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Performance of SEZsReality Check


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MAKE IN INDIA CALLMAKE IN INDIA CALL

Charges Introducedat Mumbai Airport for Using GMAX


India's Economy to Growat 6.5% in 2015 : World Bank


ContentsNational News

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8

9

International News

10

11

Spot Report

12

Trend Setters

14

Viewpoint

16

22

28

Cover Story

18

21

Current Issues

24

Air Canada to resume non-stop service between Toronto-Delhi

Bengaluru Airport introduces e-freight

Govt & industry meet at National Workshop on 'Make in India'

Secretary DIPP stresses on inclusive growth at FICCI AGM

Emirates launches 13th weekly flight to Kolkata

DNATA strengthens global venture in 2014

IAG Cargo's bond with Airforwarders Association

Etihad Cargo on expansion trail; records best ever performance

Safexpress enhances facilities in Faridabad, opens Logistics Park

DHL in India: Banking on eCoomerce

Air cargo and Carbon Footprint

India Leaps Forward

CRW emphasises on skill and scale

Appeal of Make in India call: Hope floats for 2015 and beyond

Exclusive Interview Air India upbeat cargo biz to Grow in 2015

Charges Introduced at Mumbai Airport for using Gmax services

Industry Associations

30

Glimpses of Events

32

Cargo Uplift

36

37

38

39

Book Review

40

44

Civil Aviation

48

Leaders' Lead

50

Freight forwarders Gear up to increase global biz

41st Annual Convention of ACAAI in Shanghai

Airlines wise exim cargo uplift from Delhi International Airport for November and December, 2014

Airlines wise exim cargo uplift from Mumbai International Airport for November and December, 2014

Airport wise international cargo uplift at Indian airports for April-October, 2014

Airport wise domestic cargo uplift at Indian airports for April-October, 2014

Reversing Modal Paradigm: A Logistics Challenge in Evolving Markets

Infrastructure Barometer

Performance of SEZs: Reality Check

Highlights of Draft Civil Aviation Policy

Europe cannot compete India in car making: Maruti Chairman

EDITORIAL

Business Partner for Infrastructure and Logistics

Make the House in Order

According to a recently unveiled FICCI-PwC study, 'Manufacturing

Barometer 2014', the Indian manufacturing sector faces a defining

moment in its evolutionary path. The global economy is emerging from

an extended period of sluggish performance, and growth rates across

several major economies are expected to improve. A new government

has taken charge in India with an unambiguous mandate for

development. It has stated its intention to attract manufacturing sector

investment through its “Make in India” campaign. It is believed that

with costs on the rise in global manufacturing hubs like China, there is

perhaps an unparalleled opportunity for India to step into the breach

and capture a significant share of the global manufacturing pie.

The India Manufacturing Barometer is an attempt to take a peek at the

viewpoints of business leaders across the manufacturing sector at this

critical juncture. The study reveals that business leaders are far more

optimistic than they were last year. With a more conducive economic

and political environment, more than half expect double-digit growth

over the next 12 months, and plan to make significant investments

during this period.

However, the country has a long way to go to make its house in order

at the same time of airing the incredible campaign called “Make in

India”. It is pertinent to mention that India scores poorly on the indices

of ease of doing business and corruption, infrastructure is poor in

comparison with most other competing economies, and complex

regulations related to land acquisition, labour and taxation can increase

the cost of manufacturing in India, primarily because of exorbitant

transaction and logistics costs. Eliminating these obstacles is critical to

unleashing the potential of India's manufacturing sector.

The initiatives on making India a manufacturing hub started more than

a decade ago through setting up SEZs across the country. Unfortunately,

these export oriented special economic zones could not show any

breakthrough owing to some inherent challenges that ranging from

physical infrastructure and the mind-set of the policy makers as well as

entrepreneurs. Precisely we can point out the fragile logistics

infrastructure, power crisis, land issues, connectivity problem and

misutilisation of SEZ facilities.

The present government under the leadership of PM Narendra Modi

commendably started the 'manufacturing hub' campaign once again in

a different brand name (read 'Make in India') and trying to wither away

the bottlenecks that SEZs encountered, by various mechanisms like

Ordinance. However, the call will be a reality provided both the

government (including the political class) and entrepreneurs work hand

in hand for a greater interest, which is Brand India.

Managing Director: Prof. Dinesh Kumar

E-mail: [email protected]

Mobile: +91-9818696033

Editor: Ratan Kumar Paul


Mobile: +91-9910228289

Publisher: Manish Kumar


Mobile: +91-9810742646

Marketing and Corporate Communications: Jyotsna


Mobile: +91-9818559139

Commodore (Retd) S. Shekhar

Independent Defence Analyst


Chennai Correspondent: Vikas Singh


Mobile: +91-9840255178

Design: Krishnendu Chatterjee


Corporate Address:

D-7, Suncity, Sector 54, Golf Course Road, Gurgaon-122001.

www.asiaaviationassociates.com

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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Jan-Feb, 2015 AN ASIA AVIATION ASSOCIATES PUBLICATION VOL-I ISSUE-IV | PAGE 52 | RUPEES 100

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MAKE IN INDIA CALLMAKE IN INDIA CALL





National News

Air Canada to resume non-stop service between

Toronto-Delhi ccording to the Delhi International Airport sources, Air Canada has decided to resume Anon-stop services on Toronto-Delhi route, after

a couple of years and for the third time, effective November 2015. The sources said that to enhance the connectivity and make Delhi Airport one of the strongest Hub in South East Asia, DIAL has been aggressively working with many international airlines beside its Hub partner Air India and other domestic carriers. Air Canada is one of them. On Toronto-Delhi route Air Canada will deploy their latest Boeing 787-900 Dreamliner aircraft and operate four weekly services in this sector. This will also be Air Canada's first route to receive the aircraft. The DIAL sources maintained thatwith this service Air Canada

will be the first and only airline to offer Boeing 787 Dreamliner service from North America to India. The flight schedule has been strategically planned to ensure convenient connections both within Air Canada's North American Network and in India. “Toronto and Vancouver have continuously ranked amongst our top five potential destinations – based on passenger demand that needed connectivity. With the advent of a non-stop service to Toronto aboard Air Canada's Dreamliner, we are convinced that the market will only grow. I would like to convey my best wishes to the teams at Air Canada and Delhi Airport who were trying their best to connect this route for quite some time,” said I Prabhakara Rao, CEO, Delhi International Airport.

Kempegowda International Airport, Bengaluru (BIAL) has announced that it is now an IATA e-freight compliant airport. BIAL sources claims that the airport is the first Airport in India to be declared as IATA e-freight compliant with the operationalisation and implementation of the e-freight process. “Being an e-freight compliant airport is another step towards BIAL's vision to be a role model for sustainable progress, creating best practices and setting benchmarks for all airports across the country,” asserted BIAL.

Facilitated by IATA along with the endorsement of the members of the Global Air Cargo Advisory Group (GACAG), the e-freight project is an industry-wide initiative. It involves carriers, freight forwarders, ground handlers, shippers and customs authorities to effectively streamline processes, cut costs and improve speed and reliability. The aim is to do away with paper-based processes to support the fast movement of freight. At present an average airfreight shipment generates

up to 30 different paper documents. This increases the cargo turnaround time and the cost involved in the airfreight process. IATA's e-freight implementation at this airport will bring strategic benefit to the trade in the region. “By implementing e-freight international standards, Kempegowda International Airport, Bengaluru will benefit the industry by eliminating the use of paper in the air cargo supply chain,” added the BIAL sources.

Commenting on this development Glen Hughes, Global Head Cargo, IATA said, "IATA would like to congratulate Bangalore International Airport Limited on being an e-freight compliant airport. The team has demonstrated great dedication and passion in the preparation and test pilot, an achievement that will not only benefit the airport but the entire industry. This is indeed a definite step forward in modernising air cargo shipment and an example for other airports in India and around the world.”

Jan-Feb 6 2015 |

IP Rao

Bengaluru Airport

introduces e-freight

he “Make in India” call is apparently getting a shape thanks to the appropriate home works from the government officials. Recently Tseveral government (both Union and State) officials along with

industry stakeholders met at a day-long “National Workshop on Sectoral Perspectives & initiatives: Creating an enabling framework for stimulating investments for Make in India” in New Delhi.

The workshop was addressed by Arun Jaitley, Finance Minister, Government of India. Providing an update the minister said that a number of steps have been taken in the past few months to facilitate an investor friendly climate in the country.

However, Jaitley maintained, the manufacturing still remains a challenge. Stressing on the need for manufacturing growth to ensure employment for youth of the country, the Finance Minister underlined several initiatives to facilitate ease of doing business in the country. “Entry point has to be eased, initial barriers lowered and removed, and after entry, enabling environment has to be created,” he said. He also stressed on the need for streamlining the dispute resolution mechanism, especially to ensure availability of lands for manufacturing, though it has to undergo a complex procedure.

The Finance Minister said that the entire effort was to lower the cost of manufacturing and improve quality, “Otherwise we will become a nation of traders rather than manufacturers.” In this context, two components of the Make in India program – the workshop that aimed at procedural reforms and then bankers' retreat convened by the Prime Minister to

improve liquidity and give greater access to capital to industry – would go a long way in making India a better place to do business.

Also present on this occasion was Nirmala Sitharaman, the Minister of State (Independent Charge) for Commerce & Industry. She termed the National Workshop as a unique initiative. “Nothing of this scale has been attempted in the recent memory. This National Workshop is aimed at getting industry and government on the same platform.” She pointed out that discussions would be held on the results of the recent initiatives and also for the new initiatives that need to be undertaken to strengthen the 'Make in India' initiatives. Sitharaman shared that both Department of Industrial Policy & Promotion and Department of Commerce have taken concrete steps for cutting red tape, simplifying rules and delicensing the business environment.

There were eighteen sessions as part of the one-day workshop in which 25 Ministries under the Government of India and all the States have come together to converge and integrate to chart a roadmap for short and medium term to make 'Make in India' initiative a grand success.

Attending the meet Ajit Seth, Cabinet Secretary, underlined the need to create an atmosphere where investment becomes the main driver of economic growth. The workshop, he said, was to create a roadmap to be implemented in the short and medium term to boost manufacturing.

Amitabh Kant, Secretary, Department of Industrial Policy & Promotion (DIPP) moderated the inaugural session and Shatrughna Singh, Additional Secretary, DIPP gave a vote of thanks address.

Govt & industry meet at National Workshop on 'Make in India'

Industry Feedback

“We are entrepreneurial by nature; give us a conducive environment, a rational tax regime and capital at a reasonable cost and just see how we unleash the lion of the Make in India programme,” said Dr. Jyotsna Suri, President of FICCI.

Ajay Shriram, President of CII, described the workshop as unique and unprecedented as it brought all stakeholders to offer suggestions for an actionable agenda for making the Make in India program a success. He said the programme is transformational for manufacturing and beyond.

National News

Secretary DIPP stresses on inclusive growth FICCI AGM at

peaking at the 87th Annual General Meeting of FICCI, Amitabh Kant, Secretary, Department of Industrial Policy & Promotion, Ministry of SCommerce & Industry, said that manufacturing was the key for pushing up

economic growth. The government was focusing on ease of doing business by opening of FDI and work was in progress to roll out GST and bring about reforms in labour laws and the land acquisition Act. He informed that the government

was focused on reducing paper work, simplifying processes and was looking at integrating all platforms online. This would catalyse private sector investments in diverse sectors and make the Prime Minister Narendra Modi's call to 'Make in India' a reality. Emphasising on the importance of exports from India he pointed out, “With just 1.6 per cent share in global exports India has a large potential market to tap.” He, however, clarified that though Make in India is focused on the increase of Indian exports, it would be for inclusive growth—both for international and domestic markets. The government is looking to increase the share of manufacturing in GDP to 25 per cent from 15 per cent now by 2022. In addition, the aim is to catapult escalate India into to top 50 in the World Bank's ease-of-doing business index, got slipped two places to 142 in 2014.

On e-commerce, Kant said that India allows B2B commerce, the way China does. India, he said, was encouraging young B2B entrepreneurs to flourish and was promoting the B2B model in e-commerce by allowing 100 per cent FDI.

Emirates' three major export commodities ex

Kolkata include leather goods , machinery parts

like bearings , alloys steel, auto parts & steel

ropes and perishable.

Emirates launches

13th weekly flight to Kolkata tarting on March 29, 2015 the airline will add a 13th weekly flight between Kolkata and its home and Dubai. Operating on SWednesdays, EK 572 will depart Dubai International Airport

at 13:00 hours and arrive at Netaji Subhash Chandra Bose International Airport at 19.15 hours. The return flight EK 573 will depart at 20:30 hours and arrive in Dubai at 00:05 hours.

Emirates commenced flights to Kolkata on 26th March 2006, the seventh city in India it launched flights to. Since then the airline has flown over 1.6 million people and 55,260 tonne of cargo on this route. “On the milestone of completing nine successful years of operations to Kolkata, we are happy to offer an extra weekly flight which not only increases their choice of flight times but also introduces increased capacity,” said Essa Sulaiman Ahmad, Vice President – India & Nepal, Emirates Airline.

According to Keki Patel, Cargo Manager, India & Nepal – Emirates SkyCargo, Emirates SkyCargo has witnessed growth over the years for air-freight into and out of Kolkata. “The increase of frequency of our Kolkata operations will enhance Emirates uplift capabilities,

giving shippers more opportunities to ship out their loads and meet delivery expectations of their overseas customers,” he said. Emirates further provides the right global network connectivity and frequency from its two hubs, Dubai International Airport and Dubai World Central. At present Emirates' three major export commodities ex Kolkata include leather goods (finished and Unfinished leather product like Leather Bag, wallets, purse, belts); machinery parts like Bearings , alloys steel, auto parts & Steel Ropes and perishable like fresh vegetables and chilled fish. Three major import items to Kolkata include telecom equipment, mobile phone & computer part, and machinery & spares.

National News

Jan-Feb 2015 9 | Jan-Feb 8 2015 |

DNATA strengthens global venture

in 2014 In 2014, dnata continued to strengthen its business footprint, adding capacity and new complementary competencies. The

company invested more than AED545 million to deepen its service offering in travel, cargo, ground handling and catering.

We remain committed to innovation and efficiency, while never compromising on safety and

operational excellence. This is something our 250 airline customers have come to expect from us, and we will continue to deliver,” said Gary Chapman, President, dnata.

The investments of AED545 million in 2014, made across the globe, included the acquisitions of Gold Medal Travel and Stella Travel Services, new halal kitchens, enhanced cargo infrastructure in the UK, and continued investments in the company's operations in Dubai.

