cargotalk

Cargotalk

THAI CARGO IN INDIA

Adds capacity to comply with demand

Facing serious problems due to shortage of drivers and long

pending issues

Road Transport in India

Policy of Cross Subsidisation resulting in slow growth

Rail Freight Movement

SOUTH ASIA’S LEADING CARGO MONTHLYNo.1 in Circulation & Readership

JUNE 2012

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WWW.CARGOTALK.IN2 CARGOTALK MAY 2012

JUNE 2012

FROM THE EDITOR

WWW.CARGOTALK.IN4 CARGOTALK JUNE 2012

Running on a rough surfaceDespite tall talks of smooth operations of rail and road freight across the country, these vital modes of transport are in severe crisis. It continues owing to the faults in the policy framework and malpractices at the execution level, leaving logistics entrepreneurs and the nation’s economic interest in doll drums. Rail freight, for instance, is suffering from perennial issues despite the policy of privatisation and so called PPP. Privatisation of containerised freight movement, in particular, is an irony in view of the derailment of the original plan. Private container operators are losing interest in running the show because of apathy from the Indian Railways. In fact, IR has been maintaining the same formula regarding its functions, though the Ministry of Railways harping on liberalisation of freight movement. Private operators cannot thrive and survive under tremendous pressure of infrastructure facilities including tracks, rolling stocks and terminals, and without control on them. Erratic and escalating hauling and terminal charges, on the other hand, remain a major bone of contention. Private container train operators

(PCTO) often lament for the step-motherly treatment by IR. Road sector too, is running on a rough surface. A completely unorganised sector operated by small and medium sized players are in quandary owing to shortage of skilled manpower including drivers, poor road conditions and road side amenities, multiple check posts and taxes, harassments by police and various departmental officials/staff, lack of safety and security and increasing input costs. At the same time, these factors are also responsible for slow growth of road transport industry in the country. In order to strengthen the growth tracks of the country’s economy, serious initiatives especially from governments are required. A prerequisite for sustainable growth would be to ensure smooth and fast operations of surface network by eradicating all fault lines. And, this can be achieved only through a strong, transparent and effective government policy.

Rupali NarasimhanEditorial Director

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PublisherSANJEET

EditorRUPALI NARASIMHAN

Sr. Assistant EditorRATAN KUMAR PAUL

Desk EditorNEELAM SINGH

General ManagerGUNJAN SABIKHI

Deputy General ManagerHARSHAL ASHAR

Regional Manager: SouthK N SUDHEER

Regional Manager: NorthRAJIV SHARMA

Asst. Manager: WestROLAND DIAS

Marketing Co-ordinatorGAGANPREET KAUR

DesignSHIVALI SHAKDHER

Advertisement DesignerVIKAS MANDOTIA

Production ManagerANIL KHARBANDA

Circulation ManagerASHOK RANA

5 CARGOTALK MAY 2012

JUNE 2012

8 Emirates witnesses growth for the 24th consecutive year, SkyCargo records 8.4% increase

10 Thai Cargo in India adds capacity to comply with demand

11 Kenya Airways starts Delhi-Nairobi service with special focus on cargo

22 China Airlines Cargo launches twice weekly freighter services to Chennai

Airlines News

12 dnata at Dubai World Central witnesses 700% increase in volume of cargo

18 DB SCHENKERswift: Schenker India to strengthen its position

International News

16 DHL Express inaugurates new Service Centre facility in Noida

16 Pacific Air Logistics’ new Head Office in Delhi

News in Brief

44 ACCD discusses future of Indian freight forwarders

46 Damco India hosts customer meet at Bengaluru

Family Album

Logistics Services

First Flight Couriers organises marathon for a cause

CONTENTS

DEPARTMENTS

CSR 48

Calendar of International Events

Logistics Events 50

Angre Port in Maharashtra: Open for Business

Shipping & Ports 52

Emergence of new markets: Damco puts more emphasis on India

CEO Talk 58

54 Calogi signs pact with Dubai Insurance to offer e-transaction by cargo community

Technology

The road transport sector, which provides the first and last mile connectivity, carries about 70 per cent of cargo transported by surface operators. However, grossly unorganised and dominated by small and medium players in India, this sector needs adequate attention from the facilitators and policy makers for smooth functioning, so that the lifeline of the national economy can serve the country properly. An industry perspective...

Cover Story 24

24

30

54

58

48


34 Airlines wise exim cargo performance from Delhi International Airport in April 2012

35 Airlines wise exim cargo performance from Mumbai International Airport in April 2012

36 India’s Airport wise domestic cargo performance for March 2012

38 India’s Airport wise international cargo performance for March 2012

Cargo Performance

30 Policy of Cross Subsidisation resulting in slow growth of rail freight movement

40 Indian Railways has a crucial role

Lead Story

Guest Column

COLUMNS


Airlines NewsPerformance

The Emirate Group’s 2011-12 Annual Report shows that the company posted a net profit of AED 2.3 billion (US$ 629 million), with its ground handling subsidiary, dnata, marking

its highest ever profit in 52 years of operation. The Group’s revenue reached a record high to AED 67.4 billion (US$ 18.4 billion) which is an increase of 17.8 per cent on last year’s results. The Group’s cash balance grew by 9.5 per cent reaching a strong AED 17.6 billion (US$ 4.8 billion).

Commenting on the commendable performance, Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group said, “Achieving our 24th consecutive year of profit and maintaining an upward growth trajectory is an achievement that belies the industry norm.”

He underlined the strategy of the Emirates that translated into remarkable results. “Throughout

the 2011-12 financial year, the Group has collectively invested close to AED 14 billion (US$ 3.8 billion) in new products. This investment has garnered new customers and has increased our international presence,” he pointed out. He asserted that successful business growth is the result of sustained and calculated investment. “Every dirham that we earn is strategically ploughed back into our business and it is this foresight that has allowed the Group to maintain such strong and consistent profitability,” he added.

The year 2011-12 has been a strong one for Emirates SkyCargo with revenues of AED 9.5 billion (US$ 2.6 billion), an 8.4 per cent increase on last year, on account of an increase in freight tonnage and freight yield per Freight Tonne Kilometre (FTKM) which rose by 5.4 per cent.

Remarkably, while the bulk of the cargo

industry reported downward tonnage, Emirates SkyCargo’s tonnage increased to 1.7 per cent reaching 1,796 thousand tonne. Contributing 16.2 percent of Emirates’ total transport revenue, Emirate SkyCargo continues to play an integral role in the company’s expanding operations. At the end of the financial year, Emirates SkyCargo fleet consisted of eight freighters – two on wet lease and six on operating lease.

In the 52 years of dnata, 2011-12 has been its most successful period yet. With an increase of 58.9 per cent over last year, dnata grew its revenue to AED 7 billion (US$ 1.9 billion). Overall profit for dnata also reached its highest ever point at AED 808 million (US$ 220 million).

During the year, dnata’s operating costs increased by 58.9 percent to AED 6.2 billion (US$ 1.7 billion), primarily triggered by the first full integration of the Alpha Group.

Emirates witnesses growth

for the 24th consecutive year, SkyCargo records 8.4% increaseDespite the ongoing economic slowdown in the major consumption centres in the world and fuel price hike resulting in huge pressure on profitability, the Emirates Group has unveiled its 24th consecutive year of profit and companywide growth. CT BUREAU

FOR THE FIRST TIME, catering, accounting for AED 2.5 billion (US$ 668 million) of its total revenue. The single largest factor in this revenue shift is the full year inclusion of the Alpha Flight Group who uplifted over 48 million meals during the year.

Apart from SkyCargo, dnata’s cargo

HANDLING DIVISION ALSO WITNESSED upward growth with revenues increasing by 12.6 per cent to AED 993 million (US$ 271 million) on account of increased tonnage at Dubai International Airport and Singapore Changi Airport. Increased cargo volumes at Dubai International Airport and Dubai World Central saw dnata handle 3.3 per cent more cargo.


Airlines NewsNew Initiatives

Though the going is very tough for many of the airlines flying to and from India, Thai Airways and its cargo department appears to be exuberant. The exim trade

between India and Thailand is expected to be US$ 14 billion by 2014. With this projection, the air cargo trade is also expected to grow phenomenally. Thai Cargo has taken the conscious decision to bring capacity ahead of demand, to build confidence among the shippers and customers.

Currently, Thai Airways has 52 passenger flights per week with approximately 20 tonne belly hold cargo capacity per flight. In addition, the airline recently introduced 747-400 freighters to Delhi, Hyderabad and Chennai, once a week to each of the cities. The freighter has 115 tonne capacity per flight. At present, the airline has a cargo load factor of about 75 per cent in passenger aircraft and 100 per cent in freighters. The scheduled routes are Bangkok-Delhi-Frankfurt, Bangkok-Hyderabad-Frankfurt and Bangkok-Chennai-Amsterdam, which depart from Delhi on Sunday, Hyderabad on Thursday and Chennai on Monday.

“We are highly ambitious about the potential of India as a cargo generating country. Electronics, garments, pharmaceuticals and perishable cargo are the major items that we are carrying from India. However, at the same time we are exploring new products that the country is producing for export,” said Chatasingha. Interestingly, about 80-90 per cent cargo carried by Thai Airways is

transshipment cargo, mainly for Europe, USA and South East Asian countries. “At Suvarnabhumi Airport in Bangkok, we have a very quick and efficient transshipment

facilities for long haul destinations, owing to the ultra modern airport facilities and huge worldwide network of Thai Airways,” Chatasingha underlined.

Thai Cargo in India

t hi t i l f E

The proposed comprehensive free-trade agreement between India and Thailand is estimated to double the bilateral trade to US$ 14 billion by 2014. Recently, Royal Thai Consulate Consul General Chanchai Charanvatnakit stated that the trade between India and Thailand grew from US$ 4.7 bn in 2007 to US$ 8.2 billion in 2011, almost double. He also maintained that the implementation of ASEAN-India Free Trade Agreement and India-Thai Free Trade Agreement would result in greater trade expansion.

India-Thailand trade

adds capacity to comply with demandThai Cargo, which recently started its weekly freighter flights to Delhi, Hyderabad and Chennai is quite optimistic about the increase of air cargo traffic from India. Speaking to Cargotalk, Korakot Chatasingha, general manager – India, Thai Airways International, explained the market trends. CT BUREAU

11 CARGOTALK JUNE 2012

Airlines NewsNew Launch

Kenya Airways have started its flights to the second city in India. After flying to Mumbai for quite some time, the African

carrier has announced the launch of flights between Nairobi and Delhi four times a week, effective May 16. With Boeing 767-300, the airline is providing belly space for approximately nine tonne cargo capacity per flight. The Delhi-Nairobi flights depart from Delhi on day 1, 3, 5 and 7.

