A government with cleAr - IFCBAifcba.org/sites/ifcba/files/Infralog_Magazine_Aug.pdf · Safexpress recently launched its Logistics Park at Pithampur with an objective to augment economic

A government with cleAr vision on infrAstructure And logistics

For the first time in the history of Indian politics a national party (Bharatiya Janata Party), which was ultimately voted to power in the recently held General Elections, included infrastructure and logistics in their Election Manifesto. It declared that infrastructure needed to be built keeping in view the requirements of the future.

The manifesto had said that a BJP government at the Centre would speed up work on the freight corridors and expedite industrial corridors to ensure faster movement of people and goods, connect remote states such as Jammu & Kashmir and those in the northeast with the rest of the country through highways and rail lines, speed up national highway projects, particularly along the borders and coasts, and connect every village through all-weather roads.

The manifesto had also emphasised on airport development. It had said that in addition to modernising existing and operational airports, new ones would be built to connect small towns and tourism circuits. With regard to development of ports in the country, the manifesto had promised that the existing ports would be modernised and new ones would be developed, stringing together the ‘Sagar Mala’ project.

Significantly, the manifesto had assured for an integrated public transport project that would include roadways, railways and waterways, developing waterways for passenger and cargo transport and developing a national logistics network for faster movement of goods.

It is commendable that the new government lead by BJP is now apparently heading towards chalking out action programmes to fulfill those promises. The announcements in the Budget 2014-15 of the government can be taken as the manifestation of the same. In this Budget the government recognized need for availability of scientific warehousing infrastructure in the country, and allocated Rs 5,000 crore for the fund for the year 2014-15. An institution to provide support to mainstreaming PPPs for infrastructure called ‘3P India’ will be set up with a corpus of Rs 500 crore. Sixteen new port projects are proposed to be awarded this year with a focus on port connectivity. Scheme for development of new airports in Tier I and Tier II cities will be launched for implementation through Airport Authority of India or PPPs. The Finance Minister proposed investment in National Highways Authority of India and State Roads of an amount of Rs 37,880 crore, which includes Rs 3,000 crore for the North East.

And above all, the government is confident that they would be able to resolve the issues related to GST soon and it would be implemented within a year time. It is heartaining to mention that the GST would not only streamline the tax administration, it would bring in a sea change in the warehousing and logistics industry in India.

Managing Director: Prof. Dinesh Kumar

Editor: Ratan Kr Paul

All information in InfraLog is derived from sources we consider reliable. However, it is passed on to our readers without any responsibility on our part. Opinion/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part (s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisement Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of an advertisement to appear. InfraLog is published and printed by Manish Kumar from D-7, Suncity, Sector 54, Golf Course Road, Gurgaon-122001 and printed at : Ideal Impressions Pvt Ltd, 9983, New Rohtak Road, Sarai Rohilla, New Delhi-5. Phone: 28717788, 28716080. Mobile: 9811017290.

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CONTENTSEDITORIAL

06

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27

48

COvEr STOryAFS Policy for Air Cargo: Bonanza from the new government......10

INDUSTry NEwS‘GMR IGI Awards 2014’ presented to cargo performers......6Safexpress launches Logistics Park at Pithampur......7

ACAAI CONvENTION 201441st ACAAI Convention in Shanghai will discuss Indian Logistics in changing times......8

ExPErT vIEwSOn need of Air Freight Stations: Ram Menen......22

LOGISTICS SUMMIT IN ChENNAIIndustry and policy makers come together for repositioning......24

LEAD STOryConfidence Building Exercise by the new government of India......30

FrOM ThE MD’S DESkAccelerating Economic Growth with efficient logistics and supply chain management......34

GUEST COLUMNKey issues and responsibilities of the logistics industry on skill development......36

INDUSTry ASSOCIATIONSIFCBA to make Customs Brokers business an occupation of first choice......38

LEADING AIrPOrTSchiphol Cargo registers tonnage growth......40

ExCLUSIvE INTErvIEwNew MD of CRWC to focus on express cargo services......42

CEO SPEAkSCelebi Aviation Group plans pan India expansions......44

LOGISTICS LEADErSCreate a transport grid: Tushar Jani......50

Safexpress recently launched its Logistics Park at Pithampur with an objective to augment economic growth in the region. According to the

company sources, spanning over an area of 75,000 sq feet, this ultra-modern Logistics Park is strategically located on NH 3.

“This Logistics Park will help to raise the standards of supply chain & logistics in this region to a very different level,” said Pawan Jain, CMD, Safexpress. Elaborating on the “strategic location” Jain maintained that Pithampur is a major hub for automobile manufacturing Industry. Majority of the vehicle-producing companies of India have their factories in Pithampur. It is a well-developed industrial area, which includes both large and small scale industries. Apart from automobile industries, Pithampur is home to various other industries like food processing,

With an aim to recognise the key performers in the Indian aviation industry who work relentlessly to keep the airport operations

running 24X7, the GMR led consortium Delhi International Airport (Pvt) Ltd. (DIAL) recently presented the third edition of the GMR-IGI Airport Awards. The “GMR-IGI Awards 2014” were given across 28 diversified categories with two special recognition awards at a glittering function held at the Kingdom of Dreams, Gurgaon.

The award winners from cargo sector include Jet Airways (International Cargo Airline of the Year), Zion Express Cargo (Freight Forwarder of the Year) and PS Atree & Co (Custom House Agent of the Year).

Commenting on the performance of the airport thanks to its business partners Srinivas Bommidala, Business Chairman, GMR Airport informed that the airport handled 36.8 million Passengers, 291 thousand Aircraft movements and 605 thousand tonne of cargo.

The recently organised a Round Table meet on “Indian Air Cargo-Future Outlook” witnessed the presence of a significant number of

air cargo industry stakeholders. Inaugurating the meet Ashok Lavasa, Secretary, Ministry of Civil Aviation reiterated the government’s intent to develop the air cargo logistics infrastructure in the country. “Of late, we are bringing in the Air Freight Station Policy, which would further accelerate the air cargo sourcing from the manufacturing hubs in the country by establishing a strong link with the hinterlands,” he said. He also highlighted the Budget 2014-15 announcements regarding inclusion of more airports in 24x7 customs clearance.

Canan Celebioglu, Vice Chairperson, Celebi Holdings, Istanbul Turkey in her special address affirmed the commitments of her company regarding more investment in this country to strengthen the air cargo facilities. The meet was also addressed by M K Narayana Rao, Chairman, Civil Aviation Committee of PHD Chamber; Sandeep.M. Bhatnagar, Joint Secretary,(Customs), Central Board of Excise & Customs; Muktesh

Recently, Emirates has received its 50th A380 aircraft, strengthening its position further.

According to the Emirates sources, this latest delivery takes Emirates’ all wide-body fleet to 224 aircraft, representing the world’s largest fleet of A380s, and also the world’s largest fleet of Boeing 777s.

SafexpReSS launcheS

“GMR-IGI aWaRdS 2014”

phd chaMbeR and GMR

eMIRaTeS TakeSLogistics Park at PithamPur

Presented to best Performers

organise cargo meet in DeLhi

DeLivery of 50th a380 aircraft

chemical processing, distilleries, manufacturing and textile industries. A large number of Multinationals and Indian companies have their manufacturing base in this region.

Chander, IPS, Special Commissioner (Traffic), Delhi Police; Pradeep Panicker, President, Air Cargo Forum India; B K Mehrotra, General Manager-Cargo, Airports Authority of India; Mahesh Trikha, President, Air Cargo Agents Association of India (NR) and Yogesh Srivastav, Director, PHD Chamber.

central Railside Warehouse Company Limited (CRWC) conferred with quality excellence award for Fastest Growing Company & CEO of the

year to its ex-MD from the World Quality Congress & Awards function recently held at Taj Lands End, Mumbai.

CRWC is providing logistics support across the country by integrating Rail-Road movement. “The corporate objective of CRWC is planning, developing and providing cost effective services by upgrading logistics skills as per the demand of the trade and its valued customers, along with the Indian Railways,” said the company sources.

cRWc baGS Quality exceLLence awarDs

Recently, Seema Jere Bisht, Commissioner of Customs, Nhava Sheva flagged of two 20ft Containers at Dronagiri Rail Terminal (DRT CFS) from Nhava Sheva. Federation

of Freight Forwarders’ Associations in India (FFFAI) is commencing the dry run on International North South Transport Corridor (INSTC). FFFAI is executing a dry run study with regard to the bottlenecks on the INSTC route on behalf of Ministry of Commerce, GOI, wherein two containers are moving from Nhava Sheva on following two routes: Nhava Sheva - Bandar Abbas by sea, Bandar Abbas – Baku by road and Nhava Sheva – Bandar Abbas by sea , Bandar Abbas – Amirabad by rail and further transhipped to Astrakhan through Caspian Sea.

coMMISSIoneR of cuSToMS flags off fffai's Dry run containers

DB Schenker in India announces new appointmentsDB Schenker in India has appointed Mr Vivek Chopra as new Director-Region North India. He will be based at regional office Gurgaon. Prior to the position Chopra was working as Director – Air freight with Schenker India.

To replace Chopra Gunjan Dhingra has joined Schenker India as Director – Airfreight. He has got overall 16 years of experience as an Air Cargo Professional. Prior to joining Schenker India, Dhingra was working as Regional Cargo Manager –South East Asia in one of the airlines based out of Thailand.

Brief news

JULY-AUGUST 2014 | INFRALOG 7 6 INFRALOG | JULY-AUGUST 2014

according to ACAAI, pioneers of the Indian forwarding industry are moving on, the younger generation is joining their family business,

by adding value via new professional entrants to the exciting and rapidly expanding space of Indian logistics during changing times. They bring new aspirations and perspectives, new technology and new initiatives to the business. “They are the changing face of our industry and will indeed change the face of the industry which now needs over hauling,” underlined Arora.

On the flip side, Indian industry continues to face increasing pressure from transnational competition in trade and services because of poor infrastructure particularly for logistics. Costs are rising, prices are down, margins are slim while profitability and cash flows are a challenge. “Competition becomes intense, ethics and professionalism have unfortunately taken back seat, trade partners and even customers have been unreasonably reneging on contracts and commitments,” he pointed out. Moreover, MSE and family cargo businesses are jostling alongside large corporates entering the field.

According to ACAAI, the common agenda seems to be basic survival for many freight forwarders, retention of markets, margins and manpower. New alliances are being forged, and erstwhile ones are being redefined. While core competency gets greater attention, the search for new methods, new deliverables and new revenue streams intensifies.

“This Convention hence, focuses attention on the newly emerging global economic order, global recession, and its impact on India’s international trade. We will examine the huge opportunity awaiting at home i.e India’s domestic market,” shared Arora.

The 41st ACAAI Convention discussions will focus on the external and internal resources, the relationships and the responses that the

forwarder must gain to succeed in his initiatives for delivering a world-class air freight product. The Convention will also discuss the impact of new legislations and new regulatory authorities viz service tax, the competition law, the Air Cargo Policy, Regulated Agents concept and the Airports Economic Regulatory Authority.

And, above all, the long-awaited improvements and enhancements of the air cargo infrastructure would be the major focus of the Convention. The session on infrastructure will focus attention on specific aspects that are basic and critical - Customs EDI and procedures, forwarders’ bonded terminals and other airport infrastructure, a master cargo plan for all airports, and rationalised and standardised processes that establish clear accountability at the right places. The role of technology can play a greater role behind fast clearance of cargo will be discussed with adequate emphasis.

“As the dynamics of the environment unfold, the air freight forwarder continues to struggle with old bureaucracy’s, ill-conceived new legislation and regulations, the replacement of old government monopolies by new private sector ones, and a complete lack of both the vision and a structured, integrated approach to cargo - the perpetually poor second cousin of passenger handling,” Arora underlined the serious concerns of ACAAI.

He, however, concluded with a high note, “Despite the odds, the enormous future potential of India’s domestic market is the Indian logistics industry’s anchor in this maelstrom of uncertainty. Being positioned in India with enormous opportunities, it is for the industry to realise, re-construct, rise and rule. India and Indian Industry is always known to re-emerge from crisis and there are clear signs of a steady revival of the Air Cargo Industry.”

The 41st Annual Convention of the Air Cargo Agents Association of India (ACAAI) will be held from November 12 to 15, 2014 in Shanghai, China. Speaking to InfraLOG, Sunil Arora, Convention Chairman, ACAAI said that in view of the changing face of the freight forwarding and logistics business in India, Shanghai is the perfect choice for the Convention place. ACAAI members would get an opportunity to experience the massive infrastructure of the business hub of China and to interact with about 100 local agents.

convenTIon In ShanGhaIWill discuss "inDian Logistics in changing times"

41st acaaiSunil Aroa

Convention Chairman, ACAAI

• By Ratan Kr Paul

ACAAi convention

8 INFRALOG | JULY-AUGUST 2014

The preliminary draft AFS guidelines defined that AFS is an off-airport Common User Facility with public authority status for

handling International Air Cargo just like Container Freight Station (CFS)/Inland Container Depot (ICD) for maritime cargo. AFSs are expected to ensure penetration of international air cargo activities to manufacturing and in consumption clusters located in the hinterland far away from the gateway airports. They can also potentially decongest air cargo terminals that are congested. Better scheduling/planning by the carriers will be facilitated for export cargo as advance information about customs clearance will now be available. Further, AFS can also promote competition and efficiency in the relevant market. All these will result in cutting down transaction costs for the industry and trade and improvement of overall productivity and efficiency. India’s exports by air could become more competitive. Trade and industry has therefore been representing that by providing AFS closer to production/consumption hubs, the air cargo industry would get the required support and boost.