In 2014, dnata continued to strengthen its business footprint, adding capacity and new complementary competencies. “We remain committed to innovation and efficiency, while never compromising on safety and operational excellence. This is something our 250 airline customers have come to expect from us, and we will continue to deliver,” Chapman emphasuised. In the same year, dnata became the UK's largest

long-haul travel services provider, with the acquisitions of Gold Medal Travel Group and Stella Travel Services. The UK expansion enhances the profile of Dubai as a travel destination, with both Gold Medal and Stella driving considerable traffic to the Emirates.

The UK was also a key growth market for dnata's airport operations. In 2014, dnata enhanced cargo infrastructure at Glasgow, Birmingham, East Midlands, Newcastle and Gatwick airports. At Manchester, the company moved into refurbished cargo facilities, and launched a greenfield passenger and ramp handling operation at the hub, dnata's second in the UK. dnata now handles 25 passenger flights a week at Manchester International airport.

Al Maktoum International airport at Dubai World Central (DWC) marked its first full year of passenger operations in 2014, and became a regional cargo hub with a capacity of 16 million tonnes per year. dnata now handles more than 80,000 tonnes of cargo a month at DWC and this number will continue to grow.

“ IAG Cargo’s bond with Airforwarders

AssociationWith an objective to work together with freight forwarders community for industry issues and common interest, IAG Cargo has become the world's first international carrier to gain Platinum membership of the Airforwarders Association (AfA) –that represents the voice of the air freight forwarding industry.

“IAG Cargo is one of the world's leading air cargo carriers and as such we only associate ourselves with the best. It is therefore a great pleasure and honour for us to be the first International carrier Platinum member of the Airforwarders Association. The global marketplace is more dynamic than ever and I believe IAG Cargo and the AfA are perfectly set up to grow for the long term,” said Joe LeBeau, VP Commercial, North America at IAG Cargo.

As a Platinum member, IAG Cargo will help to shape AfA policy and engage in advocacy on key legislation that affects the cargo industry, freight forwarders and airlines, making it an influential industry voice.

Benefits to IAG Cargo for obtaining the membership include affinity and training programmes, ISO certification, discounts on software products and legal advice. IAG Cargo can now also access to the AfA's Industry News Service, which provides critical, up-to-date information on the global air cargo market and relevant legislation.

Jan-Feb 2015 10 |

International AirlinesEtihad Cargo in expansion trail;

Etihad Cargo has significantly enhanced its global reach by offering belly-hold capacity on 10 new passenger destinations launched across Etihad Airways' fast growing network during the year. These include Medina, Jaipur, Los Angeles, Zurich, Yerevan, Rome, Perth, Phuket, Dallas and San Francisco,bringing to 90th total number of passenger destinations on which cargo services are currently provided.

uring the year Etihad Cargo also expanded its freighter services to Dseveral new markets to capitalise on

the strong import and export demands between global financial centres and the emerging markets. This included the introduction of new weekly services to Dar es Salaam and Entebbe in East Africa, a three-times-a- week service to Hanoi in Vietnam, and a twice-weekly service to Moscow in Russia.

Etihad Cargo also launched a new twice-a-week freighter service from Milan to Bogotá, Colombia, and from Bogotá to Amsterdam, following a partnership agreement signed with Avianca Cargo, the cargo division of leading Latin American carrier Avianca.

This brings the number of freighter-only destinations currently operated by Etihad Cargo to 15, with other routes including: Chittagong, Djibouti, Dubai World Central, Eldoret, Guangzhou, Houston, Kabul, Miami, Quito, Sharjah and Viracopos.

The expansion initiatives and the increaser of freighter services yielded good results for Etihad Cargo. The carrier achieved an all-time record in November when it carried 53,292 tonnes across its global network in one month. This is an increase on its previous monthly record of 51,688 tonnes carried in October, up seven per cent on the same month last year. Etihad Cargo's total uplift for 2014 was estimated to top

570,000 tonnes, a 17 per cent increase on 2013.

According to the airline sources, a key success factor has been Etihad Cargo's ability to further extend its global reach through the network expansion of its codeshare partners, which enables it to provide additional bellyhold space on Airberlin's new passenger services from Berlin and Stuttgart to its hub in Abu Dhabi, and on NIKI's new service from Vienna.

It also includes Air Seychelles'new services from from Mumbai (India), Antananarivo (Madagascar) and Dar es Salaam (Tanzania), in addition to existing direct services from Seychelles to Johannesburg, Mauritius and via Abu Dhabi to Paris and Hong Kong.

“We have seen strong growth in cargo volumes over the last year, and particularly to and from Asia and Africa as we continue to leverage the strategic location of our hub in Abu Dhabi to provide a link between the mature markets and emerging economies around the world,” said Kevin Knight, Chief Strategy and Planning Officer, Etihad Airways.

He also maintained that the airline's business continues to grow as it works with its global partners to provide customers with a fully integrated global cargo solution. “By working together, we are able to achieve greater capacity utilisation on our growing fleet of freighter aircraft, provide more

bellyhold capacity across an extended passenger network, and, importantly, further develop our well-performing charter business,” he added..

Etihad Airways' focus during 2014 had been to open up cargo services to a greater number of world destinations, increase frequencies on key cargo routes, and ultimately, continue to offer its customers greater choice and flexibility. “I am confident that the growth we have sustained over the last year will provide the platform for further growth during 2015,”

“Our endeavors are paying off and we are continuing to outperform the industry. 2014 promises to be a record year for Etihad Cargo, and I am confident that the growth we have sustained over the last year will provide the platform for further growth

Fact File

Etihad Cargo took delivery of two new freighter aircraft during the year. This included an A330-200F aircraft, and the placement of a third Boeing 747-400 freighter from Atlas Air Worldwide Holdings Inc. The aircraft have a range of 7,400 kms and 8,240 kms respectively, and a combined payload capacity of nearly 200 tonnes. This brings to 10, Etihad Cargo's freighter fleet which consistsof four Airbus A330-200F, three Boeing B777F, and three Boeing 747F aircraft.

Jan-Feb 11 2015 |

records best ever performance

Ground Handling/International Airlines

Spot Report Safexpress enhances facilities

in Faridabad, opens Logistics Park

afexpress, India's thriving logistics company, which is completely focused on domestic market, has recently Saugmented its warehousing facility in Faridabad-Ballavgarh

industrial area by launching a Logistics Park. Spanning over an area of 1,80,000 sq feet, this innovative, technologically sound ultra-modern Logistics Park is strategically located on NH 2, in Faridabad. In its ongoing endeavour to revolutionise the warehousing sector in India, soon the company is launching three more Logi Parks in Maharashtra (Dhule), J&K and Udaipur.

The Faridabad and Ballabgarh Complex is situated at Delhi Mathura Road (NH-2) at 32 km from New Delhi in the state of Haryana. This complex was conceived way back in 1950. At present there are more than 15,000 small, medium and large industries located in this complex providing direct and indirect employment to nearly half a million people and ranks 9th largest industrial estate in Asia. A number of international or multinational companies like Whirlpool, Goodyear, Larsen & Toubro, Asia Brown Boveri, GKN Invel, Woodward Governer, Castrol besides Escorts, Eicher, Cutler Hammer, Hyderabad Asbestos, Nuchem have their manufacturing plants in this area.

“Faridabad is a major economic growth center of Haryana. It is one of the important industrial regions of North India and a hub for both large as well as small scale industries including mechanical and light engineering goods. Faridabad is famous for various industrial products which include tractors, motorcycles, switchgears, refrigerators, shoes and tyres. The city is strategically located and serves as a nodal point for supply chain & logistics across North India region,“ highlighted Pawan Jain, CMD, Safexpress, while interacting with media persons during the launch ceremony.

According to Jain, this region was requiring a facility of this kind for

long time to keep pace with the burgeoning demand from domestic customers. On the other hand, this facility is to add value to the PM's “Make in India” initiative, which will be incomplete without a robust logistics infrastructure. “Supply chain & logistics has a very vital role to play in the growth of numerous industrial centers spread across the Haryana region. Despite being an industrial hub, Faridabad does not have adequate warehousing and logistics infrastructure to support its huge number of industries. Keeping this in mind, Safexpress has developed an ultra-modern facility at Faridabad, which will serve as a transhipment hub as well as a warehousing facility. Safexpress, with its Logistics Park at Faridabad, will bridge the infrastructure gaps and serve the supply chain & logistics requirements of the entire region,” Jain added.

With an investment of Rs 18 crore the Faridabad Logistics Park is expected to play a vital role in the company's overall turnover, in view of huge potential of this industrial belt. Hence, Jain was apparently confident about the ROI related to this facility, without any significant cost burden on its customers. Though he admitted that there would be some premium charges for offering quality services, Jain asserted that it would be for the win win benefits: for the company as well as the manufacturers and users of this facility . “We have made a significant investment to set up this ultra-modern logistics infrastructure. This will help the industries in Faridabad belt in having access to our world-class supply chain & logistics services, which would contribute heavily in the economic growth of this region,” he said.

Later Vineet Kanaujia, VP – Marketing, Safexpress elaborated on the salient features and USP of the Logistics Park. He pointed out that the Logistics Park at Faridabad has a column-less span of over 151 feet and enables loading/unloading of over 26 vehicles

Despite being an industrial hub, Faridabad does not have adequate warehousing and logistics infrastructure to support its huge number of industries. Keeping this in mind, Safexpress has developed an ultra-modern facility at Faridabad, which will serve as a transhipment hub as well as a warehousing facility.

Ratan Kr PaulPawan Jain, CMD, Safexpress along with dignitaries lighting the inaugural lamp

Jan-Feb 2015 12 |

simultaneously. The dedicated bays and docks at the Logistics Park in Faridabad provide an uninterrupted and unidirectional flow of inbound and outbound goods. The Logistics Park has a floor load capacity of 6 metric tonnes per square meter and has a truck docking area width of over 73 feet. “To provide safe & smooth movement of goods within the Logistics Park we have installed high-tech equipment. Moreover, to make our Logistics Park eco-friendly, we have taken special go-green initiatives by investing in rainwater harvesting and developing special green zone,” he said.

At present the Logistics Park in Faridabad appointed about 40 executives and other officials in addition to about 100 workers to operate it 24x7, 365 days in a year to provide time-definite deliveries. “Due to our non-stop operations, we will be providing the fastest transit time for deliveries all across India to over 610 destinations from Faridabad,” Kanaujia stressed.

Foray into eCommerce : 1000 Eco vehicles by 2015

Sharing his views about the present market trends Jain underlined the company's special emphasis on eCommerce. Remarkably Safexpress is on the verge of another leap forward to revolutionise the traditional delivery model, which is dependent on two wheelers. In view of the fact that the commodities that are being sold through ePortals are ranging

from small to big consignments, instead of only small ones, Safexpress has decided to introduce some 1000 Maruti Suzuki Eeco vehicles in 2015. Meanwhile the company procured about 200 vehicles. Presently, e-commerce business in India has a 2-wheeler delivery model with most companies relying on bikers for delivery. According to the industry experts, this will be a very unique and pioneering initiative.

“E-commerce industry is growing at an exponential rate in India. E-commerce business in India is presently estimated to be around USD 15 billion and is forecasted to grow radically to USD 100 billion in the next five years. As e-commerce industry in India explodes, e-commerce logistics seems to be the biggest challenge for this unique and lucrative business. Delivering the product to the consumer on time is a huge challenge for virtual stores. While e-commerce industry per se has seen exponential growth rates in India, e-commerce logistics is an area where a lot still needs to be done,” Jain underscored.

According to Jain, Safexpress has formed a separate firm by the name of 'Safexpress B2C' to develop its e-commerce logistics business. Safexpress B2C has tied up with large number of e-commerce companies to provide its specialised logistics services to them. The company has made massive investments to further strengthen its capacity and boost the infrastructure to cater to the e-commerce business.

(L-R): Pawan Jain and Vineet Kanaujia addressing the press conference at the Faridabad Logistics Park

Safexpress is on the verge of another leap forward to revolutionerise the traditional e-commerce delivery, which is dependent on two wheelers. The company has decided to introduce some 1000 Maruti Suzuki Eco vehicles in 2015.

Jan-Feb 13 2015 |

Trend Setters

DHL in India: Banking on eCommerce

In an exclusive interview with infraLOG, Malcolm Monteiro, CEO, DHL eCommerce and a seasoned express logistics practitioner in India and Asia Pacific region spoke eloquently that future of express logistics is lie on the growth of eCommerce. In 2014, DHL announced €100 million in India to strenghthen its infrastructure and is expecting reasonable growth in the year 2015.

infraLOG: How do you sum up the year 2014 for the cargo and logistics industry as a whole and for your company in particular?

The year 2014 was better for the industry as compared to 2013. The second half of the year witnessed a rise in the air cargo volumes due to an increase in freight movement. In the Asia Pacific region too, the logistics industry did well on the basis of increase in cross-border trade, sustained consumer spending and growth of e-commerce.

In India, the Government took some initiatives to bring cheer to this neglected sector, prominent ones being release of the draft Civil Aviation Policy, guidelines for setting up Air Freight Stations (AFS),

Malcolm:

developing regional cargo hubs at 6 metro airports etc., we hope this momentum continues.

The year also saw the government undertake more reform oriented measures. Certain sectors especially e-commerce attracted big-ticket investments and registered good growth numbers. All these worked positively for the logistics industry as it is directly linked to the country's economic performance.

Blue Dart also registered good growth numbers for the year.

: What are the prevailing trends in the market? Could you give some insights about the prospect and challenges to deal with e-commerce logistics?

2014 saw consumers in Asia Pacific spending more on e-commerce purchases than those in North America and the region is currently leading the growth rate for the sector globally. The region's rise has been due contributing factors such as increased internet access, increased credit card penetration and the burgeoning middle class with a higher spending capacity.

E-commerce logistics is different from conventional logistics as all the action is outside the web. The aim is to maintain zero inventories, ensure higher delivery speed, achieve maximum reach and create a great customer experience.

In e-commerce one very important thing is that every growing urban/semi-urban/rural market has to be viewed differently, as every city has varying demands for goods and services and differing logistics infrastructure. This calls for regular scrutiny of the market and addressing it accordingly.

Inadequate infrastructure poses the biggest challenge to ecommerce logistics as the delivery time has been shrinking and has become a major service differentiator.

With a population exceeding 1.1 billion, a large middle class population, better Internet access and penetration of smartphones, India's e-commerce potential is huge. Eyeing this huge potential, DP DHL with the aim to penetrate the sector in the Asia Pacific region ran its pilot project here in 2014. Blue Dart, a subsidiary of DP DHL's business unit DHL Post – eCommerce – Parcel (PeP) with its strong domestic delivery system, network capabilities and leadership in e-commerce logistics was the right platform for the group to foray into the e-commerce space.

: In view of the ongoing market trends what would be your expectations from the year 2015, as far as volume of business is concerned?

