cargo talk

Express Cargo in India

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

FEBRUARY 2011 SOUTH ASIA’S LEADING CARGO MONTHLYNo.1 in Circulation & Readership

FEBRUARY 2011Cargotalk Vol XI No. 3

Pages 50Rupees 50

cargotalk.inA DDP Publication

Vizhinjam Port in Kerala

E-freightWhere does the forwarding community stand?

Adequate speed required to go with the post recession time

likely to be operational by 2015

WWW.CARGOTALK.IN6 CARGOTALK FEBRUARY 2011

DEPARTMENTS

National NewsUPS Celebrates Annual

Volunteer Month in India

Take Solutions acquires 100 per cent of UK based WCT

Consulting Group

ECS Group plans more global expansion including India

Darcl Logistics strengthens ODC movements

International NewsGlobal Air Cargo Advisory

Group emphasises on security with minimum disruption

Equipment ServicesGandhi Automations

Dock levelers from Campisa

International AirportMumbai International

Airport increases cargo volume by offering incentives

Calendar of EventsCalendar of International Events

Express CargoFedEx Express to enhance

connectivity to Asian market

Emerging TechnologyCarrier Transicold introduces

natural refrigerant container technology

Cargo PerformanceAirlines wise cargo

performance from Delhi

contents

February 2011

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CARGOTALK is a publication of Durga Das Publica-tions Private Limited. All information in CARGOTALK is derived from sources, which we consider reliable and a sincere effort is made to report accurate information. It is passed on to our readers without any responsibility on our part. The publisher regrets that he cannot accept liability for errors and omissions contained in this publica-tion, however caused. Similarly, opinions/views expressed by third parties in abstract and/or in interviews are not necessarily shared by CARGOTALK. However, we wish to advice our readers that one or more recognized au-thorities may hold different views than those reported. Material used in this publication is intended for information purpose only. Readers are advised to seek specific advice before acting on information contained in this publication which is provided for general use and may not be appro-priate for the readers’ particular circumstances. Contents of this publication are copyright. No part of CARGOTALK or any part of the contents thereof may be reproduced, stored in retrieval system or transmitted in any form without the permission of the publication in writing. The same rule applies when there is a copyright or the article is taken from another publication. An exemption is hereby granted for the extracts used for the purpose of fair review, provided two copies of the same publication are sent to us for our records. Publica-tions reproducing material either in part or in whole, with-out permission could face legal action. The publisher assumes no responsibility for returning any material solicited or unsolicited nor is he responsible for material lost or damaged. This publication is not meant to be an endorsement of any specific product or services offered. The publisher re-serves the right to refuse, withdraw, amend or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian and Inter-national Advertisements Code. The publisher will not be liable for any damage or loss caused by delayed publica-tion, error or failure of an advertisement to appear.CARGOTALK is printed & published by SanJeet on behalf of Durga Das Publications Private Limited. and is printed at Cirrus Graphics Pvt. Ltd., B-62/14, Phase-2, Naraina Indus-trial Area, New Delhi – 110028 and is published from 72 Todarmal Road, New Delhi – 110001.


Opinion

The proposed ground handling policy, which was

approved by the government of India in 2007, has

created a commotion in the airline community at

large. The airlines are yet to hear the final verdict on

their plea, of trade rights, before the Delhi High Court.

Ground-handling services include check-in, baggage

handling, cargo handling, aircraft cleaning, ferrying

passengers to and from planes, etc. Hence, the gravity

of the services is huge from security aspect. In view of

the increasing security threats, the Indian Parliament

approved a policy to bar private carriers from

ground-handling activities at the six metro airports:

Mumbai, Delhi, Chennai, Bangalore, Hyderabad

and Kolkata. It was proposed that these activities

will be undertaken by the airport operators, National

Aviation Company of India Ltd. or their joint ventures

and one third party, specialised in ground handling

services. The policy also restricts foreign airlines.

The policy looks like a pragmatic step aiming to

safeguard the security of Indian airports. However,

the government should also adhere to international

practices, ensuring the trade rights of airlines.

It should be kept in mind that all the major

international airports in the world allow airlines to

handle ground operations.

Hope, the court would look into all the critical aspects

for an amicable solution to this deadlock...

Need of a fair Ground Handling Policy

22COVER STORYExpress Cargo in IndiaA recently published ICRIER (Indian Council for Research on International Economic Relations) study reveals that the express delivery services (EDS) and courier industry in India has undergone significant changes. Cargo Talk spoke to industry professionals about the current trends and their initiatives.

Airport in December 2010

Airlines wise cargo performance from Mumbai Airport in December 2010

Family AlbumACCB’s merry making

at Christmas function

ACCD organises ‘Maro Rajasthan’ trip in style

Celebi celebrates first year of operation in Delhi

International Airport

Cathay Pacific presents annual “CX Star Performer Awards”

CII Logistics Summit urges for capacity building

Trade Associations FIEO submits memorandum,

targets 500 US$ export by 2014

Shipping and PortsVizhinjam Port in Kerala

likely to be operational by 2015

COLUMNS

Face of the MonthRamu S Deora: The champion of

export issues

Guest ColumnE-freight: Where does freight

forwarders stand?

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contents

February 2011


National News News in Brief

UPS employees and their families in the Asia Pacific Region contributed 24,000 hours of voluntary community service during

the company’s 8th annual Global Volunteer Month. In India, 821 UPS employees and their families volunteered more than 4,900 hours to participate in 21 community activities in 12 cities.

The range of activities included planting trees, leveling the ground and cleaning the road in Ambishivwadi, a tribal village in Mumbai; cleaning the premises of an orphanage and playing games with orphans in cooperation with the NGO Balagurukulam in Chennai; and painting traditional Diwali festival lamps to sell to augment the income of the families being supported by the National Association of Disabled Enterprise in Mumbai.

“Being sensitive toward social issues and giving back to the community is a culture we encourage at UPS. In this way, we hope to enrich lives,” said Mark Khambatta, managing director of UPS India. Last year, UPS employees donated more than 18,000 volunteer hours during Global Volunteer Month across the region.

UPS celebrates Annual Volunteer Month in India

TAKE Solutions, the international business technology company with products and solutions backed by a strong domain expertise in life sciences and supply chain man-agement, announced the 100 per cent acquisition of UK headquartered WCI Consulting Group. This acquisition also establishes a presence in Europe for TAKE Solutions, a market previously served remotely from the company’s established areas.

According to Ram Yeleswarapu, president and chief executive officer, TAKE Solutions, WCI complements and strengthens TAKE’s portfolio of offerings to the global life sciences customers at a time when it is increasingly gaining traction with global biopharma-ceutical companies “This plugs a major gap in TAKE Solutions’ global reach and opens up the European market for us,” he added.

TAKE Solutions acquires 100 % OF UK BASED WCI CONSULTING GROUP


ECS Group, world’s leading GSSA organisation, plans to increase its global network in 2011 with five new offices in the Far East as well as India and further expansion of its presence in Africa in 2011. The ECS network already in-corporates 43 subsidiaries in 30 countries. In total, the group

generates 487,000 tonne of air cargo a year for over 100 airline customers and reports an annual turnover of US$600 million. After a highly successful year in 2010, it now intends to grow its operational footprint into more new markets.

According to Adrien Thominet, senior vice president, sales and marketing, 2010 was a great year for the company as it re-covered the tonnage and turn-over that had declined since the start of the economic downturn in 2008. “Our client Brussels Airlines, for example, achieved an average load factor perfor-mance with ECS of over 93 per cent and this was a similar story with other major customers in-cluding Aeromexico, Africa West, Corsairfly, Ukraine Inter-national Airlines and Garuda Indonesia.

ECS GROUP PLANS MORE GLOBAL EXPANSION INCLUDING INDIA

Darcl Logistics, which is one of the top leading logistics companies with a revenue of Rs.1158 Crores (audited results 2009-10) in India, has decided to strengthen its ODC (over dimensional consignment) operation. Seeing the potentialin projects and heavy loads, the company ventured into ODC segment in FY 2007-08 and currently operates 64 multi-hydraulic axles with Volvo prime movers /pullers and carries single piece weighing even more than 200 tonne. The company has executed contracts for reputed PSU and other leading private sector corporates. The company plans to scale up the business and is in the process of strengthening the team for the same.