The guidelines also underlined that it is globally accepted practice to confine the terminals (sea or air ports) as transit points and extended all other processes to outside facilities. India was lagging behind in this concept but with the advent of Customs Electronic Data Interchange (EDI), Risk Management System (RMS) and Accredited Clients Programme (ACP) coupled with the congestion with the approach roads, slowly but steadily sea ports have realised the advantages of Container Freight Stations and have exploited the facility in almost all the container terminals across the country (e.g. Chennai, Nhava Sheva, Kolkata, Tuticorin, Vishakhapatnam, etc).

In line with its 100 Days’ Programme, the Government of India is all set to announce the Air Freight Station Policy and Guidelines for the same. Thanks to the ongoing initiatives of the Ministry of Civil Aviation and the Air Cargo Logistics Promotion Board to create a robust air cargo infrastructure, the industry is on the verge to get this radical policy, which may change the landscape of the air cargo industry in the country. InfraLOG presents the Draft AFS Policy, which is at its final stage to be announced as an AFS Policy and views from the industry stakeholders about its implications.

foR aIR caRGoThe guidelines

also underlined that it is globally

accepted practice to confine the

terminals (sea or air ports) as

transit points

bonanza from the new government

afs PolicyAshok Lavasa

Secretary, Civil Aviation

The guidelines maintained that select CFSs/ICDs already notified by Customs can be authorised as AFS so that cargo logistics infrastructure available in these Customs authorised stations can be utilised for air cargo as well. These are owned by Container Corporation of India (CONCOR), Central Warehousing Corporation (CWC) and by private entities. Besides this, stand-alone AFS can also be approved for any entity that may fulfill statutory requirements on security, customs and minimum requirements of space and equipment required for the purpose.

It has been observed that some attempt made in the past to operationalise AFS in few locations such as Chennai, Mumbai, etc, did not fructify owing to absence of an integrated approach that involves all connected agencies. Feedback from industry sources suggest that there is a need for common and binding policy guidelines to facilitate setting up of AFS covering all government agencies and other private operators involved in the supply chain of export and import cargo.

According to the preliminary guidelines, steps required to create AFSs include: Finalisation of AFS guidelines by MoCA, Constitution of IMC as a Single Window Clearance for approving proposals for setting up AFS and notification of Guidelines by MoCA, finalisation of security screening arrangement for export cargo at AFS by BCAS, installation of scanning machines by the concerned CFSs/ICDs and by the private entities, posting of Customs officers at new AFS facility (if any) and Notification of Standard Operating Procedures (SoP) including modification of EDI application software by CBEC and its field formations, AAI and other international gateway airports to evolve and notify SoP.

Guidelines required to cover three different types of cases:• Authorising the existing CFS willing and capable of

handling air cargo

• Authorising the existing ICD willing and capable of handling air cargo

• Approve any new facility that fulfills basic minimum space and infrastructure requirements

The preliminary draft guidelines were circulated to stakeholders including CBEC and department of Commerce sometime back. A meeting was also taken by Secretary, Civil Aviation on May 22, 2014 with senior representatives from CONCOR, CWC, BCAS and AAI in which some members of the trade associations were also present. Based on comments received on the earlier draft and points emerged during these discussions, the following draft has been prepared for one more round of comprehensive consultation.

Concept of AFSAFS is an off-airport common user facility located outside the airport. It is a common user facility with public authority status equipped with fixed installations of minimum requirements and offering services for handling and temporary storage of import/export loaded and empty ULDs and cargo in bulk/loose carried under Customs control for home consumption, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export. Transhipment

11 JULY-AUGUST 2014 | INFrALOGINFrALOG | JULY-AUGUST 201410

COVer storY


INFrALOG | JULY-AUGUST 201412

COVer storY

can also take place from AFS. While AFSs are largely expected to deal with cargo origination/terminating in the immediate airports, they may also deal with air borne cargo traffic to and from inland locations. In the case of express companies, there could be a dedicated AFS for express cargo or they can also make use of AFS for general cargo or ICD/CFS authorised to handle air cargo.

Functions of AFSThe primary functions of AFS are summed up as under:

a. Receipt of export cargo for processing and to make the cargo “Ready to Carriage” condition including ULD building of export cargo and scanning of cargo. While ULDs will be the ideal mode of handling cargo for and from AFS, export/import consignments both in palletised/ULD and bulk/loose form shall also be facilitated.

b. Transit operation by road to and from serving airport

c. All Customs related requirement for import and exports including inspection of cargo wherever required

d. Unitisation of cargo

e. Temporary storage of cargo and Unit Load Devices (ULDs)

f. Re-building of ULDs of export cargo

g. De-stuffing of import cargo

h. Storage, examination, packing and delivery of import cargo

i. Auction/disposal of 30 days old un-cleared cargo

j. Maintenance and repair of ULDs

In a nut shell all export and import cargo processing including customs related activities from break-bulk to assessment, examination and payment of duties may be done at the AFS. This would become the Customs station. If sufficient demand arises for the presence of the cross-border regulatory agencies such as Plant Quarantine office, Drug Controller’s office etc., these would also be accommodated by the respective AFS enterprise in the same premises. This may include for example space for establishment of small laboratory for immediate inspection and the area should be well lit.

Location of AFSAFS facility can be located anywhere in India subject to fulfillment of all requirements contained in these guidelines. Setting up of AFS at the existing ICDs/CFSs which are already notified by customs would also be permitted.

Pre-requisite for establishment of AFS

A. Space requirement

i. AFS can be set up exclusively for handling export cargo or import cargo and can also be for both exports and imports. Land requirements for export or import are dependent on quantum of cargo expected to be handled. International standard for throughput efficiency at cargo terminals in general is measured in terms of tonnage handled per square metre linked to the volume of cargo handled in that terminal in a year.

ii. Base on the cover area available for air cargo for most of the international cargo terminals in Tier-II cities and taking into account the stakeholders feedback on this issue, the minimum area of covered space required for exports shall be at least one thousand square metre and if imports are also proposed to be handled in the same AFS then another one thousand square metre of covered space should be provided.

B. Other requirements

i. Since AFS will be Customs notified area, it will be governed by the “Handling of Cargo in Customs Areas Regulations, 2009” which prescribes various requirements including basic infrastructure etc. in great detail. This regulation is exhaustive and mandatory to be followed by all Cusoms notified operators. Therefore, it is not proposed to elaborate requirements of infrastructure etc. further.

ii. However, it is important to ensure that the design and layout shall be in accordance with the flow of export and import of cargo and shall into account the initial volume of business, the estimated volume in the near future and the facilities the exporters/importers would require.

iii. Ideally, facilities in AFS shall contain the scope of expansion in future as and when volume of trade grows. An important facility at AFS that is required particularly for export cargo is the scanning

The association of Private Airport Operators (APAO) presented its views before the Ministry of Civil Aviation (MoCA) about the

economic importance of air cargo business in India and its contributions to airport revenues and also to the GDP of the state/country. “We notice that while huge investments have been made by all PPP airports in setting up world class air cargo facilities, however Indian cargo business is way behind the cargo business in Dubai, Singapore, Hong Kong etc,” said Satyan Nayar, Secretary General, APAO. According to APAO, the importance and contributions of cargo business to the GDP and various problem affecting the cargo business has to be examined to understand huge cost burden incurred by Indian importers & exporters on account of high dwell times leading to huge inventory costs, speed to market, loss of opportunity, cost and hence being uncompetitive compared to their peers in other countries leading to loss of business. It is estimated that in India cost of logistics to GDP is 12-15 per cent whereas the developed countries have a rate of 5-7 per cent.

“While we principally agree on the proposals of MoCA to promote setting up of AFSs, it is important to understand that the proposal of setting up of AFSs should not be at the cost of affecting air cargo business revenues of the airport operators or its concessionaires,” Nayar pointed out. “The PPP airports and its concessionaires have invested huge amount of Capex to set up world class cargo facilities and therefore these investments must be protected to ensure that these asset do not become redundant or are optimally utilised,” he further explained.

APAO’s recommendations before MoCA• Protect the existing cargo infrastructure investment of airport

operator and its authorised concessionaire. Only they should be

allowed to set up AFS within 200 km radius of airport. New entities should be allowed only to set up AFS beyond the 200km radius of the existing airport.

• Airport operators and its authorised concessionaires should be allowed to open an AFS at an existing CFS/ICD.

• Air cargo terminal operators shall identify and allocate required infrastructure for handling goods received from AFS.

• TSP charges at the airport should be derived based on market forces.

• There should not be any Customs Cost Recovery at AFS including at an existing CFS/ICD.

• MoCA should mandate that CFS/ICD should accommodate AFS space upon request of an airport operator or an authorissed concessionaire in order to keep the costs down.

• All references to security screening/scanning, security equipment CISF/BCAS should be removed from AFS Policy. The security infrastructure should not be duplicated at the AFS. The security screening should happen only at the airport.

• Area of AFS should be decided based on market forces. APAO recommens 5000 sq ft for both export and import and can be scalable both based on business growth in order to keep the cost down.

• Minimum prescribed equipment should be truck-dock and trained manpower.

• APAO feel that since AFS is a commercial project which will be based on commercial consideration there should not be any approval required from the ministry as is the case now.

“While we principally agree on the proposals of MoCA to promote setting up of AFSs, it is important to understand that the proposal of setting up of AFSs should not be at the cost of affecting air cargo business revenues of the airport operators or its concessionaires. The PPP airports and its concessionaires have invested huge amount of Capex to set up world class cargo facilities and therefore these investments must be protected to ensure that these asset do not become redundant or are optimally utilised”

In pRIncIpleurges for airPorts' interest

aPao agrees Satyan Nayar

Secretary General, APAO

equipment and trained screeners for operating that facility. If export cargfo activity is not proposed to be handled at an AFS, the requirement of scanning facility is not applicable.

C. regulatory environment governing AFS

I. Stand-alone AFS or CFSs/ICDs additionally authorised to function as ASFs shall comply with (i) The Guidelines of MoCA that may be issued from time to time on various matters connected with AFS (ii) Handling of Cargo in Customs Regulations 2009 (as amended) (iii) BCAS regulations governing security of Export Cargo (iv) any other Statutory requirements that may govern storage and movement of cargo from airport to AFS and vice versa.

II. The required IT support (EDS 1.5 version) for the roll out of AFS operations is essential and therefore the CBEC/Directorate of Systems and the concerned Jurisdictional Commissioner shall ensure that the required modification in the application software are made to capture the transaction covered in the transshipment for AFS and are available at all stations.

III. CBEC shall ensure that the public notices that are issued by the Jurisdictional Commissioners laying down Customs procedures are simple, comprehensive and unambiguous ensuring minimal delays. They are also required to ensure uniformity in the procedures across Commissionerates of Customs/Excise barring some exceptions to accommodate local variations that are of a minor nature.

IV. Air cargo terminal operator at the concerned airport shall identify and allocate some space for handling of built ULDs/consignment meant for/ received from an AFS and direct access to sterile area in the ease of exports.

V. Airport operators shall not insist on levying full TSP charges on consignment/cargo meant for/received from AFS (particularly for “Ready for Carriage” cargo) for its transfer from land to air-side and vice versa since no value addition is contemplated at the airport terminal.

VI. In instances where existing ICDs/CFSs are proposed to be additionally authorised to function as an AFS, no-Customs cost recovery charges shall be levied.

VII. Scanning operations of export cargo moving from AFS shall be completed at AFS itself and necessary guidelines shall be issued by BCAS in this regard keeping in view the overall purpose and the benefits of moving the international trade operations to the hinterland away from the international airports.

VIII.Given the expected nature of growth of AFS and the choice available to the exporters and importers, the charges applicable for various operations to be carried out by AFS operator shall be determined by the market forces and are forborne. However, in the event of any anti-competitive practices in the market by any entity, MoCA would examine the same with evidence and decide the matter on merits which would be binding on all concerned.