We expect positive trends emerging in 2015. IATA has projected global air freight markets to expand by 4.5 per cent outpacing the projected growth of world trade of 4 per cent. As Asia Pacific is projected to increase its share in the global freight forwarding market, the market is likely to witness increased competition and new players entering the market. While sectors like

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infraLOG

Malcolm:

Malcolm:

Malcolm Monteiro, CEO, DHL eCommerce

Jan-Feb 2015 14 |

goes without saying that there has been a change in the business sentiment and investor mood ever since the new Government has taken charge and championed various initiatives, be it land acquisition, tax policy, trade policy, environment laws, manufacturing laws, fast forwarding implementation of GST etc. This has definitely caught the attention of investors. Inflationary pressure has eased along with fall in oil prices, a remarkable thing for our industry. Markets have responded well and have given a thumbs-up along with India Inc.

This has been vindicated by reports that the country is expected to clock a GDP growth of 5.5 per cent in the current fiscal and 6.6 per cent in FY16.

: What would be your expectations from the present government, especially from the forthcoming Union Budget?

We hope the Government keeps up with the pace of reforms. First and foremost would be our long pending demand of granting industry status, which would help the sector be independent and resourceful. An early consensus to the draft Civil Aviation policy (which could have been more detailed and action oriented) and its implementation is what the industry is looking forward to. The same holds for the much delayed GST, which will entirely change the way we do business.

We expect the government to not only speed up the task of developing airports but also ensure that access to business, manufacturing etc. is also developed. Also for quick processing of export and import cargo by the express players effective 24x7 functioning of customs is a prerequisite. Rationalising of ATF is also important because the high rates of taxes have pushed up the cost of ATF in India, around 40 to 45 per cent higher than the international cost.

:Could you please share your plans and programmes for the year 2015 to strengthen the business of your company in India and South Asia?

Deutsche Post DHL's new plan, “Strategy 2020: Focus. Connect. Grow”, is a continuation of the positive momentum generated by its successful Strategy 2015, and defines the Group's next phase of development. Among the focus areas of Strategy 2020 are further expansion of logistics services in the world's emerging markets and international expansion of the company's successful parcel business in order to take advantage of the global e-commerce boom.

Through Blue Dart the leader in e-commerce logistics, we already have strong capabilities in value added last mile deliveries in India, our focus is now on creating a seamless bridge between e-commerce businesses, global and regional and their customers – wherever they may be - domestic or cross border.

The group is keen on being the leader in e-commerce facilitation especially in important markets like Russia, Thailand etc. In order to do that, we will extend our service offering along the entire e-commerce value chain in areas such as eFacilitation and eFulfillment.

infraLOG

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Malcolm:

Malcolm:

pharma, insurance are likely to register good growth, the sector to watch out for is e-commerce which is expected to continue its juggernaut in 2015 and attract more consumers and investors. This will see increased volume of business at our end.

The group is investing aggressively in infrastructure and development of last mile delivery capabilities, fulfillment centres and multiple delivery options to position the company as the preferred provider for the e-commerce industry. In 2014 we announced an investment of €100 million in India over the next two years to strengthen infrastructure across all divisions. We are working closely with leading brands, market place sellers and retailers to help them establish a sustainable e-commerce footprint, contributing with our role as a trade facilitator and enabler.

: What is your opinion about the initiatives from the present government to make changes at the policy level?

The growth of express industry depends on the region's economy and the quantum of business it attracts. It

infraLOG

Malcolm:

Jan-Feb 2015 15 |

Carbon footprint is possibly one of the hot topics we discuss across the industries today. Rightly so, it should have an important place in all our discussions about

progress, to make sure that the progress is not short lived by destroying our own existence.

You may find organizations claiming carbon neutral in producing goods or services. The fact is that no goods or services delivery happens minus the logistics.Transportation is an integral part of logistics contributing a major portion of carbon footprint, which has its own challenges in doing away with fossil fuel burning. But there are many other vital links in the logistics which can try to become carbon neutral.

Air cargo is a vital link in the logistics. Air cargo may be about one per cent of the total cargo in terms of volume, but in terms of value it is about 35%, so it is significant. There are unavoidable carbon emission in air cargo, like transportation between airport and source/ destination and the air transportation itself. Here the respective industry has to adopt best technologies, carbon offset methods etc to reduce the footprint or make it carbon neutral. Let us look at more on how air cargo terminals could contribute by making it carbon neutral.

In an air cargo terminal the cargo passes through various handling from the point of receiving to the loading in to aircraft and from the aircraft to delivery. In order to reduce the

carbon footprint or to become carbon neutral, the first step would be to map the footprint at every handling stage. Major activities are broadly of two types. One the physical movement of cargo and second the associated works. The physical movement involves various material handling equipment. Material handling equipment are either motorized or non-motorized. The non motorised equipment like pallet trucks and trolleys have no carbon footprint. Motorized handling equipment are either Diesel engine powered or battery operated. The diesel operated

equipments causes a major contribution to the carbon footprint. Battery operated equipments scores better in terms of carbon footprint, but efficiency of handling is yet match with Diesel engines. A trade off between handling efficiency and care to environment is essential here.

There are many electrical operated equipments considered envronment

friendly operating in cargo terminal like Elevated Transfer Vehicles, automatic storage and retrieval system etc. However, we can't call those as carbon neutral as the source of electricity may not be a clean energy source.

It would be of interest to know that an effort in the direction of reducing carbon footprint in reality goes hand in hand with improving efficiency and reduction in operating cost. So we need not look at it as an additional activity but should be considered as part of core activity for improving efficiency at reduced cost. The first step to reduce carbon footprint is to study the movement of cargo from the point of receiving at one end to delivery at the other end. Identify the redundant and repeated movements to curtail those, which will speed up the system and reduce handling cost. Wherever possible use efficient non motorized equipment like pallet trucks, which will reduce capital cost and operating cost. Use only energy efficient battery operated equipment wherever motorized equipment is essential. You will appreciate that these steps are required to make the cargo handling more efficient and economical with a desirable byproduct of reduced carbon emission.

We are considering reduction of carbon footprint for the whole of the cargo terminal. So our next step should be to reduce or nutralise carbon footprint in the allied activities in the terminal. The allied activities are mostly power dependent like security equipments, HVAC, office equipments etc. Power consumption is also high on the core activity like ETV, ASRS and charging of battery operated equipments. In nutshell, carbon neutralisation is incomplete unless the power is drawn from a clean source. Before embarking on a clean source of energy, the terminal should be made energy efficient. A comprehensive audit will help to understand the energy wastage in the terminal and identify inefficient equipments in use. Thereafter the clean energy source should be identified. Government is encouraging the use of solar energy and airports have the potential to use solar panels on roof top or in the open fields available. Here a part of the energy requirement could be achieved through solar energy. Effort should be to procure remaining power also from a clean energy source like wind energy. There are schemes available for

wheeling the power from wind mills through state power grid. In case if still there is a gap, the terminal can purchase carbon credit to offset the footprint.

The entire exercise explained so far is in fact steps for improving efficiency and reduction in operating cost. But it would be a pleasant surprise to note that the same exercise results in to a carbon neutral cargo terminal.

It would be interesting to calculate the carbon reduction achieved by the terminal and claim carbon credits. There are consultants available who can conduct the audit and assess the carbon footprint as on date. To put the footprint in its perspective of cargo, the calculated footprint should be converted in to carbon footprint per ton of cargo handled. On successful completion all steps to reduce carbon footprint, the audit will enable to assess the footprint per ton cargo. In all likelihood it becomes zero and would that not be a laudable achievement worth shouting from the rooftop!

Air cargo and Carbon Footprint

Jan-Feb 2015 16 |

Guest Column

Hareendranathan E P, Airports Authority of India

Cover Story

Impact of Make in India call:Hope floats for 2015 and beyond

“The major enablers

would be road

infrastructure, availability

of power, land

acquisition, reduced

logistics and transaction

costs, fast clearance of

cargo to achieve our

export target and at least

6.4 per cent GDP growth

as forecasted by the

World Bank,”……….

JK Dadoo, Joint Secretary,

Ministry of Commerce.

JK Dadoo, JS, Ministry of Commerce

The business prospect in 2015 is expected to be very encouraging. With clear and loud message to the world to 'Make in India' from the Prime Minister of India, facilitation of trade and commerce, changes at the policy level coupled with a sharp focus on infrastructure development , manufacturing and investment for the same; service sector like logistics industry in India is expecting a boost in the months to come. infraLOG spoke to policy makers as well as a few industry majors to know the future prospects.

It is now evident that the 'Make in India' ball is rolling and got the desired momentum within a short span of time it was aired by Narendra Modi, the Prime Minister of India. “See the enthusiasm about the call of 'Make in India' in India and abroad, thanks to the consistent efforts by the Prime Minister and all other ministries, through various summits, conclaves, events and workshops attended by international and Indian entrepreneurs and government officials/policy makers at the Centre and State Government. I am highly optimistic that the impact of the Make in India initiatives would soon yield results in the domestic and export markets,” said JK Dadoo, Joint Secretary, Ministry of Commerce, Government of India, in an exclusive interview with infraLOG.

Concor to register 11% growth in '14-15; expects to retain '15-16

Container Corporation of India is quite confident of achieving a growth of around 11 per cent in its volumes in 2014-15 vis-à-vis 2013-14. According to Anil Gupta, CMD, Concor, there are encouraging trends in the market for this year also. “On the basis of discussions with various stakeholders and our own analysis, the volume of business is expected to continue to grow in the year 2015 also. Containerization in India will continue to grow till it reaches International standards,” he said. However, the major challenge for container traffic remains to be the imbalance between Imports & Exports that results in unnecessary running of empty flat wagons resulting in increased costs.

Commenting on the initiatives from the present government to make changes at the policy level— to boost up the manufacturing, export, investment in infrastructure, fast clearance of cargo, hinterland connectivity, e-governance, easy tax structure, land acquisition, industry-friendly labour laws, etc, Gupta expressed high optimism about the growth of the industry. “We have seen several positive initiatives at the policy level like speedier environmental clearance, changes in Land Acquisition Policy for infrastructure projects, emphasis on creating infrastructure, hinterland connectivity and likely implementation of GST in the near future. All these initiatives will result in positive market sentiment and business will grow,” he viewed.

Concor is aiming for early commissioning of MMLPs in the year 2015 to enhance our capacity. In addition, the company is exploring for avenues in Bangladesh and Sri Lanka. The PSU already has its presence in Nepal .

Anil Gupta, CMD,Concor

With manufacturing identified as the focus area by Prime Minister Narendra Modi in the "Make in India" initiative, industry professionals and experts believe this will help the country achieve double-digit growth in manufacturing and much-needed jobs for its growing labour force. There are signs of turnaround also, with the OECD recently predicting a growth of more than 6 per cent for the economy in the next two years. Experts say, the country needs the competitiveness of industry to be at the core of policy so that the mnufacturers can supply to the domestic market and export to the world and be an integral part of the global value chain.

Ratan Kr Paul

Dadoo underlined that the Ministry's set target to achieve the increase of 10-15 per cent export stands firmly, especially for 2015-16 and beyond thanks to the positive initiative from the government, recovery in the US and some other emerging markets and a confident export community. Though export performance in last two years (financial year) was sluggish because of the international market scenario, 2014-15 would see a double digit growth.

Dadoo, however, expressed that the performance related to trade and commerce is depending on the enabling environment. “The major enablers would be road infrastructure, availability of power, land acquisition, reduced logistics and transaction costs, fast clearance of cargo to achieve our export target and at least 6.4 per cent GDP growth as recently forecasted by the World Bank,” highlighted Dadoo. He urged for creation of new investment friendly atmosphere and new infrastructure facilities for them.

He also urged for a strong inter-ministerial coordination for the growth of exports from India. “We are constantly taking strong and required initiatives in association with allied ministries to facilitate exports. Jointly we have taken lot of new initiatives to iron out bottlenecks before the export community. We are also taking lead role to enhance the skill and scale of the exporters,” Dadoo added. The Joint Secretary expressed his concerns on the fluctuation of oil price and currency rate that need serious attention.

Jan-Feb 18 2015 | Jan-Feb 19 2015 |

On the international front new sectors like Moscow, Italy and Australia have been added to the Air India network, and the national carrier is promoting cargo to and from

these locations.

Kumar is confident to sustain the success story in 2015 as well. “The major trend for 2015 will be increased growth rates for the aviation industry in general and air cargo in particular. The air cargo market in India is looking up and we expect the trend of 10-15 per cent growth to continue. Also, expansion of e-commerce and online retailing will be a major trend for the

Air India upbeat cargo biz

to Grow in 2015

Exclusive Interview

The cargo business of Air India is confidently flying high with payload increased about 10 in 2014 as

compared to the previous year. Air India presently carries over 650 tonne of cargo per day, domestic as

well as international, shared Sanjiv Kumar, ED Cargo, Air India in an interview with infraLOG.

future,” said Kumar.

According to Kumar, the air cargo business in India is likely to grow at 10-15 per cent over the current year. “We see expansion of business between India and various international markets. Though the entry of new players such as Air Asia and Vistara will intensify competition, overall improved growth of the economy will boost the air freight industry as well, and e-commerce will be one of the major growth drivers,” he added.

Air India has recently introduced services to Australia, Italy, and Russia, as well as to smaller towns like Pantnagar in India. The airline is also planning to add other stations in due course. “Our major focus would be to offer customer-friendly services to our shippers while simultaneously also providing the most economical cost options,” Kumar asserted.

Commenting on the relationship with its sales network, i.e cargo agents, Kumar underlined that just as Air India is one of the major players in the Indian market for the agents, similarly the agents also play a very important role in promoting the Air India product. Hence, good mutual cooperation is not only beneficial, it is essential. Working together to promote mutual business will result in a win-win situation for both sides. “We already offer a dynamic incentive structures for cargo agents, and review it continually in the light of market trends. We are appointing new cargo General Sales Agents at many international stations and expect them to improve our cargo business and penetrate new markets” he stated.

Going paperless/e-freight is something which Air India is considering as part of its future plans. However, Kumar refrained to give a concrete time frame about when the airline would be ready to practise e-freight.

The Government's Aviation Policy proposes development of new airports as well as upgrade of existing ones. In Kumar's opinion, development of new airports and off-airport facilities will certainly help boost air freight movements into new markets hitherto not connected by air. Upgrade of infrastructure will also enable increase of air cargo volume for the industry.

“Infrastructure is one of the key issues for any industry. At present, there are constraints in areas such as warehousing and airport infrastructure. Space for cargo storage and handling is limited at the airports, and needs to be enhanced. 24X7 customs clearances and reduction of dwell time are issues which need to be addressed. Resolution of these issues will speed up movement of cargo through airports, reduce hassles faced by airlines as well as freight forwarders, and make transport of freight by air more attractive,” Kumar concluded.