According to TS Narasimhan, executive director, Darcl Logistics Darcl Logistics has shown a consistent growth rate and has reported a turnover of Rs 1158 crore in FY 2009-10, a CAGR of 24 per cent in last 5 years. ‘Darcl’ hires 97 per cent of the vehicles it uses for its transportation needs. Reporting an average ROE of 22 per cent over the last five years, Darcl has become one of the leading Full Truck Load (FTL) companies.

Darcl has a asset light business model currently, where the company caters to road transportation of short term to medium and long term Full Truck Load (FTL) / bulk transportation contracts of customers spread across the country based on owned/attached /hire vehicles as per the service level requirements. The company’s core competency is also in providing trailer loads and ODCs loads (through owned and hired Hydraulic Axle trailers) to cater to projects and other customers’ requirements.

On an average, 1200-1400 vehicles (trucks, trailers/ multi-hydraulic loads etc) are loaded on a daily basis by Darcl across the country. The company moves around 8 million TPA (tonne per annum) of cargo across the country.

Darcl Logistics strengthens ODC movements

Adrien Thominet

National News New Launch


he a ir cargo industry has a g o o d t r a c k r e c o r d a s far as ensuring security is concerned. However, recent inc idents have ra i sed the

importance of security protocols, especially risk assessment. GACAG recognises the global challenge to an air cargo industry that operates at the heart of world trade and is a recognised driver of economic

development in both the developed and developing world.

CAGA has decided to focus i ts ef forts to enhance the security of the air cargo supply chain, defined as all components of the transportation chain from shipper to consignee. But, the forum made i t clear that this must be done in a manner that results in the minimum possible disruption to the vital flow of commerce.

CAGA members feel that this will require a global push by the air cargo industry and the relevant authorities to improve risk assessment, tighten standard air cargo supply chain processes, develop viable technology for the air cargo environment, and improve compliance.

G A C A G m e m b e r s p l a n t o e x p a n d engagement with relevant authorit ies a s we addre s s r e cen t deve lopment s

Global Air Cargo Advisory Group

International News Trade Association

Emphasises on security with minimum disruption In view of the increasing security threats, the newly formed Global Air Cargo Advisory Group (GACAG), which comprises TIACA, IATA, FIATA and GSF, has decided to adopt a worldwide comprehensive programme to ensure safe and fast cargo traffic.

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CARGOTALK FEBRUARY 2011 15

and seek to further their joint goals of security and faci l i tat ion. In doing so, GACA urged for government-industry cooperation for cargo security decision-making. It observed that governments should establish mechanisms to mutually r e cogn i s e comparab l e supp ly cha in security regimes by their trading partners. According to the forum, ICAO should be the global focal point for collaboration on cargo screening requirements and both governments and industry should be part of the ongoing dialogue. ICAO should set global definitions and standards for air cargo security, including the definition of what constitutes “higher risk cargo,” and must do so on an expedited basis. In addition, national and regional regulators shou ld adop t ICAO de f i n i t i on s and standards on an urgent timetable.

A c c o r d i n g t o G A C A , i n d u s t r y a n d government should follow the international s tandard s e t by the Wor ld Cus toms Organisation (WCA) on advance cargo information to facilitate risk-assessment.

Industry and government should also jointly develop and endorse a standard

e lectronic cargo secur i ty declarat ion process and its associated paper layout.

Industry and government should also e lectronic cargo secur i ty declarat ion

GACAG RECOMMENDATIONS ON SECURITY

A comprehensive air cargo supply chain security solution should be built around a multi-layered set of actions guided by the “risk-based” concept

Consistent with ICAO Annex 17, member states should introduce supply chain security programmes established on common principles and platforms, such as those contained within Regulated Agent and Known Consignor programmes

To facilitate integrated supply chain transportation, member states should be encouraged to mutually recognise quality supply chain security programmes introduced by partner member states

Enhanced data intelligence, leveraging standardised electronic advance cargo information and consistent with the WCO Safe Framework of Standards, should underpin secure supply chain solutions to target high-risk cargo

Cargo security should be viewed on a holistic basis incorporating general cargo, express cargo, mail and baggage shipped as cargo, encompassing both freighter and combination aircraft


Equipment Services New Launch

Gandhi Automations’

he dock leve lers are s tee l platforms connecting the dock (to which they are hinged) to the truck bed of the vehicle, allowing the fork lift trucks to

load the goods by getting onto them.

During all the loading operations, the dock leveler is only an inert bridge, which follows the lifting and lowering of the truck-bed of the vehicle on its suspensions, under the mass of the load and of the fork lift truck.Dock levelers must conform to several standard norms/European Norms EN 1398

and Gandhi Automations’ dock levelers too conform to the same. Followings are some highlights of EN 1398:

The Norm defines that the nominal c a r r y i n g c a p a c i t y i s c o n s i d e r e d a s concentrated on only one axel of the fork lift truck, and discharged on two marks of 15x15 cm at 1 m of distance

The carrying capacity of a dock leveler i s to be reduced i f the use of forkl i f t trucks with smaller wheel marks than 15x15 cm is foreseen

Width of the dock leveler should be similar to the width of the truck-beds, and with at least 35 cm between the external wheel of the forklift truck and the rim of the dock leveler

Walking surface of the dock leveler must be anti slippery, and it must be easy to clean without retention of liquids

The unsupported dock levelers must have an automat ic safety system, to prevent accidents. For example, in case of accidental departure of the vehicle.

Dock levelers from Campisa

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here are two custodians in Chhatrapati International Airport, Mumbai, i .e MIAL and Air India. Since the time MIAL took over f rom the

Airports Authority of India (AAI) in May 2006, overall international cargo (export and import volume) at this airport has grown by 36 per cent. Significantly, MIAL itself has registered a growth of 81 per cent during the same period.

Wi th an ob jec t i ve to inc rease cargo volume MIAL had adopted a two-pronged strategy— to improve ef f ic iency and even out the cargo f l ow throughout the day (which is predominantly more in the evening).

Accordingly, MIAL has introduced the fol lowing incentives, so that shippers benef i t when they bring cargo to the airport during the lean time.

“All these special measures have helped us in improving the overall performance,” s a i d G o v i n d a r a j a n . A d d i t i o n a l l y , following short term measures have also been unde r taken t o exped i t e ca rgo handl ing f rom th is a i rport; creat ion of two cold storage units of capacity 225MT for 2°-8° Celsius and 15°-25° Celsius in storage of import temperature control led products , widening of the export admittance gate (work for which is in advance stage of completion), opening o f add i t i ona l Impor t De l i ve ry Gate

wi th three t ruck dock areas and re-modification of unaccompanied baggage sect ion (work to commence short ly) , shifting of car parking outside the air cargo complex, new state-of-the-art facil ity of 1850 sqm has been added to provide handling of export perishable cargo (this facility will be ready for operations shortly)

and heavy cargo export Shed (wo38 rk to commence shortly).

All these interim measures will further ease the operat ions and improve the throughput.“We expect 2010-11 volume would be higher by 20 per cent over 2009-2010,” shared Govindarajan. He further added that the warehouse capacity at the airport (as planned in the Master Plan) would be enhanced to handle minimum one million MT of cargo per annum.

Govindarajan informed that export cargos that MIAL is handling are pharmaceuticals, ga rment s , e l e c t ron i c s , eng inee r ing , leather, chemicals and project cargo. While import cargos include machinery, electronics, electrical and communication equipment, cars, hazardous cargo, food stuff and pharmaceutical products, etc.

K Govindarajan

Cargo Terminal

International Airport

Mumbai International Airport Increases cargo volume

by offering incentives Mumbai International Airport Limited (MIAL) is in the process of finalising Cargo Master Plan, which would address existing challenges and shortcomings. K Govindarajan, vice president-cargo, MIAL, spoke to Cargo Talk on the present performance and future plans.

T0 per cent discount in the

terminal charges for the export cargo, which is admitted and customs cleared, up to 1500hrs.

5 per cent discount on terminal charges for import cargo, which is cleared/ delivered on the same day, up to 1400 hrs.