D. Procedures for approval of AFS and its implementation

i. Proposals for setting up of AFS will be considered by the Air Cargo Logistics Promotion Board (which would be notified as an Inter-Ministerial Group for this purpose) based on application to be made by the entity proposing to set up the facility.

ii. The application will be accompanied by a feasibility report containing the business plan of the entity. Upon acceptance and approval of the application, Letter of Intent (LoI) will be issued by the Ministry of Civil Aviation. This shall be valid for a period of one year and no extension will be issued thereafter. If operations are not commenced within a period of one year, the LoI issued to that entity is deemed to have become invalid.

iii. Onece the LoI is issued, the entity shall immediately apply for custodianship from the CBEC. CBEC shall within 30 days thereof notify under Section 8 of Customs Act, 1962 specifying Customs area for loading and unloading of imported/export goods shall be issued by Jurisdictional Commissioner of Customs within another 30 days.

iv. In respect of existing customs notified area such as CFS/ICD, the CBEC shall note the additional approval of AFS in the existing custodianship approval.

v. CBEC, Directorate of System and the concerned Jurisdictional Commissioner shall, upon notification of AFS as a Customs Station, ensure that the required number of customs officials is posted to the station. They shall also ensure the EDI connectivity to the AFS without any delay. Jurisdictional issues, if any, shall be settled by CBEC without any delay.

vi. BCAS shall decide and communicate their approval for the security arrangements within 30 days of receipt of application from the applicant entity.

vii. As soon as business is commenced by the AFS, Ministry of Civil Aviation will be notified of the same and the AFS and the AFS operator shall periodically furnish the details of exports and imports that have taken place on the quarterly basis.

Where existing ICDs/CFSs are

proposed to be additionally

authorised to function as an AFS,

no-Customs cost recovery charges

shall be levied.

COVer storY


according to Sanjiv Edward, Cargo Head, Delhi International Airport (DIAL), Air Freight Stations are an essential requirement for the

growth of air cargo in India. AFS promotes customer convenience by taking the air cargo product to the doorstep of the customer.

“AFSs have the potential to reduce transaction costs and time, thereby converting some of the latent demand into actual growth for air cargo in India. In our experience of operating AFS at Kanpur and Ludhiana, the customer response and support has been overwhelming. Airlines see the value as they can market the AFS location as a destination on their route map. For India to realize its true potential, Airport Hubs should be complemented by efficient AFS,” said Edward.

He pointed out that some Indian airports like Delhi have made significant investments in the Cargo Infrastructure at the airport and enhanced capacity. Accordingly, it is logical that AFS be developed, to create additional volumes for air cargo, which will be beneficial for all stakeholders involved in the air cargo supply chain. “By considering

ReduceS TRanSacTIon cost and Processing time: dial

afs

Sanjiv Edward Cargo Head, DIAL

the AFS as a means to only decongest airports, I think we are missing the point. There is a larger opportunity available by converting latent demand and processing through AFS,” he emphasised.

Edward firmly believes that AFS will definitely add value to cargo operations. “By operating AFS we have reduced the processing time for outstation cargo by more than 25 per cent. We have connected outstation cargo to flight, within four hours of arriving at the airport,” he stated. In his opinion, this was unthinkable in a scenario minus AFS, if the shipments had to complete all regulatory and operational processes at the airport. “We are seeing customer taking advantage of this and preferring to move cargo from the AFS. And, the customer feedback has been very positive,” Edward shared.

“The AFS Policy is a much sought-after initiatives from the Government of India and it would definitely create a very positive

and win win situation for all the stakeholders pertaining to the air cargo logistics industry. It would not only reduce hassles at the airport for both export and import cargo, but also reduce transaction costs and transit time,” said Vinod Nautiyal, Chairman & Managing Director of the leading express logistics company, EXPAN. He also underlined that since the prime focus of setting up of AFSs at the production centre, there would be fair chance of getting additional shipments, primarily of small in size, from ocean mode to air mode. “It is evident from the facts that small shipments by ship usually cost more because of huge overseas port charges. Small shipments at the AFSs can be custom bonded at the AFSs and get transported by bonded trucks to have uplifted by an aircraft,” Nautiyal explained the rationale.

He, however, appealed that the policy makers and the regulatory authorities should play the role of watchdog, to prevent dual charges for the same shipment and same services—one at AFS and another at the

MuTual benefITS: expan it should be for

Vinod Nautiyal CMD, EXPAN

airport terminal. Otherwise the whole purpose will be defeated. “There might be charges at both the places (AFS and airport cargo terminal), but it should be equally divided and should not be more than actual cost,” he emphasised. Nautiyal foresees AFSs are going to play the actual role in creating cargo hubs.

Nautiyal also expressed serious concerns about huge wastage of fuel and time at the check posts. Accordingly, to make AFSs a successful option, the road network has to be streamlined by withering away the check post hassles. In addition, there should be railway connectivity to link the AFSs with airports. “We should also create Rail Freight Stations beside the airports to accelerate the cargo transport,” observed Nautiyal.

COVer storY


“aFS concept is new to India and success factor will be known after its existence. So far we are purely dependent on cargo

facility at the airport. As far as timings are concerned, any date is good to have something new as the whole process to establish the AFS and getting used to the environment takes lot of time,” viewed Vipan Jain, Chairman, BAR Cargo (NR).

He emphatically said that AFS would add value to the existing system as in spite of best efforts by all trade partners, the airports still have peak hours for cargo acceptance and delivery and somehow 24/7 concept is missing. With AFS but complete facility, it means entire customs EDI, ADC, Security and bonded escort facility should work with loaded cargo coming in built-up units and can straight away connect to aircraft without having any other process in place.

He underlined the facts that air cargo in India is not even 1 percent of total volume handed for export and import in terms of tonnage.

Would add value to existing system

afs

Vipan Jain Chairman, BAR Cargo (NR)

The share of 99 per cent volume is still moving as sea freight. The efficiency at sea port is able to attract more business. On the other hand, dwell time of import by air is still around 120hrs on an average and export is about 48hours. “We certainly need much faster movement of freight by air and probably active role of AFS can further contribute to generate additional air cargo,” he said.

Commenting on the cost factor Jain maintained that it basically depends on efficiency and volume of business. As far as handling charges are concerned, this is still under discussion and earlier it was agreed to share 50-50 between airport operator and AFS provider.

“Their always had been a requirement of such AFS for long now and it is good that major steps and initiatives have been taken

now. I would say it is better to be late than never. Considering a broad picture there are many commodities mainly perishables which are wasted due to unavailability of such services which if exported through such channels can yield revenue and will save on the economic loss. I feel in future this would be a fascinating product with huge demand for manufacturers who are not located near our airport stations,” said Akash Bansal, Head-Logistics, Om Logistics

In his opinion, the air cargo volumes would multiply in folds and would even ease the process at the airport and would be a less time consuming for processing. Further, there would be a considerable consolidation of cargo at the AFS leading to economies of scale throughout the value chain.

Bansal pointed out that developed countries have been working on this model for years now and there was an urgent need to capitalise the business possibility of the same in India as well.

He asserted that Om Logistics is fully ready for any support needed by its customers regarding bonded trucking from AFS to the airports. The

acceleRaTe bonded om logistics to

Akash Bansal Head-Logistics, Om Logistics

company is already into this business and has been providing support to customers in this regard. “We look forward for possible business requirement on the same from our customer and would be more than willing to support them for this time-definite trucking to enable them expand their business networking in whatever way we can,” he added.

trucking services

i feeL in future air freight stations wouLD be a fascinating ProDuct with huge DemanD for manufacturers who are not LocateD near our airPort stations

“

COVer storY


according to Keshav Tanna, past President, ACAAI and Director, Links Forwarders, the right time of setting up of AFSs in India has

long gone and the country should have already had them in place many years ago as part of Infrastructure development. “The “India Shining” story would have been very different from the Cargo perspective if AFSs were already in place,” he said. He also maintained that AFSs would add value to cargo operations. “The current shortage of space, limitation of covered storage, lack of proper handling equipment leads to congestion. As of now there is immense mishandling of air cargo shipments,” Tanna said.

“Also, it is a well known fact that Competition leads to Efficiencies; Hence with AFSs in place, Cargo would definitely be shown a little more respect. Currently all value add is single mindedly directed towards Passenger traffic only, with cargo being totally neglected,” he added.

Tanna, however discarded any scope of dual charges because of AFSs. “There is no question of dual charges since the AFSs will already collect the TSP charges (Terminal Storage and Processing charges) for shipments handled through them. The shipments will then only be passing through the airport. Hence there is no reason for any dual

dual chaRGeS should be LevieD

no

Keshav Tanna Director, Links Forwarders

handling/operations charges. The same freight cannot be charged twice, thereby making exports more expensive,” he stressed.

Elaborating on the ways of sourcing additional cargo Tanna maintained that there has been no addition of General Cargo space, particularly at Mumbai Air Cargo Complex since the last 25 years, besides Cargo Service Center added space for temperature controlled shipments. Meanwhile, cargo has grown manifold over the years. “It is unfortunate that the authorities refuse to acknowledge this fact by augmenting additional cargo space. If there is no possibility for on-site then the only answer is to create off-site facilities like AFS,” Tanna advocated.

J Krishnan, past President, ACAAI and MD, S Natesa Iyer & Co, highlighted that India is one of the very few countries where export

consolidations have not emerged. This is primarily because of the need of a common user facility to accumulate and unitise the cargo.

“If we are to achieve competitive pricing and move away from the legacy per kilo pricing to a ULD based pricing we are late in setting up of AFS. The pricing efficiency will catalise more cargoes to seek movement by air and the perceptions that present volumes do not require setting up of an AFS is erroneous,” he said.

In his opinion, the success of CFS and ICD on the sea front is a fitting testimony to this concept to be adopted for air transport also. An off airport facility created near the various export clusters will certainly see

cfSs and Icds Should be successful

J Krishnan MD, S Natesa Iyer & Co

additional cargoes seeking the air mode for transportation.

The price advantage of above 10 per cent to the existing levels of air freight can also be achieved. “The cost of airport warehousing, unit built-up costs and storage are all inbuilt in the per kg rates being currently charged by the carriers. At an AFS all these functions are transferred to the freight forwarders/ consolidator and off airport costs are much lower than the charges being levied at Indian airports,” Krishnan explained.

the role moDeLs

“With afss in Place, cargo Would definitely be shoWn a little more resPect

COVer storY


InfraLog: Could you please share your ideas about the critical role played by off airport facilities like Air Freight Stations for smooth operation of cargo?

ram Menen: Frankly, I am not a great fan of off airport locations at online points as it adds on more processing time and costs. Before AFS is looked at, the root cause of congestion, which usually is the border control process (customs), should be addressed. Ideally if cargo can be cleared in and out of the country efficiently, there generally would not be any need for off the airport facilities. Cargo should be pre-cleared or cleared immediately on arrival (inbound) or pre-cleared before it gets to the airport for exports and ready for carriage. There are existing models at many developed countries that can be looked at as an ideal model. Most western European countries have good customs systems in place. Off-airport facilities should only be considered for cargo that will need extensive holding due to clearance issues.

Since real estate on airport tends to be extremely expensive and in short supply, if the airport is in a situation where border control processes are archaic, then only the off-airport facility should be considered at online stations and that too for mainly imports. Having said that, it is pertinent to mention that AFS is very useful in non-airplane operational stations.

InfraLog: Could you also please share you experience about the performance of AFSs across the world?

My personal experience has been that off-airport facilities add more handling and processing costs and negates the whole effort of reducing transportation times. In today’s world it also adds to security

concerns and further adds to costs. One also has to factor in the cost of additional real estate and cost of transportation between the facilities. At the end of the day, the customer gets burdened with all the extra costs.

Cargo Terminal Operators/operations (CTO) should be a place for quick processing/transit facility. Any dwell time in the entire transportation process is a cost and adverse to an efficient operation. Customers generally end up paying this cost and have to allow for more time, which also adds to the cost. Additional handling also creates more exposure to damage/pilferage etc. CTOs benefit from better efficiency, as space at the airports is extremely restricted and expensive. The faster they are able to move the cargo thru their cargo sheds the better their throughput and returns would be.

InfraLog: In view of the future projection about the growth of air cargo market, how important is an AFS for air cargo operations in India?

Consideration for AFS should only be at points where there is no airport or are offline to air transportation, similar to container freight station for ocean cargo inland. In fact CFS and AFS can be a combined operation as it will bring in a lot of efficiencies in sharing both human and other resources.

InfraLog: Based on the world experience what would be your recommendations to make an AFS successful in India?

ram Menen: My advice would be to first work with the Customs to make clearance processes very efficient so that there is absolutely

The Ministry of Civil Aviation, Government of India set to announce the AFS Policy soon after the Cabinet’s approval. InfraLog is presenting an exclusive interview with Ram Menen, former DSVP Cargo, Emirates and the most renowned cargo expert in the world regarding his views on the need of AFS and its impact on the air cargo supply chain.

aIR fReIGhT STaTIonS:fast customs cLearance and efficient hanDLing are the core factors

need of Ram Menen

Former DSVP Cargo, Emirates

• By Ratan Kr Paulno dwell time other than the time required for processing physical cargo at CTO and look at good AFS facilities in cities which operate/are connected on road feeder services (RFS) basis. This will allow immediate clearance/transiting of cargo at airport CTO and off to the AFS via RFS and minimise costs and time on the ground. Freight forwarders should be focusing on providing the other non-transportation related logistics activities on the ground at their own facilities and hand-over the cargo to the CTO ready for carriage and conversely, move the inbound cargo to either the consignee’s or their own facilities for further supply chain related operations.