Offers to Agents give

E-freight Initiatives

Cargo Infrastructure

“Our major focus would be to offer customer-friendly services to our shippers while simultaneously also providing the most economical cost options”

UTi focuses on T-II and T-III cities

“The year 2014 was very encouraging for us. We have grown in all our products in India. We have witnessed phenomenal growth in contract logistics (200-300 per cent growth). Also, we have expanded our operations across the country, to satellite towns, T-II and T-III cities and hinterlands,” said Sameer Khatri, RVP, Indian Sub-continent, MD, India, UTi.

Khatri was bullish about the business opportunities and performance in 2015. According to Khatri, the US market, which remains to be the principal market for Indian exports, is gradually reviving. Additionally, Africa, certain European countries are continuously proving to be promising for the company. Apart from project cargo, UTi India would further strengthen its foray into retail and e-commerce logistics. The company already has its strong penetration in apparel/fashion, automotives and pharmaceutical logistics services.

Khatri also shared that in the days to come UTi would further strengthen its ocean cargo operations, which witnessed a 24 per cent growth in 2014. “Currently, owing to the cost factor a significant volume of air cargo is choosing ocean mode of transport. This trend

Concor is aiming for

early commissioning

of MMLPs in the year

2015 to enhance its

capacity. In addition,

the company is

exploring for

avenues in

Bangladesh and Sri

Lanka.

will grow until air cargo operations in India is streamlined and becomes cost-effective,” he added.

Khatri, however, is optimistic air cargo operation would be at per international standard thanks to the recent initiatives by the ministry of Civil Aviation, Government of India. In his opinion, the forthcoming Civil Aviation Policy and initiative pertaining to Air Freight Stations would be very beneficial for the air cargo industry in the country. On the other hand, the likely implementation of GST, Make in India initiatives, development of road infrastructure would accelerate the cargo transportation within and from India remarkably. “Now it is important to see how quickly these policies and infrastructure policies are getting implemented, which was not satisfactory for last 10 years,” he observed.

The 4th edition of 'Vibrant Gujarat' which was held from January 10-13 in Gandhinagar, Gujarat, Prime Minister, Narendra Modi and his senior colleague, Finance Minister Arun Jaitley have showcased the India story, is being scripted by the new NDA Government at the Centre. And, the PM's dream project 'Make in India' took the centre stage of discourses and interactions with the overseas delegates.

“India has always believed in 'Vasudhaiva Kutumbakam' (the whole world is one family). Few have seen this in practice. I am informed that more than hundred countries are participating in this event. After becoming Prime Minister, I have travelled to the remotest parts of India and also to various parts of the world. My Government is trying to generate confidence. We have

prepared a team to secure a robust future. We believe that changes start with a change in mindset,” said Modi while inaugurating the event.

He also pointed out that there is tremendous interest in India. Countries are coming forward to work with India. “We are on the path of transformation. To start this process, we are making efforts to change the work culture. We have to strengthen our institutions and systems of delivery,” he added. Modi underlined the HSBC`s latest report, which has identified India as the world`s largest growing exporter, and is set to move from being the fourteenth to the fifth largest exporter in the world by 2030.

The PM emphasised on creation of a robust and 'next generation' infrastructure—both physical and IT infrastructure. In addition,

the government is skilling the manpower of the country, by creating a separate ministry for that. “We are trying to complete the circle of economic reforms speedily. We are also keen to see that our policies are predictable,” he said.

Above all, he highlighted that four months back, the Government of India launched 'Make in India' initiative to encourage the growth of manufacturing in the country. “We are working hard to make India a global manufacturing hub. We are promoting, in particular, labour intensive manufacturing. Many of you might be interested to know - Why India? India has three things to its credit - Democracy, Demography and Demand,” he stressed.

Make in India call at Vibrant Gujarat

Modi underlined the HSBC`s latest report, which has identified India as the world`s largest growing exporter, and is set to move from being the fourteenth to the fifth largest exporter in the world by 2030.

Sameer Khatri, RVP, Indian Sub-continent, MD, India, UTi

Jan-Feb 2015 21 | Jan-Feb 20 2015 |

Sanjiv Kumar, ED Cargo, Air India

Viewpoint

even months into office, Narendra Modi government has done the initial announcement of the directions it Swants to take to make India one of the forefront

economies in the world. Starting from rechristening and revamping an over sixty five years old planning commission on 1stJanuary 2015, it has also cleared its vision to remodel the National Institution of Transforming India (NITI) Aayog. This is surely a step that will bring a new thought in planned development of India with Centre and State joint planning mechanism to demonstrate cooperative federalism. A professor of Economics at University of Columbia, New York, Mr. Arvind Panagariya (A free market economist) has been chosen to lead the economic development needed in the changing world economic order. He has to implement theory of Economics to hetrogenious texture of Indian nation.

Albeit, India has traversed a substantial ground from a poorest, undeveloped economy, at the time of independence, to launching Mars Orbit Mission, the first economically and accurately launched space mission, which has already completed over 100 days. This has brought India into eyes of most developed nations, demonstrating the capacity and capability of its scientists and the managers.

Red-tape and Reforms

The time is more than ripe to revitalize the sluggish routine decision making processes, which had been dragging the country's progress vital infra-sectors. The initiative of the government to rationalize labour reforms and consolidate plethora of labour laws (as many as 44 labour laws are enforced by the Central govt.) is clearly a winner. If the

labour laws are summarized in four statutes, it will bring the desired compliance by the Industry and also ensure protecting the rights of labour. This will also ensure good labour practices and improve productivity (India ranks very poor on Labour Productivity Index).

Make in India

The most important decision taken by the government is “Make in India” program, in which China story is to be imbibed for India. To attract the manufacturers all over the world to setup manufacturing facilities, all necessary clearances and requirements are to be provided hassle free so that participating countries find it profitable and contribute in making India as preferred manufacturing hub of the world over say China It is a tall order, in the midst of prevailing red tape in government departments. While a lot of pressure and efforts are being built by the government; Wall Mart Chief in India remarked recently, “it is really difficult to do business in India.” We were 142 on the Index on “Ease of doing Business” (Previous rank was 140). Reduction of essential documents for export to 3 and 4 for imports, is a good measure to ease the international trade transactions, when implemented. Environment Clearance of 53 projects in border infra projects should lead the path for other infra projects. Government has charted a programme with presentations from all Secretaries for a reform agenda in all 25 identified sectors.

Youngest Nation

India is poised to have 60 million young population 30 years of age and 2nd largest population. With other developing economies ageing faster, India has this

INDIA LEAPS FORWARD

tremendous advantage. Our young population need thrust in skilling and a push to higher education in research and innovation (pretty low level at present) to take opportunity provided by other ageing economies; to sustain industry and development. The lower labour cost advantage has to be matched with high levels of productivity to be useful to the foreign companies setting shop. Indian labour is receiving very low wages of approximately Rs.350 per day as compared to China, where the wages are almost double.

Infrastructure Is a Drag

Infra-sector is the most important to uplift the standard of living of masses by providing employment. The road sector is abysmally slow with most of the projects languishing and incurring cost and time overruns. In place of 25 kilometers required per day, our road builders could reach only 8-10 kms. Foreclosure decision of a large number of projects in litigation has to be quick and to stop recurrence.

Power Sector is yet to be able to provide desired capacity which will drive the surge in manufacturing in next 5 years period. The allocation of INR 1,00,000 crores and the plan to add 20,000 MW of solar and renewable energy complexes to total up 1,00,000 MW power base by 2022, shows some silver lining. Hope, the crude oil prices will behave so, bringing down heavy current account deficit and foreign exchange outgo.

The aviation, the driver of economic development also presents a somewhat similar story. It took 32 years for us to produce a defense trainer aircraft “Tejas” after sinking an exhorbitant cost. In terms of civil air connectivity, we have about 100 operational airports with most 2-3 tier state cities and North east still in need of air connectivity. To connect the passengers and evacuate the merchandise produced during “Make in India” program, there should be at least 100 more airports built by the year 2022. What we are struggling with is the management contracts of just 4 major airports. Huge potential is awaiting to be unleashed in pax numbers and tonnage of both international and domestic air cargo that needs immediate attention. Close to INR 75,000 Crores investment in aviation infrastructure including MRO facilities with more than 70% PPP route is left with stark gaps. Airlines going bust, one after another needs a detailed economic oversight by the government.

PM plans to make India a $20 trillion economy. Yes, it may sound a dream but, it is possible if only the economic reforms agenda does not quagmire into the greediness of politico-industry-and the executive as in the past decade. PM's wish is a driver, but each one in India will have to make their wish, and then only can “Make in India” happen in reality. The World Bank and IMF forecast of India GDP developing over 6.5% in 2016 augurs well. From about $2 trillion economy we have a long way to catch up with the emerging regional powers.

Jan-Feb 2015 23 | Jan-Feb 22 2015 |

The most important decision taken by the government is “Make in India” programme, in which China story is to be imbibed for India. To attract the manufacturers all over the world to set up manufacturing facilities, all necessary clearances and requirements are to be provided hassle free so that participating countries find it profitable.

Prof. Dinesh Kumar, MD, Asia Aviation Associates

Prof. Dinesh KumarMD, Asia Aviation Associates

According to Manoj Singh, VP- Cargo, Mumbai International Airport, GMAX is a facility offered to the stakeholders. GMAX initiative is in line with e-trade mission of Ministry of Commerce that facilitates

international trade in India by promoting e-services by various regulatory/facilitating agencies involved in the trade. The project is also in line with the “Make in India” initiative of the Prime Minister of India, as it speeds air export shipments by reducing processing time in the supply chain. This system will also contribute in improving the ranking of MIAL in

World Bank's Doing Business Report as and it will create digital infrastructure for reducing and in someplaces eliminating a lot of paperworks associated with air freight business. He also stated that GMAX is a value added optional facility for the air cargo stakeholders.

“Mumbai Airport cargo community system has been unique and has led the way to be the first in the country with e-reception. Being the largest cargo handling airport in India and one of the top 50 airports globally, CSIA is now probably the First in the World to have launched such a unique single window electronic platform with widespread EDI connectivity,” said Singh.

It is evident from the facts presently Freight Forwarders/Customs brokers are using different software solutions for different activities through various websites to interchange data. “A lot of integration needs to happen right from the shippers, freight forwarders, airlines and airport operators. To overcome duplication of data entries & re-keying errors and bring in efficiency and transparency, a single window electronic platform in the form of GMAX – Web Community Portal has been created and implemented by our IT service provider Kale Logistics Solutions Private Limited at CSIA,” Singh said.

He stressed that GMAX is a cost effective solution offered by MIAL to the stakeholders to facilitate smooth operations from CSIA. Some of the cost saving benefits is listed below.

Singh also pointed out that GMAX facilitated the concept of Advance Shipment Information (ASI) that has various benefits as listed below:

Security: Pre-arrival availability of Master Airway Bill and House Manifest for MIAL for security screening, flight planning, ware house management.

e-CSD: Electronic cargo security declarations.

Information Dissemination: Security agencies (like BCAS) will have access to this information for screening.

Paperless process: Elimination of documents like Master Airway Bill, Carting order, TSP, Flight manifest, Security declarations etc.

Digital Transactions: Implementation of electronic platform (GMAX) to enable stakeholders at the airport to exchange information through EDI and/or other digitization modes (e-dockets, interfaces, portals).

e-Commerce: e-payment of TSP, Customs duty and other charges through payment gateways.

Visibility: Real time update for the stakeholders and users throughout the supply chain eg: IATA C2K messages including auto SMS/email updates and mobile application.

Towards e-freight via GMAX

lElimination of Airway Bill copy at cargo acceptance and X-Ray screening in exports and flight segregation in imports.

lOnline carting order in exports

lElectronic Advance Shipment Information in exports

lOnline examination receipts in imports

Highlights of GMAX Offers

lReal time data processing and accurate data flow

lEnvironment friendly paperless operations by e-Freight

lEnd-to-End supply chain visibility

lEffective management and tracking of cargo

lDigital records (e-dockets)

le-Commerce (e-payment of TSP, Customs duty and other charges)

lSingle window electronic data interchange (Reduction of data entry and errors)

lElectronic filing of regulatory documents

lOnline airline communication (IATA C2K messages)

lSMS, e-Mail alerts on key milestones

lMobile applications (Better planning and co-ordination of on-airport/off-airport activities)

lEnhanced customer service/SLA compliance

lSaves Time & Costs

lOnline delivery order message for MAWB and HAWB in imports

ll Automated Vehicle Token System

lSavings on sending FWB/FHL data to carriers for ENS/AMS/ASI information filing with multiple customs.

lSaving in cost by e-docket facility thus by avoiding warehousing

Singh expects through GMAX facility MIAL will increase the velocity of air cargo operations. “A wholehearted support and commitment is expected from the stakeholders to drive this new initiative at CSIA. Handling supply chain effectively by making the best use of the available technology for optimal performance is the need of the hour,” he appealed.

Manoj Singh, VP- Cargo, MIAL

Agents Cry Foul

SL Sharma, President, ACAAI

has been sent to MIAL on 30th December 2014. MIAL have been requested to amend their letter stating “This is an optional service. If the members of the trade do not wish to use the services of GMAX, they are free to use GVK.COM.

Normally, for implementation of any such charges, approval of the statutory or regulatory body is sought, whereas in this case, this does not seem to have been obtained. Hence, a Protest letter has been sent to AERA to look into the matter and reverse the unwarranted charges levied by GMAX to the Members who were using GVK.COM before the implementation of GMAX.

After the outsourcing of Services like provision of EDI Platform to outside agencies (GMAX), ostensibly in the grab of providing improved software and facilities for use by the exporters at an additional cost of Rs. 285/- per HAWB/MAWB, there was serious protest by the Association and its Members. Hence, in order to arrive at some solution, a meeting was held on 22nd December 2014, in which it was decided to constitute a “Governance Committee” to look into the grievances of the Stakeholders and whose decisions will be a binding for all. The Commissioner of Customs, Mumbai had also very categorically declared that the option of MIAL of adopting Manual System which was discarded years back. A letter in this regard

Jan-Feb 2015 25 | Jan-Feb 24 2015 |

Current Issues

Recently, CSI Airport, Mumbai has launched its pioneering initiative “GMAX-GVK MIAL AIR XCHANGE” – an electronic airport cargo community system that facilitates digital interaction between multiple stakeholders viz. airport operator, freight forwarders, customs brokers, airlines, customs and other regulatory agencies. However, there were certain concerns from the users of this facility on the extra charges levied on them to avail of the technological facilities. infraLOG presents both sides' views with an aim to bring in more transparency.

