carrier’s prior atmosphere control solutions and relatively easy to install on existing equipment. xtendFrESH system actively controls oxygen and carbon dioxide levels and

removes ethylene, a hormone given off by ripening produce that will accelerate ripening if left unchecked. xtendFrESH system will also aid in maintaining optimum quality of delivered produce, which can also result in less spoilage per shipment.

According to Mehta, xtendFrESH significantly lengthens the amount of time produce can spend in refrigerated transit – by more than double in some cases. For example, bananas can be shipped for up to eight weeks rather than four, and beans for up to four weeks rather 10 days. “The

The entry of multinational retailers

will help in bringing modern

standards and protocols in food processing,

handling and retail in India

Pankaj Mehta country Head & director carrier transicold, india

carrier transicold introducesnew atmosphere control technology for perishablesThe recently-introduced Carrier Transicold’s new xtendFRESH Container atmosphere control system uses innovative technologies to help maintain the quality of shipped produce, while extending shipping distances to enable growers reach new customers. Pankaj Mehta, Country Head & Director, Carrier Transicold, India spoke to Cargotalkabout the importance of this product for Indian market.

n RATAn KR PAUl


a ccording to the MoUs; the products that will be exported from India include zinc and

copper concentrates, cotton yarn, frozen fish/ linter, cotton and cotton yarn, menthol, castor oil, guar gum, acrylic tow, Indian granite block and cedrus deodara seeds. The MoUs were signed at India-China Business Matchmaking Symposium for promoting exports from India to China in New Delhi. According to the ministry sources, this initiative will be followed by some more events in other cities in India.

The Department of Commerce of India in coordination with Ministry of Commerce, People’s Republic of China is facilitating the visit of an important Chinese business delegation to India to explore procurement opportunities with their Indian counterparts companies. CII has been designated as

the local co-organiser. The delegation is led by Jia Guoyong, Vice Director General of Trade Development Bureau, MOFCOM with representatives from 27 national-level Chinese companies.

Some 60 companies from India from varied sectors attended the symposium and the B2B meetings in New Delhi. The sectors that the Chinese counterparts represented include textile, infrastructure, minerals and metals, chemicals, plastics, light industrial products, aero technology, steel, glassware and arts and crafts. The day-long programme began with the inaugural address by Asit Tripathy, Joint Secretary, in charge of China, Department of Commerce. The session was also addressed by Deep Kapuria, Chairman, CII National Committee, MSME and Wang Hejun Economic and Commercial Counsellor, Embassy of People’s Republic of China.

Huge Logistics Opportunities Chinese companies sign MoUs for buying products worth US$ 338 from India In a bid to beef up exports from India to China, the Ministry of Commerce, Government of India has recently facilitated the process to sign 15 MoUs between Indian and Chinese companies, worth value of US$ 338 million.

xtendFrESH system will give the shipping industry a new, more economical way to implement container atmosphere control and, in turn, grow market opportunities,” he asserted.

Presence in indiaFor more than 40 years, Carrier Transicold has been an industry leader, providing customers around the world with the most advanced & energy efficient equipment and services for refrigerated transport and cold chain visibility. Since 1993, Carrier Transicold has served the transport refrigeration business in India, with a large network of service dealers and parts distribution.

The company manufactures, sells and service intermodal transport, van, truck and trailer refrigeration systems for over-the-road and rail applications and container refrigeration systems and generator sets for ocean-going vessels. “our products cover the complete range of customer requirements and integrated cold chain management from the smallest distribution van to large 12-meter trailers, and are

designed to operate in ambient temperatures ranging from -30 C to +50 Celsius, in both single temperature and multi-temperature versions,” underlined Mehta.

Carrier Transicold India works with all stakeholders – including the leading truck manufacturers, insulated box manufacturers and reefer transportation logistics providers - at every stage to integrate the reefer equipment with the vehicle and to install and commission the equipment, using the right technology and resources. “our strength lies in adapting products to suit Indian conditions, engineering them on the vehicles and supporting them with our after-sales team,” he concluded.

Mehta asserted that Carrier is a global leader and has immense focus on Indian market. He underlined that the total available basket of perishable products in India is estimated to be around 336 million tonne, which comprise fresh fruits and vegetables, milk and milk products, meat and marine products and poultry, ice cream and vaccines. “The perishable products transaction volume in India itself is

estimated to be around 104 million MT. We work closely with our industry partners and government ministries to develop the cold chain for safe transport of perishables across the country,” he shared.

In view the fact that India is a cost sensitive market and logistics cost in India is already higher than other competing countries Carrier has specific services catering to this market. “Maintaining the product temperatures at the lowest operating cost during transportation is very important factor in cost sensitive markets like India. our products used in India are ideally selected to meet these operational expectations. The recently introduced CitimaxTM range is a targeted for larger volume products like fruits and vegetables at minimal costs since these take power from the vehicle engine. The earlier introduced VientoTM range for smaller vans is very popular for city distribution of cakes, chocolates and processed foods. Carrier Transicold products provide a balance between high technology, temperature precision at optimum cost,” he concluded.