InfraLog: Will AFSs be able to increase the volume of air cargo? Will it be able to divert cargo from ocean mode to air mode?

It will, of course, allow more volumes to be handled, but at a cost. This will further create wider gap between ocean costs and air whilst the shippers are trying to find more economic solutions. As far as modal shift is concerned, I wouldn’t be too concerned with it as the mode of transportation depends on what where in economic cycle we are. When the demand picks up and interest rates rise, we will see cargo coming back to air. Ocean has its own challenges at the moment in battling high cost of fuel. They are on to slow steaming mode which increases transit times, and as a result shippers don’t like increased transit times. Their yields are also

Off-airport facilities should

only be considered for cargo that will

need extensive holding due to

clearance issues.

“T his is the right time to raise the issues of air cargo and logistics industry in India. Because, we have a very strong and stable

government at the Centre and logistics was in the election manifesto of BJP, who are leading the government. The new government is showing very pro-active attitude towards the issues of logistics industry. And, announcement of ‘Air Freight Station Policy’ for setting up off-airport facilities similar to CFSs and ICDs within 100 days of the new government will bring in radical changes in the air cargo movement in the country,” said SL Sharma, President, ACAAI.

SL Sharma President, ACAAI

under extreme pressure and there is a lot of attempt at capacity rationalisation going on.

It is, however, true that as supply chain operations are getting more and more optimised, there will be modal competition. Air has to further take costs out of the air transportation processes to be more competitive in an environment where cost of fuel and security is on the rise. E-commerce singly will be the largest boost for airfreight. The current model of air cargo industry has to change. There has to be more transparency in interaction within the players in the supply chain operations. E-freight will help to improve process and resource efficiency helping overall reduction in costs at all levels which will also make airfreight further competitive by reducing overall transportation times. Any online AFS solution has to be temporary otherwise in longer term it won’t be ideal. Efficiency will come with improved throughput and getting better economies of scale from the available facilities.

InfraLog: What is your opinion about the initiatives from the Ministry of Civil Aviation, Government of India regarding framing up of AFS policy to expedite the off-airport facilities?

ram Menen: I am glad to hear that the GOI is on the right track in supporting the logistics industry. They also need to work on a major customs reform and have consistent pan India customs regulation for the country’s commerce to grow at the exponential rates.

Would bRInG InraDicaL changes in the air cargo industry

afss

expert views


held on June 9, 2014 at Hyatt Regency Hotel in Chennai, the “Logistics Summit 2014” was inaugurated by Senthil Balaji, Minister

of Transport, Government of Tamil Nadu. Addressing more than 120 delegates and special invitees from infrastructure, logistics and supply chain industry from all over India he underlined the importance of logistics and supply chain in strengthening the economy of the nation. He also emphasised on the strategic position of Chennai and other parts of Tamil Nadu to feed the country’s economy, by contributing adequately manufacturing industry in particular with a sound infrastructure and logistics facilities. The minister also highlighted the key aspects of “Vision 2023 Document” and “Industrial Policy 2014”of the Government of Tamil Nadu to further strengthen its economy. “We are open to have discussions with industry stakeholders to make the vision of the Chief Minister of Tamil Nadu and the Government of Tamil Nadu an astounding success. The government would work in collaboration with industry players,” he stated.

The inaugural session of the Summit was also addressed by Dr. S Ramachandran, Vice Chancellor, Hindustan University, Chennai; Atulya Mishra, Chairman, Chennai Port; Masanori Nakano, Consul General of Japan, Chennai; M.A. Bhaskarachar, Chairman, Kamarajar Port, Chennai and T Prabhakara Rao, IAS, Principal Secretary, Transport,

Goventment. of Tamil Nadu and Prof. Dinesh Kumar, Managing Director, Asia Aviation Associates (the organiser of the Summit). Chola Nachhiar Rajasekhar, President, Tamil Chamber of Commerce delivered the welcome address. At this Summit the Minister also unveiled a cofee-table book of paintings and verses “The Stream”, which is written by Prof Dinesh Kumar and AAA publication-infraLOG.

In his theme speech on “Accelerating Economic Growth by Adopting Better Supply Chain Practices” Kumar elaborated on critical role played by the logistics industry, especially like a manufacturing hub like Tamil Nadu. “Logistics and Supply Chain Management has assumed a great importance as a subject for economic development in India. With emphasis on manufacturing, auto industry, IT industry, medical tourism, export operation, efficient road and transport network, as a cultural centre and a learning centre with maximum universities, major ports and airports, the logistics and supply chain industry is extremely important for economic development of Tamil Nadu,” he said. He also pointed out that this industry holds a great promise as potential employment generator in different sections, components and stages of logistics and supply chain management. Kumar underlined that the logistics industry is worth its value equivalent to over 100 billion US Dollars. The industry YOY is growing at approximately 15 per cent.

The first National event of Asia Aviation Associates (AAA) and the first Logistics Summit in the country after the new NDA Government took charges at the Centre was a great success, in respect of quality participation and issues discussed to strengthen the logistics infrastructure across the country and Chennai as one of the potential logistics hubs. The event was jointly organised along with the Federation of Indian Chambers of Commerce and Industry (FICCI), Tamil Nadu. At this summit AAA has also launched its publication for the Infrastructure and Logistics Industry—InfraLOG.

polIcy MakeRScome together for rePositioning

industry and

“But we know it is still primitive in our country. This though is not the actual exploited potential. It can be worth 500 Bn,” he maintained.

He, however, put utmost importance on upgrading infrastructure of roads, highways, railways, freight corridors, SEZs, CFSs, ICDs, airports and ports, waterways, and IT systems for logistics. He also emphasised on skill development and setting up training institutions and universities for this largely unorganised sector.

Kumar lauded the announcements made by the new government at the Centre pertaining to bringing back the country’s economic growth and particularly the call of the Prime Minister of India to enhance “Speed, Skill and Scale”.

According to him, logistics is a misunderstood and misrepresented segment. However, simply, it means movement of goods and merchandise, B2B, B2C and C2B seamlessly, end to end, from original producer to

ultimate consumer’s hands just in time and in a very cost effective manner.

Kumar highlighted the pressing issues which are creating bottlenecks before the industry. “The transportation cost has been in deliberation and subject of many committees, yet we haven’t been able to reduce it. Much of it is unproductive, and due to high, irrational taxation and processes that need a total reengineering. There are issues that will have to be tackled by chambers of commerce and industry and the government regarding rationalising customs duties, harmonizing trade and labour regulations, GST, low and common tax on jet fuel and wastage in logistics and supply chain,” he recommendad.

Kumar also urged for setting up adequate and strong infrastructure to accelerate the growth of domestic cargo industry.

There were three Business Sessions at this Summit on “Requirements of Ports to Serve the Economy”, “Airport Infrastructure Development in India” and “Logistics, Supply Chain and Skill Development”. The Business Sessions were moderated Chola Nachhiar Rajasekhar; J Krishnan, Past President, ACAAI and a leader of Madras Chamber of Commerce and Industry and Radharamanan Panicker, the then CEO of Cargo Service Centre India respectively.

The speakers for the first Business Session were Shankar Chatterjee, CMD, S Cube Transcontinental Group; Ennarasu Karunesan, CEO, DP World, Chennai; Rajieve Krishnan, APM Terminals Mumbai; P.S. Krishnan, President, Customs House Clearing Agents Association of Chennai; Capt. A Lawrence, Chennai Steamer Agents Association and K.G. Sathyanarayanan, Senior DGM, L&T Ports.

The 2nd Business Session was addressed by Pradeep Panicker, President, Air Cargo Forum India and Chief Commercial Officer, Delhi International Airport Limited; G Chandramouli, M D, Kannur International Airport Limited; S N Ashok, Chairman, BAR Cargo, Chennai; N Sivasubramaniam, Past Chairman ACAAI (SR) and V Krishnan, Airports Authority of India.

The speakers for the 3rd Business Sessions included K Senthil Kumar, Associate Professor, Madras Institute of Technology; Capt. V. j. Pushpa Kumar, Director, Indian Institute of Logistics, Chennai; R Ramamurthy, Chairman, Cyber Security and Privacy Foundation and Shakthivadivel, M.D., Esquire Express India Pvt Ltd.

Rajeev Ranjan, IAS, Principal Secretary, Highways and Minor Ports, Government of Tamil Nadu was the Chief Guest for the valedictory session. He outlined

“We are open to have discussions

with industry stakeholders to

make the vision of the Government

of Tamil Nadu an astounding

success”


LOgistiCs summit in chennAi

the “Vision 2023” Document of the Government of Tamil Nadu. He shared various projects connected to development of roads, highways and ports in Chennai with the planned investments for economic development of Tamil Nadu and improvement of Logistics and Supply chain.

Quotes from the Speakers“Today is the most opportune time for logistics industry, thanks to a strong government at the Centre as well as at the State of Tamil Nadu. Infrastructure should not be the only concern, we need to integrate all forces and departments to have a strong logistics system in the country”

Atulya Mishra, Chairman, Chennai Port.

“Tamil Nadu is the magnet for attracting investment. The Infrastructure Promotion Board is taking all projects forward, though many of them are cost and time over-run. Our check posts are being modernised supported by IT”

T Prabhakara Rao, Principal Secretary, Transport,

Tamil Nadu

“Creation of infrastructure and logistics services should go hand in hand. To get rid in transactional hassles and costs, processes should be very simple. The sense of equal ownership and compliance of the rules and regulations should be the prime focus”

Shankar Chatterjee, CMD, S Cube Transcontinental

Group

“Industry is facing huge congestion at the ports and CFSs/ICDs because of shortage of Customs officials.

The new government should take serious steps to facilitate the exports/imports and brighten up the image of the country”

P.S. Krishnan, President, Customs House Clearing Agents Association of Chennai

“Indian ports are gradually heading to be major transshipment hubs. DP World’s International Transhipment Terminal in Cochin is one of the living examples. The country will have to take serious measures to woo mainline vessels”

Ennarasu Karunesan, CEO, DP World, Chennai

“Indian airports are facing challenges because of the difficult times the airlines are facing. However, despite difficult times we are consistently offering world class services and taking all efforts to make Delhi International Airport as a hub. The airport is competitive in terms of costs”

Pradeep Panicker, CCO, DIAL

“There are significant differences between old (AAI) and new (JV and Greenfield) airports. For example in Chennai Airport there are lots of procedural issues, whereas in Bengaluru Airport cargo moves very fast”

S N Ashok, Chairman, BAR Cargo, Chennai

“After spending of huge money for the modernisation of Chennai Airport, what is the development of cargo infrastructure here? Traffic is growing only at 0.4 per cent. In Bengaluru and Hyderabad the growth is about 7 to 8 per cent”

N Sivasubramaniam, Past Chairman, ACAAI (SR)

“Three key challenges are regulatory (mainly Customs), infrastructure and skilled manpower. There is a mismatch between expectations and delivery. People, process and infrastructure should go together to reach the desired goal”

Radharamanan Panicker, the then CEO, CSC India

“To harmonize the cargo handling mechanism, all service providers should be in line and individual working style has to be done away with. In addition, service and cost has to be balanced”

S. Shakthivadivel, M.D, Esquire Express India Pvt Ltd.

“The problem is the mindset. Many of the industry players are not willing to pay for training and skill development. Similarly, students are not keen to join this industry because of its unorganised and unrecognised features. Both industry and government have to take serious initiatives to make this industry robust”

Capt. V. j. Pushpa Kumar, Director, Indian Institute of Logistics

All service providers should

be in line and individual working

style has to be done away with.

GlIMpSeS of loGISTIcS SuMMIT 2014LOgistiCs summit in chennAi


Indian exporters are now apparently bullish. rafeeque Ahmed, President, FIEO said that global situation is conducive to exports as

both advance and emerging economies are showing better economic indicators. The steps announced by the Finance Minister in the Union Budget including extension of 24 x 7 facility for all Export Promotional Schemes, single point interaction with Customs as the hub for all exim transactions online, institutionalisation of Export Promotion Mission and involvement of the States in the export will further facilitate exports besides reducing transaction cost and time.

“The Finance Minister has laid down a road map for inclusive growth, sustainable manufacturing and competitive exports. Clear policy against retrospective amendment, e biz single platform for services provided by the government, advance ruling facility to private limited companies will add to the ease of doing business,” he maintained. In his opinion, the focus on roads, airports, sea ports, power would usher in an era of internationally bench marked facilities at competitive rates. Once implemented, the infrastructure improvement would significantly compress the delivery schedule of exports.

Ahmed said that engagement of States in exports is a long due step as all factors of productions are within the ambit of State. “Export Promotion Mission is a novel concept and bringing all stakeholders under one umbrella will provide an effective resolution to the issues within minimum time frame,” he added.