Charges Introduced

at

for

Mumbai Airport

Using GMAX

Current Issues

Bharat Tahkkar, Past President, ACAAI

My understanding is that this has not been imposed, as options are available and those who found merit have registered and rest are using GMAX FOC in view further extension and some via GMAX Help Desk on Manual Basis, where the hard copies submitted by forwarders are manually updated in the system.

Technology is the only way forward and with that one can do business at touch of button, even from a remote location. And, any such development has costs.

Post 2006 PPP, some airport terminal operators apply for tariff revision every year, and introduce new Nomenclature to generate revenue. It is not out of place to mention that there is no uniformity on Levy of TSP, while at most airports its per kilo and a minimum charge per AWB of small shipments, but at few airports minimum charge of TSP is per shipping bill.

It is most surprising that same are also approved due to lack of collective consultancy process approach by stakeholders, as there are no comments submitted to regulators, or when published by AERA on their website for stakeholders comments, no comments are sent by stake holders or if sent same are not given due importance and approvals are given on soft or light touch basis

It should not be appropriate to make any comment on how much these charges should be, or should not be or to compare with Index and living standard in India. However, as a “global best practice” such charges are paid by users.

Vipin Vohra, CMD, Continental Group

Prior to the introduction of GMAX Air Cargo Community Portal at CSI Airport at Mumbai, the UPLIFT Airport Community System has been in use by all the stakeholders. MIAL wanted to bring in greater control and visibility of all operations through automation. MIAL commissioned Kale Logistics who have introduced GMAX at CSI Airport at Mumbai with effect from November 24, 2014.

Kale Logistics was appointed by MIAL to upgrade their UPLIFT system then in vogue. It needs to be examined:

i) Whether Kale Logistics have any locus standi to issue a Circular notifying a fee for the use of the GMAX software when the airport operator is MIAL

ii) Whether MIAL, in their capacity as the airport operator, should have issued the Circular instead of Kale Logistics,

iii) Whether, in their capacity as airport operator, MIAL is not obliged, under the OMDA, to provide a state of the art facility to the users, commensurate with the quantum of cargo traffic for the efficient and punctual operations of the services at the Mumbai Airport,

iv) Whether MIAL would have been justified in announcing the charges for upgrading the software in the light of the OMDA signed by them as airport operator,

v) Whether, MIAL was obliged to take prior approval from the regulatory authorities like AERA before notifying the levy of the fee now announced, and have deliberately taken this route to circumvent the approval for the additional charges.

Cyrus Katgara, Partner, Jeena & Co

People don't see the big picture. When electronics transactions are introduced they are supposed to bring down the cost of transaction. Monopolies view the picture in a different way.

Kales and ACAAI were the first to provide a neutral technology platform for the industry. However, their collaboration with MIAL and the exorbitant charges for development of EDI passed on to the trade has come as a shock to all. By introduction of EDI all parties including MIAL will save cost. EDI development charges can never be passed on to the customer unless you are acting as a monopoly. If any increase has to come then it may be via THC and with the approval of AREA. No need of introducing new revenue streams through different heads.

IT solution charges should be managed by terminal operators as their cost to manage terminal activities and enhancing their operational excellence and no at freight forwarder cost.

All stakeholders should take the responsibilities for fast clearance of cargo by using tecghnology. As far as bearing the cost (related to technology) is concerned, it depends on the control levels. For example, till the cargo under freight forwarders' control, they are responsible and once tendered at the terminal all the responsibilities should be with carriers/terminal operators and other partners who are involved in the process.

As we are already dealing and have PD A/C with the GVK / CONCOR for the same facilities, No need to open an additional A/C for GMAX.

We are definitely looking for smooth cargo operations and for that have to adopt the best technology services. GVK should take this responsibilities of any cost incurred for utilizing technology at the airport level. As already E-AWB data captured in GVK system, it will help to flow with the required continuity for future data capturing too.

Observers

According to the industry insiders in today's scenario the trade is using their in house system and GMAX – the system of KALE Logistics is thrust upon them. After issuance of Air way bill the details are required to be filled in by the trade in the GMAX system.

The custodian is then benefitted with data for further transmitting to customs for filing EGM by airlines, for which an additional cost is paid by the user, data for transmitting the messages to transit and destination countries, for which again there shall be a charge to the user.

The benefit for the trade is nil except for tracking

Ravinder Katyal, Director, UTi India

Clarifications from Kale Logistics

According to the Kale Logistics sources, in spite of our continuous efforts of keeping the trade informed on GMAX initiatives through training, road shows, presentations in conferences, circulars, one on one meetings, etc with industry people , misconception on GMAX are being formed by people who did not attend these sessions or could not get complete

Richard Theknath, MD, Jet Freight

understanding of GMAX system. “In traders' request we have also extended the trial period for understanding of GMAX system.

The Kale Logistics sources maintained that GMAX is not only a TSP printing system or an e-AWB system, in fact GMAX is an effort of creating single widow EDI initiative which trade members can use to exchange digital information with custodians, airlines, forwarders, ground handling agents, customs and soon other authorities like BMC, with an objective to provide

single window communication platform, which can potentially eliminate lot of paper documents. It would also reduce transit time significantly. In addition, it would enhance cargo security (by fulfilling the requirements of advance pre-loading data by USA, EU and Canad) and visibility/transparency.

Kale Logistics also maintained that forwarders/shippers those who are not interested to use GMAX are free to go for other operating systems.

Exclusive Interview

Looking at the Kale Logistics Circular in the above perspective, I am sure that the freight forwarders/shipers will find the same to be ill-conceived, illogical and without legal sanctity.

Jan-Feb 2015 27 | Jan-Feb 26 2015 |

Current Issues

shipment status which today is availed free of cost on the net or from the airlines.

With GMAX, freight forwarders need to feed the data ourselves and then pay Rs. 285/- + taxes.

MIAL has made a 70 / 30 revenue sharing agreement with Kale and theyshall by implementing this system to earn an amount of Rs. 200/- per AWB, about 14 to 15 cores per year taking advantage of their dominant position.

The main issue here is not so much of MIAL appointing a Concessionaire (Kale Logistics) and/or introducing new electronic systems, but arbitrarily decision on additional charges to be paid by the trade without following the due process of law and/or obtaining the necessary approval of AERA.

The system is design for facilitation only for Terminal Operator and not to a user. Not a single quantifiable benefit to user is spelt out other than less stress and running around.

Any technology introduced must lead to lowering of existing fee/charges but this goes in the opposite direction. Shipment data is commercial information and we may be providing this through the GMAX platform which can lead to

misuse.

On the other hand, obtaining of Carting Orders is an obsolete activity that is abhorrent & needs to be done away with. Mumbai is one of the rare Airports where this avoidable practice is still prevalent, on account of the Custodian claiming lack of space to accommodate air cargo. Instead of improving the infrastructure and doing away with this undesirable practice, MIAL is actually making it permanent by appointing Kale Consultants as a Concessionaire to design & implement a special software called GMAX for issuing Carting Orders.

Viewpoint

CRWC emphasises on skill and scale

In an interview with infraLOG, KU Thankachen-MD, CRWC, spoke on multi-pronged aspects for the development of supply chain and logistics industry in general and Central Rail-side Warehousing Company in particular. He emphasised on skill development and proper utilisation of IT to bring professionalism in this largely unorganised sector.

“There is no doubt about the inefficiencies in the current supply chain & logistics industry in India due to predominance of unorganised sector, lack of inadequate skill development and other perennial constraints faced by the sector. Radical changes are called for in order to enhance quality and productivity, rationalise inventory and reduce costs,” said Thankachen. In his opinion, intelligent application of information technology, elimination of data duplication, organising process flow, skill up gradation, etc. can help organisations to overcome the roadblocks and reorient their business within the context of larger vision and goals.

Increase in IT adoption has provided a boost to the growth and maturity of logistics players in India wherever it is not only implemented but also institutionalised in daily activities. IT plays multiple roles in the Indian logistics sector. However, its primary objective is to enforce and cleanse internal

Importance of IT

hygiene and manage operations with increased efficiency. IT also plays conventional roles such as increasing productivity and standardization of information management. Due to its multiple roles, its growth can be seen in the following ways :- Increasing customer account management, relationship and accessibility Integration of off-road and on-road movement of consignment and vehicle Real-time tracking and tracing of consignment and vehicles off-road and on- road Standardisation of processes and improving process efficiency Reducing labour costs and handling fuel and sales management costs Increasing transparency and accountability within the organization Quick response and access of information.

Thankachen shared that CRWC is taking innovative measures to maximise asset utilisation and ensuring quality of service to maintain its leadership in market in providing logistics services to the customers. Emphasis will be given to strengthening systems and procedures at its terminals and enhancing efficiency. With a view to lease

CRWC Initiatives

enhance its product port folio and customer base, CRWC has initiated various plans to set up/operate warehouses and logistic parks in association with other agencies, such as IWAI, IFFCO, DFC, through joint ventures/strategic alliances. Construction of a liquid cargo terminal at Kandla and warehousing facility at Dahej are on the cards. As a part of the overall strategy to increase market share, CRWC will also seek to provide multimodal transportation and logistics services to its potential users. CRWC is opening new vistas in the field of logistics by venturing into multi-modal logistics services in association with Inland Waterways Authority of India (IWAI). The Company has taken on lease from IWAI the facility of Warehousing alongside the railway siding at Pandu Port, Guwahati.

10 Additional terminals have been proposed to be handed over to CRWC for construction of warehouse facilities with temperature controlled storage as announced by Minister of Railways in the last Railway Budget. This is expected to give a boost to the rail based movement of fruits and vegetables. CRWC is also operating parcel handling facility.

CRWC has initiated various plans to set up/operate warehouses and logistic parks in association with other agencies, such as IWAI, IFFCO, DFC, through joint ventures/strategic alliances.

FIEO Awards

ecently the Federation of Indian Export Organisations (FIEO)

presented Niryat Shree and Niryat Bandhu Awards to 50 Routstanding exporters, service providers, best performing banks

and export promotion organisations, contributing maximum foreign

exchange to the country's Forex reserves. The awards were handed over

by the President of India, Pranab Mukherjee at a function held at Vigyan

Bhawan, New Delhi.

Congratulating the award winners the President of India commended

them for helping the country in diversifying its exports and moving away

from advance economies of US, EU and Japan to untapped markets of

Africa, Latin America and CIS countries. Mukherjee asked exporters to

maintain the requisite qualities and standards and maintain complete

transparency in dealing with foreign buyers. He also underlined the

importance of exports for showcasing the strength and prowess of Indian

manufacturing sector. The President of India gave a detailed account of

evolution of Indian exports which has moved from USD 18 billion in 1991-

92 to USD 312 billion in 2013-14. He urged the young entrepreneurs to

enter the challenging field of exports and look for global market for

pushing their production.

Addressing the huge gathering consisting of exporters, service providers

and government representatives Rafeeque Ahmed, President, FIEO said

that exports play a pivotal role in Indian Economy and combined share of

Merchandise and Services imports and exports together account for over

50 percent of country's GDP. The award winners have demonstrated that

tough market conditions can be overcome through better marketing

strategy and moving up the value chain. The FIEO President urged

exporters to look for branding of their products to increase per unit

realisation and make India a quality supplier of goods and services.

The two categories of prestigious awards “Niryat Shree” and

“NiryatBandhu” were instituted in 1995-96 for recognising the

contributions of exporters and other agencies engaged in export

promotion. “Niryat Shree” is awarded to member exporters for achieving

outstanding performance in export of goods and services and

“NiryatBandhu” is given away to organisations helping exporters in

achieving higher growth such as export promotion councils; commodity

boards; export development authorities; banks and other agencies.

Besides these FIEO also constituted a new set of E-commerce award

category this time.

President of India felicitates & Exporters Service Providers

Jan-Feb 2015 29 | Jan-Feb 28 2015 |

CRWC officers and team members participating in “Swach Bharat Abhiyan”

Industry Associations

Freight forwarders Gear up to increase

global biz The 41st Annual Convention of the Air Cargo Agents Association of India (ACAAI), which was held in Shanghai, in November 2014, explored new B2B opportunities for the freight forwarders in India. Significantly, a number of freight forwarders from China interacted with their Indian counterparts, for mutual benefits in view of future bilateral trades, thanks to the recent initiatives from the governments of India and China. SL Sharma, President, ACAAI elaborates on the outcome of the convention in an interview with infraLOG.

infraLOG: What according to you is the outcome of the ACAAI Convention in Shanghai? What experience have you gathered from this Convention by interacting with your counterparts in China and witnessing the Chinese Infrastructure?

The Convention was well attended by ACAAI members, as well as eminent speakers from various organizations such as Airlines, Custodians, freight forwarders, shippers etc, all of whom play a vital role in the freight forwarding and logistics industries. As an end user of the services of these organizations, it was vital and it was suggested that the entire supply chain system should function smoothly and efficiently enabling the trade to carry out it's businesses successfully It was also pointed out that Systemic problems and impediments anywhere in the logistics chain result in delays in import and export activities. Such delays have a huge

Sharma:

adverse impact on the efficacy, viability on export activities, as well as on the competitiveness of exports from India in the global market. These problems need to be resolved urgently. The interaction by our members with their counterparts in China was very beneficial in transacting their business activities abroad. Our members were definitely impressed with the infrastructure facilities provided by the Government of China and we wish that our New Government is exploring avenues for providing excellent infrastructure for Indian Airports by way of Make in India.

Airports by way of Make in India.

: In the convention you mentioned about the requirement of separate ministry for Logistics & Infrastructure. Could you please elaborate on this point? Do you think that it is possible (in view of the fact that multiple

infraLOG

ministries are involved related to this sector)?

The creation of a separate Ministry is extremely necessary. See the facts: Important meeting like Air Cargo Logistics Board of the Ministry of Civil Aviation and the SCOPE AIR of the Ministry of Commerce, which are supposed to be held every month generally take place after three to four months. Hence, the purpose for which these have been constituted are defeated and the stakeholders have to wait for years for decisions on the important issues. This needs immediate attention. It is, therefore, imperative that such meetings should be held under the banner of one Ministry like Ministry of Logistics & Infrastructure in order to assure fast track mechanism is in place under one nodal ministry.

have been constituted are defeated and the stakeholders have to wait for years for

decisions on the important issues. This needs immediate attention. It is, therefore, imperative that such meetings should be held under the banner of one Ministry like Ministry of Logistics & Infrastructure in order to assure fast track mechanism is in place under one nodal ministry.

: You have mentioned about the reduction of transaction cost. However, do you think the existing policies like cargo handling procedures, transaction and dwell time, check posts, multiple taxes, poor EDI, customs clearance time, surcharges, etc, the desired low transaction costs and low logistics costs can be achieved?