Facility for advance generation of export terminal charges receipt for the next working day (This has resulted in increased inflow of around 10-15 per cent of export cargo during morning hours)

Cargo vehicle entry fee of ` 70 has been dropped

SPECIAL INCENTIVES TO SHIPPERS

Contd. on page 20


Events CalendarInternational Events

Description

MIAL

(in MT)

Air India (in MT)

Import 131629 38701 170330

Export (Gen) 105827 40028 145855

Export (Per) 69752 69752

Domestic 164281 164281

VOLUME WISE PERFORMANCE FOR THE YEAR 2009 - 2010 AND 2010 - 2011

2009 - 2010 DOMESTIC TOTAL CSIA (IN MT)

Description

MIAL

(in MT)

Air India (in MT)

Import 123790 28469 152259

Export (Gen) 102272 29873 132145

Export (Per) 44372 138878

Domestic 138878 164281

2010 -11(UPTO DEC.10) DOMESTIC TOTAL CSIA (IN MT)

6th Philippine Ports and Shipping 2011 February 17 and 18, 2011 The Peninsula Manila, Philippines

+60 87 426 [email protected]

Air Freight Asia 2011March 8-10, 2011Asia World ExpoHong KongContact: Reed Exhibitions 39/F, Hopewell Centre,183 Queen’s Road East, WanchaiHong Kong

Australasian Ports and Harbours Congress 2011February 21-23, 2011Stamford Plaza, BrisbaneQLD, Australia. Terrapinn [email protected]

5th Indian Ocean Ports and Logistics 2011March 30 and 31, 2011Hotel Carlton, Antananarivo, Mada-gascar


African Logistics Summit March 10-12, 2011The International Conference CentreAbuja, NigeriaCall: [email protected]

6th Southern Asia Ports, Logistics and Shipping 2011May 5 and 6, 2011 Sheraton Park Hotel and Towers, Chennai, India


9th ASEAN Ports and Shipping 2011June 22 and 23, 2011Windsor Plaza Hotel, Ho Chi Minh City, VietnamCall: +60 87 426 [email protected]

Air Cargo EuropeFrom May 10 to 13, 2011New Munich Trade Fair CentreGermanyMesse München GmbH81823 München, Germany

(+ 49 89) 9 49-1 13 [email protected]

Cold Chain Logistics China 2011From June 1 to 3, 2011Guangzhou Jinhan Exhibition Center Guangzhou China

+852-2827-6766, +86-20-83642986 www.coastal.com.hk

9th Intermodal Africa 2011 September 21 and 22, 2011Sheraton Hotel and Towers, Casablanca, Morocco


13th Annual Global Liner Shipping ConferenceApril 4 - 5, 2011Radisson SAS Portman, London

+44 (0) 20 7017 [email protected]

China International Lo-gistics and Transportation ForumOctober 12-14, 2011 Call: 001-213-628-9888Fax: [email protected]

Contd. from page 18


he ICRIER (Indian Council for Research on International Economic Relations) study r e v e a l e d t h a t i n I n d i a f a m i l y - o w n e d c o u r i e r

businesses have grown and developed into EDS companies providing integrated services. There have also been a number of mergers, acquis i t ions and t ie-ups, which has resulted in some consolidation. Nevertheless, the express/courier industry in India is still highly fragmented with a wide var iety of companies of fer ing dif ferent kinds of services. There are four main categories of express/courier companies in India, apart from India Post, which also offers express mail services. These include the global integrators, the large Indian companies, regional players and small courier companies. All the four global integrators (UPS, FedEx, TNT and DHL), are present in India.

Global integrators have also acquired Ind ian compan i e s who ca t e r t o the domestic market. These companies have well-developed logistics networks and infrastructure, including own aircraft, dedicated gateways for custom clearance, sophisticated globally owned networked IT and scanning systems, etc.

The large Indian companies such as Desk to Desk Courier (DTDC), First Flight, etc. focus on the domestic market and most of them have a good, countrywide network. Some of these companies also service selected international markets.

The study highlighted that the courier/express industry in India is fragmented and there are a large number of small players. I t is di f f icult to est imate the total number of players in this industry. According to one estimate, there are more than 2500 companies, employing close to one million people directly and indirectly. Out of them, only a handful (between 20 and 30) belong to the organised/corporate sector, but they account for 70 per cent of the total revenue. There are about 2400 companies in the unorganised/non-corporate segment, which earn less than 15 per cent of the total revenue.

Mark Khambatta

A recently published ICRIER study reveals that the express delivery services (EDS) and courier industry in India has undergone significant changes. Cargo Talk spoke to industry professionals about the current trends and their initiatives.

Express Cargo in India

View Point

Cover Story

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Adequate speed required to go with post recession time


T h e I C R I E R s t u d y a l s o u n v e i l e d that the sector was growing at a compound annual growth rate (CAGR) of 33 per cent in the last decade, the growth rate has since stabil ised at 20-25 per cent pe r annum. There was a f a l l i n the growth rate during mid 2008-2009 due to the global financial crisis, however, growth rates started to increase after September 2009. Industry estimates indicate that the express industry grows at two and a half times the Gross Domestic Product (GDP) growth rate. Hence, i f India is expected to grow at between 8.25 and 8.75 per cent in 2010-2011, as projected in the Economic Survey (2010), then the growth of the express industry will continue to be 20-25 per cent.

S i n c e t h e r e i s l i m i t e d i n f o r m a t i o n on the courier/express industry, ICRIER and IIMC (Indian Institute of Management-K o l k a t a ) , c o n d u c t e d a s u r v e y t o understand the express de l ivery and courier industry in India, its key drivers, barriers that the industry is facing and its future growth prospects. According to the survey, the future growth of this sector will depend on the forthcoming Postal Amendment Bill.

Industry’s Projection and InitiativesAccording to RK Saboo, deputy managing d i r e c t o r , F i r s t F l i gh t Cour i e r s and chairman, Express Industry Council of India (EICI), post recession, industry is on a growth path and that too in double digits. The year 2010 has been good from growth point of view and this trend will continue in 2011 also.

Malcolm Monteiro, senior vice president and area d irector for the South As ia region, DHL Express, observed that the demand for air cargo transport rebounded sharply in 2010 after a calamitous 18-month decline that began in May 2008. As businesses continue to expand beyond domestic or nearby regional markets, the international express sector will continue to grow at more sustainable, long-term rates. Growing world trade, stringent inventory control standards, increasing demand for transport of perishable, time-sensitive commodities and the need to replace airplanes, will create a requirement

for 2,490 freighter deliveries over the next 20 years and the world air cargo traffic will be tripled.

“With China and India leading the growth emerging in APAC markets, the region’s economy will grow at a rate of 4.6 per cent per year for the next 20 years, significantly outpacing the world’s average growth rate,” Monteiro emphasised to show the potential of the express cargo industry.

Keeping the present scenario in mind, DHL has implemented a few strategies on a global level and the focus has clearly shifted to key areas and regions. “In the South Asia Area (and India in particular), we will continue to grow market share organically, by offering enhanced customer experiences through our highly engaged people,” said Monteiro.

“Together with Blue Dart, DHL offers the largest domest ic reach and retai l footprint, dedicated freighter uplift and an integrated range of products and services all the way from a domestic document to an International Express Pallet to freighter charters,” he added.

Mark Khambatta, managing director/area manager India, Bangladesh and Sri Lanka, UPS, said that the company’s international business has just been phenomenal and is on track to turn its best year ever in operating profit. “During the third quarter of 2010, we saw a 13 per cent increase in international volume, led by Asia exports jumping nearly 35 percent. China export volume was up more than 50 per cent, and U.S. export volume was up about 10 per cent,” he informed. UPS in India experienced more than 30 percent growth

Malcolm Monteiro


in export volume. The company’s Asia-to-Europe trade lane export volume grew by more than 30 percent.

“ W e a r e d e t e r m i n e d t o s u s t a i n t h e enhancements we’ve made to our cost structure and we will continue to invest for the future while remaining focused on disciplined and profitable growth. We will continue to offer services in India with unmatched capabilities, to help Indian businesses succeed in the global market place,” Khambatta asserted.

UPS’s strategy is to continue building on its strengths, with a strong emphasis on building the UPS brand image. Khambatta believes that the Asia-Pacific region and specifically India offers a great opportunity for their business.