According to Ahmed, extension of 24x7 Customs Clearance Facility to 13 new ports in respect of all export goods and 14 more sea ports both for imports and exports coupled with implementation of single window concept for exim trade with Customs as the hub would significantly reduce the transaction time and cost.

“The allocation of Rs.5000 crores warehousing for agricultural products is a good announcement when considering the damage of more than 40 per cent of the India’s vegetables and fruit production due to non availability of cold storage and warehousing facility. The 10000 crore funds marked for startup companies would help for entrepreneurs,” added Chozha Naachiar rajasekar, President, the Tamil Chamber of Commerce.

The new Government of India under the leadership of the Prime Minister Narendra Modi has built tremendous confidence among the cross section of the people of India and the industry/trade practitioners in particular, regarding the bouncing back of the country’s economy. Manufacturing, export and logistics industry is now quite optimistic about making a strong presence in the international market with competitive edge as well as fulfilling the domestic demands thanks to the “Budget 2014-15” announcements by the Finance Minister of the government. ImfraLOG takes a peek of the emerging scenario with inputs from the industry people.

buIldInG exeRcISeby the new government of inDia

confidenceRafeeque Ahmed

President, FIEO

Logistics Service Providers’ reactions“The Finance Minister has set the tone for an aggressive and sustained growth path by announcing a progressive Union Budget. Being the lifeline of the economy, logistic companies expected a set of reforms and thrust across related sectors of the economy and the Finance Minister didn’t disappoint,” said Mahendra Agarwal, Founder & CEO, Gati.

According to him, the proposed investment of Rs 5,000 crore in warehousing, a clear focus on implementing GST by the end of this fiscal will provide the much needed impetus to the logistic industry. The proposed investment of Rs 37,800 crore into NHAI and State roads and a specific focus on development of select expressways in parallel to the development of industrial corridors will improve overall infrastructure, connectivity and lend efficiencies to supply chain.

Shashi kiran Shetty, Executive Chairman, Allcargo Logistics said, “When the Finance Minister said in his Budget speech that “a modern country needs multiple modes of transport” I don’t think it could have been articulated in a better way. The proposed reforms in the crucial sector of the economy like manufacturing, transport, trade, energy and consumer goods will provide the much needed stimulus to the sluggish logistics sector.

“The biggest move has been to boost the transport sector by announcing a total of Rs. 52,239 crore investments in NHAI and development of rural roads. This will act as a catalyst in the entire process of logistics, as a major part of India’s cargo is moved by road,” he underlined.

According to him, the proposed SEZs at high-traffic ports like Kandla and JNPT will facilitate greater inflow and outflow of container cargo and benefit all companies present in the ports. The Inland Container Depots and Container Freight stations will witness a surge in cargo volumes.

Malcolm Monteiro, CEO, Asia-Pacific, DHL eCommerce maintained that this budget of the new government has ushered in some bold moves that have the potential to be transformative. Announcements pertaining to GST and e-commerce are the radical indicators. “The announcement regading allowing all manufacturers in India, whether Indian or foreign, to sell their goods through e-commerce without the need for any further permission can revolutionize B2C landscape in India, and actually attract greater FDI into the manufacturing sector,” he maintained. In his opinion, the focus on trade facilitation with the announcement of a comprehensive single-window clearance for exports and imports is also revolutionized the business atmosphere and help make India more attractive to global-value chain driven FDI.

“I feel it was a very pragmatic and balanced budget touching a vast majority of segments. The real test now would be to see how effectively the implementation of the promises takes place as the real success lies in “feeling the change on the ground” and not just talking about it!” said Sameer khatri, Regional Vice President - Indian Subcontinent & Managing Director – India, UTi.

“The budget has overall been a positive one. The Finance Minister has dealt with some major challenges in the economy around fiscal consolidation and infrastructure growth. There has been a lot of focus on developing key social sectors under PPP model which can be a boost to economy. Focus has been given on infrastructure development especially roads as it is the most significant mode of cargo transport in India. Allocation of funds for road-development via NHAI is a positive step towards promoting hinterland connectivity,” said rajesh Goel, CEO, Celebi India.

However, he feels that few steps are still awaited to simplify the complex tax regime of India. Though commitment to roll out GST is there but there has to be a clear cut road map for its implementation.

“This budget had no frills and had no drama, and on contrary it was soothing like cool water in Delhi heat. The primary focus of this budget was to ensure streamlining and disciplining the current state of affairs and above all not to increase deficit. It does indicate that the Prime Minister and the Finance Minister have spent serious time in chalking out the roadmap for tomorrow. Hence when Government proposes increased public private partnership for Airports and Ports, it is a welcome news. And, what is heartening to know is Government considering/bringing Railways into it,” added Shesh kulkarni, President and CEO, UFMI.


Mahendra Agarwal Founder & CEO, Gati

Shashi Kiran Shetty Executive Chairman, Allcargo

Malcolm Monteiro CEO, Asia-Pacific, DHL eCommerce

Sameer Khatri RVP, Indian Subcontinent;

MD, India, UTi

LeAd storY


Subhash Goyal, Chairman, STIC Travel Group and President, Indian Association of Tour Operators pointed out that after a very long time the people of India has got a government with full strength and clear vision. “The people of India have full confidence that the new government would serve the greater interest of the country. Tourism, civil aviation, manufacturing and logistics industry would definitely flourish in the months to come thanks to the pro-active measures already visible from the steps taken by the Modi Government, especially his government’s Budget 2014-15 announcements. It may be recalled for the first time both tourism and logistics got mentioned in the Vision Document of the ruling party.” In addition, already the Civil Aviation Minister indicated that the Ministry of Civil Aviation is keen to allow Indian carriers flying abroad without completing five years flying norms.

“The Finance Minister’s concerns and plan outlays for infrastructure boosts and allocations towards strengthening multi modal transport would benefit the logistics industry for sure. But what will be important to wait and watch how the new government operationalises the plans and outlays and removes the structural bottlenecks and delays in project execution. The case in point will be further clear when we see that there is a promise of outlaying 8500 kms of road infrastructure without any specific plans being outlaid towards how the goal shall be achieved within a specified timeline. So budgeting is done and the focus now must clearly be on operationalising the Budget 2014-15,”concluded Shankar Chatterjee, Chairman & Managing Director, S CUBE Trans Continental Group.

According to G Balaraju, MD, Sindhu Cargo Services, this budget has addressed some of the trade issues with announcements of increasing 24X7 customs clearance at ports and airports and a strong intent to implement GST in the coming year. “The government’s plan to accelerate projects like Diamond Quadrilateral, Sagar Mala, Dedicated Expressway on high traffic density roads would have great impact on the infrastructure on transportation. Another appreciable initiative of the government is building airports at second tier cities,” he pointed out. He expects that thanks to the Budget announcements bankers would now be able to make infrastructure loans for a longer period which would help in financing infrastructure. And, over all initiatives taken in this budget would accelerate logistic Industry.

highlights of Budget 2014-15• The government has announced a new scheme to develop airports in metro and non-metro cities

through public-private partnership (PPP) to enhance air connectivity. It has also hiked allocation for the civil aviation sector by over 11.4 per cent to Rs. 9,474 crore.

• Impetus on increasing warehousing capacity for increasing the shelf life of agriculture produces. The Finance Minister proposed an allocation of ` 5,000 crore for the fund for the year 2014-15.

• A National Industrial Corridor Authority, with its headquarters in Pune, is being set up to coordinate the development of the industrial corridors, with smart cities linked to transport connectivity.

• The Amritsar Kolkata Industrial master planning will be completed expeditiously for the establishment of industrial smart cities in seven States of India.

• Industrial Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka will also be completed.

• The Government is committed to revive the Special Economic Zones (SEZs) and make them effective instruments of industrial production, economic growth, export promotion and employment generation.

• An institution to provide support to mainstreaming PPPs called ‘3P India’ will be set up with a corpus of Rs 500 crores.

• Sixteen new port projects are proposed to be awarded this year with a focus on port connectivity. Rs 11,635 crore will be allocated for the development of Outer Harbour Project in Tuticorin for phase I.

• SEZs will be developed in Kandla and JNPT.

• A project on the river Ganga called ‘Jal Marg Vikas’ (National Waterways-I) will be developed between Allahabad and Haldia to cover a distance of 1620 kms, which will enable commercial navigation of at least 1500 tonne vessels.

Rajesh Goel CEO, Celebi India

Subhash Goyal Chairman, STIC Travel Group

Shesh Kulkarni President and CEO, UFMI

G Balaraju MD, Sindhu Cargo Services

LeAd storY


Logistics – the economic driverOur trade and commerce has progressed from supplier of raw materials in sixties to finished products, with our entrepreneurs competing with international market players Fortune and Forbes lists. However, we are yet to achieve our deserved place. Exports of India which pay our import bill of dear crude are only $ 320 bn. However, there is confidence that India’s exports could be doubled to USD 750 bn by 2020.

Logistics industry, inter alia, holds a great promise as potential employment generator in different sections, components and stages of logistics and supply chain management. Just to give an indication, approximately five crore people are employed in this industry in India. The industry is worth its value equivalent to over 200 bn US Dollars. The industry YOY is growing at approximately 15 per cent. But we know it is still fragmented, unorganised and primitive. This though is not the actual exploited potential. It can be worth USD 500 bn.

If India is considered the wholesale and retail market of the world, as everyone from anywhere and everywhere can sell their wares here, we lap it all, and yet it is like drop in the ocean, we can, therefore fathom what we can achieve if only we keep upgrading our infrastructure of roads, highways, railways, freight corridors, SEZs, CFSs, ICDs, airports and ports, waterways, trucks and tracks. We run the IT processes of the world’s developed economies, and make them model economies. We have to do it for our own country too.

To my mind, I consider that the logistics industry is the core of the economic development. It is also very pertinent in the wake of the change that has taken place on the horizon of our largest democracy, which has ushered in a new government at the Centre. The new government is determined to bring back India on the path of double digit growth, to fulfill the aspirations of citizens of India for an inclusive growth. I am also confident logistics industry will get the recognition and attention of the Government of India.

Logistics is the keyMore often than not, logistics is also a misunderstood and also misrepresented. Cross border trade between almost disappeared physical borders of the nations “Supply Chain” operates. From Levi’s example, today inter alia making of Airbus 380 is a legend in logistics. Simply, it means movement of goods and merchandise, B2B, B2C, C2B seamlessly, end to end, from original producer to ultimate consumers’ hands. One must not lose sight of the fact that for the raw materials, capital goods and machinery, spare parts, consumables, modes of movement, ICT, and other host of services, companies, providers and the producers are themselves the intermediate or end consumers.

All industries require logistics and supply chain management. It is an all pervasive industry from health to happiness; from whole sale to retail; from single brand to multi-brand, from creation to destruction and

Logistics and supply chain management has assumed a great importance as a subject for economic development of India. With emphasis on manufacturing, auto industry, IT industry, medical tourism, export orientation, efficient road and transport network, as a world heritage and cultural centre, a 7500 km coast line, natural resources and weather, the logistics and supply chain industry is extremely important for economic development of India.

econoMIc GRoWTh

“We in the aviation,

infrastructure, Logistics and supply chain industry can

extend our all willing hands to reach the stars.”

With efficient Logistics and suPPLy chain management

acceleratingProf Dinesh Kumar

MD, Asia Aviation Associates

destruction to recreation (I mean scrapping and then reproduction).

Therefore, to put things in simple terms, to be understood by a layman, I think this connotes movement of merchandise from one part of the globe to another, seamlessly just in time, to satisfy a need of the producer, consumer and all those involved in the logistics and supply chain management.(includes intra and inter country movement by all modes – head load, camel and horse-back, small delivery vans, trucks, rail, road, sea, air, express, courier, including electronic transfers, and cyber trade).

Need for skilled personnel for logisticsAcademia and academics are very essential for knowledge and skill development of human resources engaged in this industry. Strangely, the industry does not yet realise that to compete with the giant logistic and supply chain operators of the world, people must formally learn, know and employ modern techniques, technology and state of art equipment essential to achieve the level of professional competence and be competitive. “University has to link to industry” to provide what it takes to be a productive employee or worker or manager armed with modern skills and tools. Specific diploma/degree level courses with guarantee of employability by the industry are to be evolved and prescribed to join this industry.

Airport infrastructureTo be 3rd largest aviation player by 2030 we need at least 300 airports. Our air traveling per capita p.a. is only 0.07 as against China at 0.2, Europe at 1.54 and USA at 2.5. If Indians travelled like Americans, there will be 2 billion passengers, p.a. Are we equipped to take on these numbers. Are we adopting the requisite infrastructure, support systems, skilled manpower and technology? Aviation sector is an important player in logistics as it carries more than 35 per cent merchandise by value. We in the aviation, infrastructure, Logistics and supply chain industry can extend our all willing hands to reach the stars. Aviation is also high multiplier of investment (Rs.100 invested generates Rs. 325). With the passenger projections at 290 million in 2020 there is enough work for all stakeholders and the government.

Turkey plans an airport with 6 runways and 150 million capacity at USD 10 billion spend, to be commissioned by 2017. Infrastructure is the key. All 127 airports of India handled 160 million passengers. That kind of “big think” we need to do as a great country.