Speaking to Cargotalk, Bennet Stephens, area manager-India, Sri Lanka, Nepal and Bangladesh informed that the Nairobi-Delhi sector is not only important for passenger traffic, but is equally important for cargo traffic’s point of view. “We are

quite confident that our aircraft will have full belly load from Delhi. We are expecting good volume of pharmaceuticals, spare parts, machine-related engineering goods and perishable cargo,” he said. Kenya Airways has appointed Jet Air as its GSA for looking after cargo marketing and booking.

Stephens highlighted the fact that India has been aggressively promoting trade with Africa as it seeks to gain access to the continent’s emerging markets. India is Kenya’s sixth largest trading partner. The Kenya-India bilateral trade hit US $4.8 billion in 2010-2011. He also underlined that there would be a substantial volume of transshipment cargo that would reach

beyond Kenya. “Nairobi is the natural hub in Africa and our USP would be lowest transit time in the region. Moreover, we are offering time bound express services and competitive price, so that shippers can have an extra edge in the market,” he added.

starts Delhi-Nairobi service with special focus on cargo

Kenya Airways


International AirportsTerminal News

Dnata’s international presence has already grown substantially. To date, the company is one of the world’s largest combined air services providers with operations in 39 countries around the globe. dnata-operated air cargo terminal at DWC was opened in June 2010. Currently,

the terminal handles local and sea-air export and import cargo as well as transit cargo at DWC. In 2011-2012, dnata handled 127,665 tonne of air cargo, representing an increase of 700 per cent over the previous period. The total number of active cargo flights handled by the dnata team on the ramp and in the cargo terminal was 2,832 for the financial year, having grown by 600 per cent from the previous period. “The huge increase in volume and aircraft movements is a result of customers taking advantage of the many benefits that dnata’s facilities and services offer. Some of these benefits include the lack of congestion at the new airport, the wide range of cargo and ground handling services that are available and also the proximity to the nearby Jebel Ali Port and the many logistics companies who are based in the adjacent Jebel Ali Free Zone,” explained Hayman.

He also maintained that the proximity to the port has meant dnata has seen increased cargo volumes in the form of multi-modal cargo. “Loads are arriving by sea, making the quick and easy transfer to the airport cargo terminal using the customs bonded bridge connection, and then flying out for the final leg of the journey. The same is also happening in reverse with cargo arriving by air and then departing via sea,” said Hayman. According to him, dnata has also seen an increase in commercial scheduled flights carrying large import loads for specific freight forwarding customers who have substantial logistics operations in both Dubai Logistics City (DLC) and Jebel Ali Free Zone (JAFZA). They are taking advantage of the shorter transit times from DWC airport to their warehouses.

DIFFERENT TYPES OF CARGO HANDLED AT DWCDnata has seen a comprehensive range of different types of cargo handled through FreightGate-8 throughout the course of the last year. A large quantity of ‘general cargo’ including IT equipment, garments, machinery, spare parts and automotive parts were the major items handled by dnata. “We have also seen a lot of ‘project cargo’ activity with some specialised loads including heavy generators. In fact, we recently handled the heaviest shipment ever across all of our FreightGate cargo terminals. It was a massive generator with a single piece weighing 95 tonnes that

dnata at Dubai World Central

Witnesses 700% increase in volume of cargoWorld’s leading ground handling company, ‘dnata’, which operates its newest cargo terminal, FreightGate-8, located at Dubai World Central-Al Maktoum International Airport (DWC), has managed an increase of 700 per cent in air cargo volume for 2011-2012. Speaking to Cargotalk, Stuart Hayman, vice president, cargo operations, dnata, huge increase in volume and aircraft movements were the principal factors behind the remarkable performance. RATAN KR PAUL

DIFFERENT TYYPPPEEEESSSS


required a great deal of very careful planning and specialised equipment to have this piece loaded on to the chartered freighter aircraft,” shared Hayman.

MAJOR DESTINATIONS Europe and Asia have been strong destinations for flights operating to and from DWC. In addition, there have been a number of charter flights providing regional distribution to various destinations within a four hour flying radius of Dubai and also further fly to and from Africa. In addition to actual flights, FreightGate-8 also handles cargo that is destined for departure from other airports in the UAE including Dubai International (DXB), Sharjah (SHJ) and Abu Dhabi (AUH) which are all serviced through a robust road feeder service which provides connectivity to and from any destination around the world.

dnata has over 30 airlines, which are regularly using dnata’s handling services at DWC. Some of the major scheduled operators include Martinair, Saudia Cargo and Atlas Air (operating for a major freight forwarder based at Dubai Logistics City). Regular charter operators include: National Airlines, SkyLink Aviation, Kalitta Air and Chapman Freeborn.

DWC is currently running as a freighter only airport in terms of commercial flights. Accordingly, all cargo physically being handled for flights arriving and departing DWC is being carried by freighter aircraft. Hayman informed that with respect to the import cargo traffic, the ratio between Dubai bound cargo and transshipment cargo is approximately 50:50 with the percentage of transshipment cargo being largely driven by the multi-modal air to sea traffic.

DWELL TIME/CLEARING TIME The dwell times for import and export cargo at DWC that is moving on commercial scheduled flights is very similar to DXB, with imports being handed over within hours of arrival of shipments rather than days. Export cargo is also moving through the cargo terminal at a faster pace than other FreightGates. “This is a result of a larger component of ‘shipper-built’ pallets that are arriving at DWC and are being delivered intact without the need for any physical break-down in the cargo terminal. Import cargo is capable of being delivered to our customers within two hours of flight arrival and is also being electronically cleared through customs,” Hayman said.

dnata currently handles a wide variety of freighter aircraft types at DWC, including: Ilyushin IL76s, Antonov AN124s, Hercules C130s, Airbus A300Fs, Boeing 747Fs, Boeing 777Fs and the newest freighter in the skies, the Boeing 747-8F which can carry a payload of up to 134 tonne. These varied aircrafts are operated by 36 different airlines at present.

In addition to the aircraft flights, dnata’s FreightGate-8 also handles another 35 airlines which operate truck flights. Over 30,000 tonne of cargo have been transported from this mode of handling during the past 12 months.

International AirportsTerminal News

In response to the growing volume, dnata has steadily been increasing and improving its fleet of equipment to service the DWC operation. In addition to the standard cargo-handling equipment, dnata has also invested in specialised equipment to help handle the out-sized loads. This includes a specially fabricated ‘40 foot dolly’ that was engineered by dnata’s ground support equipment (GSE) team which allows for the safe and easy transportation of loads that are up to 40 feet in length. “We measure our volumes for each shift (which covers a 12 hour period) and we often handle volumes in excess of 1,000 tonne in these 12 hour shifts. With these volume records constantly being set and all of the unusual loads that we have been handling recently, our motto has now become, ‘If it fits in to an aeroplane, then dnata’s FreightGate-8 and ramp operations teams can handle it safely and securely!’ We are truly open for business and look forward to the volume growth continuing in the months and years to come,” he concluded.

MODERNISATION OF EQUIPMENT


Industry NewsNews in Brief

Recently, DHL has inaugurated a new, modernised Service Centre facility in Noida (UP). It features new, state-of-the-art conveyors and sorting systems and spread over 13,000 sqft. The facility was inaugurated by Malcolm Monteiro, SVP and area director, South Asia, DHL Express. Commenting on the occasion, Monteiro said, “The new service centre facility showcases our commitment to India and our customers so they continue to receive the highest level of service from DHL.” According to him, with the upgraded Service Centre, DHL Express will be able to take care of all the logistics requirements of in-dustries in the Noida region. The Noida service centre will have 19 routes, 31 staff members and 14 vehicles servicing the area. He also informed that in 2011, DHL Express handled about nine million international shipments in India.

Pacific Air Logistics, the Indian division of the global GSSA, Air Logistics Group, has recently established a new head office in Delhi at G5 Building, Terminal 1, IGI Airport, to oversee the five branch offices at key gateways across India.

Commenting on the launching of the new office, Vikram Singh, regional director – Asia Pacific, Air Logistics Group, said, “The time has come to open a dedicated head office in India to ensure we provide the best possible service to our customers in India. With a dedicated head office bringing together our department managers from finance, business development and operations, we can now fully utilise the potential of this growing market.”

Pacific Air Logistics’ new Head Office in Delhi

KU Thankachen appointed chief manager, ICD TUGHLAKABAD

Recently, KU Thankachen has taken over as chief manager, ICD, Tughlakabad. Prior to his new assignment at the ICD Tkd, he was posted as chief general manager, central region, Nagpur, looking after terminals at Nagpur, Aurangabad, Raipur, Mandideep and Bhusawal. Thankachen started his career from Airports Authority of India, in New Delhi as cargo manager before joining Concor. He held various portfolios in commercial and international marketing in the corporate office of Concor.

Express Transport becomes Express Global Logistics

DHL Express inaugurates new Service Centre facility in Noida

DB Schenker in India, a leading provider of integrated logistics services in the region has taken a new initiative to facilitate the exporters and importers

community in India. The new product ‘DB SCHENKERswift’ is focused on the customers mainly in the Tier II and Tier III cities which are yet to reap the advantages of proximity to international air routes.

Elaborating on the nature of the product, Tuteja clarified that though the name sounds that DB SCHENKERswift is an express service, it is not alike. However, he maintained that driven by Schenker’s philosophy of time bound delivery, DB SCHENKERswift campaign, will improve the company’s product range for customised solutions, faster deliveries, customer incentives and excellence in customer relationship. “There would be more value additions in the 2nd phase - covering multiple destinations and commodities; special pricing during scheme period, customer incentives and widening the industry base to serve more customers,” he said. REACH OF DB SCHENKER SWIFT

According to Tuteja, Tier II and Tier III cities hold the future in them, for growth of India and the industry. Today, there are many manufacturers and exporters in Tier II and Tier III cities who are catering to many DB Schenker customers around the globe. The participation from such

cities would be increasing in the global trade at a pace much more than others, and these cities will be driving India’s industrial outlook for tomorrow. “So focusing on these areas will be a move to consolidate our brand in the areas which otherwise know about DB Schenker but consider us as a premium service provider which is limited to metros and multinational customers to serve with. I think this is the right time when we move forward and serve a larger base of customers which actually is the engine of India’s growth in the coming time,” Tuteja explained.