Anil Khanna, managing director, Blue Dart, conveyed the same sentiment. In his opinion, the growth in the Indian economy and the overall economic scenario, fuelled primarily by domestic consumption,is promising. The Indian economy is poised to record robust growth between 8 and 9

per cent in the financial year 2011-12, the Indian express industry is expected to reg i s ter double-dig i t growth over the next few years. This in i tse l f i s a strong indicator of the potential of the express industry.

“The organised domest ic a i r express market is pegged at around ` 1,500 crore, which grew at a CAGR of 7-8 per cent in the last five years, while the domestic organised ground express market is pegged at around ` 1,700 crore, which grew at a CAGR of 14-15 per cent in the last 5 years,” Khanna pointed out.

Blue Dart is in the process of rolling out several sector-specific, innovative products and services in a phased manner, in line with specif ic needs and requirements of different industries. These products provide the much-required flexibility to the shipper and consignee. Some recent add i t ions to the company’ s product portfolio include Express Pallet, Smart Box: Ground Express , Time Def inite Delivery, etc.

Suresh Bansal, director, DTDC Courier & Cargo, added another perspect ive. According to h im, Indian market for express business is growing but slowly changing in i t s nature . For example growth for normal document business has slowed down whereas demand for time bound deliveries, high quality service and service by branded companies are growing. Similarly there is high growth in small parcels business.

DTDC is expecting overall growth between 14 to 17 per cent. “We see that demand for premium quality t ime bound, day definite service is growing. We also see a larger growth in e-commerce business, home shopping, te le market ing, B2C business, COD business, gifts business etc,” said Bansal.

DTDC has already invested heavily on new technology platform, new product line such as DTDC PLUS, DTDC Prime t ime PLUS, DTDC BLUE, Premiere Express Cargo etc. To meet the changing demand of customers DTDC has created a completely separate SBU with more then 500 people to cater to this demand. The company also set up a separate Supply Chain Solution SBU to meet logistics, warehousing and transportation needs of its customers. In the last two years, DTDC has doubled its infrastructure and expanded its reach by 25 per cent. DTDC has strengthened its manpower; 5200 strong team on its payroll and another 15000 through its partners.

Abhik Mitra, managing director, TNT India said that after witnessing recession in the last two years, growth came back in 2010. The company’s base, Europe, has

“The organised domestic air express market is pegged at around ̀ 1,500 crore, which grew at a CAGR of 7-8 % in the last five years, while the domestic organised ground express market is pegged at around ̀ 1,700 crore, which grew at a CAGR of 14-15 % ,”

Abhik Mitra Anil Khanna

R K Saboo

View Point

Cover Story


been showing positive sign and the US market is also improving gradually. Mitra is also highly optimistic about increase i n e x p r e s s c a r g o v o l u m e b e t w e e n India and China, part icularly import shipments. Under these circumstances, TNT will strengthen its operations for export and import from Europe and also import from China.

Mitra also shared that in 2011, TNT will launch its freighter aircraft services between Belgium and India. He, however, declined to comment on any specific time and destinations to be covered in India.

International express cargo operation apart, TNT India will also continue to strengthen its domestic operation in the country organically. It will touch all the emerging sectors in India. In 2010 TNT India registered 36 per cent growth in domestic cargo volume compared to 2009. For international cargo, the company achieved 18 per cent growth.

Areas of ConcernMitra was buoyant about a strong growth of express cargo logist ics industry in India. However, he observed that the infrastructure and procedure re lated i s sue s need t o be addre s s ed by the government for the greater interest of the Indian economy. “Especially, government needs to offer more financial support for infrastructure building. EDI connectivity has to be strengthened further by weaning away faulty implementation procedures,” said Mitra.

According to Saboo, courier and express cargo industry will have to go through a bumpy r ide i n the day s t o come . Continuous increase in petrol/diesel price is putting a huge burden on the industry’s bottom line. “The margins remain wafer

thin. Retention of right talent would be the key challenge,” said Saboo.

“Load retrieval at various Common User Terminals are taking a lot of time and that is affecting the overall delivery of shipments to consignees. Load retrieval at Delhi Common User terminal is becoming a nightmare as it takes invariably more than 2.30 hrs and some time close to 4 hrs. Similarly at Mumbai, Common User Terminal is located on city side, which is almost 5 km from the domest ic airport,” Saboo pointed out. At Mumbai airport, after the flight arrival load, which used to get retrieved within 45 minutes earlier, now takes almost more than four hrs. So shipments, which arrive by the late morning flights goes out for deliveries in the evening most of the time, whereas earlier the delivery of same flight shipments used to be over before lunch time.

“ In f ra s t ruc ture , l i k e Common Use r Terminal, should improve efficiency so authorities should help industry to ensure timely retrieval of load .There should be proper co-ordination between airl ines and team of Common User Terminal with enough loader and trolley to get the load off within 30 minutes of flight arrival, and in another 15 - 30 minutes load should be handed over to respective courier / express companies,” Saboo appealed.

I n B a n s a l ’ s o p i n i o n , t h e b i g g e s t chal lenges faced by the industry are trained manpower, ever increasing cost of manpower, transportat ion and air line charges. In addition, pressure from changing customer demand requires continuous investments in technologies and training

Khanna added that though express cargo is s t i l l the preferred opt ion for those seeking reliability and speed, inadequate infrastructure, increase in fuel charges, higher operating costs, shortage of skilled personnel and adverse policy decisions are some of the major challenges.

“Industry initiatives, as well as innovative solutions by individual players based upon current needs, will be required to overcome these hurdles and ensure that operating margins are not adversely impacted,” Khanna concluded.

Suresh Bansal


i th record growth of over 30 per cent i n i n t e r n a t i o n a l s h i p m e n t s f o r FY10 over FY 09 in

India, FedEx Express, a subsidiary of FedEx Corp. is working on various plans to strengthen India’s connectivity with global markets in the coming years. The recent flight from Bengaluru, establishing direct connections to Europe, Middle East and the U.S was the first step towards the goal. The Company has also introduced d irect connect ion f rom Mumbai and New Delhi to Guangzhou in China. The new ded ica ted A310 f l i ght connect s Guangzhou – Mumbai – New Delhi – Guangzhou, five times a week. Coupled with its international strategy, FedEx has confidence in the domestic market and has announced the expansion of its premium domestic express delivery service across India. The FedEx Priority Overnight and FedEx Standard Overnight services, will now include 331 destinations, up from 58 destinations previously.

Talking to Cargotalk, Kenneth Koval, vice president – India Operations, FedEx Express said, “India is one of our key markets and it is important for us to invest in such a high growth market. We are recording an average growth of 30 per cent for international shipments from the Indian market year-on-year. Our recent flight launches are aimed at opening up India’s trade with key global markets. With the launch of the new flight from Bengaluru, it becomes the third Indian gateway for FedEx, joining Delhi and Mumbai and

enhancing FedEx customers’ access to the global marketplace. Additionally, the new flight connecting India and Asia will enhance trade between the two regions. These, coupled with the expansion of our domestic connectivity will further enable us to faci l i tate unprecedented connectivity and widen our supply chain both domestically and internationally.”

FedEx also recently introduced FedEx Import services in India, which will not only meet the growing demand of Indian importers, but will also complement its export and domestic services.

While exports from the country grew by 23.2 per cent, imports posted a 26.1 per cent year-on-year growth in September 2010. Koval said, “We were looking at introducing our import services in India for quite some time but were waiting for the right time. After the recovery signs from global financial crunch and with the rising demand in the market, we thought

of introducing i t . At the r ight t ime – for the right market with the right services! We are pos i t ive about the growth in th i s s e rv i c e a r ea i n Ind ia . We have successful ly leveraged the strength of our vast network and flexible product portfolio, to drive the competitiveness of Indian businesses, by connecting them to an extensive network of global suppliers and customers.”

Thus, the Indian importers now have a c ce s s t o the comp l e t e po r t f o l i o o f FedEx services, for express and economy shipments, including dangerous goods, per i shab le and va luab le sh ipments . Importers can also consolidate multiple packages into one shipment for ease o f c u s t o m s c l e a r a n c e a n d t h e n deconsolidate into individual shipments, informed Koval.

Express CargoNew Launch

FedEx Express to enhance connectivity to Asian market

After introducing FedEx Import services to enhance the service portfolio in India and expanding its domestic Express Service, FedEx Express in India is now looking at strengthening its connectivity with Asian markets.