Need to adopt real time ICT We have to gear up to handle huge volumes of transactions of all kinds by simplistic electronic forms and controls, “no hold” real time electronic processing, tracking of documents, payments and merchandise adopting state of art movement modes. We have to convert plethora of forms and approvals. We have to come out of hundreds of approvals in some industries before they startup. FDI is restricted because of the fearful unease for opening business in India (134th place out of 185 countries, even other below BRICS nations).

vicious circle of Transaction CostThe “Transaction cost” has been in deliberations and subject of many a committee for the past 3 decades, yet we haven’t been able to reduce it. Much of it is unproductive and due to high, irrationalized taxation and archaic processes that need a total reengineering. It stands in Indian context to 10-11% of total value of exports as against 6-7% world average.

Approximate average “Cost to export” in India is estimated at 1100 USD and “Time to export” is 16 days. Where-as the world does it with 700 USD and 9 days respectively. An estimate of an international agency puts it that there could be a 30% savings achieved, if proper state of art logistics and supply chain management practices are adopted. This can translate to savings of billions of dollars.

Clearing the impeding factors in logistics There are issues that will have to be tackled between the Industry and the government regarding, congestion at ports, efficient turnaround of ships, rationalising aviation regulation air safety issues and a pragmatic aviation policy. General aviation, MRO and aerospace, aero-sports, manufacture of aircraft and parts both for civil and military are areas yet to be exploited. Rationalisig into few slabs of customs duties, harmonising trade and labour regulations, a single GST, a low and common tax on jet fuel and a pragmatic aviation policy to avoid impediments losing airlines and wastage in Logistics and Supply Chain. Organised large scale warehousing, electronic bar coded tracking, high speed rail, roads, highways, larger size trucks have to replace the scene to cope with the expected movement of logistics systems in the next decade when we pace to become 3rd largest economy.

frOm the md’s desk

34 INFRALOG | JULY-AUGUST 2014 35 JULY-AUGUST 2014 | INFrALOG

The logistics industry is considered as a’ sunrise industry’; it is vital for any and every economic activity and brings about linkages. Its

importance is growing due to greater economic growth and production; newer concepts like just-in-time, reverse logistics and green logistics are gaining strength.

We also see that logistics costs are very high as compared to other developed nations. India needs to make a concerted effort to reduce these costs, which will in turn help to reduce the overall price level in the country. It is therefore important to apply information technology in different facets of logistics including transportation, warehousing, freight forwarding, express cargo delivery, container services, shipping services, e-commerce delivery, etc.

The key issues facing the logistics industry are:• Long and uncertain transit times due to lack of infrastructure –

inadequacy of road and rail network

• Multiple check points for toll payment, RTO checks and Octroi. For a journey of 2150 kms from Kolkata to Mumbai 32 hours are wasted in 26 check point stoppages.

• High turnaround time – time taken at JNPT is twice that of Colombo.

• Storage infrastructure makes up 20% to 25% of the logistics costs. Most of the ICDs and Warehouses are not leak proof; there is no security system or racking system. Cold storage is deficient. In Delhi alone there is a shortage of 9,000 acres of storage facility.

• Use of technology – automation is in its infancy.

• Payment of multiple state and central taxes.

The above challenges cause addition to production costs due to inefficient logistics, adds to inflation and resultant wastages lead to scarcity. All efforts should be concentrated to reduce logistics costs.

To be able to achieve this, what is essential is to change the mindset of the heads of the logistics companies – they should be willing to bring about a change by inducting trained manpower, by equipping them with competitive salaries and modern technology to keep them motivated to deliver at highest level of efficiency and productive capacity.

The industry needs to join hands with training institutes and constantly give them feedback on how they can improve and enhance their training programs to better serve the development of the logistics industry. At present there seems to be a disconnect between the administrators of the logistics industry and training institutes.

It has been observed that for the managerial level, trained graduates from the good business schools don’t opt for logistics as a career choice because the remuneration is poor as compared to other sectors. Hiring quality manpower thus becomes a challenge. For the operational services, mostly unskilled manpower is willing to work – less paid, less motivated, untrained workers do not understand the importance of their job profile and are constantly looking out for better prospects – causing Attrition. The path of progression is also not clearly defined.

Once trained blood is infused in the system, change is bound to take place for the better leading to higher adoption of technology, cost reduction and greater efficiency. The government needs to take firm measures in this direction: formulate binding and uniform policies and draft guidelines that would benefit the growth of production, transportation, infrastructure, improvement in tax structure and manpower. In short, it can be said that much needs to be done and on an urgent basis.

It is a paradox that on the one hand there is huge demand for skilled manpower for the logistics industry, on the other hand for the managerial level, trained graduates from the good business schools don’t opt for logistics as a career choice. We should find out the root causes of this critical scenario and the industry players should take some corrective measures for the greater interest of the industry. One of the pragmatic solutions can be relooking at the existing salary structure.

ReSponSIbIlITIeSof the Logistics inDustry on skill DeveLoPment

key issues & Dr Veni Mathur

Visiting Faculty, IIT Delhi

• By Dr Veni Mathur

Moc vISITS fffaI office on instc Project

Jt secretary,

Ravi Capoor, Joint Secretary, Ministry of Commerce ( MoC) recently visited the office of the Federation

of Freight Forwarders’ Associations in India (FFFAI) to brief members on International North South Transport Corridor (INSTC). FFFAI is doing a dry run study of the bottlenecks on the INSTC route.

Capoor in his briefing said that there are 4 emerging

markets in the world, namely ASEAN, LATIN, AFRICAN and CIS countries. Indian companies are trading with ASEAN, LATIN, AFRICAN, countries but till date their presence in CIS countries is not substantial. He said that after 1991 when integrated USSR collapsed, there was huge economic mayhem and during the same period simultaneously in India there was economic liberalization. The volume of trade with the erstwhile USSR moved towards the west, since many countries of the broken USSR became land locked countries and trading with these countries became difficult. From 1991 to 2001 out of 15 countries 12 countries were formed as CIS countries namely, Russia, Ukraine, Kazakhstan, Belarus, Azerbaijan, Uzbekistan, Turkmenistan, Georgia, Armenia, Tajikistan, Kyrgyzstan, Moldova.

“There are a lot of trade opportunities for the Indian exporters and importers. Custom brokers, freight forwarders, shipping lines can gain from development of INSTC route as a lot of bulk cargo can be imported from these CIS countries and finished products can be exported, as these countries do not locally manufacture most of their requirements,” Capoor said.

37 JULY-AUGUST 2014 | INFrALOG

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Address: D-7, Suncity, Golf Course Road Sector-54, Gurgaon.

according to Bhadkamkar, the IFCBA represents the interests of the worlds’ customs brokers and works to bring about improvements in

Customs policies and practices on a global basis. The interest of IFCBA for member and non-member countries is limited to the non-fiscal provisions of facilitation of customs matters. IFCBA will therefore watch with interest the announcement of ‘Indian Customs Single Window Project’ to facilitate trade. “Presently it is only an announcement, we will need to study the steps and administrative reforms that will be initiated for the effective implementation,” he said.

Commenting on the crucial role played by Customs Brokers Bhadkamkar pointed out that Customs brokers have integrated into global supply chains as experts in logistics and border management, and have made unparalleled contributions towards making supply chains tax efficient, legally compliant, environmentally friendly, safe and secure. “As the newly elected Chairman of the IFCBA, I am committed to work with our member associations to strengthen our professionalism, implement IFCBA best practices and continue to add value to the many small and medium sized businesses, who rely on our expertise and experience,” he emphasised.

IFCBA held its bi-annual world conference “Celebrating 25 years of Trade Facilitation through Expertise and Innovation” in Seoul, Korea from May 13-17, 2014. The IFCBA is entering its twenty-fifth anniversary year as the only global organisation representing customs brokers. It continues to work to enhance the understanding of the customs broker’s role and value in facilitating trade and improving trade efficiency.

The term for IFCBA Office Bearers and the Board of Directors is for two years. “We will therefore have a two year programme for strengthening the capabilities of the Customs Brokers all round the world,” the IFCBA Chairman added. IFCBA holds its biennial conference in different

member countries and the next conference is scheduled to be held in May 2016. India will be one of the preferred venues for the same.

Market Trends & Customs BrokersIn Bhadkamkar’s opinion, according to the the global corporate trends during the last decades, the relentless pursuit for process efficiency and the reduction of costs can be regarded among the most outstanding. The World Customs Organisation has two important initiatives in this area, namely ‘Globally Networked Customs’ & ‘The Economic Competitiveness Package (ECP)’. In addition, India is also to be committed to WTO for Customs Facilitation in the ‘Bali Package’. This decision for Trade Facilitation is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. It will be a legally binding agreement and is one of the biggest reforms of the WTO since its establishment in 1995. However, there is a concern that the Courier mode under the garb of ‘Express Cargo’ will get a preferential treatment, something which in conflict of interest for both other modes of transport and Customs Brokers. “We feel an artificial unequal playing field should not be created, and all modes be subject to equal facilitation,” he argued.

Challenges & DoableBhadkamkar observed that the growth of global trade and increasing security threats to the international movement of goods have forced customs administrations to shift their focus more and more to securing the international trade flow and away from the traditional task of collecting customs duties. Recognising these developments, the World Customs Organization (WCO), drafted the WCO Framework of Standards to Secure and Facilitate global trade (SAFE). “The Customs Brokers should augment their capabilities to adapt constructively to

Recently, Shantanu Bhadkamkar, Immediate Past Chairman of Federation of Freight Forwarders’ Association in India (FFFAI) took over as Chairman of International Federation of Customs Brokers Associations (IFCBA). InfraLOG had a tete-e-tete with him to know his focus area, particularly for India.

cuSToMS bRokeRS business an occuPation of first choice

ifcba to make Shantanu Bhadkamkar

Chairman IFCBA

the ever changing global business and economic environment. In addition to the traditional skills and knowledge of dealing with the customs regulations, the Customs Brokers need to cultivate knowledge and develop skills to adapt to the WCO’s SAFE Framework of Standards for Secure and facilitated Global Trade, which will act as a deterrent to international terrorism, secure revenue collections and promote trade facilitation worldwide,” he explained. He also undelined that Developing an ‘Authorised Economic Operator’ (AEO) Programme is a core part of SAFE and the customs brokers therefore need to take steps to become an AEO. Meanwhile, two Indian Customs Brokers have already achieved AEO status.

Plan & vision for IFCBA Term 2014 -2016• IFCBA will facilitate the enabling of the members

of the IFCBA to augment the capabilities of the Customs Brokers to adapt constructively to the ever changing global business and economic environment; and further empower them to move into the next league.

• The Customs Broker shall emerge as the force multiplier in enhancing the reliability, security, and compliance of regulations, environmental norms and safety standards in the Global Supply Chains by being an effective interface & facilitator between the authorities & the trade

• To transform Customs Broker’s profession into a vital profession and make it ‘An Occupation of First Choice’

• To integrate in to Global Supply Chainsas a Logistics & Regulatory ComplianceExpert and be a Hallmark for Tax Efficient, Law Complaint, Environmentally Friendly, Safe & Secure Supply Chains

• Conceptualise and lead the Global ‘Thought Leadership’ initiative for the industry, and the regulatory aspects of the international trade

“As the newly elected Chairman

of the IFCBA, I am committed to work

with our member associations to strengthen our

professionalism,”


Newly elected IFCBA office bearers

Achievements of BhadkamkarIn advance of the International Federation of Customs Brokers Associations (IFCBA) world conference held from May13-17 2004 in Seoul, Korea, the IFCBA Board of Directors unanimously elected Shantanu Bhadkamkar, Immediate Past Chairman of Federation of Freight Forwarders’ Associations in India (FFFAI) as Chairman of IFCBA.

Apart from being Immediate Past Chairman of FFFAI, Bhadkamkar is also the Sr. Vice – President of Maharashtra Chamber of Com-merce Industry and Agriculture (MACCIA), Vice –President of Association of Multimodal Transport Operators in India (AMTOI) and Immediate Past Chairman of Council of Supply Chain Management Professionals (CSCMP)

He leads a newly elected executive committee team in IFCBA.

industry AssociAtions


Enno Osinga, Senior VP, Schiphol Cargo

LeAding Airport

ReGISTeRS TonnaGe groWth by 8.8% in first haLf

schiPhol cargo

air Cargo tonnages through Amsterdam Airport Schiphol continued to build throughout the second quarter of 2014, leading to overall

growth of 8.84 per cent in the year to date.

In the period January-June, Schiphol handled a total of 801,700 tonne. Schiphol’s cargo throughput has outstripped 2013 in every month of 2014, reaching a peak increase of 14.1 per cent in May.

Asia remains the airport’s top market, with a total of 304,872 tonne - up 8.3 per cent, and supplying 38 per cent of the total. North America retained second place, with 143,686 tonne – up 14.6 per cent and accounting for 17.9 per cent of all traffic.