Commenting on the implementation of DB Schenker services to and from beyond seaports and airports, Tuteja maintained that DB Schenker has already expanded its network during last 16 years across India to offer multi-modal and door-to-door services. “Today we have the capability, in India and in most of the countries, to serve our customers with one stop solutions,” he said. Tuteja pointed out that in the Indian context, apart from the freight services where DB Schenker is amongst the top service providers, the company has its own customs clearance license. For domestic transportation to/from the ports, DB Schenker has identified the suppliers on the basis of the company’s global quality policies. For the transportation to/from airports, the areas covered under international airports routes are mostly covered by the road transport for any cargo

requirement. In case of ocean freight customers, DB Schenker provides the transportation as well as facility of inland container depots and freight

DB SCHENKERswift


Schenker India to strengthen its position Recently, DB Schenker in India has launched a new service called ‘DB SCHENKERswift’ to facilitate small and medium enterprises in the satellite towns and Tier II and Tier III cities with promotional pricing and door-to-door solutions in time-bound manner. Sateshwar Tuteja, director, sales and key accounts management, industry vertical sales, Schenker India, provides details. RATAN KR PAUL

Logistics ServicesNew Initiatives

To improve the company’s product range for customised solutions, faster deliveries, customer incentives and excellence in customer relationship

To move forward and serve a larger base of customers which actually is the engine of India’s growth in the coming time

To serve the customers with one stop solutions

To focus on the development of trade lane customers from India to various destinations

AIMS ANDOBJECTIVES

stations across India to a location nearby the customer facility. For such cargo, the company provides the bonded warehousing facilities to the customers on requirements.

TARGET CUSTOMERSTuteja informed that DB SCHENKERswift is focusing on the development of trade lane customers from India to various destinations. Eventually, many of them are located in the Tier II and Tier III cities where DB Schenker has its own network of branches and logistics facilities. Currently, DB Schenker in India is operating from 34 locations in India and has almost every industrial hub covered within its network. “Simultaneously we have more than 48 warehouses covering more than 1.3 million square feet of space in India which can facilitate customers in domestic and international movement of goods,” added Tuteja.

He expects that for DB SCHENKERswift there will be customers from across the industries with a fair degree of variation from Schenker’s usual stronghold areas. “We are going to focus more on commodity basis than supported by the ‘vertical structure’, since this would be more appropriate to the customers in satellite cities. Also, for a geographical cluster of industries, there would be different solutions based on the requirements.”

TARGET MARKETS Tuteja appeared confident about the reach of the new product across the world as well. He maintained that being a global logistics group, DB Schenker has its strength across the world. From India, the company is providing integrated logistics services to Americas, Europe and Asia Pacific trade lanes which are the major trade lane partners for the country. Simultaneously, DB Schenker is promoting Middle East and Africa trade lanes which offer high potential to its customers’ businesses. “We have our infrastructure in place for the trade lane concept for all these continents and have dedicated persons to look after the customers in particular trade lanes,” he said.DB Schenker’s trade lane concept further develops with the country representatives in selected countries who are placed in

particular destination countries to look after customer’s need in the trade lane. “The biggest advantage of this type of functions is one face to the customer in the trade lane who will be entirely responsible to service the customers for best priced, designed and door-to-door solutions as per the requirement,” Tuteja asserted.

Tuteja, however, expressed concern about the prevailing economic slowdown in the US and EU markets. “Like others in the industry, we are also concerned about the situation in these two major economic partner regions to India and future outlook is invariably depends upon India’s trade with these regions and vice versa,” he said. He observed that India has a robust buying power today, and hence, it is expected that import would not be affected much.

In Tuteja’s opinion, the economic situation in last 2-3 years has although reduced the pace

of development yet things are still on the track for DB Schenker. “These are minor corrections which economy undergoes due to external factors and we don’t see any negative out of it. Keeping the macro situations apart, we are sure that our offerings are powerful. These services have strong ability to catch-up with the market trend very fast. These would certainly be turned out to be successful in capturing the market very soon,” Tuteja shared.


ti l d ti ti t i t l k ft

We are going to focus more on commodity basis than supported by the ‘vertical structure’, since this would be more appropriate to the customers in satellite cities

“

Logistics ServicesNew Initiatives


Airlines NewsNew Launch

The national carrier of Taiwan, China Airlines Cargo, has commenced a twice weekly B747-400F freighter service on the Taipei-Kuala

Lumpur-Chennai-Luxembourg-Taipei route, with effect from May 16, 2012.

Commenting on this new launch, Brian Chou, senior vice president of the airline was confident that routing through Kuala Lumpur would be an advantage as it would help in cross-loading, since it attracts cargo from Hong Kong, Indonesia and other South-East Asian markets. He said that the allocation from Chennai was 40 metric tonne on each flight. According to Chou, the exports cargo

from Chennai would be primarily electronics, mobiles, pharmaceuticals, leather, textiles, etc.. The imports into Chennai would mainly consist of electronics goods.

To celebrate the new launch, China Airlines Cargo organised an event in Chennai which was well-attended by freight forwarders, regulatory authorities, media and senior staff from the airline. The airline officials included Brian Chou, senior VP, KK Wu, VP-sales & mktg., Paul Hseuh, GM-cargo mktg. & planning and HoJo Chang, country GM-India. Pukhraj Chug, MD, Ascent Air, GSA in India of China Airlines Cargo from November 1999, was also present on the occasion to welcome the guests.

launches twice weekly freighter services to Chennai

China Airlines Cargo


Cover StoryRoad Transport

At present, the logistics and transportation cost in India is not competitive with respect to other countries and is also one of the highest. There are various roadblocks that impinge upon optimum utilisation of the

resources. The policies of the government are not facilitating for growth and are rather regressive. They are more tuned as controlling mechanism rather than providing impetus for growth. The road transport sector is full of industrious people with entrepreneurial zeal who are running their businesses under trying conditions.

There is a need of strong political will to facilitate growth and organise this sector. For instance, there are plethora of taxes imposed on the trucker and transporter when they are doing the business on hairline margins to feed their families. The corruption and harassment on roads is rampant and the working conditions are miserable. The new generation is not willing to enter this trade and there is imminent danger for drivers’ shortage looming large.

Said BAL MALKIT SINGH, president, All India Motor Transport Congress (AIMTC), “We have been highlighting and raising the issues adversely affecting the trade in various forums as well as with the government. We are professing

Road Transport in India

Facing serious problems due to shortage of drivers and long pending issuesThe road transport sector, which provides the first and last mile connectivity, carries about 70 per cent of cargo transported by surface operators. However, grossly unorganised and dominated by small and medium players in India, this sector needs adequate attention from the facilitators and policy makers for smooth functioning, so that the lifeline of the national economy can serve the country properly. An industry perspective... RATAN KR PAUL

s and policy the lifelinecountry

tangible solutions for smooth functioning of the trade but they need to be taken in right earnest.”

Adding to this plight, there is an uncertain situation. The government is insisting on minimum eight standard qualification for drivers. This is already having a telling impact as drivers’ licenses are not being renewed and educated people are embracing other employment avenues rather than transport sector.

VINEET AGARWAL, joint managing director, TCI, highlighted that India has the second largest road network in the world but national highways constitute only two per cent of the total road network in the country. In India, roads account for 65 per cent of the freight traffic while the railways serve the remaining 35 per cent.

Presently, the average speed of trucks on Indian roads is about 20kmph. A truck can cover only 250-400km per day compared to 700-800km in developed countries like US and Europe—the reason being poor roads and check-post delays, which, in turn, increases truck’s operating cost. Fuel worth Rs. 100-150 billion is wasted on highways and check-posts annually due to interstate and intrastate check-post delays, stringent documents, etc. Poor maintenance of roads also leads to slow speed, equipment breakdown and accidents. “Road’s condition in India is not satisfactory in our point of view. There is much improvement required in the maintenance of roads, the facilities provided at the road side amenities, security of the drivers and the condition of street lights which hamper night driving. The Joint Study Report of TCI-IIMC has found that the road transport of the country is facing a number of problems,” said Agarwal. One of the major problems faced by the sector is interstate and intrastate check-post

delays. Since different states have different documentation requirements for sales tax compliance, a considerable amount of time is wasted at interstate check-posts for completing sales tax-related formalities. On top of this, there is police harassment and corruption soliciting unofficial payments from drivers.

The facilities provided to the truckers in the name of road side amenities are quite poor. Transporters/drivers are facing problems pertaining to wayside amenities like far-off motels/restaurants for stays at night, petrol pumps, minor vehicle repair workshops, designated parking, ATM and STD facilities.

The Joint Study Report by TCI-IIMC shows that one of the biggest impediments has been delays at check posts and on-road for filling in forms required by various govt. departments, checking and scrutiny of documents and physical checking of the vehicles, drivers and consignment by RTO and Traffic police, and collecting highway toll and taxes.


Multiple Check Posts

Multiple taxes

Bribes

Harassment by police and RTO

officials

Physical assault of drivers/assts

Cascading and demoralising effects

on drivers and truck operators

Unsafe driving zones, poor trucker

friendliness en route

Poor road conditions in many areas

CRUCIAL ISSUES

Many a times truck drivers are running on a tight schedule and in spite of having all the required documents, they end up paying bribes to the officials to minimise the procedural formalities. The study shows that on-road stoppage expenses (toll/RTO/ST/Octroi, etc.) including unofficial payments made to government officials and traffic police amount to, an average, 15 per cent of the total trip expenses.

This has created inefficiencies in the system and resulted in increased cost of operation. The report has even suggested solutions such as adoption of a system similar to the TIR Carnet system prevailing in Europe and implementation of uniform integrated tolling systems which can help in removing much inefficiency.

MANISH GUPTA, MD, RCPL, informed that multiple checks conducted by various agencies at border continues unabated resulting in undue detention which results in lower speed, increased fuel consumption, idling of vehicles and leads to corruption. “India needs a barrier free movement of goods without further delay,” he said.

One of the major problems faced by the sector is interstate and intrastate check-post delays. On top of this, there is police harassment and corruption.


AREEF PATEL, vice chairman, Patel Integrated Logistics, underlined that the road freight transport industry has always been the backbone for economic growth of a nation. With around 85 per cent share from unorganised sector, the industry has become highly competitive. Even the players from organised sector strive to achieve double digit profit margins due to the presence of large number of small players in the industry.

“Industry growth has high co-relation with the economy and factors like fuel cost, GDP growth, regulatory and policy framework, etc., have strong bearing on the industry growth. Industry profitability is dependent on various factors like fuel cost, freight rates, vehicle utilisation, vehicle mix, broker commission, etc. In addition to this, increased costs due to road conditions and stoppages at various check points also impact the profitability,” Patel pointed out.