W Kenneth Koval

FAST FACTS

The Asia Pacific region is India’s largest region for trade and contributes to around 27 per cent of India’s exports and 32 per cent of India’s imports. The launch of FedEx’s new direct flight will help to boost the increasing trade between the two regions, especially between India and China. The latter is India’s largest trading partner, with bilateral trade expected to cross $60bn this year compared to $42.42bn in FY 2009-2010.


Carrier Transicold is a unit of Carrier Corp., the world’s leader in high technology heating, air-conditioning and refrigeration solutions.

Carrier experts provide sustainable solutions by integrating energy efficient products, building controls and energy services, for residential, commercial, retail, transport and foodservice customers.

The natural refrigerant container technology has been used in Carrier’s newest container refrigeration unit design, to be known as NaturaLINE.

“Carr i e r ’ s NaturaLINE techno logy combines our industry leadership and our expertise in the use of natural refrigerants in other energy-efficient refrigeration applications,” said Chiou Fun Sin, vice pres ident , Carr ier Globa l Conta iner Refrigeration. Carrier has already placed demonstration units in service, for around-the-world tests with Hamburg-based Hapag-Lloyd. In 2011, they will extend the programme with full field trials.

“NaturaLINE technology is a revolutionary breakthrough for the marine container refrigeration market and advances Carrier’s natura l l eadersh ip in environmenta l technologies,” said John. According to John Mandyck, vice president, Carrier, Sustainability & Environmental Strategies, “NaturaLINE technology also demonstrates how technological innovation can reduce the impact on climate change, continuing

Carrier’s long-standing commitment to providing sustainable solutions.”

Carrier’s natural refrigerant container t e c h n o l o g y i n c o r p o r a t e s n u m e r o u s innovations, some of which are new to container refrigeration applications. For example, the system includes a new gas cooler/condenser coil that wraps around the fan, to enhance surface area and maximize heat transfer . I t a lso takes advantage of a new marine-duty, multi-stage compressor. New power electronics and an advanced software control system

combine to efficiently optimise fan speeds and compressor capacity, to match cooling loads and temperature control.

Commenting on the company’s plans and programmes to promote the technology in Indian market, Kartik Kumar, director of marketing and strategic planning, global container refrigeration, Carrier Transicold, informed that as this is in field trials (which is an advanced developmental stage),

Carrier Transicold is not actively marketing the product yet. “However, the eventual availability of refrigerated container units, combining both best- in-class energy eff iciency and the natural refrigerant with the lowest global warming potential, will appeal to shipping lines, container leasing companies, exporters and importers anywhere on the planet, who are seeking the most sustainable solutions with the lowest carbon footprint,” Kumar added.

“NaturaLINE technology is a revolutionary breakthrough for the marine container refrigeration market and advances Carrier’s natural leadership in environmental technologies.

Kartik Kumar

Emerging TechnologyCold Chain

Carrier Transicold introduces natural refrigerant container technology

Carrier Transicold, which is a leading company offering transport and shipping temperature control equipment, for refrigerated trucks, trailers and containers, has launched natural refrigerant container technology, for container refrigeration.


Cargo PerformanceExport/Import

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

All wt. in mt.

Export(MTs)S. No.Export

Perishable Cargo (MTs)

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

ImportTotal

Cargo%

of Total

# Cargo Handled at Centre for Perishable Cargo

1 Cathay Pacific 971 48 1019 1739 2758 9.2%2 Jet Airways 984 237 1221 1483 2704 9.0%3 Emirates 645 942 1586 601 2188 7.3%4 British Airways 795 3 798 863 1661 5.5%5 Air India 675 116 791 742 1533 5.1%6 Thai Airways 297 22 320 1150 1470 4.9%7 Singapore Airlines 606 18 624 764 1388 4.6%8 Lufthansa Cargo Airline 392 57 449 624 1073 3.6%9 Deccan Express Log 166 0 166 792 958 3.2%10 Aerologic 531 0 531 379 910 3.0%11 Etihad Airways 288 106 394 477 871 2.9%12 Qatar Airways 216 217 433 300 733 2.4%13 Swiss World Cargo(India) 382 0 382 342 724 2.4%14 Fedex Express Corpation 431 0 431 227 658 2.2%15 Malaysian Airline System 258 45 303 342 645 2.1%16 Turkish Airlines 426 47 473 146 619 2.1%17 KLM 315 77 392 211 603 2.0%18 Virgin Atlantic 300 0 300 188 488 1.6%19 Austrian Airlines 239 0 239 167 406 1.3%20 Japan Airlines 183 2 184 218 403 1.3%21 Finnair 230 3 233 166 400 1.3%22 Air France 262 28 290 93 383 1.3%23 Uzbekistan 192 9 201 182 383 1.3%24 China Air 111 6 116 230 346 1.1%25 American Airlines Cargo 158 3 161 131 292 1.0%26 Saudia 221 41 262 14 276 0.9%27 Eva Air 63 10 73 194 267 0.9%28 Aeroflot Cargo Airlines 203 38 241 19 260 0.9%29 China Eastern Airlines 111 1 112 141 253 0.8%30 Continental Airlines 164 0 164 87 251 0.8%31 Blue Dart 191 3 195 3 198 0.7%32 Air China 106 2 108 77 184 0.6%33 Indian Airlines 96 4 100 52 151 0.5%34 Pamir Airways 137 0 137 0 137 0.5%35 Kuwait Airlines 30 80 110 14 125 0.4%36 Gulf Air 83 24 107 5 112 0.4%37 Asiana Airlines 45 1 46 66 111 0.4%38 Mahan Air 74 10 84 6 90 0.3%39 China Southern Airlines 26 3 29 50 78 0.3%40 Air Mauritius 47 26 73 2 75 0.3%41 Oman Air 38 22 60 0 61 0.2%42 Air Arabia 54 0 54 0 54 0.2%43 Kam Air 54 0 54 0 54 0.2%44 Ethopean Airlines 32 20 52 0 52 0.2%45 Pakistan International 28 1 28 24 52 0.2%46 Air Astana 36 6 41 10 51 0.2%47 Ariana Afghan Airlines 31 0 31 4 35 0.1%48 Royal Jordanian Airlines 22 10 32 3 34 0.1%49 Sri Lankan Airlines Ltd 19 1 20 11 31 0.1%50 Turkmenisthan Airlines 15 0 15 0 15 0.1%51 Jetlite 3 10 13 1 14 0.0%52 Royal Nepal Airlines 2 0 2 3 5 0.0%53 Druk Air 2 0 2 0 2 0.0%54 Air India Expres 0 0 0 0 0 0.0%55 MIS 1139 138 1277 1225 2502 8.3%

Total 13121 2437 15558 14570 30128 Cargo handled in Dec‘09 12611 2381 14992 13368 28360 % VARIATION 3.89% 2.29% 3.64% 8.25% 5.87%

Airlines


MUMBAI CSI AIRPORT EXPORT/IMPORT CARGO TONNAGE HANDLED

I N D E C E M B E R 2 0 1 0

WEIGHT IN TONNES

GENERAL

AirlinesS. No.Export

General Perishable Total ImportTotal

Exp+Imp

(Including TP Cargo)