The Middle East grew 14.5 per cent to 106,937 tonne, representing 13.3 per cent of the total; at the same time, Africa saw more modest growth of 4.14 per cent to 89,010 tonne, an 11.1 per cent share. The relative figures in these two markets are slightly distorted by the increasing use of Middle East-based freighters to uplift fresh produce from Africa.

Europe grew by 16.2 per cent to 76,598 tonne, accounting for 9.6 per cent of traffic. Latin America was the only sector to show a decline, of 5.2 per cent to 80,597 tonne – still a 10 per cent share of Schiphol’s total cargo throughput.

The balance between imports and exports shifted to 51.42 per cent and 48.58 per cent respectively in 2014 H1: a swing of 0.58 per cent to imports, compared to the same period in 2013.

Freighter operations to the end of June 2014 totalled 8,106 – up 7.2 per cent on 2013.

According to Enno Osinga, Senior VP, Schiphol Cargo, these figures, supported by those of other European gateways, are clear indicators that the European air cargo market is stabilising, and returning to moderate growth. “Freighter operations have grown again, but by

less than the increase in total traffic; this supports feedback from our carriers that they are enjoying improved utilization,” he said.

He also maintained that Schiphol’s growth figures are once again the strongest among the major European gateways, and that the airport continues to out-perform the industry. “We, our logistics community and our authorities have earned this growth by strongly supporting the continuing drive towards streamlined processes. We believe in an integrated support of the entire logistics chain; given our current results, this seems to be paying off,” he explained the success story.

Amsterdam Airport Schiphol Cargo Facts & Figures- Third largest cargo airport in Europe- Schiphol’s air cargo community employs over

26,000 people.- 1.531 million tonnes of cargo in 2013 (+3.2%) - 323 scheduled airline destinations in 98 countries - 99 scheduled airlines- 27 scheduled freighter operators- 426,000 aircraft movements in 2013, (including

15,623 freighter flights)- 25 dedicated full freighter Cat 8/9 stands - 5 main runways, ranging from 3,400 – 3,800

metres in length- Ready to handle multiple A380s & B747-8Fs- 8 cargo handling companies- 400,000 m2 of cargo warehouses, of which 60%

have direct air side access - 11,000 m2 of new cargo buildings under

construction with direct air side access - Airside access for logistic service providers- Extensive facilities for perishables and pharma/life

science cargo in multiple controlled-temperature zones, featuring refrigerated/deep-freezer and heated storage/handling facilities;

- X-Ray screening, high-security handling and

storage for valuables, hazardous and radioactive goods handling, outsize/heavy cargo handling, mortuary

- 2 livestock/bloodstock handling centres with vets and health officials on hand 24/7

- Express/Courier Centre- Transit Zone, Free Port/Foreign Trade Zone.- 150+ logistic service providers situated at or near

Schiphol- 50%+ of all American and Asian European

Distribution Centres located in the Netherlands - Airport-seaport synergies: Amsterdam Airport

Schiphol close to Ports of Rotterdam and Amsterdam

- Unparalleled European road feeder and distribution network

- 25+ airfreight hauliers operate from the airport

New Initiatives- 2 new logistic parks in operation; a third under

construction- Dedicated freight lane planned to connect air cargo

terminal directly to logistics parks, truck-, water- and High Speed Train Cargo terminal of ACT

Schiphol SmartGate Cargo The airport, air cargo industry & Customs have joined forces to integrate monitoring of goods entering and leaving the EU via Schiphol, allowing rapid and efficient clearance:- Integrated cargo control & inspection - Shorter lead times & lower costs - Increased reliability, safety & security

Leading the e-freightAmsterdam Airport Schiphol actively supports the IATA E-freight initiative which aims to replace paper with digital documents throughout all elements of the air cargo supply chain – including shippers, forwarders and export customs, carriers, import customs, handling agents, forwarders and consignees.

Asia remains the airport’s top

market, with a total of 304,872

tonne - up 8.3 per cent, and

supplying 38 per cent of the total.

The Major Commodity from India to Schiphol is pharmaceuticals


InfraLOG: First of all we would like to congratulate you for taking over as MD, CRWC and wishing all the best for you. As a new MD

what would be your primary focus to strengthen the services and business of CRWC?

Thankachen: It gives me a great pleasure to take over as new MD of CRWC, the company which has shown immense growth in the past few years.

My main goal is to continue to innovate to provide high quality logistic services for our clients and service providers. We will achieve this and our other objectives by being actively catering to the needs of our clients, business partners, contractors and our employees. We want to develop and establish more rail-side warehouses as it would be convenient for the customers ultimately bringing down the logistics cost.

Our focus will be on adapting and developing our existing supply chains to support rapid expansion and capitalise on the growing number of middle-class buyers in emerging markets.

Also in the radar is to take up new projects to develop and provide modern facilities to our existing as well as new clients.

Last but not the least, I would also focus on developing policies around sustainability and adapting how we can source materials and manufacture and distribute finished products to reduce their impact on the environment and the communities where they operate so that our services respond to customer business positively and contribute to the growth of the revenue for CRWC.

InfraLOG: Being an ex-Concor official you have vast experience of

containerised cargo movement in the country. How would it benefit you to add value to CRWC?

Thankachen: My association with CONCOR has helped me to gain exposure to multi faceted logistics activities such as terminal operations, train operations, IT & system applications, transport management function, mechanised product handling system, dealing with customs and also coordination with Indian Railways. The experience gained will help me in driving CRWC further to its fullest potential.

InfraLOG: Presently, there is huge demand for express cargo delivery because of fast increase of e-commerce. How CRWC is planning to tap this segment through its products/services?

Thankachen: Of course, with the fast increase of e-commerce the demand for express cargo is definitely going to increase. In addition, the demand is also likely to increase on account of non-availability of cost effective logistics Service Provider.

CRWC is quite focused on this aspect of the logistics business and also as per the vision document of Indian Railway-2020. The current practice of attaching 02 no’s of VPU’s with passenger trains to cater to the need of parcel services is gradually getting phased off and dedicated full VPU rake parcel trains is going to be common phenomenon to be seen in the coming days. These exclusive parcel trains will be operated on various routes from separate rail terminals exclusively meant for handling of goods traffic only. CRWC has also been allocated two full VPU parcel trains to be operated on round trip basis for Chalakudi- Moga- Chalakudi and Vapi- Guwahati sectors . We expect to commence services on these sectors shortly. Railways have also permitted

Recently, K.U. Thankachen has taken over as MD, CRWC. Thankachen is a seasoned professional in the field of logistics and warehousing with over 25 years of experience. He started his career with Airports Authority of India in the year 1987 and joined Container Corporation of India Ltd. in 1995. In his first and exclusive interview with InfraLOG after taking over the charges of the first growing CRWC, Thankachen shared his ideas and plans and programmes.

of cRWc To focuS on exPress cargo services

neW mdKU Thankachen

MD, CRWC

operation of parcel trains connecting CRWC facilities at Shakurbasti , Whitefield and Dankuni.

InfraLOG: What is your opinion about the present trends and future of logistics industry in India? What would be your recommendations for the greater interest of the logistics industry and the country’s economy as a whole?

Thankachen: India is being touted as ‘Destination Future’ for logistics service providers all over the world. In the coming years, a lot will be changing since the government is finally appreciating the importance of infrastructure and is demonstrating a strong commitment towards providing the same along with creating conducive regulations. Regulations around rationalisation of tax structures, proposed introduction of GST and prevention of overloading are creating a favorable environment, in which the sector can flourish. At the same time, emphasis should be given for the integration of IT enabled technology in the sector. With the latest technology, logistics service providers will no longer be restricted to the geographical boundaries but can expand their business to any location.

InfraLOG: What is your opinion about the announcements in the ‘Budget 204-15’ for the logistics industry’s point of view?

India has voted for economic growth and prosperity in the hope for a change. With great power comes great responsibility and in my opinion our finance Minister has announced a progressive Budget.

The government announced that it will work to introduce the much awaited Goods and Services Tax (GST) this year which no doubt will provide the much needed impetus to the logistic industry since ultimately future of the Indian logistics industry lies in the value proposition of the customer. Value solutions can be engineered only if the complex supply chain meshes together seamlessly. The future course of action, policies of the government will determine the success ratio of growth in this field. It is going to turn around on the back of robust GDP growth, globalisation and FDI in logistics.


k.U. Thankachen has held various important positions in Marketing, Commercial and Operations functions within CONCOR. He was posted as Chief General Manager, Central Region of CONCOR at Nagpur having jurisdiction of five terminals at Nag-pur, Bhusawal, Aurangabad, Raipur and Mandideep from September, 2010 to April, 2012. Thereafter, he was posted as head of the largest Inland Container Depot in Asia at Tughlakabad, New Delhi from April, 2012 to September, 2013. He also recently attended a one year international MBA programme organised by International Centre for Promotion of Enterprises, Ljubljana, Slovenia.

Thankachen completed his schooling from Loyola School, Trivandrum and higher secondary education from Mayo College, Ajmer. He completed his gradu-ation in Physics from St. Joseph’s College, Devagiri, Kozhikode and M.B.A with specialisation in Market-ing from Department of Commerce & Management Studies, University of Calicut in 1986.

exCLusiVe interview

“My main goal is to continue to innovate to

provide high quality logistic

services for our clients and service

providers.”


aInfraLOG: As a new and first CEO-India of Celebi Aviation, what would be your prime focus to strengthen the operation and business

of Celebi Aviation in India?

ramachandran: Celebi Aviation Holding Inc has business interests at two airports in India as on date. We handle the largest share of the Cargo business through Delhi and have a fair share of the Ground Handling space at Mumbai and Delhi. We are clearly looking at expanding our reach within the country and be a part of the growth story that India is going to witness. With more airports heading toward privatisation and modernisation, there is a profound need for improvement in the sector, on ground in specific. I will be focussing on refining and implementing the strategic growth plan to expand and position Celebi as a powerful player in Ground Handling and Cargo Handling services in India in specific.

InfraLOG: What is your opinion about the prospect of aviation business in India for private companies like Celebi in the years to come?

ramachandran: After a couple of challenging years, the Indian domestic aviation is expected to deliver double digit returns and is expected to sustain this tempo for a decade. The international traffic is also expected to continue growing. India should emerge as the third largest aviation market by 2023. Celebi has demonstrated its seriousness and credibility in this space since our entry 6 years back and hence is confident of being able to add value to this growing industry. With an investment of over 100 million USD done so far, we are looking at expansion and believe that we can play a very critical role

in this ecosystem by providing world class services which the industry and its stakeholders rightfully deserve. There is a desperate need for the functions on ground in both ground handling and cargo to get into an organised mode and that’s where we believe we can contribute immensely.

InfraLOG: What would be the emerging trends for the aviation industry in India in view of the fact that still airlines in India are largely in red? Will the low cost airport model rise to cope up with the demand of low cost/budget airlines?

ramachandran: There is limited demand for the full service product beyond the Delhi, Mumbai, Bengaluru and Chennai markets. The LCC model has captured over 65% of the space and the balance is running at a very marginal price difference and this trend will continue. May go thru a bit of re jig with TATA SIA entering the fray. Airlines will go hybrid in terms of their business model. As on date there is no low cost airport model, at least not as yet and it will take some time before such a model emerges. Airlines will have to focus on revenues and adopt innovative methods. Ancillary revenues will be a part of this strategy. We will play an important role in bringing some serious cost advantages to the airlines as this is our core business and we will be able to bring in better productivity and synergies, thereby be able to help airlines save on their existing costs.

The country has immense potential as long as the policy and regulatory framework is able to align and support the industry. Quite a few systemic issues need correction and I am sanguine that the government

Murali Ramachandran has been appointed as CEO-India, Celebi Aviation Group and he will be responsible for aviation activities (particularly ground handling and cargo) of Celebi in India as well as in the Indian subcontinent. His main responsibility would be to stimulate the growth of Celebi’s presence in this subcontinent. In an exclusive interview with InfraLOG Rmachandran shares his views about the business opportunities in India and focus areas of Celebi Aviation Group.

avIaTIon GRoupPlans Pan inDia exPansions

celebiMurali Ramachandran

CEO-India, Celebi Aviation


and the regulatory bodies are looking at making changes to assist the industry. With more airports heading towards privatisation, the overall offer to the passengers and its stakeholders will step up tremendously.

InfraLOG: The government of India is now emphasising more on non-metro airports. Will you be interested to expand your services to those airports? What would be your prime focus……passenger related, ground handling or cargo handling/ terminal operations?

ramachandran: We would certainly like to be a part of this development process. As of now we exist at the two large gateways and would definitely want to be at these locations and contribute in all the areas mentioned. The so called non metro airports have immense potential for growth and would continue feeding the gateway airports. As mentioned the industry needs subject matter experts and we will be keen to participate in this story of progress and growth. Our prime focus will remain Ground Handling and Cargo warehouse functions.