According to him, introduction of the proposed Goods and Services Tax (GST) would change the rules of the game for logistics sector in India. With introduction of GST and abol i t ion of CST, trade boundaries between states will not exist and companies can consolidate their supply chains. It would facilitate seamless supply across supply chain and across states. GST would increase the importance of logistics for the manufacturing sector. Presently, most large manufacturing firms have regional warehouses of their own to avoid inter-state taxes, but under GST they can streamline their operations and outsource their supply chain requirements to the logistics sector.

UDAY V. MALYA, chief financial officer, BLR Logistiks, endorsed Agarwal. In his opinion, though road conditions have improved over the years, India is still way behind the international average of 800-1200 km a day. Security remains a major concern, especially in the hinterlands. Huge improvement is needed in the road

side amenities, both in terms of recreation and safety. “These obstacles are resulting in an increase in the overall operating cost and is an important factor for logistics cost being 13 per cent of India’s GDP as compared to 11 per cent in Europe and 9 per cent in the US. For instance, a major component of every ODC consignment is the payment that has to be made at several stages to facilitate the movement of the goods,” he said.

DILEEPA B.M., CEO, Bonded Trucking, Shreeji Transport Services, added similar perspective. “Road freight volume is increasing as we can deliver the cargo in very short time only because of the good condition of roads,” he said. He also maintained that the emergence of Customs Bonded Trucking Services is very helpful to the industry people. “Bonded Trucking is playing a vital role for all international carriers. The places where airlines are able to land, they are using bonded trucking facilities and increasing their business. In the days to come there will be a huge demand for bonded trucking in India,” he explained.

On the flip side, Dileepa unveiled some gray areas that may create havoc for this segment. “Presently in India, we have very good roads. But toll charges are increasing day by day, which is an additional cost for the bonded trucking operations,” he said. Moreover, hassles at check post are the most regular problems faced by all Bonded Trucking operators. “This is because of the lack of knowledge. The Bonded Trucking means carrying export and import transshipment cargo under a Transshipment Bond accepted by the commissioner of customs on behalf of the President of India. Once cargo is sealed in customs Bonded Truck, it has to be opened by the destination customs only. But still the check post officers stop the trucks and hold them for a long time. Then we need to explain the concept of bonded trucking and release the trucks,” Dileepa unveiled.

Bonded Trucking is playing a vital role for all international carriers. In the days to come there will be a huge demand for bonded trucking in India

Ministry of Road Transport and Highways launches RFID based electronic Toll Plaza

Union Minister for Road Transport and Highways, Dr. CP Joshi has recently inaugurated country’s first RFID technology-based electronic Toll Collection Plaza at Chandimandir, Punchkula (Haryana). This technology will help users to make payment without stopping at toll plazas and will reduce traffic congestion and

GOOD BEGINNING



SUNIL KUMAR JAIN, MD, North Eastern Carriers Corp, was confident that despite the rough surface, thanks to the current expertise, qualified manpower and positive plans and execution, the freight transportation sector would surely gain a competitive edge and would tap the increasing volume of freight movements. “India is the destination of the future in the field of freight transport and logistics. The Indian freight transport by road sector service is striving for improvements to catch up with growing business need of the Indian economy,” he emphasised.

However, he too observed that much is to be desired as regards to improvement of road conditions and other facilities like road side amenities, security, etc. “The freight cost in India is very high due to lack of infrastructure, administrative cost, toll taxes and congestion in roads, etc.,” he argued.

VIPUL NANDA, MD, Mercurio Pallia, expressed high optimism about the growth of road transport sector in

India. He was of the view that freight transport industry in India is highly fragmented and unorganised. However, changing policies with regards to tax structure are likely to give a competitive edge to make it an organised sector. “In the past ten years, the road freight segment has reported a remarkable growth rate and it is expected to sustain this growth momentum in the coming years. This growth of freight transport is supported by ongoing investment in road infrastructure which will drive growth in future as well,” he felt. He also maintained that infrastructure, of course, is a challenge but that can be improved and is improving slowly. “But major challenge is security that is needed to be dealt with,” he urged.

LONG PENDING DEMANDS Though, the road transport sector is the lifeline of the economy, yet it is not considered as a sector for planning for growth and for generation of revenue. “We appeal to the government to

accord industry status to the road transport sector so that it gets some incentives for development,” voiced the AIMTC president.

Agarwal stressed that Indian logistics industry has gained immense significance over the years owing to increased industrial activities but the logistics sector lacks the industry status. “The government should look accordingly at the industry status of the logistics sector,” he endorsed AIMTC’s resolution. Agarwal also suggests setting up a separate regulatory authority for the logistics sector in accordance to the Insurance Regulatory & Development Authority or Telecom Regulatory Authority of India as it would help to coordinate between the various ministries for an integrated policy for the sector.

Malya added that the logist ics/road transport industry is awaiting the implementation of GST for a long time and the government should take urgent

GOOD BEGINNING

commuting time. Toll statements can be made available online to the road users and they need not have to stop for the receipt. Before issuance of RFID Tags, the road users need to register with the agency with the basic details like name, address, vehicle type, vehicle registration no., etc. The information will be stored in the central database along with the unique identification code of Tag.

Strong government policies from the Centre and States are much needed to eradicate the harassment related to check posts, multiple taxes and police.

steps to roll out the same. The multiplicity of taxes and requirement of various state wise documentations would be replaced by a unified country level tax structure and standardised documentation, and this would facilitate effective compliance. According to him, increasing ‘toll nakas’ and toll charges are becoming major components of cost and they also reduce the mileage of the fleet.

“We request the government authorities to have toll fee only at one point for one truck in India, so that round the year truck can travel anywhere without any problem,” added Dileepa. While Jain felt that strong government policies from the Center and States are much needed to eradicate the harassment related to check posts, multiple taxes and police.


NEED OF THE HOUR

Malya raised a vital aspect,“The industry should do more to address the working conditions of the drivers as, in the long run, the availability of drivers can be a major hindrance to the growth of this industry.”

Agarwal maintained that safety should be a prime concern as transporting goods on roads is prone to accidents. In his opinion, the prime factors responsible for road accidents are overloading and rash and negligent driving. It is imperative that drivers and crew are imparted proper training.

According to Nanda, though drivers are pivotal for freight transport industry, ironically no driver wants his son to join this business because of ill-treatment everywhere. “Logistics players should take it up with various state governments to improve border crossings. Enhancement of highway patrolling to improve safety on roads, more facilities for trucker’s en route for rest and recreation should be the prerequisite to develop the industry scenario,” he said.

Jain urged different government authorities and the road transport operators’ associations like AITWA, AIMTC, PHDCCI (task force on logistics) etc., to constantly have joint talks and address all related issues.



According to the recent figures published by the Indian Railways, 38.58 million tonnes of containerised freight was moved by Indian Railways during 2011-12 comprising 29.17 million tonnes of EXIM traffic and

9.41 million tonnes of domestic traffic. This is hardly 3.98 per cent of the total originating traffic (969.78 million tonne) moved by Indian Railways during 2011-12.

The global average of containerisation is 60-70 per cent of total freight. This is much higher than India’s level of containerisation at 25 per cent. However, it is growing at 12-15 per cent. In India, container train operators contribute about Rs 4,000 crore annually to railways freight revenues. The Indian Railways projects to handle container traffic of 210 mt by 2020, according to the Vision 2020 document.

In the past years, CONCOR has emerged as the main player facilitating the rail freight movement in containers during 2011-12. CONCOR moved 28.3 million tonnes of containerised cargo (by rail) during 2011-12 which is over 73 per cent of the total containerised cargo moved by rail. Concor’s share in EXIM traffic has been around 76 per cent.

CHALLENGES AND BOTTLENECKS

According to ANIL GUPTA, MD, CONCOR, there are two main challenges before the Container Train Operators (CTOs). First and primary challenge is to increase the rail coefficient of EXIM containers which is currently very

Policy of Cross Subsidisation

Lead StoryRail Freight

Resulting in slow growth of rail freight movement It is an irony that despite a gigantic railway network available with the Indian Railways and privatisation of container train operations, the share of rail freight is only about 30 per cent in the total cargo moved by surface transport mode. Is the Railways becoming expensive and inefficient as compared to cargo moved by road transport? Cargotalk spoke to the industry stakeholders to delve into the issues. RATAN KR PAUL


low. “As per my estimates, total EXIM tonnage handled at all Indian ports was little over 150 million tonnes during 2011-12, including 120 million tonnes handled at the major ports. EXIM Rail coefficient at 29.17 million tonnes comes to a little under 20 per cent. The big challenge is to take this rail coefficient up to around 30 per cent during next fiscal year which will require a minimum rate of growth of over 16 per cent in the EXIM traffic,” said Gupta. In his opinion, the second main challenge is to increase the domestic traffic which as per the tonnage estimates of Railways has actually gone down by 7.2 per cent, from 10.14 million tonnes (moved in 2010-11) to 9.41 million tonnes in 2011-12. Gupta also maintained that the first block to be tackled is the one related to higher dwell time of import containers at the gateway ports. Today dwell times are very low for some ICDs for which large volumes are available. For other ICDs, dwell times are high since aggregation of 90 TEUs takes time before the rake can be loaded for any destination. E-transactions and e-filing of the documents will facilitate hassle-free and fast container movements and clearances which is yet another area of concern. However, even though there have been lots of improvements, yet almost 15 per cent to 20 per cent of the containers at port continue to be there without SMTP at the right time which results in delayed movements of containers. Ports are already under pressure to turn out the rakes faster and the delays in availability of SMTPs often lead to situation of CTOs running under load trains whereas containers are physically available for shipment.

BUDH PRAKASH, MD, Kutch Railway Company, pointed out the recent (just before the Rail Budget) hike of rail freight rate by Indian Railways. Interestingly, in the Budget there was no increase in passenger fare in Classes up to 3 tier A/C. “This means that the cross subsidisation has increased further as the input cost in passenger services too has gone up. This is a dampener to increase in the rail share in the total goods transport,” said Prakash. He underlined the fact that business community calculates the total cost from door to door movement and then decides to use railways for their goods movement. “There is hardly any incentive for the industry to prefer rail as the mode of transport. On the other hand, Railways are having severe capacity constraint.

Any improvement in capacity is only marginal as introduction of more passenger train partially eats into the increased line capacity,” added Prakash.