Guest ColumnEmerging Verticals

McKinsey & Company in 2007 portrayed India as the fifth-largest consumer market by 2025 after the United States

(US), Japan, China and the United Kingdom (UK). The retail sector in India was estimated to be over $ 500 billion in 2012. Estimates show that it is expected to grow at a compound annual growth rate of 15% between 2012 and 2017. The share of organised sector was around 7.8 per cent in 2012 and is expected to grow at around 19 per cent.

areas of ConcernsIn spite of the high growth in the past decade and optimistic projections, in recent years there have been some areas of concerns. The GDP growth rate has slowed down and the retail growth has also slowed down. AT Kearney in its market attractiveness index for global retailers have downgraded India significantly as an attractive retail destination. In 2011, India was ranked fourth worldwide (after Brazil, Uruguay and Chile) and first among emerging Asian markets as an attractive destination for foreign retailers. However, in 2013, India slipped to the 14th position while other developing countries such as Brazil and China continued to be in the topmost destinations. The slowdown in the economic growth in the past two years and the slow pace of retail liberalisation in India may have adversely affected the attractiveness of India’s retail sector.

The government has opened up the retail sector in a phased manner, but it has not been successful in attracting FDI. The FDI inflow into this sector is low and shows a fluctuating trend. The FDI inflow in retail gradually increased after the liberalisation of the single brand retail policy in 2006 and reached a peak in December 2010 ($229.1 million). It thereafter declined sharply. By June 2012 retail FDI declined to $42.7 million with a share of only 0.02 per cent in total FDI inflows into India and stayed at that level till February 2013. In March 2013, FDI in retail revived to $95.36 million with a share of 0.05 per cent in total FDI into India. During the last two years, the government has issued several notifications on FDI liberalisation in the retail sector - both for single and multi-brand retail, but the restrictiveness of the conditions associated with the FDI liberalisation has made the policy unattractive. Specifically, foreign retailers have raised objections to mandatory back-end investment requirements, restrictive conditions of sourcing from SME and restrictions on e-retailing. Till date, none of the global multi-brand retailers have invested in India after the 2012 liberalisation of the multi-brand retail policy.

inter-state BarriersIt is important to note that FDI in retail is not an entry ban and foreign retailers can enter India through other routes such as franchising if the market offers

future of organised retail in india:

need for Policy Support

Arpita Mukherjee Professor, icRieR The growth of organised or modern retail in India in the past decade has

drawn global attention. The high rate of growth of gross domestic product (GDP), rise in per capita income, growing middle class and the shift in consumption pattern from necessity items to discretionary consumption has propelled the growth of organised retail. The growth is also supported by liberalisation and globalisation of the Indian economy and entry of foreign brands and domestic corporates into the retail segment. However, there are some crucial issues need to be addressed soon.

In 2011, India was ranked fourth worldwide (after Brazil, Uruguay and Chile) and first among emerging Asian markets as an attractive destination for foreign retailers. However, in 2013, India slipped to the 14th position


potential. The market attractiveness is undermined by several restrictions on inter-state movement of goods (for example, restrictions on movement of agricultural commodities under the Essential Commodities Act). Moreover, taxes vary across states, which make it difficult to have a pan-India operation. The implementation of the single goods and services tax (GST) is long-pending.

fragmented distribution ChannelThere is a dearth of third-party logistics service providers and in some states, integrated supply network and 3PL services are entirely missing. The distribution chain is fragmented and is marked by the presence of a large number of intermediaries. The logistics cost in India is high – a Planning Commission study estimated that approximately 14 per cent of a product’s cost represents logistics-related costs. This makes it difficult and costly to have an efficient supply chain which is the key to success of organised retail. retail is regulated by multiple agencies and a typical food and grocery retailer has to obtain 40-50 licenses to set up operations for each store. A number of corporates are facing shortages of talents and they have to set up in-house training facilities to develop skills.

real estate issuesThe price of real estate is very high. other real estate related issues include lack of urban planning, restrictive zoning regulations (which limit the availability of land for retail/commercial purposes) and high stamp duties. Laws relating to land conversions and rent Control Acts vary

across states. While some states are in the process of amending the old Acts, in states like Delhi such laws are very stringent. non-availability of government land together with fragmented private holdings makes it difficult for retailers to acquire large plots of land. The property market is not transparent and lack of clear ownership/titles and high stamp duties result in grey markets for property.