1 Air India 776.87 1433.95 2210.82 3644.76 5855.58 2 Jet Airways 1649.51 947.47 1649.51 2596.98 4246.49 3 Emirates 1497.34 592.45 1497.34 2089.79 3587.12 4 Cathay Pacific 1031.88 47.34 1031.88 1079.22 2111.09 5 Lufthansa 974.73 16.69 974.73 991.42 1966.15 6 Singapore Airlines 622.00 146.67 768.66 915.33 1683.99 7 British Airways 720.86 89.94 720.86 810.80 1531.65 8 Federal Express 583.16 0.00 583.16 583.16 1166.33 9 Ethopian Airlines 572.34 4.87 577.21 582.07 1159.28 10 Etihad Airways 487.91 77.97 487.91 565.88 1053.80 11 Qatar Airways 418.75 194.22 418.75 612.97 1031.71 12 Air France 509.07 5.33 509.07 514.40 1023.47 13 Swiss Intl. Airlines 417.77 3.35 417.77 421.12 838.89 14 Turkish Airlines 410.95 0.00 410.95 410.95 821.90 15 Kingfisher Airlines 379.59 0.00 379.59 379.59 759.18 16 Kuwait Airways 101.42 174.40 275.82 450.22 726.04 17 Thai Airways 253.41 35.16 288.56 323.72 612.28 18 Malaysian Airlines 301.42 0.57 301.42 301.99 603.42 19 Korean Air 296.73 2.73 299.46 302.19 601.65 20 Saudi Arabian Airlines 211.32 88.14 211.32 299.46 510.79 21 Delta Airlines/KLM 247.83 0.00 247.83 247.83 495.66 22 Kenya Airways 242.88 0.00 242.88 242.88 485.76 23 South African Airlines 223.76 9.96 233.72 243.67 477.39 24 Gulf Air 77.62 143.16 77.62 220.78 298.40 25 Air Mauritius 120.80 8.29 129.09 137.38 266.46 26 Oman Air 15.40 150.86 15.40 166.26 181.65 27 Airasia 87.26 0.00 87.26 87.26 174.53 28 EL-AL Airlines 80.03 3.29 80.03 83.31 163.34 29 Air Arabia 47.98 52.23 47.98 100.21 148.19 30 Qantas 71.90 0.00 71.90 71.90 143.80 31 Iran Air 59.60 7.19 59.60 66.79 126.39 32 UPS 62.38 0.00 62.38 62.38 124.77 33 Pakistan Airways 36.38 29.95 36.38 66.33 102.71 34 Continental Airlines 47.25 0.00 47.25 47.25 94.49 35 Srilankan Air 40.51 3.73 40.51 44.24 84.75 36 Yemenia Airways 25.87 10.58 36.45 47.03 83.48 37 Blue Dart 37.43 0.00 37.43 37.43 74.86 38 Egypt Air 35.45 0.00 35.45 35.45 70.90 39 Nas Air 10.63 0.00 10.63 10.63 21.27 40 Royal Jordanian Airways 9.70 0.00 9.70 9.70 19.40 41 Indian Airlines 1.34 0.00 1.34 1.34 2.69 42 Air Cargo Germany 0.00 0.00 0.00 0.00 0.00 43 Austrian Airlines 0.00 0.00 0.00 0.00 0.00 44 Jade Cargo 0.00 0.00 0.00 0.00 0.00 45 Charters 0.00 0.00 0.00 0.00 0.00 46 Others 92.85 0.00 92.85 92.85 185.69

TOTAL 13891.87 4280.47 15718.46 19998.93 35717.39


Family AlbumClub Function

Merry making at Christmas functionAir Cargo Club of Bombay celebrated Christmas function on 10th December 2010 in Mumbai.

The function was well attended by members alongwith their family and guests.


Family AlbumClub Function

The Air Crago Club of Delhi (ACCD) organised a remarkable out station trip to Rajasthan from January 7 to 9. The highligts of the trip were fantastic music and dance events at Chokhi-Dani and a gala evening at the historical Amer Fort in Royal Maharaja style.

ACCD organises‘MARO RAJASTHAN’ TRIP IN STYLE


Family AlbumAniversary

Celebi Delhi Cargo Terminal Management India (Celebi) organised a gala evening on January 13 to celebrate

the successful completion of its first year of operations in Delhi International Airport. Can Çelebioglu, chairman,

Celebi Holding; Sanjay Khanna, CEO, Celebi Delhi Cargo Terminal

Management India and several DIAL officials were present on this occasion to

honour their business partners with Annual Celebi Excellence Awards.

Celebi celebrates first yearOF OPERATION IN DELHI INTERNATIONAL AIRPORT


Family AlbumAwards

Recently, Cathay Pacific Airways hosted “CX Star Performer Awards 2009” ceremonies in Mumbai, Delhi, Chennai and Bengaluru to honour majors of the cargo industry for their

excellent support to the airline in 2009.

Cathay Pacific presents ANNUAL “CX STAR PERFORMER AWARDS”


Family AlbumIndustry Event

The CII Logistics Summit 2010, which was organised on December 13 and 14 in New Delhi witnessed a galaxy of speakers from India and abroad. GK Vasan, minister for shipping

made a special address on this occasion.

CII Logistics SummitURGES FOR CAPACITY BUILDING


ccording to Deora, both government as well as the exporters should ensure that India becomes the globally preferred trading

pa r tne r . “The gove rnmen t and the business community should work together in the interest of the nation to ensure uniform growth –across all sectors. The growth should also reflect an increase in government revenue. Our share of 1.52 per cent in global trade should increase to 3 per cent,” he said.

While the Government is contemplating an export target of US$ 400 billion by 2014, Deora is optimistic that Indian exporters could touch US$ 500 bil l ion provided adequate infrastructure is made available to cope with multi-fold increase in exports. “Looking at manufacturing growth and diversification of exports, we believe that the growing trade deficit could also be arrested,,” he observed.

“We do not need any stimulus package. The government has done much at the policy level with meaningful policies, but their implementation at the ground level requires improvement,” Deora stated.

Burning IssuesNodal Agency: FIEO urged for a nodal agency to tackle export related matter under the Finance Ministry. In his opinion, policies are unclear, with

references being made to various old circulars, noti f ications, amendments, etc., leading to varying interpretations and confl ict ing decis ions being taken by government authorities and courts.He also pointed out that exporters are compelled to enter into litigation with tax authorities on numerous issues concerning customs, excise, service tax, income tax, VAT, etc., due to which government as well as the funds of exporters, are blocked in litigation. Therefore all old notifications and circulars should make way for the issuance of new, simple and clear policies. Furthermore, there should also be a high power executive appointed under Finance Ministry, to deal exclusively with export related issues.

Online System: FIEO welcomed the introduction of an online system for various statutory and other requirements. “However, in spite of online system there i s s t i l l a huge amount o f paperwork involved, which needs to be resolved. In addition, the servers need to be equipped to handle the load. Many a times site is not working or is under maintenance eg. DGFT and Customs website at times are not functioning and problem of 1.5 version has not been addressed fully,” said Deora.

Refund of Service Tax: Despite procedural simplifications carried out by the Ministry of Finance, refund of service tax is still beset with problems and delays.

targets 500 US$ export by 2014

The Federation of Indian Export Organisations (FIEO) recently met the Union Finance Minister where Ramu S. Deora, the recently elected president, FIEO, submitted a pre - budget memorandum for the greater interest of exports from India.

FIEO submits memorandum,

Indian Export

Trade Associations

A

(L-R): Ajay Sahai, DG, FIEO; Ramu S Deora, president, FIEO and J K Jain, VP, FIEO


While exemption from service tax on all output services used during the course of exports is an ideal solution, the list of item not available for refund should be made clear.

The FIEO president recommended that the Ministry of Finance can alternatively work on a mechanism to allow an All Industry Service Tax rate for different product groups, as is the case with All Industry Duty Drawback Rate. Exporters, not satisfied with the All Industry Service Tax rates, can always apply for refund on actual basis like Brand Rate of Duty Drawback.

Income Tax: There a re l a rge numbers of small scale entrepreneurs who are exporting more than 75 per cent of their production without enjoying the Income Tax benefit as available to Export Oriented Units (EOUs). Such units may also be given Income Tax benefit under Section 10-B for a period of Three Years up to 2014.

Waiver of TDS: Overseas agency commission is paid to foreign agents who procure orders and ensures realisation of export proceeds for the orders procured by them. The services are rendered outside India. Income does not accrue or arrive

in India for fore ign agents rendering services outside India. Hence, provision of Tax Deduction at Source (TDS) should not be applicable to commission paid to foreign agents. However, Income Tax Authorities are not accepting the above plea and are raising demands resulting in unnecessary Litigation.

Extension of tax benefits: The income tax benefit available to Export Oriented Units & Software Technology Park Units is expiring on March 31, 2011 and may be extended till March 31, 2014.

Currency Conversion: The recent problem of ACU (Asian Currency Unit) mechanism has exposed the problem of settlement of foreign trade in a few specified currencies. This also increases the conversion cost for the exporters as at times they have to first convert the currency of importing country into US$ and then convert US$ into Indian rupees for making remittances.