Commenting on the role of capacity building by Kutch Railway Company (KRC), Prakash clarified the company’s position. He informed that Kutch Railway Company has a limited role of providing Broad Gauge connectivity to two important ports in Gujarat, i.e., Kandla Port and Adani Port (formerly known as Mundra Port). At present, the connectivity has been provided through a single Broad Gauge Line. KRC has already initiated a proposal for doubling the line up to Palanpur. Various clearances are awaited and it is expected that the same will be available in the near future. This double BG line will serve as a feeder connection to Western Dedicated Freight Corridor (DFC).

According to Prakash, the biggest challenge before the rail freight/container operators is unreliability of movement. Indian Railways run passenger carrying trains to fixed paths published in time-tables. Freight trains/container trains have no fixed time-

OBSTACLES BEFORE THE PCTOS

Indiscriminate increase in haulage

and other charges leading to price

instability

Denial of non-discriminatory access

to sidings owned by Railways,

CONCOR and private parties

Restriction of movement of certain

commodities

Levy of haulage charges for

movement for examination of the BLC

rake to a base examination depot

Lack of any reasonable level of

operational service by the Railways

Lack of Common User Terminals/

Container Rail Terminals

Delay in development of container

terminals/ ICDs by PCTOs

Lack of level playing field

Multiple/conflicting roles of the

Indian Railways


table. They are run through the available paths in between passenger carrying trains. If due to any reasons the scheduled paths of passenger carrying train get disturbed, goods/container movement is further hit. The speed differential between freight trains and passenger carrying trains is also a major constraint in improving the average speed of goods/container trains which, at present, is very low. Another problem is under powering of freight trains resulting into low average speeds.

RC DUBEY, president, Association of Container Train Operators (ACTO) was also of the view that the Rail Budget 2012-13 was not focussed on basic infrastructure for rail freight movement, which is not sufficient

for resource mobilisation. “Ironically, a few days before the Budget, Indian Railways had increased the freight charges (20 per cent hike), though there was little investment in infrastructure,” he said. As a result, added Dubey, Rail freight traffic is tilting towards road transport, which is already sharing 70 per cent share of total traffic carried by surface mode of transport.

According to Dubey, despite the initiatives from the Ministry of Railways regarding privatisation of container train operations a few years ago, the private companies are not growing as per expectation and potential. “Major challenges before the private container train operators include the restrictions from the Indian Railways

on carrying certain cargo, lack of stability on rate offered by IR, poor transit time because of poor services from IR (e.g., changes of engines, excessive examination time, lack of proper technology, etc.), heavy terminal access charges, poor hinterland connectivity (beyond rail stations and rail terminals), etc.,” observed Dubey.

Taking cue from Dubey, SAJAL MITTRA, CEO, Arshiya Rail Infrastructure (one of the leading private container train operators) pointed out that in order to bring in the desired investment and efficiency in the container train operations business, PPP model was the way forward and in line with the Government of India’s policy in this regard. He underlined that Indian Railways (IR) collected Rs 640 crore as license fees under various categories from 16 container train operators. Till date, Private Container Train Operators (PCTOs) have invested over Rs. 4000 crore in creating the infrastructure including terminals, rakes, handling equipment and start-up costs. The PCTO industry employs around 1,000 people directly and 3,000-3,500 people indirectly.

Over the next five years, PCTO industry also anticipates to operate approximately 450 rakes, pay haulage of Rs. 3,000 crore per annum to IR, and employ 3,000 to 3,500 people directly and 11,500 -13,000 people indirectly.

He also informed that as a part of the Arshiya Group’s long-term plan Arshiya Rail shall induct 150 rakes and build five mega terminals adjacent to the five planned Free Trade & Warehousing Zones and Domestic Distriparks located in North, West, South and East and Central part of India. “Even though private operators have made significant investment in this space, however, since 2010, the growth in the CTO space has stagnated primarily due to the restrictive policy regime of the Railways. Introduction of commodity specific restrictions, notifications and sudden haulage hikes has impacted the long-term prospects as well as the day-to-day business of the industry,” Mittra viewed. He further stated that though the government has implemented PPP through PCTO policy, but due to irrational policies it has not been able to leverage its true potential.

Lead StoryRail Freight

THE WAY FORWARD

According to Gupta, all the CTOs need to deliberate on how to increase the EXIM traffic by these proportions, by addressing the main issues of export/import imbalances, port-wise imbalances and other issues of facilitation and logistics costs. In addition, Gupta appealed, “All CTOs need to sit together with the shipping lines and sort out the area of movement of empty containers from the hinterland in case lines are not able to generate exports for their containers within a reasonable time.” Offering a solution for increase of speed, Budh Prakash suggested that only fixed path/ dedicated lines should be used for the freight/container trains. Construction of DFC is a step in that direction. “Improve the rolling stock design for goods/container trains so that the problem of speed differential is resolved. Expedite the construction of Dedicated Freight Corridor. “For the CTO industry to succeed and achieve its true potential, the Railways needs to support and accept the CTOs as partners rather than viewing them as competitors.On the other hand, Dubey urged for collaboration between road and rail transport operators. “Neither rail nor road transport can offer A to B, i.e., point to point services. Door-to-door means there has to be three legs of transportations—first mile is by road transport, second mile is by rail transport and third mile is by road transport,” he explained.

Private container train operators are increasing their market share. Currently, they are retaining 30 per cent share in total volume handled by railways

DELHI INTERNATIONAL AIRPORT CARGO DEPARTMENT, IGI AIRPORT, NEW DELHI

( A I R L I N E - W I S E I M P O R T / E X P O R T C A R G O P E R F O R M A N C E F O R T H E M O N T H O F A P R I L 2 0 1 2 )

All wt. in mt.

Export(MTs)S. No.Export

Perishable Cargo (MTs)

Export (with Peri.) (UPL)(MTs)

ImportTotal

Cargo%

of Total

## Cargo Handled at Centre for Perishable Cargo

1 Jet Airways 1374 159 1532 2169 3702 11.79%2 Cathay Pacific 812 2 815 2305 3119 9.93%3 Emirates 896 1045 1941 545 2486 7.91%4 Air India 550 526 1075 930 2005 6.38%5 British Airways 897 51 948 715 1663 5.29%6 Thai Airways 328 43 371 1023 1395 4.44%7 Lufthansa Cargo Airline 620 25 645 744 1389 4.42%8 Singapore Airlines 603 17 620 703 1323 4.21%9 Fedex Express Corpation 802 23 825 341 1167 3.71%10 Etihad Airways 415 30 446 420 865 2.75%11 Qatar Airways 425 118 544 266 810 2.58%12 Malaysian Airline System 314 37 352 375 726 2.31%13 Swiss World Cargo(India) 441 37 478 221 699 2.23%14 KLM 452 43 495 192 687 2.19%15 Kalitta Air 380 0 380 291 671 2.14%16 Uzbekistan 421 34 455 202 657 2.09%17 Turkish Airlines 473 31 504 123 627 2.00%18 Virgin Atlantic 355 3 357 208 566 1.80%19 Air France 284 30 314 185 498 1.59%20 Unitop Airlines 0 0 0 475 475 1.51%21 Finnair 347 17 364 105 469 1.49%22 Martin Airline 186 9 195 264 459 1.46%23 Japan Airlines 125 3 128 265 393 1.25%24 Aeroflot Cargo Airlines 232 60 292 56 348 1.11%25 Austrian Airlines 199 10 210 112 322 1.03%26 Saudia 209 100 309 9 319 1.01%27 United Airlines 197 1 198 92 291 0.93%28 China Eastern Airlines 131 6 137 122 260 0.83%29 Air China 117 1 118 140 258 0.82%30 Philippine Airlines 46 10 56 160 215 0.69%31 Aerologic 5 0 5 185 190 0.60%32 Gulf Air 142 21 163 4 166 0.53%33 Ariana Afghan Airlines 104 0 104 58 162 0.52%34 China Air 79 0 79 79 158 0.50%35 Indigo Cargo 103 0 103 50 154 0.49%36 Blue Dart 128 0 128 4 133 0.42%37 Safi Airways 126 1 127 1 128 0.41%38 Kam Air 122 0 122 0 122 0.39%39 Mahan Air 112 2 113 7 121 0.38%40 Ethopean Airlines 22 4 26 80 107 0.34%41 Eva Air 46 0 46 59 105 0.34%42 Dhl Express 0 0 0 100 100 0.32%43 Air Mauritius 60 32 91 2 93 0.30%44 China Southern Airlines 41 0 41 41 83 0.26%45 Air Arabia 73 2 75 0 75 0.24%46 Aerosvit 42 22 64 8 72 0.23%47 Oman Air 59 9 68 0 68 0.22%48 Asiana Airlines 20 0 20 47 67 0.21%49 Sri Lankan Airlines Ltd 37 0 37 29 66 0.21%50 Air Shagoon 0 0 0 57 57 0.18%51 Axios Aviation Services 50 0 50 0 50 0.16%52 Air Astana 24 13 37 3 40 0.13%53 Kuwait Airlines 3 24 27 12 39 0.12%54 Biman Bangladesh 23 2 26 12 37 0.12%55 Kingfisher Airlines Ltd. 27 0 27 2 29 0.09%56 Air Shagoon 27 0 27 0 27 0.09%57 Pakistan International 10 1 11 13 24 0.08%58 Jetlite 5 0 5 19 23 0.07%59 Turkmenisthan Airlines 11 6 17 0 17 0.05%60 UPS 0 0 0 16 16 0.05%61 Royal Jordanian Airlines 10 1 11 1 12 0.04%62 Elal Israel Air 0 0 0 5 5 0.02%63 Druk Air 1 0 1 0 1 0.00%

Airlines

Total 14145 2611 16756 14654 31410 100.00% Cargo handled in April‘11 15285 2392 17677 16422 34098 % VARIATION -7.46% 9.15% -5.21% -10.76% -7.88%


Cargo Performance Import/Export

MUMBAI CSI AIRPORT

E X P O R T / I M P O R T C A R G O T O N N AG E H A N D L E DI N A P R I L 2 0 1 2

WEIGHT IN TONNES

AirlinesS. No.Export

GeneralExport

PerishableTotal

Export ImportTotal

Exp+Imp

(Including TP Cargo)