Under the banner of “Make in India”, all the concerned Ministries like- Ministry of Civil Aviation, Ministry of Commerce and Ministry of Finance have started looking into these aspects and have started holding meetings with the stakeholders and the allied agencies to ng transformation in the stringent rules and procedures of the Customs, Airports Authority, AERA etc. in this regard and have held meetings on the issues of EDI, Dwell Time, 24x7 clearance, and infrastructure etc. If implemented properly they will definitely bring positive results.

bring transformation in the stringent rules and procedures of the Customs, Airports

infraLOG

Sharma:

Authority, AERA etc. in this regard and have held meetings on the issues of EDI, Dwell Time, 24x7 clearance, and infrastructure etc. If implemented properly they will definitely bring positive results.

: What were the resolution of the 41st ACAAI Convention in Shanghai? What would be your plans and programmes in the months to come for the greater interest of the air cargo industry in India?

The Theme of the 41st ACAAI Annual Convention 2014 held on 12th November 2014 at Shanghai was quite appropriate with the present scenario, particularly when the Industry needs improvement in the Infrastructure and Logistics to the world class status. This was discussed at length and the requirements of the Industry were highlighted by the eminent Speakers who had wide experience and professional knowledge of the day to day needs of the Industry. ACAAI has taken up issues like Dwell Time, 24x7 working and levy of unwarranted charges by the Custodians. ACAAI is trying to widen the sphere of business of the Industry globally and the same has been appreciated in the said Convention. ACAAI is focusing on the breathtaking pace of changes taking place in the Air Cargo Sector, the recent policies

infraLOG

Sharma:

induced by the Government to ease the working of this Sector and implementation of “Make In India” projects successfully with the participation of the stakeholders and the users of the Industry.

knowledge of the day to day needs of the Industry. ACAAI has taken up issues like Dwell Time, 24x7 working and levy of unwarranted charges by the Custodians. ACAAI is trying to widen the sphere of business of the Industry globally and the same has been appreciated in the said Convention. ACAAI is focusing on the breathtaking pace of changes taking place in the Air Cargo Sector, the recent policies induced by the Government to ease the working of this Sector and implementation of “Make In India” projects successfully with the participation of the stakeholders and the users of the Industry.

The New Government is concentrating on the introduction of new policies, simplify the rules & procedures and raise the standard of Infrastructure to the world class status. I am quite confident that with the cooperation and support of all the stakeholders, ACAAI will be able push through all the policies and have these implemented.

Manufacturing, Industrial Production & Export - Month-wise % Growth Y-o-Y - Base : 2004-05 (as on 12-12-2014)

Months 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

Jan 14.48 8.09 1.12 2.65 0.26 13.33 7.52 0.95 2.48 1.10 20.89 47.98 10.24 1.56 3.79

Feb 15.30 7.47 4.12 2.14 13.73 6.65 4.29 0.57 31.97 49.82 6.72 5.85

Mar 16.31 11.01 4.33 14.94 9.42 3.52 56.81 50.19 28.51

Apr 14.45 5.72 1.79 3.01 13.08 5.29 1.46 3.72 43.12 33.53 0.32 2.47 5.26

May 8.88 6.29 2.58 -3.18 5.89 8.51 6.17 2.47 5.60 34.22 62.10 0.53 12.40

Jun 7.91 11.18 -1.74 2.91 7.42 9.48 4.31 46.61 32.90 10.19

Jul 10.82 3.09 0.00 2.99 1.68 9.93 3.66 2.57 0.93 12.56 63.18 11.64 7.33

Aug 4.66 3.93 2.39 -0.23 5.33 4.46 3.40 2.04 0.43 0.48 24.06 46.79 13.85 2.35

Sep 6.85 3.08 1.43 2.94 1.63 6.13 2.51 2.70 2.81 24.48 45.91 12.99 2.73

Oct 12.37 9.95 -1.26 2.38 11.31 8.40 21.10 10.82 20.95 14.34

Nov 6.53 6.56 -2.61 6.33 6.41 6.00 43.91 8.28 4.09 7.27

Dec 8.72 2.84 -1.10 9.50 8.17 2.65 0.11 42.13 8.21 0.36 3.49

-5.34

-3.93 -7.24 -1.99 -3.67

-3.64 -1.25 -5.16 -2.85 -0.46 -21.87 -3.15

-1.76 -1.92 -1.26

-1.69 -2.52 -7.53

-3.21 -1.78 -1.98 -1.85 -5.99 -3.61

-0.27 -0.06 -12.15

-1.25 -6.49

-1.58 -0.73 -6.25

-5.98 -7.61 -4.97 -1.17 -4.25 -5.04

-0.79 -1.01 -1.33 -0.08

-0.78 -0.55

Industrial Production - General ExportsManufacturing in IIP

Source : http://mospi.nic.in (as on 12 December, 2014) & www.commerce.nic.in/tradestats/indiatrade_press.asp dated 12.12.2014

Jan-Feb 2015 31 | Jan-Feb 30 2015 |

ACAAI leaders and other dignitaries at the inauguration of 41st ACAAI Annual Convention in Shanghai, China

Glimpses of ACAAI Convention

in Shanghai

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Jan-Feb 2015 37 | Jan-Feb 36 2015 |

% of

Total

Airlines Export

Without

Perishable

(Mts)

Export

Perishable

Cargo

(Mts.)

Export

(with Peri)

(upl) Mts

Import

(Mts)

Total

Cargo

(Mts)

Airlines wise exim cargo performance from Delhi International Airport for November 2014

% of

Total

Airlines Export

Without

Perishable

(Mts)

Export

Perishable

Cargo

(Mts.)

Export

(with Peri)

(upl) Mts

Import

(Mts)

Total

Cargo

(Mts)

Airlines wise exim cargo performance from Delhi International Airport for December 2014

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

Airline Export Import Total

Aerologic 0 436 436

Air Arabia 154 51 205

Air China 15 5 20

Air France 443 253 696

Bangkok Airways 48 19 67

Blue Dart 19 141 160

British Airways 1224 653 1877

Cathay Pacific 909 1717 2625

Delta/KLM/Martin Air 367 294 661

EL-AL Airlines 113 79 192

Emirates 3299 2003 5302

Ethopian Airlines 969 36 1005

Etihad Airways 1356 1434 2790

Federal Express 651 158 809

Fly Dubai 46 6 52

Gulf Air 223 108 331

Indigo Air 228 36 264

Iran Air 33 0 34

Jet Airways 3184 2824 6008

Kenya Airways 347 11 358

Lufthansa Airlines 1337 1491 2828

Malaysia Airlines 368 363 731

Oman Air 114 99 214

Qatar Airways 763 739 1501

Royal Jordanian 0 0 0

Saudi Arabian Airlines 858 394 1252

Singapore Airlines 810 940 1750

Spice Jet 34 18 52

Srilankan Air 147 177 324

Swiss Intl. Airlines 472 377 849

Turkish Airlines 593 361 954

United Airlines 107 163 270

UPS 507 525 1032

Virgin Atlantic 249 250 499

Air India 1500 815 2315

Air Mauritius 114 16 130

Egypt Air 10 1 11

Korean Air 106 67 173

Kuwait Airways 528 317 845

Pakistan intl Airlines 20 1 21

South African Airlines 261 9 270

Thai Airways 277 389 666

Yemenia Airways 42 0 43

Others 16 20 36

Total 22865 17794 40659

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

Airline Export Import Total

Aerologic 0 266 266

Air Arabia 170 58 228

Air China 12 6 19

Air France 365 261 626

Bangkok Airways 59 9 68

Blue Dart 16 179 195

British Airways 1334 599 1933

Cathay Pacific 1016 1833 2848

Delta/KLM/Martin Air 339 302 641

EL-AL Airlines 107 95 202

Emirates 2945 2265 5210

Ethopian Airlines 985 72 1056

Etihad Airways 1389 1769 3158

Federal Express 717 126 843

Fly Dubai 41 9 50

Gulf Air 246 90 336

Indigo Air 253 63 316

Iran Air 42 2 44

Jet Airways 3258 2979 6237

Kenya Airways 441 19 460

Lufthansa Airlines 1245 1336 2581

Malaysia Airlines 327 362 689

Oman Air 108 107 215

Qatar Airways 1011 833 1844

Saudi Arabian Airlines 943 489 1432

Singapore Airlines 701 962 1662

Spice Jet 19 14 34

Srilankan Air 116 135 251

Swiss Intl. Airlines 479 394 873

Turkish Airlines 592 425 1018

United Airlines 70 152 222

UPS 491 615 1105

Virgin Atlantic 306 288 594

Air India 1596 1072 2668

Air Mauritius 173 18 191

Egypt Air 12 8 20

Korean Air 84 76 160

Kuwait Airways 533 342 875

Pakistan intl Airlines 35 1 36

South African Airlines 363 14 377

Thai Airways 313 413 726

Yemenia Airways 46 0 46

Others 218 84 302

Total 23517 19141 42658

Cargo Performance at Delhi International Airport Cargo Performance at Mumbai International Airport(Top 31)

Jan-Feb 38 2015 |

Domestic air cargo performance at Indian Airports during April- 2014October

SL. NO. AIRPORTS OCTOBER2014

%Change

OCTOBER2013

%Change

2014-15 2013-14

For the month For the period April - OctoberFREIGHT (IN TONNES)

1 CHENNAI 6956 6766 2.8 46945 41832 12.22 KOLKATA 7023 7118 -1.3 54187 49231 10.13 AHMEDABAD 3619 3218 12.5 24719 20953 18.04 GOA 290 266 9.0 1792 1336 34.15 TRIVANDRUM 111 358 -69.0 745 1203 -38.16 CALICUT 12 19 -36.8 228 104 119.27 LUCKNOW 404 271 49.1 1896 1700 11.58 GUWAHATI 926 551 68.1 5559 3946 40.99 SRINAGAR 524 322 62.7 4017 2369 69.6(A) 18 INTERNATIONAL AIRPORTS10 JAIPUR 175 541 -67.7 853 4081 -79.111 BHUBANESWAR 511 361 41.6 2906 2207 31.712 MANGALORE 37 31 19.4 218 188 16.013 COIMBATORE 668 616 8.4 4424 3640 21.514 AMRITSAR 50 4 1150.0 241 72 234.715 TRICHY 0 0 - 0 0 -16 VARANASI 62 58 6.9 396 262 51.117 PORTBLAIR 241 272 -11.4 1519 1401 8.418 IMPHAL 0 361 -100.0 2198 2404 -8.6TOTAL 21609 21133 2.3 152843 136929 11.6(B) 6 JV INTERNATIONAL AIRPORTS19 DELHI (DIAL) 24019 21220 13.2 153925 119768 28.520 MUMBAI (MIAL) 17951 16932 6.0 123686 106816 15.821 BANGALORE (BIAL) 10408 8513 22.3 66544 53452 24.522 HYDERABAD (GHIAL) 3826 3513 8.9 25003 21177 18.123 COCHIN(CIAL) 923 828 11.5 6590 5435 21.324 NAGPUR (MIPL) 655 515 27.2 3457 3016 14.6TOTAL 57782 51521 12.2 379205 309664 22.5(C) 7 CUSTOM AIRPORTS25 PUNE 2461 2038 20.8 15665 11729 33.626 VISAKHAPATNAM 40 106 -62.3 2368 1035 128.827 PATNA 263 360 -26.9 3000 2648 13.328 CHANDIGARH 23 372 -93.8 3224 2056 56.829 BAGDOGRA 248 148 67.6 1675 1045 60.330 MADURAI 142 105 35.2 698 711 -1.831 GAYA 0 0 - 0 0 -TOTAL 3177 3129 1.5 26630 19224 38.5(D) 15 DOMESTIC AIRPORTS32 INDORE 527 265 98.9 3808 2638 44.433 JAMMU 158 155 1.9 1018 990 2.834 RAIPUR 356 288 23.6 2308 1886 22.435 AGARTALA 366 446 -17.9 3785 4078 -7.236 VADODARA 135 188 -28.2 1072 1128 -5.037 RANCHI 321 253 26.9 1977 1383 43.038 AURANGABAD 114 34 235.3 722 415 74.039 UDAIPUR 3 0 - 9 0 -40 BHOPAL 92 66 39.4 571 508 12.441 LEH 92 73 26.0 726 621 16.942 DEHRADUN 3 0 - 19 0 -43 RAJKOT 12 14 -14.3 73 105 -30.544 JODHPUR 1 7 -85.7 6 13 -53.845 TIRUPATHI 0 0 - 0 0 -46 DIBRUGARH 31 28 10.7 164 177 -7.3TOTAL 2211 1817 21.7 16258 13942 16.6(E) OTHER AIRPORTS 76 148 -48.6 754 885 -14.8(D) 17 DOMESTIC AIRPORTSGRAND TOTAL (A+B+C+D+E) 84855 77748 9.1 575690 480644 19.8

Reversing Modal Paradigm -A Logistics Challenge in

Evolving Markets

The Indian Ports are on a journey to mega-formations and creating capacities not in millions but billions; thus we expect Indian Port capacity to reach about 3 billion in 2020 which is only about 6 years hence. Many new ports will join the bandwagon and excel in this field. Port sponsor or an port operators need an approach and instruments of action that would help the port planners and port operators to conceptualize, build and operate to excellence.

This timely publication will certainly fill up a gap that existed in this domain for many years. The whole process has been described in a structured manner to suit the needs of new comers, people already in work ( as in many cases there is not much scope to learn the details of other departments/functions) - as people are too occupied to deal with the regular work.

While managers can get everything handy on their table - it may help students and learners to digest complex issues with ease and without much guidance. Sponsors can use this as a handy guide as build-maintain-operate are available in one place.

CONTENTS OF THE BOOK The emerging Continents:

According to Das, every one of us --at some time or another has heard of the phrase “All roads lead to Rome”. “But looking at the world developments – we are tempted to say that there are seven routes to one goal i.e. growth. Mexico, Brazil, China, Russia, Turkey, India and possibly South Africa – all can foresee heightened trade and traffic including project movements. But unfortunately each of these countries differ significantly from each other with regard to the size of the economy, the political and regulatory framework, the geographic location, the structure of the population and many other macro-economic factors.

These parameters form the basis for domestic and international trade and are critical for the logistics industry. If we go deeper we are likely to find that global trade flows have shifted within regions; such that new transportation corridors between emerging countries and least developed countries have been established. Many logistics companies are looking to respond to the

development of new transport corridors, however the sheer geographic size of emerging markets and the multitude of cultures, attitudes and languages require a significant investment. companies are looking to respond to the development of new transport corridors, however the sheer geographic size of emerging markets and the multitude of cultures, attitudes and languages require a significant investment.