Opportunities and challengesE l a b o r a t i n g o n t h e m e m o r a n d u m Deora maintained that the government

should recognise the requirement of the de s i r ed i n f r a s t ruc tu r e t o mee t th i s milestone (US$ 500 billion export target by 2014). Deora added that quantum jump in investment would be required in roads, ports, airports, containers, power and telecommunications, cold storage and refrigerated vans and warehouses f o r p e r i s h a b l e c o m m o d i t i e s , s o a s t o augmen t t h e i n s t a l l ed c apac i t y . The p r e s en t bo t t l eneck s i n va r i ou s s egment s o f in f ra s t ruc ture ca l l s f o r immediate intervention.

Deora also explained that out of US$ 500 Bil l ion exports, major chunk wil l be contributed by Asia with a share of US$ 230 bill ion, with the ASEAN countries alone importing more than US$ 100 billion from India. On the other hand, export to Africa will zoom to US$75 Billion while LAC wil l touch US $50 Bil l ion. Share of Europe and North America will be down to 15 per cent and 10 per cent respectively as growth in the advanced economies wi l l taper of f . Export to Europe wi l l reach US$ 75 billion while North America m a y s e e e x p o r t t o u c h i n g U S $ 5 0 Bi l l ion. With Russia leading the way, Central Asian Republics and CIS countries will be market for US$ 20 billion exports by 2014-15.

Simplification of procedures

Reduction in paperwork

Clarity on policies

Quick decision on litigations

Reduction in transaction costs

Quick dispersal of refunds where due

Greater coordination between various government agencies

Vast improvement in infrastructure

SMEs should be given more importance and encouraged as they are contributing for more than 45 per cent of manufacturing, more than 40 per cent of exports and employing more than 60 million people

IMPROVEMENTS REQUIRED

Indian Export

Trade Associations


ISL is a special purpose company, fully owned by the Government of Kerala (GoK) w i th a mandate to attract private sector

participation for the port’s development and to set up the external infrastructure. V ISL i s tak ing the adv ice o f var ious i n t e r n a t i o n a l c o n s u l t a n t s , s u c h a s International Finance Corporation (IFC) who are the lead transaction advisors and market leaders in PPP transaction adv i s o ry . V ISL p l an s t o imp l ement the project (Vizhinjam Port) on a Public Private Partnership model. The company h a d r e c e n t l y p u b l i s h e d a R e q u e s t for Qualifications (RFQ).

According to Kaushik, in order to make V i zh in jam an a t t rac t i ve inve s tment opportunity, GoK has positioned the port as an alternate gateway to serve shippers in the hinterland. As a multipurpose port, it will provide the flexibility to handle an optimal cargo mix, to maximise traffic vo lumes and revenue. In addit ion to meeting financial return objectives of the private partner, the port will be an impetus for economic development in southern Kerala, complementing local economic activities and providing opportunities f o r a d d i t i o n a l d i r e c t a n d i n d i r e c t employment for the local population. The civil infrastructure is likely to begin early 2012. In the meantime, VISL will be focused on necessary hinterland and utility connections in 2011. The port is expected to start operations by 2015.

Based on estimates from Drewry Shipping Consultants, UK, container volumes at Vizhinjam Port are expected to reach 822,000 TEUs (twenty-foot equivalent units) by the end of Phase I in 2020; 1.76 million TEUs by the end of Phase II in 2030; and 2.82 million TEUs by the end of Phase III in 2044. Container revenues are estimated to be more than USD 7 million in the first year of operations, touching more than USD 35 million by 2020.

Commenting on the location of the project Kaushik said, “The geographical location of Vizhinjam port is a major advantage to India, which is much closer to East-West sh ipping route and of fers c lose proximity to international route. Added to that, it is close to Trivandrum city that has an international airport, human resource and social infrastructure and can provide immediate access to road and rail network.”

Infrastructure developmentVizhinjam Port’s Phase I civil infrastructure development (to be spearheaded and f u n d e d b y V I S L ) i n c l u d e s 3 . 3 k m breakwater; reclamation of land of 650 m length and 400 m width; quay wall of 650 m length; and access channel of 300 m width and 700m diameter.

“We have made significant progress on the base infrastructure, including road and ra i l connec t i v i t y and acce s s t o power and water supply, having already disbursed ` 450 crore for this purpose. With access to the Tamil Nadu hinterland, we are spending ` 30 crore to reinforce the existing 30 km road from Kovalam to Kaliyikkavilai on the inter-state border,” said Kaushik. Moreover, work has already started on building a truck terminal and establishing rail connectivity from the nearest rail head.

The first phase of the project is estimated to cost ` 2,620 crore, out of which ` 970 crore would be borne by the private party/consortium for the port superstructure. The remaining ` 1,650 crore, in civi l infrastructure, will be provided by the GoK through an engineering, procurement and construction (EPC) contract, to be given out through bidding, in early 2011. VISL is raising this money through a consortium of banks led by State Bank of Travancore.

Shipping & PortsSouthern Region

Vizhinjam Port in Keralalikely to be operational by 2015

The upcoming Vizhinjam Port, located in Kerala and 16 km south of its capital Trivandrum, has chalked out an ambitious plan of handling 822,000 TEUs (20 -foot equivalent units) by the end of Phase I, in 2020. Sanjeev Kaushik, MD, CEO, Vizhinjam International Seaport Ltd (VISL) and secretary (Ports), Kerala talks about the port.

V


Financial Aspects“In addition to meeting financial return object ives of the private partner, the port wil l be an impetus for economic d e v e l o p m e n t i n S o u t h e r n K e r a l a , complementing local economic activities and providing opportunities for additional direct and indirect employment for the local population,” Kaushik emphasised.

He clarified that Vizhinjam Port will be managed as a “Landlord” port, similar to Major ports in India. In this model, the port authority, VISL, will own the land and the basic infrastructure and maintain

regulatory control , but wil l al low the private party/consortium, through a Build-Operate-Transfer (BOT) concession, to set up and operate the commercial facilities at the terminal.

VISL wil l col lect port dues and vessel related charges and provide operations and maintenance to the civil infrastructure (i.e. maintenance dredging), while the concess ionaire wi l l co l lect conta iner related charges, providing operations and maintenance to the port superstructure (i.e. terminal, equipment).

Vizhinjam will offer an optimal mix of domest ic gateway conta iner i sed and general cargo and container transhipment. The GoK has a l ready appl i ed to the Government of India, Ministry of Shipping, f o r s p e c i a l e x e m p t i o n t o c a b o t a g e restrictions restricting foreign carriers from calling at the Port.

W i th t r an sh ipment , t he r e i s a h i gh potential of other local ports in Kerala and the south and east coast of India to be connected to Vizhinjam. “Much of the partnership opportunities depend on the operator chosen through the bidding process, as high quality operators will be able to attract premier shipping lines to the port,” Kaushik maintained.

The por t has r ece ived cons ide rab l e domes t i c and in te rna t iona l in te re s t from top maritime companies; 31 major national and international players have shown interest , whi le 19 part ies had purchased the RFQ document. Many of these interested parties participated in the Investor Roundtable Meet, held in Trivandrum on November 25.

The bid criteria will be the Net Present Value (NPV) of the absolute amount of revenue share (or grant subsidy in the form of negative revenue share) plus upfront concession fee from concessionaire to the authority. The highest NPV would be the selected bidder. “In the case of no positive bids, the lowest negative NPV would be the selected bidder,” added Kaushik.

The fo recas t f rom Drewry spec i f i e s container (gateway and transhipment) as the primary cargo for the port. However, the port may also attract general cargo

such as fer t i l i zer , raw cashews, and petroleum products.

Questioned about the marketing strategy, Kaushik informed that VISL had done a number of act ive investor outreach exerc i se s both in Ind ia and abroad. In September, the company met with por t operators throughout Europe - Par i s , Marse i l l e , L i sbon , Barce lona a n d A m s t e r d a m . I n p a r a l l e l , V I S L h a d o r g a n i s e d s e v e r a l o n e - o n - o n e interactions in Mumbai, and sponsored the Investor Roundtable in November in Trivandrum.

Vizhinjam, with its plans to cater to large 12,000 TEU vessels is a new and exciting opportuni ty without legacy i ssues of existing ports.

VISL project receives 14 submissions

Vizhinjam International Seaport Ltd announced on January 10 that the project had received 14 submissions as a part of the RFQ process. The RFQ was announced on November 25, 2010 and January 10, 2011 was the deadline for submission.