1 Jet Airways 1336.20 1167.48 2503.68 2918.59 5422.27 2 Emirates 1203.19 1429.57 2632.76 910.43 3543.19 3 Air India 678.52 1643.03 2321.55 944.11 3265.66 4 Lufthansa 525.50 620.17 1145.67 1680.59 2826.26 5 Cathay Pacific 901.43 79.45 980.88 1798.13 2779.01 6 Singapore Airlines 576.90 242.05 818.95 1082.99 1901.94 7 British Airways 500.95 416.67 917.62 646.84 1564.46 8 Etihad Airways 554.36 52.77 607.13 609.43 1216.56 9 Air France 386.17 184.63 570.80 436.38 1007.18 10 Swiss Intl. Airlines 373.21 113.91 487.12 408.14 895.26 11 Qatar Airways 177.14 342.12 519.26 350.69 869.95 12 Turkish Airlines 483.05 63.19 546.24 302.04 848.28 13 Malaysian Airlines 392.75 27.75 420.50 359.92 780.42 14 Thai Airways 159.41 98.02 257.43 513.29 770.71 15 Saudi Arabian Airlines 490.82 169.99 660.81 80.04 740.85 16 Federal Express 356.30 0.00 356.30 342.71 699.01 17 Ethopian Airlines 554.04 4.57 558.61 15.47 574.08 18 UPS 92.86 0.00 92.86 333.45 426.31 19 Delta/KLM Airlines 86.88 52.70 139.58 199.66 339.24 20 Korean Air 263.87 18.59 282.46 49.47 331.93 21 Kenya Airways 262.34 2.06 264.40 10.71 275.11 22 Fin Air 234.21 26.15 260.36 0.00 260.36 23 Gulf Air 82.36 141.40 223.76 2.30 226.06 24 Kuwait Airways 74.90 136.52 211.42 8.31 219.72 25 South African Airlines 194.80 5.40 200.20 9.94 210.14 26 Qantas 71.99 5.17 77.16 75.95 153.11 27 Air Arabia 43.38 106.05 149.43 0.85 150.28 27 Oman Air 112.90 23.50 136.40 3.54 139.94 28 Continental/United Airlines 41.30 0.14 41.44 94.00 135.44 29 Indigo Air 94.98 12.95 107.93 24.57 132.50 30 Blue Dart 85.82 0.00 85.82 34.58 120.40 31 Air Mauritius 109.58 3.33 112.91 1.14 114.05 32 EL-AL Airlines 57.20 0.11 57.31 54.85 112.16 33 Charters 0.00 0.00 0.00 111.05 111.05 34 Srilankan Air 43.44 5.11 48.55 30.98 79.53 35 Bangkok Airways 62.36 0.77 63.13 0.41 63.54 36 Pakistan Airways 24.14 11.31 35.45 9.68 45.13 37 Yemenia Airways 29.81 9.00 38.82 0.27 39.09 38 Baharin Airlines 34.34 0.00 34.34 0.27 34.61 39 Iran Air 25.85 7.77 33.62 0.47 34.09 40 Egypt Air 14.77 0.00 14.77 0.49 15.26 41 Kingfisher Airlines 13.53 0.00 13.53 0.00 13.53 42 Royal Jordanian Airways 9.71 0.00 9.71 0.82 10.53 43 Air China 0.00 0.00 0.00 2.99 2.99 44 Air Cargo Germany 0.00 0.00 0.00 0.00 0.00 45 Austrian Airlines 0.00 0.00 0.00 0.00 0.00 46 North West Airlines 0.00 0.00 0.00 0.00 0.00 47 Others 3.34 92.56 95.90 690.11 786.01

Cargo Handled in March’12 14197.80 7016.14 21213.94 16782.72 37996.66

EXPORT/IMPORT CARGO TONNAGE HANDLEDI N M A R C H 2 0 1 2

GRAND TOTAL 11820.60 7315.95 19136.55 15150.65 34287.20


T R A F F I C S T A T I S T I C S DOMESTIC FREIGHT

(A) 11 International Airports1 Chennai 7415 8245 -10.1 84730 93336 -9.2 2 Kolkata 6872 7198 -4.5 81703 84861 -3.7 3 Ahmedabad 3204 1284 149.5 19964 15060 32.6 4 Goa 355 437 -18.8 4016 4247 -5.4 5 Trivandrum 139 121 14.9 1449 1540 -5.9 6 Calicut 20 17 17.6 191 282 -32.3 7 Guwahati 437 705 -38.0 7761 8520 -8.9 8 Jaipur 626 636 -1.6 6475 8177 -20.8 9 Srinagar 182 181 0.6 2361 2016 17.1 10 Amritsar 7 5 40.0 89 161 -44.7 11 Portblair 247 202 22.3 2386 2299 3.8 Total 19504 19031 2.5 211125 220499 -4.3 (B) 6 JV International Airports12 Delhi (Dial) 17045 17551 -2.9 200525 209113 -4.1 13 Mumbai (Mial) 16580 17988 -7.8 190288 199831 -4.8 14 Bangalore (Bial) 7132 7357 -3.1 83256 87515 -4.9 15 Hyderabad (Ghial) 2959 3053 -3.1 34472 36390 -5.3 16 Cochin (Cial) 774 755 2.5 8533 8610 -0.9 17 Nagpur (Mipl) 296 449 -34.1 4588 9145 -49.8 Total 44786 47153 -5.0 521662 550604 -5.3 (C) 9 Custom Airports18 Pune 2421 2327 4.0 24134 27828 -13.3 19 Lucknow 219 384 -43.0 3690 3492 5.7 20 Coimbatore 614 624 -1.6 7281 6637 9.7 21 Mangalore 25 28 -10.7 267 305 -12.5 22 Patna 260 260 0.0 3425 3279 4.5 23 Trichy 0 0 - 0 0 -24 Bagdogra 154 94 63.8 1672 1114 50.1 25 Chandigarh 304 86 253.5 3042 1013 200.3 26 Varanasi 18 31 -41.9 356 422 -15.6 27 Madurai 78 56 39.3 842 580 45.2 28 Gaya 0 0 - 0 0 - Total 4093 3890 5.2 44709 44670 0.1 (D) 20 Domestic Airports29 BHUBANESWAR 195 271 -28.0 2286 2667 -14.3 30 INDORE 345 471 -26.8 4734 5380 -12.0 31 AGARATALA 484 595 -18.7 6889 7105 -3.0 32 VISAKHAPATNAM 190 284 -33.1 1046 1107 -5.5 33 JAMMU 125 106 17.9 1265 1371 -7.7 34 VADODARA 238 166 43.4 2282 2099 8.7 35 IMPHAL 410 592 -30.7 4984 6002 -17.0 36 RAIPUR 272 217 25.3 2870 2356 21.8 37 UDAIPUR 0 0 - 0 0 -38 RANCHI 122 148 -17.6 1650 1306 26.3 39 BHOPAL 84 82 2.4 890 1175 -24.3 40 AURANGABAD 124 115 7.8 1227 1841 -33.4 41 LEH 92 131 -29.8 1336 1426 -6.3 42 RAJKOT 62 68 -8.8 738 933 -20.9 43 DIBRUGARH 28 41 -31.7 343 322 6.5 44 JODHPUR 2 4 -50.0 41 27 51.9 45 TIRUPATI 1 1 0.0 26 12 116.7 46 SILCHAR 26 48 -45.8 497 480 3.5 Total 2800 3340 -16.2 33104 35609 -7.0

March 2012

For the Month

Freight (in Tonnes)

For the period April to March

S. No. March2011

%Change 2011-12 2010-11 %

ChangeAirport

(E) Other Airports 121 106 14.2 1491 1279 16.6 Grand Total 71304 73520 -3.0 812091 852661 -4.8 (A+B+C+D+E)


Cargo Performance Indian Airports

T R A F F I C S T A T I S T I C S INTERNATIONAL FREIGHT

(A) 11 International Airports1 Chennai 22885 27326 -16.3 272461 295497 -7.8 2 Kolkata 3562 4111 -13.4 43890 45098 -2.7 3 Ahmedabad 986 923 6.8 11793 12980 -9.1 4 Goa 275 420 -34.5 2154 2535 -15.0 5 Trivandrum 4555 3582 27.2 46753 37795 23.7 6 Calicut 2775 2246 23.6 25400 21964 15.6 7 Guwahati 0 0 - 0 0 -8 Jaipur 29 14 107.1 235 398 -41.0 9 Srinagar 0 0 - 0 0 -10 Amritsar 723 471 53.5 6998 5834 20.0 11 Portblair 0 0 - 0 0 - Total 35790 39093 -8.4 409684 422101 -2.9 (B) 6 JV International Airports12 Delhi (Dial) 32720 36204 -9.6 367830 390932 -5.9 13 Mumbai (Mial) 40973 43983 -6.8 467182 470402 -0.7 14 Bangalore (Bial) 13108 13317 -1.6 141693 135263 4.8 15 Hyderabad (Ghial) 3702 4097 -9.6 43627 42170 3.5 16 Cochin (Cial) 2551 3449 -26.0 34173 32198 6.1 17 Nagpur (Mipl) 45 31 45.2 388 346 12.1 Total 93099 101081 -7.9 1054893 1071311 -1.5 (C) 11 Custom Airports18 Pune 0 0 - 0 0 -19 Lucknow 97 73 32.9 839 586 43.2 20 Coimbatore 49 39 25.6 467 390 19.7 21 Mangalore 0 0 - 0 0 -22 Patna 0 0 - 0 0 -23 Trichy 179 154 16.2 2012 1775 13.4 24 Bagdogra 0 0 - 0 0 -25 Chandigarh 0 0 - 0 0 -26 Varanasi 0 0 - 1 0 -27 Madurai 0 0 - 0 0 -28 Gaya 0 0 - 0 0 - Total 325 266 22.2 3319 2751 20.6 (D) 18 Domestic Airports 0 0 - 0 76 - (E) Other Airports 0 0 - 0 0 - Grand Total (A+B+C+D+E) 129214 140440 -8.0 1467896 1496239 -1.9

March 2012

For the Month

Freight (in Tonnes)

For the period April to March

S. No. March 2011

%Change 2011-12 2010-11 %

ChangeAirport

Chapman Freeborn Air Chartering has moved its office in India to a new location in New Delhi to accommodate its expanding team. According to the company sources, over the last two years, the global aircraft charter specialist’s India operation has seen a continued growth. Hence

the move is to larger premises in order to accommodate for all its aircraft brokering activities. The new office is located opposite the Indira Gandhi International Airport and near the new Terminal 1-D Domestic Terminal. “In the last two years of managing the India office we have seen

a substantial growth in this region. We have expanded our local team in order to adapt to the increase in business we are witnessing. Our goal is continue to expand into the best locations to ensure value and commitment for our clients’ needs,” said Shailendra Seth, director of Chapman Freeborn India.