Exiting Paradigm:

According to Das, any one challenged to create a logistics for movement of any project cargo – the first thing one does it as a part of the paradigm that any heavy cargo has to be moved by sea. “True there are certain weights and sizes which need the boudoir of a specialized cargo ship but there can be many other consignments having lesser dimension or weight. But as a general practice these are dealt in a similar manner as that of the bigger loads,” he pointed out.

“With demands for such project cargo related to turbine installations, nuclear plants and drilling and hydraulic fracturing technologies for natural gas supply looming on the horizon - the

two-year association with the Indian Maritime University (Kolkata Campus). Presently he is associated with a number of academic institutions - like Gujarat University and CEPT University -Ahmedabad. He is also a Senior Faculty and Adviser some B-schools and Logistics Institutions. Training and development is also his passion. His love of the subject and vision for posterity; has encouraged him to continuously write on the subject of port and shipping logistics for last few years and those have been well received by the community.

Mihir Das MICS (UK) is a Port & Shipping professional with more than 37 years of association in ports and shipping logistics. He has been the General Manager of Samsara Group looking after Saurashtra ports (including MSC operations). He was with the Adani Mundra Port and SEZ associated with profiles like process re-engineering (including health, safety & security) and different terminal operations. He was an Operations Head in Kolkata Port and HOD Railways with a 2-year stint as Chief Public Relations officer CPT. He had a

About The Author

first step, then would be to see things with an “out of the box” manner and look beyond the long worn out path that has been created by numerous projects before.,” Das emphasized.

Few grand questions:

Should a piece of equipment be moved intact or should it be broken down into subassemblies and be reassembled at destination?

“If so; why do we always think in terms of moving these objects by sea when the connectivity concerns are serious enough for the many major emerging economies? In case the movement fits into the air-lifting plan many issues of permissions, possibly, statutory requirement for road/rail permissions may be bypassed through such plans. In countries such constraints are equated to non–tariff barriers even,” the author responded.

Thus a transportation consultant possibly needs to compare cost and timeline factors to determine which will be more advantageous, investigate loading protocols and explore in-country length, width, height, and weight restrictions along the entire route leading to the construction site that may necessitate using one type of transportation versus another. Or even radically create a different modal split. Planning initial moves, shepherding together shipment components from multiple vendors, overseeing the loading of a ship, tracking the vessel, and being there when it's loaded—all of that requires more resourceful thinking than any other sector of logistics.

The Black Swan

The first question that comes immediately in mind is that the superior technology will always be linked to extensive infrastructure. Thus a heavier and bigger aircraft might need equally a longer and sturdier runway. Are these available? Let us see the examples.

An Antonov An-225 made history in 2009 when it carried the heaviest single-piece load ever, a power station generator that topped the scales at 187.6 tonnes. The generator was air shipped from Frankfurt to Yerevan, Armenia as the lack of a suitable port and mountainous terrain made this the only means of delivery viable. To reduce the weight per metre within the hold a special frame was specially designed and made for the transport. The An-225 loads and unloads through its nose—the rear ramp and cargo door were removed to save weight—and actually kneels using its retractable nose-gear, allowing deliveries to drive directly into the cargo bay and more easily position loads. The Mriya also differs from the earlier Ruslan in its tail assembly. The An-225 uses a split, twin tail—rather than the single vertical fin—that allows it to carry large external items up to 440,000 pounds.

The Airlander 50 is designed as a heavy lift cargo vehicle, flying multiple segments daily, and operating in remote areas. With minimal environmental impact, and running costs claimed to be significantly lower than any equivalent form of transport, Airlander 50 can deliver 50-ton payloads just about anywhere.

Sea transport today:

In the author's opinion, With a complete reversal; the cost of fuel has become five times

that of the ship. It is an elementary concept that the fuel and crew cost is the determinant in feasible shipping ventures. Project cargo destinations are not necessarily close – thus the back-haul is never thought of.

The challenge with the shipping companies will lie with the utilization of the sophisticated heavy-lift vessels that might be required to carry equipment that cannot be segregated & reassembled in parts and especially those which are quite long to be accommodated in newly developed aircrafts.

Issues with the ports in India

The Indian Ports had been long under fire for connectivity issues and it seems that much remains to be done in terms of timeline and concerted efforts. There is not much need to elaborate as any rational person can imagine that creating seamless integration with hinterland is not an issue that hinges on money – but the powers at variance and time being the key critical concern.

Summarising

'My purpose of writing this piece - is that we soon may have to change the way of thinking; how to handle heavy lifts; once these mega-air carriers becomes more tested and proved way of deciding the right kind of logistics and the transport then becomes independent of terrain”, share Das..

The black swan theory is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

JBS Academy publishes book

on Customs Clearance

JBS Academy has also published a comprehensive guide to make Customs Clearance simple and increase the Domain knowledge of the reader – “Clearance thru Indian Customs”. The book has been re-edited by the Chief Mentor and Director of the Academy, Samir J Shah. The book contains 422 pages of over 38 chapters covering every aspect of Customs Clearance in India. Rakesh Misra I.R.S., Chief Commissioner of Customs, Gujarat Zone, released the publication at an Award ceremony held recently in Ahmedabad.

Jan-Feb 2015 41 | Jan-Feb 40 2015 |

Book Review

Mihir Das, the author and Samir Shah, Chief Mentor & Director, JBS Academy with R S Sondhi, MD,

Gujarat Cooperative Milk Marketing Federation who is releasing the book

Prof. Arpita Mukherjee

Awards & Accolades

DIESL felicitated with

“ ” awardOutstanding Company in Logistics

Drive India Enterprise Solution Limited (DIESL), the logistics arm of Tata group has been conferred as winner for “Outstanding Company in Logistics” Award for Infrastructure Category at the 5th EPC World Awards 2014 which was recently held in New Delhi. The event endorsed by Zee Business, along with Ernst & Young LL, who were also the audit partners for the award ceremony. The award jury panel included key Industry members like Vijay Jolly, Convenor of 5th EPC World Awards 2014, Pramod Deo, Former Chairman of CERC, Sushi Shyamal, Partner – Transaction Advisory Services from Ernst & Young LLP, R. S Butola, former Chairman of Indian Oil Corporation Ltd., P. Uma Shankar, Former Power Secretary and others.

Samir Shah JBS Academy

Skill Development

of receives

awards for

Samir J Shah, Chief Mentor and Director of JBS Academy – Centre for Logistics, Maritime and Management Studies, which is a part of the 57-year-old JBS Group, recently honoured with two awards. Sha received the first one at the “Supply Chain Strategy Summit 2014” for “Distinction in Supply Chain Skill Development”, presented by Institute of Supply Chain Management and Supply Chain Management Professional . On the very next day he was conferred with “Logistics Personality and Mentor of the Year” award at the Gujarat “Star Awards 2014”. It is pertinent to mention that Shah has initiated a large number of training programmes in the sector of Customs Clearance; Port Management; ICD and CFS Management; International Freight Forwarding; etc. He has till date trained over 2000 people in 11 Indian cities and 3 cities in Middle East; UK and Europe. “The JBS Academy undertakes regular programme in the above Domain as Open Programmes; Association Programmes; In house company programmes etc,” informed JBS Academy sources.

Manoj Sharma CRWC

Media Ratna Award

of

honoured with “ ”

Manoj Kumar Sharma, Public Relation Officer, Central RailSide Warehouse Company Ltd. (CRWC ) has been conferred with the “Media Ratan Award 2014” for achieving excellence in public relations. Manoj Tiwarl, MP and Pinki Anand, Additional Solicitor General of India presented the award, instituted by Indraprastha Media Club of India.

GATI-KWE

National CSR Award 2014

wins award

at the “ ” GATI-KWE (subsidiary of Gati Ltd) the leader in Express Distribution and Supply Chain Management won second prize in the category of “Best CSR Project for Sustainable Development” at the 36th edition of All India Public Relations Conference, National CSR Awards 2014. The prestigious award was given away by Kailash Chandra Meghwal the Speaker of Rajasthan Legislative Assembly in a glittering function held recently in Jaipur.According to the company sources, this award is the testimony to one of the many sustainable CSR activities carried out by GATI-KWE in providing livelihoods to the weaver community in Rajoli village, known for its famous Gadwal sarees. The village was among one of the worst affected villages in Mahabubnagar district, Andhra Pradesh that was hit by the floods in October 2009. Gati took up the responsibility to revive the handloom weavers' community of this village and acquired 2 acres of land in that village to construct worksheds.

Chief Executive Officer, Gateway Rail Gateway Rail Freight Limited (Gateway-Rail), subsidiary of Gateway Distriparks Limited (GDL) has appointed Sachin Bhanushali as Chief Executive Officer (CEO) with effect from 1 December 2014. Earlier he was President, Gateway-Rail. He joined Gateway-Rail in January 2007. Earlier, he was with Indian Railways and Container Corporation of India Limited (CONCOR). Bhanushali would continue to report to Prem Kishan Gupta, Chairman & Managing Director, Gateway-Rail.

Vice President, Cargo Operations Worldwide, EmiratesRecently, Henrik Ambak has taken over charges as Senior Vice President, Cargo Operations Worldwide, Emirates SkyCargo, the freight division of Emirates. He joined Emirates SkyCargo after having spent the past 27 years in various roles in the air cargo industry, including Novia, CSLux and Cargolux Airlines. He started his career as a freight forwarder, and then moved into ground and cargo handling, before joining Cargolux to oversee cargo and ground handling, trucking, standards and procedures, network delivery, ground safety, ULD management, Customs and e-Business, as well as IT systems used by the commercial division.In his new role, Henrik will be responsible for the management of all Emirates SkyCargo's operations at its hub in Dubai, comprising the Cargo Mega Terminal at Dubai International Airport and Emirates SkyCentral at Dubai World Central, as well as the operations at the more than 140 outstations across the world.

ACCD Annual Ball: A show of spirit, perfection and team-work The Annual Ball of the Air Cargo Club of Delhi (ACCD), organised on January 10, at JW Marriot in New Delhi, once again demonstrated its proficiency in presenting a dazzling evening to its members and their spouses. Meticulously done coupled with innovative ideas, the event witnessed huge turnout and especially adorning youngsters, who enjoyed it till late night, thanks to amazing dance & music, and sumptuous supper.

Jan-Feb 2015 43 | Jan-Feb 42 2015 |

Appointments/Events

Infrastructure Barometer

Performance of SEZs: Reality Check

With 'Make in India' is making gung-ho in every discourses, from political to economic activities in the country, it is time to delve into the existing initiatives by previous governments that are meant for manufacturing exports. At this juncture the performance of Special Economic Zones (SEZ) needs to be examined with a holistic and research based approaches, so that the bottlenecks and issues can be removed before entering into other projects of this kind, and to make the call a reality. Prof Arpita Mukherjee of Indian Council for Research on International Economic Relations (ICRIER) highlights some key findings.

Announced in April 2000 as a policy and declared as an Act in 2005, Special Economic Zones had a vision to encourage manufacturing and export from India without hassles and with a sound infrastructure. However, from the very beginning the project SEZ could not achieve the desired target owing to various reasons. Policy issues and infrastructure bottlenecks are the vital factors among others.

Facts reveal that after several years of high growth rate, India's growth rate has slowed down and the manufacturing sector is not doing well. As a result, soon they voted to power last year, the present government focused on development of manufacturing through the Prime Minister Narendra Modi's 'Make in India' campaign. The aim is to attract foreign manufacturers to establish presence in India to cater to the large Indian market and also to link India with their global production networks. The government is focusing on improving the business environment and development of economic corridors to attract investors. It is pertinent to mention that SEZs are an important component of the policy which can help to develop manufacturing and link India to the global value chain.

Unfortunately, the performance record of the existing SEZs is not satisfactory at all. Several recent studies and reports including the reports of Parliamentary Committee and Comptroller and Auditor General of India (CAG) conveyed negative perceptions regarding SEZs.

According to a recent statement by the Minister of State (Independent Charge), Ministry of Commerce & Industry the In addition to Seven Central Government SEZs and 11 State/Private Sector SEZs set-up prior to the enactment of the SEZ Act, 2005, approval has been accorded to 524 proposals out of which 352 SEZs have been notified. Presently, a total of

196 SEZs are exporting.

As on September 30, 2014, out of the total employment provided to 13,50,071 persons in SEZs as a whole, 12,15,367 persons is incremental employment generated after February, 2006 when the SEZ Act has come into force. This is apart from millions of man days of employment generated by the developers for infrastructure activities.

The statement also revealed that the total exports from SEZs as on September 30, 2014 has been to the tune of Rs.2,34,821 crore approximately. The total investment in SEZs till September 30, 2014 is Rs.3,80,284 crore. The contribution of SEZs exports in the total exports of the country is 23.71 per cent. Taxes including direct taxes, indirect taxes and State level taxes are collected as per the respective Acts and Rules.

Commenting on the poor performance of SEZs, Mukherjee highlighted out some notions that need to be thoroughly examined to make the Make in India venture a success. These are as follows:

Though land was acquired for establishing special economic zones in the country, not much of industrialization has come up there and instead, real estate business has become prosperous in the guise of SEZ.

SEZs are tax havens leading to foregone duties and loss of

government revenue, without any commensurate benefits to the nation.

Coordination issues between departments of the Central Government and between the Centre and the State Governments, have had an effect of undermining the objectives of having an effective Single Window Mechanism.

Significant shift in the promised fiscal incentives regime has led to uncertainty, caution and holding back on part of developers / units.

The SEZs have resulted in shifting of existing units in DTA into SEZs and this has not resulted in any push to the manufacturing sector.

In addition, said Mukherjee, there are huge logistics issues that hampering the growth of SEZs; mainly connectivity with highways, airports, sea port and hinterland.

She underlined that main objectives of the SEZ Act are: generation of additional economic activity; promotion of exports of goods and services; promotion of investment from domestic and foreign sources; creation of employment opportunities; and development of infrastructure facilities.

According to the statistics of Export Promotion Council for EOUs and SEZs (EPCES), as of March 31, 2014, the SEZs have contributed to an investment of Rs. 3,01,656 crores have generated 12,77,645 direct employment and Rs. 4,94,077 crores were exported from the SEZs.

Exports from SEZs increased from Rs. 22840 crores in 2005-06 to Rs. 494077 crores in 2013-14 registering a CAGR of 47

In addition to Seven Central Government SEZs and 11 State/Private Sector SEZs set-up prior to the enactment of the SEZ Act, 2005, approval has been accorded to 524 proposals out of which 352 SEZs have been notified. Presently, a total of 196 SEZs are exporting.

percent. In real terms, exports from SEZs witnessed a more than twelve fold increase during this period and the share of SEZ exports in country's total exports increased from 3.6 percent in 2005-06 to over 8 percent in 2008-09 and jumped to around 19 percent in 2009-10. But since 2009-10, the share of SEZ exports has remained more or less stable hovering between 18 to 22 percent. The CAGR of SEZ employment for the seven year period (2005-06 – 2011-12) is 35.8 percent compared to a CAGR of 1.6 percent recorded for total employment over the same period.