Competition from unorganised sectorAlthough India has a large consumer base, Indian consumers are price sensitive and there is considerable heterogeneity in consumers’ tastes, product choices and shopping behaviour. They are experimenting across brands and brand loyalty is low. Moreover, the unorganised sector is strong and offer significant competition to organised players, especially in sectors such as food and grocery.

in Conclusion: the Policy MattersThe domestic corporates entered the retail segment with a lot of optimism but many of them have not been able to make profits

and it has led to mergers and acquisition. retail is a difficult business with long gestation lags. Its success depends on a number of factors including effective logistics network, availability of retail space, and supporting regulation. A number of regulations which can not only help this sector but the entire logistics network are pending. Implementation of GST in India is a much bigger reform for retail modernisation than allowing FDI in retail. The government should make necessary changes in the FEMA Act so that profit repatriation related issues of foreign retailers are addressed. Unless this is done, foreign retailers would not invest in India. FDI in retail should be delinked from domestic regulations. While it is important to regulate retail, regulations should be transparent and non-discriminatory. Also, regulations should support scale expansion, growth of manufacturing and linkages of Indian manufacturers into global value chains of retailers. Conditions restricting scale expansion of manufacturers such as requirements to source from SMEs will not enable Indian manufacturers to grow and become part of global value chain of retailers. The role of the government is to provide the supporting infrastructure and regulatory transparency. If that is done, industry will come forward and invest in retail.

The growth of organised retail will lead to quality employment creation, enhance tax revenue earnings of the government, lead to investment in the supply chain and support the growth of local manufacturing and brand building, among others. It is closely interlinked with the growth of other sectors such as transport, tourism and constructions. Countries such as UAE (Dubai), Hong Kong, Singapore and Thailand earn a significant amount of foreign exchange through retail. Indians spend a lot in shopping abroad and India can itself become an attractive tourism and retail destination. At present, the number of tourists received by India is much lower than East Asian countries and Dubai. It is also important to note that consumerism and growth of retail have in the past enabled economies to come out of slowdown and India can return to the fast track growth path through a holistic approach to development of modern retail which takes into account its interlinkages with other sectors of the economy.

The logistics cost in India is high – a Planning Commission study estimated that approximately 14 per cent of a product’s cost represents logistics-related costs

Guest ColumnEmerging Verticals


Based in Dehradun, Uttarakhand; the University of Petroleum & Energy Studies has been playing a crucial role as the supplier of skilled

manpower for the aviation and logistics industry. It has established the Centre for Aviation Studies (CAS) in 2007 with an aim to act as the university’s interface with the aviation sector. CAS courses are designed with active participation of the industry with an aim to equip students with academic inputs and application skills. CAS runs a mix of management and teaching programmes for the aviation industry at the entry, management and working executive’s level.

After tremendous feedback received from across the country for UPES in Dehradun, the associates of this university are now planning to launch more institutes of this kind in other parts of the country. In the near future, a university called University of Technical Management (UTM) will be launched in northeast India (Shillong in Meghalaya) which will be mainly for aviation and logistics. UPES associates are also planning to open a university in South India as well.

“UPES is India and Pan Asia’s first Energy & Core Sector University. UGC approved and nACC accredited, UPES offers over 50 graduate and post-graduate programmes to more than 6,200 students in the high-growth sectors of oil & gas, power, aviation, shipping, automobile, infrastructure, electronics, IT and logistics & supply chain. With the Centre for Continuing Education (CCE) and Centre for Aviation Studies (CAS), UPES offer Executive programmes through distance-learning mode for working professionals,” he said.

“We are the pioneering institute providing special manpower to aviation and logistics. UPES is the first institute offering MBA, focussed on higher courses for fleet management, capacity management and cost management. We also introduced BBA in Aviation and BBA in Logistics, which is for more ground-level functions,” said Diwan. Currently, about 200 students are pursuing BBA in Aviation and about 150 students are pursuing BBA in Logistics from UPES.

of late, UPES has also introduced an Executive BBA course (3 years’ course) for 12th standard pass students to provide them job opportunities in aviation and logistics sectors. “Though we are not meant for placement services, however UPES offers 100 per cent job support to all the students who complete the respective courses successfully,” Diwan added.

Commenting on aviation and logistics as a career option, Diwan maintained that aviation is already an organised sector in India, and there is huge demand for skilled manpower. Logistics, on the other hand though unorganised, is a sunrise sector and there will be huge opportunities for the aspiring candidates. “In recent times, the logistics industry in India is heading towards an organised and most promising future. The logistics entrepreneurs are now running their business in a very professional way,” observed Diwan. He also admitted the fact that there are a number of challenges and issues need to be addressed by appropriate authorities and the government to make the industry strong and hassle-free. Issues like check posts, taxes, infrastructure and fast clearance can be resolved by an empowered committee of all ministries of the Government of India.

Skill DevelopmentAcademic Institutions

UPES to enter Shillongto provide aviation and logistics courses The aviation and logistics sectors are facing tough times because of escalating fuel prices, increasing taxes, stringent rules & regulations, poor infrastructure, lack of skilled manpower and reducing profit. Parag diwan, Vice-Chancellor, University of Petroleum & Energy Studies, says the need of the hour is to increase efficiency at all levels by acquiring appropriate knowledge and education.

UGC approved and nACC accredited, UPES offers over 50 graduate and PG programmes to

more than 6,200 students Parag Diwan

Vice-Chancellor, University of Petroleum & Energy Studies

Cargotalk November 2013

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Transcript of Cargotalk November 2013