InfraLOG: Will you be interested in operating off-airport cargo handling services like Air Freight Stations? What is your opinion about the requirement of AFSs in India?

ramachandran: AFS is a necessity to increase our the catchment area. Such a facility will augment and support the whole cargo industry and simplify how business is done in the country. Celebi is quite keen to set up such faclities and is infact looking for suitable partners. Such faciliites have been successful in the other parts of the world and we feel that India needs such solutions to increase the reach to the interiors and locations with high potential but find it difficult to manage the logistics.

InfraLOG: What kind of changes can the users of Celebi Aviation in India expect from the new CEO-India in the days to come?

ramachandran: Celebi has built a credible reputation for itself in this market in a very short time. We have a prestigious list of customers. We would like to be available to this discerning group at many more locations within India and thereby give them an opportunity to leverage the experience and quality that Celebi brings with itself. Service quality & standards is what our customers expect and they will be able to get this at more locations that they do presently. With my strong service background and airlıne experience, I am confident that I will be able to associate well with their expectations and build a strong and fruitful bond between the parties.

India is a discerning market and we are confident that we will be able to rise up to our customers’ expectations and jointly work towards a successful and harmonious working relationship.

BrIEF PrOFILE

Ramachandran graduated from Institute of Hotel Management (National Council) and holds Masters in Management from Welcomgroup Management Institution. He started his career in 1990 and worked 13 years for ITC hotels and during this time carried out executive positions. Ramachandran joined Jet Airways in Mumbai Airport as a General Manager in 2003 and later he was promoted to Senior General Manager in charge of all India Airports in 2006. He joined Kingfisher Airlines in 2007 as Vice President for Ground Services. Ramachandran was promoted to Senior Vice President and at the same time was in charge of Cargo Sales and Services department in 2010. Prior to joining Çelebi, Ramachandran was heading the airport operations of Mumbai International Airport in the capacity of Executive Vice President, Operations.

CeO speAks

“The Indian domestic aviation

is expected to deliver double

digit returns and is expected to

sustain this tempo for a decade.”


The focus of the Conclave was to discuss challenges pertaining to multimodal transportation, cold chain and warehousing for a way

forward of the Indian logistics industry. Addressing the delegates Dinesh Rai, Chairman, Warehousing Development and Regulatory Authority (WDRA), who was the Chief Guest at the Conclave, laid emphasis on the need for cost effective solutions required for the logistics and supply chain to benefit the manufacturing sector. He underlined the importance of promotion of logistics in the agricultural sector. He also expressed concern over the fact that the cost of land is a major bottleneck in the development of warehousing infrastructure.

The Conclave was also addressed by Santosh Kumar Sarangi, Chairman cum Secretary, Agricultural and Processed Food Products Export Development Authority (APEDA); Alok B Shriram, Senior Vice President, PHD Chamber; R.S. Bedi, Chairman, Task Force on Logistics Management, PHD Chamber; B.N. Puri, Executive Director, Asian Institute of Transport Development; M.S. Mathur, Executive Director / Traffic/PPP, Ministry of Railways; Vinod Nautiyal, Chairman and Managing Director, EXPAN Logistic; S.L. Sharma, President, The Air Cargo Agents Association of India (ACAAI); Vanish Ahluwalia, General Manager- -Northern Region-NVOCC, All Cargo Logistics; Pankaj Kumar, Director, Ministry of Food Processing Industries (MOFPI); Rajesh Agarwal, Director, Crystal Group; Jasmohan Singh, MD, Frick India Ltd; Vijit Madan - Head Sales & Service – Thermo King (Climate Solutions), India; Pankaj Mehta, Country Head and Director, Carrier Transicold India; Deepak Takkar, Vice President-Sales & Marketing and GM, Emerson Climate Technologies (India) Limited; Ranvir Singh, Joint Secretary, WDRA; V.R. Khusro, DGM, NABARD; Dr. Rakesh Gupta, General Manager, Punjab National Bank; Dr. C. Prabhu, Partner, Rabo Equity Advisors, New Delhi; Sudhanshu Pachisia, Co-Chairman, Task Force on Logistics Management, PHD Chamber and Dr. Ranjeet Mehta, Director, PHD Chamber.

conclave 2014 underlines key concerns and tasks aheaD

Phd logistics

FACTS & CONCErNS

• India is the largest producer of milk and the second largest producer of fruits, vegetables and tea

• As per the data available to the Govt. as on 30th October, 2012 , there were 6,488 numbers of cold storages having cumulative capacity of 30.75 MMT

• The value of losses of crops and livestock produce at national level was estimated by CIPHAT Ludhiana as Rs. 44143 crores at 2009 wholesale prices

• Annual wastage of fruits and vegetables is estimated to range from 5.8% to 18% having value of Rs. 13309 crores

• Against the total production of more than 500 MMT of hor-ticultural & non-horticultural produces, the total cold storage capacity is estimated approximately 31 MMT, which is not even 10% of the total production

• 96 % of the cold storage are in Pvt. Sector; more than 75 per cent of the capacity is utilized only for potato and only about 23 percent are under multi commodity category

• Most of the cold storage are not linked to the Farm and the market through controlled temperature ( Reefer vans) transportation.

PHD Chamber of Commerce and Industry organised “Logistics Conclave -2014” on July 21 at PHD House, New Delhi. The Conclave was addressed by a large number of speakers and attended by more than 200 delegates from different parts of the country including key officials from government.

Dignitaries are addressing the ‘Logistics Conclave 2014’ during the inaugural session at PHD Chamber, New Delhi

Airlines wise exim cargo performance from Delhi International Airport in July 2014 (top 30)

Airlines

Export without

Perishable (Mts)

Export Perishable

Cargo (MTs)

Export (with Peri.) (Upl) Mts

Import (Mts)

Total Cargo(Mts)

% of Total

Atlas Air 0 0 0 603 603 1.58%

Jet Airways 1063 120 1184 1495 2679 7.00%

Air India 1223 614 1837 1324 3161 8.26%

British Airways 840 64 904 364 1268 3.31%

Cathay Pacifc 912 35 947 2807 3755 9.82%

Emirates 803 1375 2178 1061 3240 8.47%

Etihad Airways 795 238 1033 2080 3113 8.14%

FedEx 439 6 445 614 1059 2.77%

Jet Time/Jin Air 162 8 170 548 718 1.88%

kalitta Air 566 0 566 543 1109 2.90%

Lufthansa 681 52 733 532 1265 3.31%

Malaysian Airline 412 50 462 399 860 2.25%

All Nipon Airways 485 7 492 340 832 2.17%

Austrian Airlines 237 19 257 223 480 1.25%

Qatar Airways 692 182 874 367 1241 3.24%

JSC Aeroflot russian Airlines

303 82 385 13 398 1.04%

Saudi Arabian Airlines

263 188 450 16 466 1.22%

Turkish Airlines 258 18 276 184 460 1.20%

United Airlines 284 15 299 125 424 1.11%

virgin Atlantic Airways

407 3 410 252 662 1.73%

Air France 417 13 430 196 626 1.64%

kLM royal Dutch Airlines

464 16 480 249 729 1.91%

Singapore Airlines 516 18 534 793 1327 3.47%

Thai Airways 583 14 597 793 1390 3.63%

Swisss International Airliness

503 16 519 409 929 2.43%

Air China 139 0 139 99 238 0.62

China Airlines 112 0 112 94 206 0.54

Interglobe Aviation 104 1 105 57 162 0.42

China Southern 51 0 51 87 139 0.36

Gulf Air 102 47 149 2 159 0.39

Total Cargo handled by Delhi Airport

16501 3447 19987 18367 38252

Export & Import cargo tonnage handled at CSIA for the month of July 2014 (Freight in Metric Tons)

Airline Export Import Total

Aerologic 0 335 335

Air Arabia 170 55 225

Air China 16 5 21

Air France 586 257 843

Bangkok Airways 74 6 80

Blue Dart 12 137 149

British Airways 1159 646 1804

Cathay Pacific 1265 1491 2757

Delta/KLM/Martin Air 482 422 904

EL-AL Airlines 88 67 156

Emirates 3113 1516 4629

Ethopian Airlines 999 27 1025

Etihad Airways 1271 1272 2542

Federal Express 664 146 810

Gulf Air 207 67 274

Indigo Air 192 129 321

Iran Air 62 0 62

Jet Airways 3428 2700 6128

Kenya Airways 369 10 380

Lufthansa Airlines 1618 1892 3509

Malaysia Airlines 397 414 811

Oman Air 102 78 180

Qatar Airways 906 753 1659

Royal Jordanian 25 0 25

Saudi Arabian Airlines

943 520 1463

Singapore Airlines 710 839 1549

Spice Jet 13 2 16

Srilankan Air 194 221 415

Swiss Intl. Airlines 508 431 939

Turkish Airlines 572 329 901

United Airlines 61 167 228

UPS 217 588 806

Virgin Atlantic 391 231 623

Air India 1219 810 2029

Air Mauritius 157 8 165

Egypt Air 11 2 13

Korean Air 137 116 253

Kuwait Airways 551 252 803

Pakistan intl Airlines 67 1 68

South African Airlines 325 7 332

Thai Airways 319 392 711

Yemenia Airways 47 0 47

Others 153 78 231

Total 23801 17418 41219

aIR caRGo peRfoRMance In July 2014 fRoM delhI and MuMbaI aIRpoRT

industry events


acaaI nR hoSTS evenInG funcTIonOn the occasion of the National Committee meeting of the Air Cargo Agents Association of India (ACAAI),

the Northern Regional Committee of ACAAI hosted a gracious event on August 1 in New Delhi. At this evening function Kiran Bedi, recipient of Ramon Magsaysay Award & Former IPS officer was present as Chief Guest to address the huge

gathering comprising freight forwarders, airlines, airport operators and other industry stakeholders.

“We may recall that for the first time in the country’s history a national party (read BJP) has emphasised on the importance

of logistics and supply chain management in their Election Manifesto. And, accordingly, we have witnessed a very enabling ‘Budget 2014-15’. Though it did not mention any radical target, but clearly outlined the direction how to reduce deficit and to achieve this goal strengthening three areas viz manufacturing, infrastructure and agriculture. Hence, logistics would be one of the major areas of concentration of the new government,” said Jani. He also lauded the Finance Minister’s announcements on launching of 15 new ports and 24 new airports and enhancing multimodal connectivity to streamline the supply chain system within and in and out of the country, without any procedural hassles. He lauded the PM’s call “Less Government, More Governance.”

Commenting on the further expectations from the government Jani mentioned that there should be a strong transport grid with multiple hubs and multimodal connectivity. “We have huge road and rail network, inland waterways and good number of existing airports and ports apart from many in the offing. Need is to establish the links with each other to create a strong transport grid across the country,” he pointed out. He emphatically maintained that India is able to take on the challenges from its competitors like China, provided the manufacturing, logistics and transaction costs can be reduced by proper utilisation of the multimodal transport network and less procedural hassles. “India is far ahead of China in high value and value added manufacturing. However, it is not cost competitive because of low production and high logistics and transaction costs,” he added.

Jani also maintained that there should be a cluster of manufacturing hubs with adequate logistics infrastructure. “For example our

manufacturing centres are not properly connected to the airports. In this case like CFSs and ICDs there should be AFSs at all major manufacturing areas. In addition, the AFSs should be suitably connected by both road and railway services,” he advocated. Jani welcomed the Government of India’s initiatives to bring in AFS Policy. “It is a welcome initiative in respect of facilitation of air cargo from manufacturing hubs to any airport. However, at the same time the government has to be careful about the business interest of the airport/terminal operators. We should also be careful about optimal utilisation of existing capacity with airports,” he stated.

According to Jani presently the CSC’s Greenfield cargo terminal, which has a capacity ahead of demand and the brownfield cargo terminal at IGI airport has adequate capacity to handle cargo till at least next 10 to 15 years.

The CSC Chairman also made caution of proper follow up of the government policies (many of them are very positive viz EDI, 24x7, AEO, etc), collaborative approach and strong industry responses towards the same. He emphasised on a common EDI platform for all stakeholders that may be created by PPP.

Jani observed that airport terminal operators will have to give more emphasis on domestic cargo facilitation. “We are already on this job. Previously, cargo used to lie on road. We have brought it under a shed for common users. We are developing the facilities further to provide all modern amenities. And, we expect full cooperation from our customers and users of this terminal including bearing the cost for availing of services,” he urged. Jani shared that CSC India is in constant dialogue with its customers to resolve all issues, if any.

With a new Government at the Centre and some positive announcements made in the Union Budget 2014-15, the country has high optimism about the changing scenario of its economy and the logistics industry in particular. The changes are already visible at every level, from government to private sectors; feels Tushar Jani, Chairman, CSC India, and an acclaimed logistics expert.

TRanSpoRT GRIdWith muLtiPLe hubs and muLtimoDaL connectivity

create a Tushar Jani,

Chairman, CSC India


LOgistiCs leAders


Documents

A government with cleAr - IFCBAifcba.org/sites/ifcba/files/Infralog_Magazine_Aug.pdf · Safexpress recently launched its Logistics Park at Pithampur with an objective to augment economic