Chapman Freeborn India shifted to new office


Cargo Performance Indian Airports


Guest ColumnIndian Rail

Indian Railways has a crucial role

to play for logistics industryThere is no denying the fact that for the nation’s economic development, transportation is a key facilitator. Within that, keeping environmental and energy considerations in mind, rail technology is the best. The railways have been the ‘lifeline’ of the nation and will need to be more so now. However, the ‘lifeline’ being in the ‘ICU’ does not augur well for the nation. PROF. G RAGHURAM

Financially, the Indian Railways (IR) was in the ‘ICU’, even needing a short-term loan of Rs 3,000 cr from the Finance Ministry. The question is when and how will

the IR get out of this state. The Railway Budget 2012-13 is a welcome step, conceptually gutsy attempt to lay the way forward for reforms in the Indian Railways (IR).

Under such circumstances, planning an investment of Rs 60,100 cr during 2012-13 was significant, with an expected contribution of—Rs 24,000 cr from the general budget, Rs 18,050 cr from internal surplus, Rs 15,000 cr from market borrowings through Indian Railway Finance Corporation, Rs 2,000 cr from safety fund, and Rs 1,050 cr from extra budgetary resources.

This annual investment is the highest ever planned, but substantially below the required average annual investments of over Rs 150,000 cr during the 12th five year plan. This figure is in the range of the requirement that has been projected both in the ‘Vision 2020’ document released under former Railway Minister, Mamta Banerjee and by the Expert Group for Modernisation of Indian Railways (of which the author is a member). To avoid conflict of interests, this would require an independent assessment. While the IR has been resisting the concept of a regulator, former Railway Minister Dinesh Trivedi had, for the first time, proposed the

idea of an independent Railway Tariff Regulatory Authority. The needs and terms of such an Authority were expected to be first discussed by

a committee of key stakeholders, and then by the parliament.

Internal surplus can be generated by increasing revenues and controlling costs. Freight rates were increased (‘rationalised’ as claimed by the then minister) by 10 per cent to 15 per cent before the budget, and hence did not come as a budget proposal. A similar increase for passenger fares was proposed in the budget. Given that passenger fare increase had not happened for almost eight years, most stakeholders have appreciated the move. However, the Minister’s own party not being happy about it made him sacrifice his job as the Minister of Railways.

With the projection of increased freight traffic from 970 million tonne in 2011-12 to 1025 million tonne in 2012-13 and the increased freight and passenger rates, the net surplus was expected to provide Rs 18,050 cr towards investment. This would be the highest such surplus anticipated. The obvious risk is whether the freight increases would turn away the traffic. The Modernisation Committee expects over Rs 200,000 cr over five years as internal surplus! It is important that IR move in this direction.

RAIL FREIGHT OPPORTUNITIESThere are opportunities in increasing freight traffic by investments in routes where bulk freight is moving by road due to lack of rail capacity, especially through some of the major ports. There are opportunities in revenue generation

A major way to step up the

investments would be to generate

substantially more internal surplus,

and seek extra budgetary resources

through public private partnerships

(PPPs). Another source, of course, is

the general budget.

Contribution from the general budget

can be expected in the case of

strategic projects (which are normally

provided for), and explicit subsidies

towards (i) non-remunerative lines

and (ii) fares, if kept lower than

‘desirable,’ towards a larger national

goal.

INVESTMENTS

and cost reduction by focusing on low investment and high return activities. Standardisation of intercity and long distance passenger trains could enable greater flexibility in usage of coaches, the average of which is around 550 kms/day, but offers a potential of reaching 700 to 800 kms/day. Investments in reversals and flyovers at various railway junctions would streamline traffic flows, thereby reducing costs and increasing asset utilisation. Signalling investments can improve capacity and of course safety. Rationalisation of work force by automation and retraining could help reduce staff costs. Prioritising investments directed at projects which are nearing completion could help generate revenues quickly. The budget does not explicitly talk of these options, except signalling, unless they are implicitly implied.

ROLE OF PPP: EXPERIENCES SO FARBig ticket extra budgetary resources need to come in through PPPs. There are issues, however, of how PPP friendly IR is perceived to be. For example, one of the significant PPP domains, namely container train operations, has been riddled with a series of problems, leaving the private investors feeling uncomfortable in relating to the IR. One of the significant players has even gone to the Competition Commission against the IR. Keeping this reality in mind, the budget 2012-13 expects only Rs 1,050 cr towards this. The Modernisation Committee expects over Rs 220,000 cr through PPPs over five years! The IR would need to change their mindset and do significant organisational reforms before PPP funds start flowing in. I would commend the approach followed in coming up with the budget, which (as was often said) is not just an annual statement, but a vision for the long-term, to be achieved by ‘biting the bullet’. Apart from the parliamentary, industry and other key

Guest ColumnIndian Rail

ministry consultations, State Governments, Institutions (I know for sure the Indian Institute of Management, Ahmedabad and National Institute of Design, Ahmedabad) and two specific high level committees, namely the Modernisation Committee, and the High Level Railway Safety Review Committee were consulted.

The budget was also path breaking in its attempt to talk of missionary approaches to delivering results, as recommended by the Modernisation Committee. In addition, a slew of special purpose vehicles (or focused organisations) and authorities have been announced, they are: Rail-Road Grade Separation Corporation of India, Railway Safety Authority, Railway Research and Development Council, Indian Railway Station Development Corporation,

Logistics Corporation, National High Speed Rail Authority and SPV with State Government of Andhra Pradesh.

A lost (though not irretrievably) opportunity is making the Dedicated Freight Corridor an independent railway. Similarly, the High Speed Rail should be envisaged as an independent railway. There should be more proliferation of organisations at the customer service level, so that market orientation becomes the much required mindset. Overall, the question for the country is primarily how to best leverage rail technology and how to make IR a vibrant organisation! In my view, this year’s bold budget has set the tone for this.

(The author, Prof. G Raghuram is a Professor, IIM Ahmedabad, and a member of the Expert Group for Modernisation of Indian Railways)

The way forward to create a climate for PPPs has also been considered through the setting up of Indian Railway Station Development Corporation and Logistics Corporation. However, more significant restructuring is required in the separation of the policy making (Ministry), operations (Railway Board) and regulation (Safety, Tariff). Further, at the operational level, more organisations that will compete for and in the market are required.

MAJORCONSIDERATIONS

Investments in flyovers at various railway junctions would streamline traffic flows, reduce costs and increase asset utilisation.



Family AlbumClub Function

The Air Cargo Club of Delhi (ACCD) recently organised a luncheon meet in New Delhi on a serious issue pertaining to the future of small and medium sized freight forwarders in India. Addressed by Tushar Jani, chairman and Radharamanan Panicker, CEO- Group CSC, the meet was attended by a huge number of ACCD members and guests.

ACCD discusses future of Indian freight forwarders

members and guests. ge number of ACCD mhug m


Family AlbumGet Together

Damco India recently organised a customer meet on May 8, 2012 in Bengaluru to celebrate the organisation’s success in one of the fast growing markets in South India. Rolf Habben-Jansen, CEO, Damco Global, was present at the event along with Lars Sorensen, CEO, Damco South Asia; Ram Kumar Nair, GM - South India and Krishna Kumar, national sales head, Damco India, to interact with the customers.

Damco India hosts customer meet at Bengaluru

Corporate Social ResponsibilitiesAnnual Event

First Flight Couriers organises marathon for a cause

First Flight Couriers, which is India’s leading courier company, has been organising marathon from last four years and the entire collections were

donated to the welfare institutions like Snehasadan & Cheshire Homes. This year too the Marathon was organised on February 12, 2012 at Bandra Kurla complex. Like previous years, few celebrities and top bureaucrats were present at the event as the guests of honour. Approximately 600 plus employees of the company participated in this sporting event. The race started from the City Park located at BKC and was ended at the same venue followed by a prize giving ceremony.

“First Flight has always been in the forefront when it comes to supporting noble causes and helping institutions, which dedicate their services for the betterment of the underprivileged section of our society,” said RK Saboo, deputy managing director, First Flight. According to him, the management of the company has always been conscious of its corporate social responsibility.

At present, First Flight Couriers has a network across the country. While the corporate office of the 25 year-old company is based in Mumbai, its 20 regional offices are located in the metros and other major cities of the country.

The Airports Authority of India (AAI) celebrates its 17th Anniversary on April 28 in New Delhi. On this occasion, AAI in-house cultural team organised a spectacular evening on the theme titled “Indralok se Indraprastha – A Runway Yatra”. Ajit Singh, Union Minister for Civil Aviation was present at the evening as Chief Guest. Also present at the function were V P Agrawal, chairman, AAI and several other dignitaries.

AAI Celebrates 17th Annual Day


International Events

International Events

Logistics Events

2. LogiChem Asia June 26 - 28, 2012 Grand Hyatt Singapore, SingaporeContact: +65 6408 9217E-mail: [email protected]

11. 8th Trans Middle East Bahrin 2012 November 20-21, 2012Gulf International Convention And Exhibition Centre, Kingdom of BahrainContact: Level 1, Lot 7, Block F, Saguking Commercial Building,Jalan Patau-Patau, 87000 Labuan F. T., MalaysiaTel: +60 87 426 022Fax: +60 87 426 223Email: [email protected]

1. Air Cargo China June 5-7, 2012Shanghai New International Expo CentreContact : Messe München GmbHAir Cargo ChinaMessegelände81823 München, GermanyPhone +49 89 [email protected]

Calendar of International Events

4. Aviation Outlook China 2012 July 10-11, 2012Jumeirah Himalayas HotelShanghai - Chinawww.terrapinn.com

6. Aviation Outlook Africa July 23-26, 2012Sandton Convention Centre Johannesburgwww.terrapinn.com

5. Compack Chennai 2012July 13-15, 2012Chennai Trade Centre Chennai, IndiaContact : Smart Expos, Chennai, IndiaPh : +(91)-(44)-22501986/22501987

9. FIATA 2012 World Congress October 8-12, 2012Hyatt Regency Century PlazaLos Angeles, [email protected]: 202-373-4174

10. India Maritime 2012October 17 -20Panaji, Goa, IndiaContact: Federation of Indian Chambers of Commerce and Industry (FICCI)Federation House1, Tansen Marg, New Delhi-110001Ph: 011-23359734E-mail: [email protected]; [email protected]

7. Cool Logistics GlobalSeptember 24-26, 2012Crowne PlazaAntwerp, BelgiumContact: +44 20 8744 0244

3. e-Cargo Conference 2012June 26 - June 28, 2012Geneva, SwitzerlandIATA Geneva Conference Centerwww.iata.org

8. ACF 2012October 2-4, 2012 Georgia World Congress Center285 Andrew Young International Blvd. N.W. Atlanta, Georgia 30313-1591Phone: 1 786 265 7011 Fax: 1 786 265 7012 Email: [email protected]

Shipping & PortsCapacity Building


Angre Port in Maharashtra

With increasing import-export business, leading Indian ports are having tough time to manage operations. The newly launched Angre Port – Maharashtra’s first private port – intends to release the tension by attracting traffic on Western Coast and further boost the growth in shipping and cargo industry. ANITA JAIN

Open for Business

With an investment of close to Rs 520 crore, Maharashtra’s f i rst merchant minor port was thrown open for

commercial operations on April 23, 2012. Situated on the west coast of India (between Mumbai

and Goa in Ratnagiri district), the all weather port boasts of natural draft of 10 meters, 700 meter quay length, natural break water, cargo handling facility of around 16 million tonne per annum with facilities to handle merchant cargo

including dry bulk, liquid cargo and container cargo. In the second phase of development, it plans to increase the draught to 13 meters and capacity to 25 mtpa.