Major companies including large Indian infrastructure companies like GMR, GVK, and Reliance, in addition to consortiums of foreign players from Turkey, UK and Australia submitted the RFQ. Additionally companies like Gammon Infrastructure Projects; Mundra Port; Essar; Global Yatirim Holding and STFA consortium (Turkey); Jaiprakash Associates; Patel Engineering and Limak (UK) Consortium; Sterlite Industries; Consortium of SCI, SKIL, HCCL; Consortium of Welspun Infratech and Leighton Contractors; Nagarjuna Construction Company and Condor Brookfield Consortium also submitted RFQ.

Announcement of pre-qualified applicants is scheduled to take place on January 19, 2011 along with distribution of the Request for Proposal (RFP) document Bid Evaluation/Empowered Committee will be chaired by the Chief Secretary. On the same day, a meeting at the Ministry of Environment and Forests in Delhi will be held to approve the Terms of Reference for the Environmental and Social Impact Study – the first stage of the environmental and social clearance process. The RFP submissions are due on March 23, 2011.

Shipping & PortsSouthern Region

The Minister of Shipping G.K. Vasan has announced the Maritime Agenda 2010-2020, a perspective plan of the Shipping Ministry for the present decade. The objective of the agenda is to create a port capacity of around 3200 MT to handle the expected traffic of about 2500 MT by 2020. The minister stated that Rs 165000 crore would be the investment in the shipping sector by 2020. The total proposed investments in major and non-major ports by 2020 is expected to be approximately Rs 287000 crore.

The Maritime Agenda projects a total traffic of 2494.95 million tonnes for all major and non-major ports taken together.

Did you know


Deora was recently elected as president, Federation o f I n d i a n E x p o r t Organisations (FIEO) for the third time. Earlier he

had been president, FIEO from 1987 to 1991 and from 1997 to 1999. Deora’s present term will continue until 2012.

Deora has held various positions: chairman o f CHEMEXCIL (Ba s i c Chemi ca l s , Pharmaceuticals & Cosmetics Export Promotion Council); director of ECGC (Export Credit Guarantee Corporation of India Ltd); member of SCOPE (Standing Committee on Promotion of Exports); Trustee of Bombay Port Trust; member of RBI Committee for Banking, Export Advisory & Exchange Control, etc. He is also a member of BOT (Board of Trade), set up by the Ministry of Commerce & Industry, Government of India; chairman of ASCOBIPS (Association of Shippers Councils of Bangladesh, India, Pakistan & Sri Lanka) and chairman FTFF (FICCI – Trade Facilitation Forum).

He be l ieves that “Export i s the only b u s i n e s s ” , a s i t c r e a t e s m a x i m u m emp loymen t and g ene ra t e s f o r e i gn exchange for country’s development. He has led Indian exporters in favour of simplification of trade and fiscal policy and brought about several benefits to the

exporters, particularly complete exemption of Income Tax on export profit (under section 80HHC). He was also instrumental in curtailing the ‘license raj’ and reforming the fiscal and trade policy.

When India’s foreign trade was at an infant stage, Deora played a crucial role by taking

initiatives across the country and abroad along with the exporters. He took intensive export promotion campaign to Chile, Argentina, Mexico, Venezuela, Bogota, Portugal, Madagascar, Mauritius, South Africa, Soviet Union, Hungary, Poland, Romania, Indonesia, Philippines, Thailand, South Korea, Taiwan, Malaysia, China, Hong Kong, Singapore, Japan, U.S.A., Egypt, Iran, Dubai, Turkey, England, France, Germany, Switzerland, Belgium, Netherlands, Italy, Spain, Australia, New Zealand, etc . He s igned many MoUs (Memorandum of Understanding) for the promotion of trade with their respective

Chambers and Federations.

Deo ra ’ s own a c ompany , c a l l ed G . Amphray Laboratories, is headquartered in Mumbai and a manufacturer of Active Pharmaceutical Ingredients (API’s) for the food, pharmaceutical, veterinary/animal health and other allied industries since

1966. The company’s products have won several National Awards for Outstanding Export Performance from the President of India, the State Government & Councils, e tc . The company has been the f i r s t Indian company to have warehousing facilities overseas, in Hamburg, Germany and in Mexico City for the distribution of their products.

Deora was honoured for with the most coveted “ Lifetime Achievement Award” for “Outstanding Contribution to India’s Exports ,” by the Union Minis ter for Commerce and Industry.

Face of the MonthFIEO

Born in 1937, Ramu S. Deora is a multi-faceted figure on the Indian economic scenario and an acknowledged leader on the export front. He has won several laurels for his outstanding contributions to promote international trade, exports from India and investment in the country.

Ramu S Deora

Ramu S Deora

Export is the only business, as it creates maximum employment and generates foreign exchange for country’s development.

The champion of export issues


o go paperless or E-freight, is a very ambitious project in the entire process of air freight. IATA claims that the air cargo industry can fill up 39 Boeing

747 freighters, each year, with paper, wasted on documentation, and this is something E-freight could address.

I t i s bel ieved that the industry could save US$ 1.2 billion each year. IATA also states that the current six day in transit shipment average, wil l reduce to just four days with E-freight. If all this is true then the question is why is it that the E-freight programme is taking so long to become a reality?

IATA ’ s p ro j ec t ed t ime l ine s , by end 2010 were 44 locations and 76 airports live, which account for approximately 80 per cent of international trade. However, it is understood that currently, eventhough over 12,000 shipping lanes are in theory E-freight enabled, only four per cent of air cargo shipments on those lanes are paperless— a figure that represents just one per cent of all air cargo shipments g lobal ly . A major reason for th is has perhaps been the ‘wait and see’ policy of the forwarding community, because they do not see any direct benefit for themselves by embracing the E-freight programme.

The main quest ions to be addressed there fo re a re—What i s in i t f o r the forwarders? Why should they inves t in E-freight until they see clear benefits f o r t h e m s e l v e s f r o m t h e s a m e ? I s the programme only meant to benefit the airlines?

The programme must be so designed, that i t i s bene f i c ia l not on ly for the airlines segment but also the forwarding community; thus, making it a win-win situation for both segments of the global supply chain.

While we all know that the business world is going paperless, and everyone should support such initiatives, there are certain realities in the air freight industry which on the ground level are quite different. Some of the realities that are still prevalent in today’s market p lace are g iven in the box.

The argument of course would be that E-freight could perhaps be the answer to these issues.

With the world real iz ing the benef i ts of E-freight, what is it that makes the Indian forwarders averse to the idea of adopting this phenomena. Are there factors unique to the freight community here? Perhaps this has to be identified

f i r s t be fore the f r e ight in Ind ia can go paperless!

(Keshav Tanna is managing director, Links Forwarders and former president of ACAAI. )

Guest ColumnCurrent Issue

One has been hearing of the E-freight project for quite some time now. The International Air Transport Association (IATA) embarked upon this project sometime in 2006. However, the progress has been very slow, says Keshav Tanna

Forwarder requires to deliver a signed airway bill to the airlines

Most of the airlines accept only FORM-SET Airway Bills (No E-Airway Bills)

Carting still has to be released physically by numerous airlines (AWB Copy Faxed/Telephone Calls)

The physical requirement of a dangerous goods certificate

Statutory documents like Certificate of Origin / Carnets etc. required in hard copy

Forwarder requires to deliver a signed airway bill to the airlines

Most of the airlines accept only FORM-SET Airway Bills (No E-Airway Bills)

Carting still has to be released physically by numerous airlines (AWB Copy Faxed/Telephone Calls)

The physical requirement of a dangerous goods certificate

Statutory documents like Certificate of Origin / Carnets etc. required in hard copy

Carting still has to be released

The physical requirement of a

Statutory documents like

Most of the airlines accept

THE REALITY OF TODAY’S AIR FREIGHT MOVEMENTT

Where does the forwarding community stand?

E-freight

Emirates skycargo flight ek702 recently operated its first paperless flight from mauritius to dubai. The Boeing 777-300 ER aircraft, with a capacity of tonnes, transported various cargo including bank notes, flowers, fruits, clothing, textiles and courier items.

Did you know

Postal Registration No.: DL (ND)-11/6002/2010-11-12, Licensed to Post without Pre-payment No.: U(C)-272/2010-12 for posting on 25th-26th of advance month at New Delhi P.S.O.,

RNI No.: DELENG/2003/10642.

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