There has been a slowdown of exports from SEZs. For example, post-2009-10, the growth rate of SEZ exports flattened compared to the rest of the economy and exports from SEZ declined in 2013-14 when the exports from the rest of the economy witnessed a healthy growth of 12 percent over the previous year.

Majority of the exports from SEZs are from two sectors - computers/electronic software and chemical and pharmaceuticals. There are variations in performance across states and some states such as Gujarat, Karnataka, Tamil Nadu, Maharashtra and Andhra Pradesh account for bulk of the SEZ exports. There are also wide variations in performance across different SEZs and some SEZs have contributed to bulk

There are huge logistics issues that are hampering the growth of SEZs; mainly connectivity with highways, airports, sea port and hinterland.

Prof. Arpita Mukherjee

Jan-Feb 2015 45 | Jan-Feb 44 2015 |

Ratan Kr Paul

Exports, Imports and Trade Balance with YoY Rate of Growth (for the period 1984-85 to 2013-14)

Year TradeBalance

Exports(incld.

Reexports)

Imports Rate of Change (%)

Exports Imports

Exports(incld.

Reexports)

Rate of Change (%)

(in Rs. Crore)

Imports TradeBalance

(in US $ Million) Exports Imports

1984-85 11,744 17,134 20.19 8.23 9,878 14,412 4.54

1985-86 10,895 19,658 -7.23 14.73 8,904 16,067 11.48

1986-87 12,452 20,096 14.29 2.23 9,745 15,727 9.45

1987-88 15,674 22,244 25.88 10.69 12,089 17,156 24.05 9.09

1988-89 20,232 28,235 29.08 26.93 13,970 19,497 15.56 13.65

1989-90 27,658 35,328 36.70 25.12 16,612 21,219 18.91 8.83

1990-91 32,553 43,198 17.70 22.28 18,143 24,075 9.22 13.46

1991-92 44,041 47,851 35.29 10.77 17,865 19,411

1992-93 53,688 63,375 21.90 32.44 18,537 21,882 3.76 12.73

1993-94 69,751 73,101 29.92 15.35 22,238 23,306 19.97 6.51

1994-95 82,674 89,971 18.53 23.08 26,330 28,654 18.40 22.95

1995-96 106,353 122,678 28.64 36.35 31,797 36,678 20.76 28.00

1996-97 118,817 138,920 11.72 13.24 33,470 39,133 5.26 6.69

1997-98 130,100 154,176 9.50 10.98 35,006 41,484 4.59 6.01

1998-99 139,752 178,332 7.42 15.67 33,218 42,389 2.18

1999-00 159,095 215,529 13.84 20.86 36,715 49,738 10.53 17.34

2000-01 203,571 230,873 27.96 7.12 44,076 49,975 20.05 0.48

2001-02 209,018 245,200 2.68 6.21 43,827 51,413 2.88

2002-03 255,137 297,206 22.06 21.21 52,719 61,412 20.29 19.45

2003-04 293,367 359,108 14.98 20.83 63,843 78,149 21.10 27.25

2004-05 375,340 501,065 27.94 39.53 83,536 111,517 30.85 42.70

2005-06 456,418 660,409 21.60 31.80 103,091 149,166 23.41 33.76

2006-07 571,779 840,506 25.28 27.27 126,414 185,735 22.62 24.52

2007-08 655,864 1,012,312 14.71 20.44 163,132 251,654 29.05 35.49

2008-09 840,755 1,374,436 28.19 35.77 185,295 303,696 13.59 20.68

2009-10 845,534 1,363,736 0.57 -0.78 178,751 288,373

2010-11 1,142,922 1,683,467 35.17 23.45 251,136 369,769 40.49 28.23

2011-12 1,465,959 2,345,463 28.26 39.32 305,964 489,319 21.83 32.33

2012-13 1,634,319 2,669,162 11.48 13.80 300,401 490,737 0.29

2013-14(P)a 1,894,182 2,714,182 15.90 1.69 312,610 450,068 4.06

-5,390 -4,534 -5.87

-8,763 -7,163 -9.86

-7,644 -5,982 -2.12

-6,570 -5,067

-8,003 -5,527

-7,670 -4,607

-10,645 -5,932

-3,810 -1,546 -1.53 -19.37

-9,687 -3,345

-3,350 -1,068

-7,297 -2,324

-16,325 -4,881

-20,103 -5,663

-24,076 -6,478

-38,580 -9,171 -5.11

-56,433 -13,023

-27,302 -5,899

-36,182 -7,586 -0.56

-42,069 -8,693

-65,741 -14,306

-125,725 -27,981

-203,991 -46,075

-268,727 -59,321

-356,448 -88,522

-533,680 -118,401

-518,202 -109,622 -3.53 -5.05

-540,545 -118,633

-879,504 -183,355

-1,034,843 -190,336 -1.82

-82,000 -137,458 -8.29

Source : DGCI&S, Kolkata & Economic Survey 2013-14 P = Provisional*Growth rate on provisional over revised basis and based on Department of Commerce methodology.

Note : For the years 1956-57, 1957-58, 1958-59 and 1959-60, the data are as per the Fourteenth Report of the EstimatesCommittee(1971-72) of the erstwhile Ministry of Foreign Trade.

of the exports. Therefore, although the export performance is noteworthy, the success story of SEZs, even when measured in terms of exports only, is indeed the success story of a few SEZs concentrated in few product categories and in few states.

In Mukherjee's opinion, for a comprehensive performance there should be a set time-bound target. At present the target is missing. Unlike other policies such as the National Manufacturing Policy 2011, in the SEZ policy there are no performance targets. Only units have to be net foreign exchange earners but the policy itself does not have any export targets or targets for net value addition or targets for attracting foreign investment or targets for creation of employment. This makes it difficult to evaluate the policy.

Based on Chinese experience she maintained that there should be a few SEZs that need to be selected and concentrated. Having too many small SEZs increases the investment requirement for providing external infrastructure to these SEZs. In a developing country, one of the rationales of promoting SEZs is to create enclaves where best quality infrastructure could be provided that the country otherwise couldn't provide across the country. The current pattern of SEZ development undermines this logic affecting the quality of infrastructure available to these SEZs.

She pointed out that though some states (SEZs) are performing commendably because of the policy and infrastructure support from the respective State Governments, in many states, SEZ developers have faced issues related to getting state level clearances and in land acquisition. industries will not locate in backward areas unless there is good outside zone connectivity and availability of world-class infrastructure inside the zone. Moreover, it is difficult to get high-skilled workforce in backward areas and therefore industries are not interested to relocate to such areas. Backward areas are “backward” because of lack of infrastructure. Unless the Government invests in developing the

infrastructure including social infrastructure, no industries will be interested in locating in SEZs in these areas. Similar issues are also with respect to barren land. It is often said that SEZs should locate in barren land. A land may be barren due to the lack of water. If there is water shortage industry may not develop.

She also urged for giving adequate time to grow the SEZs. It takes 10-15 years for a large multi-product SEZ to become operational and breakeven. Successful cases of SEZs countries such as China and Republic of Korea show that SEZs have been given enough time to evolve.

In addition, there should be single window mechanism to achieve proper coordination between various departments of the central government and between the central government and the state governments through a mechanism like Board of Approval (BoA) and the Unit Approval Committee (UAC).

“I am optimistic that the new government at the centre would take experience from the experiments of SEZs and script the success story of Make in India, where SEZs have to take a significant role. It is commendable that the government is already taking some corrective measures to amend the rules and regulations pertaining to SEZs,” Mukherjee concluded.

Jan-Feb 2015 47 | Jan-Feb 46 2015 |

he Draft Civil Aviation Policy pointed out that the

development of the civil aviation sector has a very high Tmultiplier effect on the economy. According to a study

done by the International Civil Aviation Organization (ICAO)

the output multiplier and employment multiplier are 3.25 and

6.10 respectively. And, every 100 rupees spent on air travel

would result in 325 rupees worth of total benefits, and every

100 direct jobs in aviation would result in 610 jobs overall.

The direct benefits of development of civil aviation include

employment and income generation in airline and airport

operations, aircraft maintenance, air traffic management,

ground handling services etc. The indirect benefits arise from

the supply chain that is required for airline and airport

operations including civil construction, multi-modal transport

services, supply of materials and products etc.

It also accelerates the development of specific sectors such as

tourism and the hospitality industry. Air connectivity can also

stimulate the growth of sectors such as manufacture of

perishable goods like fruits, flowers, food products, marine

products etc. which depend on being transported to the

required destination within a specific time. It also improves

linkages with remote areas and regions involving the difficult

terrains and thus improves social cohesion.

Key objectives

The Draft Policy underlines that airports should be designed as

integrated multimodal hubs. An integrated multi-modal hub

should include rail, metro, bus and truck connectivity as well

as accommodation and other services. The airport to ensure

that related sectors such as access to manufacturing, business,

tourism and pilgrim centres are developed. The Draft Policy

says this needs to be done in association with the other

Central Government Departments concerned as well as the

State Government/ Union Territory concerned to enable

integration and pooling of resources as well as contributions

by different stakeholders.

Highlights of

Draft Civil Aviation Policy

With an objective to provide the best possible conveniences to

passengers, the upgradation of world standard facilities will

be in the 18 major airports in the first phase that account for

86 per cent of the traffic. The remaining airports will also be

covered subsequently.

The six metropolitan airports of Delhi, Mumbai, Chennai,

Kolkata, Bangalore and Hyderabad would be developed as

major international hubs and would in future be the main

access points for international travel to and from India. The

country would follow a “hub-and-spoke” model, which

would also facilitate the development of regional networks

and air connectivity as a whole.

The existing bilateral agreements with foreign airlines will be

reviewed on an equal opportunity basis. Future bilateral

agreements will be designed in such a way as to facilitate the

hub-and-spoke model.

Government's objective will remain to develop more airports in

the PPP mode, with appropriate modifications to ensure

competitiveness in costs. In the first phase, the development

of the airports in Chennai, Kolkata, Ahmedabad and Jaipur

will be taken up.

Due to high rates of taxes, the cost of ATF in India is 40 to 45

per cent higher than the international costs. Steps will be

taken in association with the Ministry of Finance and State

Governments to rationalise the rate of taxes so that our costs

are competitive.

An Expert Committee will be constituted to develop a future

roadmap for Air India. Airports Authority of India will be

corporatised, followed by listing in the Stock Exchanges, in

order to improve efficiency and transparency. Pawan Hans Ltd.

will be listed in the Stock Exchanges with the same objective.

To enhance regional and remote areas connectivity a special

package will be developed for the North-Eastern Region. In

addition, the Route Dispersal Guidelines will be reviewed.

The 5/20 guidelines will be reviewed with a view to

encouraging the entry of new Indian carriers.

The Air Navigation Services (ANS) under the Airports Authority

of India would be strengthened further to international

standard to reduce flying time, eliminate of crowding at

airports, and for direct routing of aircraft from destination to

destination.

The rules and regulations followed by DGCA will be upgraded

to international standards. Systems will be introduced for

online receipt and clearance of various permissions and

clearances.

The functioning of Ministry of Civil Aviation and the offices

under the Ministry will be digitised to improve efficiency and

transparency. The services and clearances to be given by

different agencies will be made online.

Operational Airports in India

India has at present 132 airports, of which the Airports Authority of

India (AAI) runs 46 domestic airports and 15 international airports.

There are 4 Joint Venture airports in Delhi, Mumbai, Bangalore and

Hyderabad developed under the PPP mode with private sector

companies. Of the remaining, 31 are not operational and the rest

are Civil Enclaves in Defence airports or Customs airports. There are

also 6 airports run by the State Governments/ Union Territories or

the private sector.

The Draft Policy proposes to substantially develop the transport

of cargo by air, for which there is considerable potential. To

achieve this objective, the six metro airports will be developed as

regional cargo hubs, integrating multimodal transport facilities,

cold chains and other commodity specific requirements. The

turnaround time for cargo will be upgraded to international

standards. Air Freight Stations will be developed in different parts

of the country to streamline Customs clearance and to reduce

congestion in the airports.

Aviation Policy

Jan-Feb 48 2015 | Jan-Feb 49 2014 |

Leader’s Lead

Car manufacturers excepting those in the luxury segment have no reason to worry from Europeans seeking duty free access to Indian market through a Free Trade Agreement (FTA) since they cannot compete with Indian firms drawing big advantage from the local components. Addressing members of the EEPC India, the country';s apex engineering export organisation, Bhargava said , “Contrary to the fears that the Europeans can come and dominate the Indian markets , the FTA can work to India's advantage by way of access to a vast European car market through a duty-free regime. Such a dispensation would push India's car exports to a vast European market,” he argued. Europeans want lower duties on automobiles. “My personal view is I do not believe it will hurt us one bit. There is nobody in Europe who can compete with Indian manufacturers with high local content. On the other hand, if the long pending FTA under negotiations gets through, I get access in European markets,” said the Chairman of India's largest car maker giving his Leadership Talks on January 7 in New Delhi. However, he maintained the agreement would hurt the luxury car makers who do not depend much on the local Indian components. Bhargava underlined that the global firms with large manufacturing facilities in India are exporting a large volume of passenger cars from their local units here to across the world, including Europe. Maruti Suzuki exports about 10,000 cars a month while Hyundai about 18,000 a month. A duty free or concessional access to export market would give a major

Europe cannot compete with India

in car making:

Maruti Chairman

boost to these Indian companies. “Ultimately, it is the quality and competitiveness which would define success of manufacturing units in the well-integrated global market. Every segment of the manufacturing, including MSMEs, has to become competitive,” Bhargava emphasised.He said no amount of protection through mechanism like Defence offset policies would help and can motivate unless the global OEMs (Original Equipment Manufacturers) can take the local suppliers on board their supply chain network.

Commending the Make in India programme, said, fortunately the country has some able leaders who understand how important it is for the country to achieve global quality at competitive costs.He said the government policies must be changed to give incentives on quality and competitiveness of the MSMEs rather than the number of employees they would have and the number of such units in the sector. The past policies have only acted as disincentives to the productivity and quality of the MSMEs.Bhargava stressed immense importance on workers' role and involvement in the production. “Create an environment within your organization, where your workers think that their ideas are being valued. And, reasons of rejection of an idea should be properly explained before the workers, to encourage them to bring more ideas,” he concluded.

“Maruti Suzuki exports about 10,000 cars a month while Hyundai about 18,000 a month. A duty free or concessional access to export market would give a major boost to these Indian companies.”

“Create an

environment

within your

organisation,

where your

workers think

that their ideas

are being

valued”

Jan-Feb 50 2015 |

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