Furthermore, for additional revenue stream, the port is in process of building India’s first ship-lift repair yard facility at a cost of Rs 430 crore to be ready by June 2013. It will be the first such major facility for ship repair on the western coast and will serve as a cheaper and convenient alternative as compared to Sri Lanka or West Asia. A lift that can raise a vessel of up to 8,500 tonnes to 14.5 metres above the water level will be deployed at the facility to place the vessel ashore, and on to the repair yard. The yard will have a total of six berths of up to 150 meters in length and capacity to handle six ships simultaneously of up to 10,000 DWT size ship. This integrated ship repair facility will be able to accommodate all kind of activities including electronic navigation, underwater, etc.

According to Vijay Chowgule, Chairman, Chowgule Ports & Infrastructure (holding co. of Angré Port), the port has finalised container feeder service operations with multiple shipping lines that will connect it with two transshipment hubs – Jebel Ali and Colombo. The container feeder vessel originating from Jebel Ali will call at Colombo, Cochin and New Mangalore port before connecting Angré port directly with Jebel Ali. He said, “By bringing down the logistics costs, goods produced and traded in the region, will

become competitive in the overseas markets. Angré Port will act as a catalyst to the development of Kolhapur emerging as the new manufacturing hub beyond the golden triangle of Mumbai, Pune and Nashik. Our concentration on clean cargo will help. I think there is enough room and enough business in the geography waiting to be tapped.” This port, according to him, will bring about a saving for Exim cargo originating from Kolhapur and Belgaum which at present involves transportation and handling cost at JN Port, of about USD 560 and USD 700 per container, respectively.

This port project was awarded to Chowgule group in March 2008 by the Maharashtra government for a 50-year period as per the concession agreement on Build Own Operate Share and Transfer (BOOST) basis. “The port will have customs clearance facility at site, and hence, will also reduce the total cycle time needed at JN customs,” informed Atul Kulkarni, CEO, Chowgule Ports & Infrastructure.

This is the second port to come up in Jaigad, after the much larger one constructed by the Jindals--whose JSW Power runs a thermal power plant in the area--is already operational. Chowgule said, they do not consider JSW’s Port in competition as it has been built largely keeping in mind the group’s requirements of handling coal. Additionally, the Angre Port’s focus on handling only clean cargo and not coal and iron ore, will help it gain advantage.

DID YOU KNOW?


Emerging TechnologyCargo Portal

Cargo insurance is essential in this industry as cargo in transit means cargo at risk. The online cargo portal, Calogi, currently serves a user base of more

than 500 companies and 1,500 discrete users, all of whom require insurance to protect their cargo against loss or damage. “We are currently shortlisting distribution partners for the Calogi solutions in the Indian Market. We are in the process of negotiating with the potential partners and aim to have the contract signed by mid-May,” informed Patrick Murray, head of Calogi.

Commenting on the significance of the agreement with Dubai Insurance, he maintained that cargo insurance quotes will now be available online and forwarders will no longer have to use other time consuming communication modes such as the telephone and fax to satisfy their insurance needs, increasing productivity and eliminating paperwork for both the forwarders and insurance companies. “I believe that our offering will be very attractive to the Indian market as our is the only system that unites the major air cargo supply chain stakeholders on one platform,” Murry said.

To be associated with Calogi solution, the data is entered once and re-used across the supply chain offering complete transparency. For Indian air cargo supply chain stakeholders who use the portal, there are no expensive messaging costs. For those that still require traditional messages, the

company can send them via email or file transfer, thus removing SITA costs.

“The new Calogi solution will allow Dubai Insurance to offer products at competitive prices for all domestic and international cargo either while the shipment is being transported or while in the possession of the forwarder,” said Abdellatif Abuqurah, CEO, Dubai Insurance.

Abuqurah claimed that Calogi has brought a new dimension to the airfreight industry in the form of credit management. Distributing stock to a forwarder is no longer like issuing a blank cheque. Instead airlines can decide the amount of financial risk they are willing to take with each forwarder by setting credit limits.

“We will continue to develop Calogi to keep abreast of industry standards and initiatives. We have two philosophies. The first is to continue to support the industry by developing and testing features once and make them available on the portal, thus helping our stakeholders to keep their costs down. Our second philosophy is to increase our income by increasing the volume of users and transactions,” Murry shared.

According to Murry, Calogi has priced its solution in a manner so that it remains within the reach of the small-to-medium enterprises. “We did not want cost to be a barrier. Even an exporter who has one or two shipments a week has found our system extremely cost effective,” he asserted.

Calogi signs pact with Dubai Insurance

PROSPECTOF INDIAN MARKET

to offer e-transaction by cargo community Calogi, the Dubai based leading air cargo portal, recently signed an agreement with Dubai Insurance to offer cargo insurance online via the Calogi portal. The services will be for across the world and the company is targeting India in a big way, through business partners. RATAN KR PAUL


NEWSOLUTIONS In 2012, Calogi introduced c-Club—the first loyalty programme dedicated to the air cargo supply chain business. Murry maintained that it offers even more benefits to the company’s customers conducting their business on the portal. According to Murry, the Calogi c-Club loyalty solution allows any seller of services on the portal to run his own flexible loyalty scheme with any buyers on the portal. By running their own loyalty programme, Calogi subscribers will be able to solidify existing relationships, initiate new relationships and convert one-time customers into repeat business.

In addition, Calogi has built an express and mail product which will enable forwarders to ship courier products (even under Courier Baggage Voucher) with the same rating and stock control

features as general cargo. In this case, Calogi will act as a clearing house for such courier transactions.

Calogi has also developed and implemented a third party logistics module which allows 3PL service providers to sell services, such as packing, dangerous goods management and storage to any user on the Calogi portal. “Calogi will deduct the money from the purchaser’s account and pay the seller of the service. The Calogi loyalty programme will also be used by 3PL service providers,” Murry highlighted. Calogi has also developed a solution to offer opportunity for shipper, origin forwarder, airline and destination forwarder to view the A4 air waybill. “This presents airlines, flying domestic routes, with an opportunity to remove neutral and manual stock from their domestic market and pave the way for full e-freight compliance,” Murry informed.

Emerging TechnologyCargo Portal

PVC Dock Shelter

Dock shelters from Campisa

CUSHION DOCK SHELTER

Gandhi Automation sources maintain that Cushion Dock Shelter is ideal to maintain the ‘cold chain’. Thanks to its high insulation factor, Cushion Dock Shelter is the ideal solution for controlled temperatures.

Gandhi Automations

UPDATE


As far as outlook in India is concerned, Damco is quite posit ive about the Indian growth story as it is based on sound economic fundamentals.

Moreover, the Indian market remains attractive and with India being the second most populous country in the world after China, domestic internal demand is here to stay.

“Companies are learning how to change sourcing locations much more quickly and easily than even a few years ago. So sourcing may happen today from China, tomorrow from India, and later from Vietnam,” stated Jansen.

He pointed out that the Asian, Latin American and African consumer is growing in confidence and spending power. On the other hand, the impact of political unrest in the Middle East has had more impact on oil prices than trade. The Japanese Tsunami and the Thailand floods had larger impacts on global trade and supply chains in some specific industries. The weak consumer demand in the US and Europe have had a rather larger impact.

However, these events have not had a particular impact on Damco’s operations and logistics strategies because Damco operates in 95 countries and is not particularly dependent upon any one region.

“We believe that service providers, such as Damco who stay close to their customers and have over a period of time built a strong understanding of their business, will be able

to provide value to customers even in difficult scenarios,” Jansen asserted.

The CEO further shared that emerging markets would play a key role in Damco’s future success. “Our strategy includes a strong focus on high growth markets in Asia, Africa and Latin America. If you look at how our organisation is built, roughly 65 per cent of the people we employ are in these high growth markets, which is also a plus from a cost perspective as it makes us quite competitive,” he underlined. He maintained that Damco’s position in places like Sub-Saharan Africa, India, Bangladesh, Vietnam, Cambodia, Indonesia and China is also quite strong.

Jansen emphasised that India would continue to provide Damco with attractive opportunities to achieve new levels of growth for its products and services. “We feel that there is a lot of growth still waiting to happen with many major Indian businesses increasingly outsourcing their logistics activities to capable and globally experienced third party logistic service providers like us,” he said.

Commenting on the new products launched by Damco to cope up with current trends and future challenges, Jansen highlighted the recently launched services called ‘Damco Dynamic Flow Control’ (details about this product were published in the May 2012 issue of Cargotalk). He expects that this product will elevate Damco’s position in the market place. “We see this solution as a clear differentiator that has the potential to create significant value for our customers as well as for Damco,” he added.

Emergence of new markets

Logistics ServicesCEO Talk

Damco puts moreemphasis on IndiaWith weak prospects for growth in Europe and North America, large companies are increasingly turning elsewhere, including Africa, which has been under-developed for a long time. And, India perhaps tops the priority list. Let’s find it from an exclusive interview with Rolf Habben-Jansen, Global CEO, Damco. RATAN KR PAUL

Jansen stressed that Damco has significant growth plans. “In air freight, we have enhanced our sea-air product by offering services through several hubs located in strate-gic locations that offer a cost and transit advantage to the customer,” he added.

ACCORDING TO JANSEN, in 2011 Damco made steady prog-ress mainly due to its continued focus on remaining close to its cus-tomers and offering them cost effec-tive reliable logistics solutions. The company grew its ocean volume by over 20 per cent and air freight volumes by over 10 per cent.

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Documents

road freight

road sector

private operators

growth tracks

private container operators

poor road conditions

new delhi

sustainable growth